589 F.2d 1305 (7th Cir. 1978), 78-1453, United States v. Marathon Pipe Line Co.

Docket Nº:78-1453.
Citation:589 F.2d 1305
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. MARATHON PIPE LINE COMPANY, Defendant-Appellant.
Case Date:December 22, 1978
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 1305

589 F.2d 1305 (7th Cir. 1978)

UNITED STATES of America, Plaintiff-Appellee,

v.

MARATHON PIPE LINE COMPANY, Defendant-Appellant.

No. 78-1453.

United States Court of Appeals, Seventh Circuit

December 22, 1978

Argued Oct. 30, 1978.

Page 1306

John P. Ewart, Craig & Craig, Mattoon, Ill., for defendant-appellant.

Robert L. Simpkins, Asst. U. S. Atty., East St. Louis, Ill., for plaintiff-appellee.

Before CASTLE, Senior Circuit Judge, and BAUER and WOOD, Circuit Judges.

CASTLE, Senior Circuit Judge.

Marathon Pipe Line Company appeals from the district court's enforcement by way of summary judgment of a $2,000 civil penalty assessed by the United States Coast Guard against Marathon under section 1321(b)(6) of the Federal Water Pollution Control Act (FWPCA) 1 for a discharge of oil into navigable waters in violation of section 1321(b)(3) of the Act. The issue presented is whether section 1321(b)(6) permits the Coast Guard to assess more than a nominal civil penalty against the owner of a discharging facility where the owner is without fault and the spill was caused by a third party. 2 Affirming the district court, we hold that section 1321(b)(6) is an absolute liability provision which contemplates a substantial penalty even in the absence of fault and, accordingly, that the Coast Guard did not abuse its discretion in assessing a $2,000 civil penalty for a discharge of 19,992 gallons of crude oil.

On November 20, 1975 Marathon was notified by local police that a pipeline owned by it had ruptured and was discharging crude oil into the Kaskaskia River in southern Illinois. The company immediately took steps to contain the spill and reported the occurrence to the United States Environmental Protection Agency. In all, 19,992 gallons of crude oil were discharged from the pipeline and 10,920 gallons were recovered or burned, so that approximately 9,072 gallons escaped downriver. Subsequent investigation by the company revealed that a bulldozer had struck the four-

Page 1307

inch buried pipe back in June or July of 1975 while hired to dig an irrigation ditch for the owners of the land. The bulldozer operator had reported the damage to the landowners, but as the latter thought that the pipeline was no longer in use, neither ever reported the damage to Marathon. The location of the pipeline was a matter of public record, the easement having been duly recorded with the local recorder's office, and the pipeline was marked in accordance with all federal regulations. It is undisputed that the eventual split in the line resulted from the bulldozer damage and that Marathon was in no way at fault in not learning of either the digging or the damage at any time prior to the spill.

The Statutory Scheme

The FWPCA was enacted "to restore and maintain the chemical, physical and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). Toward that end Congress set the goal of eliminating the discharge of all pollutants into navigable waters by 1985. § 1251(a)(1). Section 1321, dealing with oil and hazardous substance liability, sets a "no discharge" policy of immediate effect and prohibits any discharge in harmful quantities. §§ 1321(b)(1) & (3). The section holds owners or operators of discharging facilities 3 liable for clean-up costs, subject to the defenses of act of God, act of war, negligence of the United States Government, or act or omission of a third party. § 1321(f). If the discharged substance is nonremovable, the owner or operator is liable to a variable civil penalty dependent on the amount and toxicity of the substance spilled. 4 This "liquidated damages liability" is again subject to the four enumerated defenses. § 1321(b)(2)(B)(iii). Finally, section 1321(b)(6), the immediate focus of our concern here, makes owners and operators liable to a civil penalty of up to $5,000, with no provision for any defenses but with the amount of the penalty to be determined by the Coast Guard, which is instructed to take into account ability to pay and "gravity of the violation." 5

Marathon's Statutory and Abuse of Discretion Claims

The civil penalty provision is clearly one of strict liability since fault is not even a requisite for clean-up or liquidated damages liability, and every court which has considered the question has so held. See, e. g., Tug Ocean Prince, Inc. v. United States, 436 F.Supp. 907, 924 (S.D.N.Y.1977); United States v. Atlantic Richfield Co., 429 F.Supp. 830, 836-37 (E.D.Pa.1977); Ward v. Coleman, 423 F.Supp. 1352, 1357 (W.D.Okl.1976); United States v. General Motors Corp., 403 F.Supp. 1151, 1157 (D.Conn.1975); United States v. Eureka Pipeline Co., 401 F.Supp. 934, 942 (N.D.W.Va.1975). However, Marathon claims that, although civil penalty liability attaches without regard to fault, a nominal amount only may be assessed in the absence of any fault on its part. We do not regard General Motors, supra, which also involved zero fault and third party causation, as authority for such a...

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