U.S. v. Jho

• Decision Date: 30 June 2008
• Docket Number: No. 06-41749.,06-41749.
• Citation: 534 F.3d 398
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Kun Yun JHO, Overseas Shipholding Group, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

534 F.3d 398

UNITED STATES of America, Plaintiff-Appellant, v. Kun Yun JHO, Overseas Shipholding Group, Inc., Defendants-Appellees.

No. 06-41749.

United States Court of Appeals, Fifth Circuit.

June 30, 2008.

Richard Allen Udell, Todd Steven Aagaard, Ronald J. Tenpas (argued), U.S. Dept. of Justice, Environment & Natural Resources Div., Washington, DC, for U.S.

Robert Jon Sussman, Christopher Benjamin Dove (argued), Locke, Lord, Bissell & Liddell, LLP, Houston, TX, Tom N. Kiehnhoff, Reaud, Morgan & Quinn, Beaumont, TX, for Jho.

Russell Stanley Post (argued), Robert David Daniel, David Michael Gunn, William Bradley Coffey, Stephen Douglas Pritchett, Jr., Beck, Redden & Secrest, Houston, TX, Judson W. Starr, David G. Dickman, Washington, DC, for Overseas Shipholding Group, Inc.

Appeal from the United States District Court for the Eastern District of Texas.

Before GARZA, STEWART and OWEN, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

The government appeals the district court's dismissal of criminal charges against Kun Yun Jho ("Jho") and Overseas Shipholding Group, Inc. ("OSG"). The counts dismissed by the district court charged that Jho and OSG knowingly failed to maintain an oil record book aboard OSG's ship the M/T PACIFIC RUBY in violation of 33 U.S.C. § 1908(a) and 33 C.F.R § 151.25. For the following reasons, we reverse the district court's dismissal and remand.

I

The M/T PACIFIC RUBY, a ship owned by OSG, transfers bulk petroleum from off-shore oil tankers to ports along the Gulf of Mexico. The M/T PACIFIC RUBY flies the flag of the Marshall Islands. During the time period at issue, Jho served as the Chief Engineer on the ship and was responsible for the engine department operations on the ship. This position included responsibility for making entries in the ship's oil record book. An oil record book includes, among other things, a log of the ship's discharge and disposal of oil and certain oil-water mixtures. See 33 C.F.R. § 151.25(a), (d).

Based on a tip from another engineer on the M/T PACIFIC RUBY describing unlawful discharges from the ship, the Coast Guard conducted an inspection of the ship during a stop in Port Neches, Texas. The tipster also alleged that Jho manipulated some of the ship's pollution-detection equipment so that it would not recognize discharges with higher oil-content than that allowed under United States law. The Coast Guard met with the ship's captain and with Jho. They discussed oil record book entries with Jho. After this inspection, the Coast Guard determined that the ship appeared to be in compliance and no action was taken. During a subsequent inspection at another port stop soon thereafter, the Coast Guard discovered evidence corroborating the tipster's allegations of unlawful discharges and tampering with the ship's equipment.

Based on the Coast Guard's inspections, the government brought charges against Jho and OSG. In a second superseding indictment, the government charged ten counts against both Jho and OSG: one count of conspiracy, 18 U.S.C. § 371 ("Count 1"); one count of making false statements to Coast Guard officials, 18 U.S.C. § 1001 ("Count 2"); and eight counts of knowing failure to maintain an oil record book, 33 U.S.C. § 1908(a), 33 C.F.R. § 151.25 ("Counts 3-10"). Count 1 charged Jho and OSG with conspiracy to violate 18 U.S.C. § 1001, 33 U.S.C. § 1908, and 18 U.S.C. § 1519. The eight counts charged under § 1908(a) correspond to eight different times at which the M/T PACIFIC RUBY allegedly entered a United States port with a knowingly inaccurate oil record book.

Jho and OSG each moved to dismiss their indictments on numerous grounds. Both defendants argued that international law prohibits the government from prosecuting the oil record book offenses charged in the indictments. The magistrate judge recommended that the motions to dismiss be denied in their entirety. The district judge partially modified the magistrate judge's recommendation. The district court agreed with Jho and OSG that international law prevented their prosecution for the record book offenses. Accordingly, the district court granted the defendants' motions to dismiss as to Counts 3-10, as well as to Count 1 so far as any conspiracy stemmed from the oil record book offenses. The district court denied the motions to dismiss as to Count 2 and as to the conspiracy charges in Count 1 that were unrelated to § 1908. The government appeals the district court's dismissal of the oil record book counts and the conspiracy count connected to the oil record book offenses.

II

The Act to Prevent Pollution from Ships ("APPS"), 33 U.S.C. § 1901, et seq., represents Congress' implementation of two related marine environmental treaties to which the United States is a party: the 1973 International Convention for the Prevention of Pollution from Ships and the Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships. Together, these treaties are generally referred to as MARPOL 73/78 ("MARPOL"). These treaties specifically target the prevention of oil pollution in the sea. The APPS authorizes the Coast Guard to "prescribe any necessary or desired regulations to carry out the provisions of the MARPOL protocol ...." 33 U.S.C. § 1903(b)(1). The APPS prohibits violations of MARPOL, the APPS, and the regulations promulgated pursuant to § 1903(b). In terms of criminal sanctions, the APPS provides that, "[a] person who knowingly violates the MARPOL Protocol ... this chapter, or the regulations issued thereunder commits a Class D felony." 33 U.S.C. § 1908(a). Civil penalties are available for any violation, whether knowing or not. See 33 U.S.C. § 1908(b).

The criminal charges brought against Jho and OSG under § 1908(a) arise from alleged knowing violations of oil record book requirements outlined in 33 C.F.R. § 151.25. In order to help monitor and prevent pollution from oil discharges, the APPS regulations require that ships over a certain tonnage "maintain" an oil record book. See 33 C.F.R. § 151.25(a). The regulation states that the "master or other person having charge of [the] ship" is responsible for "maintenance of such record." Id. at 151.25(j).¹ The oil record book must be kept on board the ship and "be readily available for inspection at all reasonable times." Id. at 151.25(I). APPS regulations give the Coast Guard authority to board the ship and inspect the ship for compliance with MARPOL, the APPS, and APPS regulations. Id. at 151.23(a); see 14 U.S.C. § 89(a). In conducting inspections to identify vessels that have polluted or are likely to pollute² in violation of the APPS, Coast Guard personnel rely on statements of the vessel's crew as well as the vessel's registration and compliance documentation. The Coast Guard's inspection authority includes the ability to examine the oil record book kept by a ship. See 33 C.F.R. § 151.23(c).

The APPS provides two pertinent limitations on the application of § 1908(a) and 33 C.F.R. § 151.25. First, the record book requirements of 33 C.F.R. § 151.25 only apply to foreign-flagged ships, such as the M/T PACIFIC RUBY, "while in the navigable waters of the United States, or while at a port or terminal under the jurisdiction of the United States." 33 C.F.R. § 151.09(a)(5); see also 33 U.S.C. § 1902(a) (limiting application of the APPS to foreign-flagged vessels while they are in the "navigable waters of the United States"). Second, the APPS states that, "[a]ny action taken under [Chapter 33] shall be taken in accordance with international law." 33 U.S.C. § 1912. Focusing on the limitation imposed by § 1912, the district court dismissed the oil record book counts against Jho and OSG. As phrased by the district court, § 1912 "circumscribes" the enforcement scheme created by APPS and prevents the government from prosecuting a § 1908(a) violation where prosecution would violate principles of international law. See United States v. Kun Yun Jho, 465 F.Supp.2d. 618, 624 (E.D.Tex.2006). Because the district court held that prosecution of the oil record book offenses would violate principles of international law, it dismissed those counts of the indictments against Jho and OSG. Id. at 624-26.

We review de novo a district court's dismissal of an indictment based on its interpretation of the underlying criminal statute. See United States v. Flores, 404 F.3d 320, 326 (5th Cir.2005).

III

A

The district court stated that "[h]ere, the United States government is seeking to criminally prosecute a foreign flag ship for alleged violations of U.S. Coast Guard regulations that occurred aboard ship and outside U.S. waters." Jho, 465 F.Supp.2d. at 625 (citing 33 C.F.R. § 151.25). Framing the alleged criminal conduct in this way, the district court identified multiple sources of international law that it found to prevent prosecution pursuant to 33 U.S.C. § 1912. Before reaching those sources, we first conclude that the district court erred in construing the criminal conduct alleged against Jho and OSG to have occurred "outside U.S. waters."

The indictment alleges that Jho failed to maintain an accurate oil record book on eight separate dates. On each of the dates listed in the indictment, the M/T PACIFIC RUBY docked in a U.S. port. In contrast to the district court's characterization of the oil record book offenses, we read the indictment to allege eight knowing failures to maintain an oil record book that each occurred entirely within the ports of the United States. As explained below, the statute, its purposes, and related case law reinforce this reading of the indictment.

The defendants argue that § 151.25's requirement that an oil record book be "maintained" does not impose a separate substantive duty. Instead, the defendants contend that the only duty imposed under § 151.25 is a duty to make the requisite entries in the oil record book. Consequently, the defendants claim that the offense conduct took place outside of U.S....