U.S. v. Healy Tibbitts Const. Co., 82-4568

• Citation: 713 F.2d 1469
• Decision Date: 26 August 1983
• Docket Number: No. 82-4568,82-4568
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. HEALY TIBBITTS CONSTRUCTION COMPANY, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1469

713 F.2d 1469

20 ERC 1684

UNITED STATES of America, Plaintiff-Appellee, v. HEALY TIBBITTS CONSTRUCTION COMPANY, Defendant-Appellant.

No. 82-4568.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted April 14, 1983.

Decided Aug. 26, 1983.

John E. Droeger, Hall, Henry, Oliver & McReavy, San Francisco, Cal., for defendant-appellant.

Arthur E. Gowran, Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of California.

Before KILKENNY, SCHROEDER, and BOOCHEVER, Circuit Judges.

SCHROEDER, Circuit Judge.

We are concerned here with an application of the civil penalty provisions of the Federal Water Pollution Control Act. A $3,000 civil penalty was assessed under that Act against the Healy Tibbitts Company, based upon the Coast Guard's findings that its vessel had discharged oil into navigable waters. The United States sued to collect the fine and the district court granted summary judgment in its favor, holding that the Coast Guard's findings were supported by substantial evidence in the administrative record.

On appeal, Healy Tibbitts contends that the Coast Guard's procedures violated both the Due Process Clause and the Administrative Procedures Act, that it was entitled to a de novo hearing in district court, and that the civil penalty provisions were misapplied in this case. We reject these contentions and affirm the district court's judgment.

I STATUTE

The Federal Water Pollution Control Act (FWPCA), originally enacted in 1948, ¹ was extensively amended and recodified in 1972 to strengthen the national policy against the discharge of pollutants into navigable and ground waters. Federal Water Pollution Control Act Amendments of 1972, Pub.L. No. 92-500 § 2, 86 Stat. 816 (1972) (codified as amended 33 U.S.C. §§ 1251-1376). Section 311(b)(3) of the Act (codified as amended 33 U.S.C. § 1321(b)(3)) was added to prohibit, inter alia, the discharge of harmful quantities of oil into the navigable waters in the United States; ² the President was required in section (b)(4) to determine, by regulation, what quantities were to be considered "harmful." 33 U.S.C. § 1321(b)(4).

Pursuant to Executive Order No. 11,735, 38 Fed.Reg. 21,243 (1973), the Environmental Protection Agency promulgated 40 C.F.R. § 110.3. This regulation defines a "harmful quantity" of oil for the purpose of section 311(b) as a quantity which violates applicable water quality standards, causes a film or sheen upon or discoloration of the surface water or adjoining shorelines, or causes a sludge or emulsion to be deposited beneath the surface of the water or upon adjoining shorelines. Section 311(b)(6)(A) (codified as amended 33 U.S.C. § 1321(b)(6)(A)), provides that a civil penalty of up to $5,000 shall be assessed for any violation of section 1321(b)(3) "after notice

and opportunity for a hearing" and charges the Coast Guard with executing its terms. ³

II CASE HISTORY

This proceeding is based upon a Coast Guard investigation of an oil spill in September 1978 which was apparently caused by a grounded barge under lease to Healy Tibbitts. The Coast Guard, pursuant to 33 U.S.C. § 1321(c)(1), arranged and paid for the removal and clean-up of the spill. Healy Tibbitts refused to accept responsibility for the spill or to pay for its clean up. See 33 U.S.C. § 1321(f) (imposing liability on owners or operators for the cost of removing spills for which they are responsible).

The Commanding Officer of the Coast Guard port safety station then forwarded a pollution violation report, including photographs, witness reports and a workbook, to the Coast Guard District Commander. The District Commander's Office, after reviewing these materials, forwarded the file to a Hearing Officer with a recommendation that Healy Tibbitts be assessed a $3,000 penalty for the spill. These procedures were in accordance with 33 C.F.R. § 1.07-10(b) (1982), a regulation promulgated by the Coast Guard. That regulation provides:

Reports of any investigation conducted by the Coast Guard or received from any other agency which indicate that a violation may have occurred are forwarded to the District Commander of the District in which the violation is believed to have occurred. The District Commander reviews the reports to determine if there is sufficient evidence to establish a prima facie case. If there is insufficient evidence, the case is either returned for further investigation or closed if further action is unwarranted. If it is determined that a prima facie case does exist, a case file is prepared and forwarded to the Hearing Officer, with a recommended action. A record of any prior violations by the same person or entity, is forwarded with the case file.

The Hearing Officer, pursuant to section 1.07-20, determined that there was sufficient evidence to proceed in a penalty action because a violation appeared to have been committed, and he in turn notified Healy Tibbitts as required by 33 C.F.R. § 1.07-20(b) (1982). This regulation states:

If on the basis of the preliminary examination of the case file, the Hearing Officer determines that a violation appears to have been committed, the Hearing Officer notifies the party in writing of:

(1) The alleged violation and the applicable law or regulations;

(2) The amount of the maximum penalty that may be assessed for each violation;

(3) The general nature of the procedure for assessing and collecting the penalty;

(4) The amount of penalty that appears to be appropriate, based on the material then available to the Hearing Officer;

(5) The right to examine all materials in the case file and have a copy of all written documents provided upon request; and

(6) The fact that the party may demand a hearing prior to any actual assessment of a penalty.

Healy Tibbitts requested a hearing, and one was conducted in accordance with the applicable regulations, including that which permitted Healy Tibbitts to review all the evidence in the case file. See 33 C.F.R. §§ 1.67-30, 40, 45, 50, 55, 60 (1982). After reviewing all of the evidence, including the material in the case file, the material submitted by Healy Tibbitts, and additional evidence from the Coast Guard Program Manager, the Hearing Officer found that a violation of section 1321(b)(3) had been established and that Healy Tibbitts should be assessed a $3,000 penalty. In an administrative appeal of this holding pursuant to 33 C.F.R. § 1.07-70 and 1.07-75 (1982), the Coast Guard Commandant affirmed.

When Healy Tibbitts refused to pay the fine, the claim was referred to the U.S. Attorney for collection pursuant to the Federal Claims Collection Act, 31 U.S.C. §§ 951-53 (1976) (codified as amended in scattered sections of 31 U.S.C. ch. 37 (1982)). The government then brought this action, properly asserting jurisdiction under 28 U.S.C. §§ 1345 and 1355. The district court, based upon a review of the record of the administrative proceedings, granted the government's motion for summary judgment, holding that the findings of the Coast Guard were supported by substantial evidence and that the fine was neither excessive nor arbitrary or capricious within the meaning of the Administrative Procedures Act, 5 U.S.C. § 706. We have jurisdiction of the appeal under 28 U.S.C. § 1291.

III

DENIAL OF DUE PROCESS--IMPROPER "COMMAND INFLUENCE"

Healy Tibbitts contends that the Coast Guard enforcement procedures deny due process because there is no opportunity for a hearing with respect to the District Commander's initial determination that a prima facie violation has been shown and that the matter should be forwarded to a Hearing Officer for further consideration. See 33 C.F.R. § 1.07-10(b). Healy Tibbitts acknowledges that the role of the District Commander's office at this stage is only to recommend that a proceeding should be initiated. The company maintains, however, that the District Commander's decision, in a practical sense, is dispositive of the entire case because the District Commander is superior to the Hearing Officer and his "command influence" taints any subsequent hearing provided by the Hearing Officer.

In support of its argument, Healy Tibbitts relies upon O'Callahan v. Parker, 395 U.S. 258, 267, 89 S.Ct. 1683, 1687, 23 L.Ed.2d 291 (1969), in which the possibility of command influence was cited by the Court as one of several factors supporting its conclusion that a military court martial could not be used in peace time to prosecute a soldier for commission of an off base rape. Appellant's attempted analogy of this proceeding, a civil administrative hearing with judicial review by Article III courts, to a criminal proceeding before a military tribunal, is inappropriate. Moreover, the Court in O'Callahan did not hold that the existence of a command relationship between the officer initiating charges and the one who holds a hearing, presumptively affects the fundamental integrity of the truth-determining process. See Gosa v. Mayden, 413 U.S. 665, 680-82, 93 S.Ct. 2926, 2936-37, 37 L.Ed.2d 873 (1973). Other appellate courts consistently have refused to assume unfairness or prejudice from "command influence" In the relatively few cases which have invalidated military administrative determinations on the basis of command influence, the evidence clearly demonstrated that the superior officer actually influenced the decision-making process. See Engels v. United States, 678 F.2d 173 (Ct.Cl.1982); Skinner v. United States, 594 F.2d 824, 219 Ct.Cl. 322 (1979) (evidence sufficient), but see Gruendyke v. United States, 639 F.2d 745, 226 Ct.Cl. 193 (1981); Blevins v. Plummer, 613 F.2d 767 (9th Cir.1980) (no influence shown). There is nothing in this record, however, to suggest that the Hearing Officer was in fact influenced by the Commander or that he conducted the proceedings in any way other than in a fair and impartial manner. We therefore cannot conclude that the company's due process...