United States v. Allied Chemical Corp.

• Citation: 431 F. Supp. 361
• Decision Date: 06 May 1977
• Docket Number: No. Cr. 76-24.,Cr. 76-24.
• Parties: The UNITED STATES of America v. ALLIED CHEMICAL CORPORATION, Defendant.
• Court: U.S. District Court — Western District of New York

431 F. Supp. 361

The UNITED STATES of America v. ALLIED CHEMICAL CORPORATION, Defendant.

No. Cr. 76-24.

United States District Court, W. D. New York.

May 6, 1977.

Richard J. Arcara, U. S. Atty., W. D. N. Y., Buffalo, N. Y., for plaintiff; Edward J. Wagner, Asst. U. S. Atty., Buffalo, N. Y., of counsel.

Robert B. Conklin, Hodgson, Russ, Andrews, Woods & Goodyear, Buffalo, N. Y., for defendant.

MEMORANDUM and ORDER

ELFVIN, District Judge.

On February 12, 1976 an Information was filed against defendant Allied Chemical Corporation ("Allied") alleging:

"That on or about August 11, 1975, in the Western District of New York, ALLIED CHEMICAL CORPORATION, defendant, a corporation, a manufacturer of chemicals, did knowingly offer for shipment to a common carrier, in interstate commerce, and ship from its Industrial Chemical Division Plant at Buffalo, New York, a shipment of nitric acid, a corrosive, without said nitric acid being packaged and stored in a container in compliance with the requirements for packaging of nitric acid as set out in 49 CFR 173.268(c); all in violation of 49 CFR 173.1(b), 49 CFR 173.22(a) and Title 18, United States Code, Section 834(f)."¹

Allied moved before the Honorable Edmund F. Maxwell, United States Magistrate for the Western District of New York,² to dismiss the Information on the grounds that 18 U.S.C. § 834(f) did not apply. Allied raised two arguments in support of its motion. Firstly, it contended that section 834(f) applies only to violations of the Interstate Commerce Commission ("ICC") Regulations and not Department of Transportation ("DOT") Regulations. Alternatively, Allied urged that the exclusive penalty for violation of DOT Regulations is 49 U.S.C. § 1809.³ The Government argued that 49 U.S.C. § 1655(e)(4) effected, when enacted, a transfer from ICC to DOT of functions, including enforcement, of existing regulations under 18 U.S.C. §§ 831-835 over hazardous materials' transportation. It also countered that 18 U.S.C. § 834(f) is the sole provision applicable inasmuch as regulations have not been promulgated under 49 U.S.C. §§ 1804 and 1809, or, alternatively, that the regulations allegedly violated are enforceable under either 18 U.S.C. § 834(f) or 49 U.S.C. § 1809 and the election to prosecute under 18 U.S.C. § 834(f) is within the Government's discretion.

Magistrate Maxwell found that 18 U.S.C. § 834(f) and 49 U.S.C. § 1809 were irreconcilably in conflict and, inasmuch as 49 U.S.C. § 1809 covers the whole subject matter embraced by section 834, section 1809 was clearly intended by Congress to substitute for section 834(f). Therefore, he found that the Hazardous Materials Transportation Act, P.L. 93-633 Title I, §§ 101-115, repealed 18 U.S.C. § 834(f) by implication and dismissed the Information by his Order dated December 7, 1976 and entered December 8, 1976.

Thereupon, The United States of America timely moved this case before me for a de novo rehearing of the Decision and Order, and the defendant (perhaps out of an excess of caution) renewed its motion to dismiss on the legal grounds advanced before the Magistrate. The matter is now pending before me.

Having considered the Decision and Order of Magistrate Maxwell and the memoranda submitted to him and additional memoranda by both parties, submitted to me upon my request, I conclude that 18 U.S.C. § 834(f) is not inconsistent with 49 U.S.C. § 1809(a)(1) and was not repealed by implication, and that defendant's motion to dismiss the Information should be denied.

My determination that 49 U.S.C. § 1809(a)(1) does not apply to the exclusion of the earlier law, 18 U.S.C. § 834(f), is based upon the history of the sections involved.

Prior to 1960 provisions similar to section 834 appeared in 18 U.S.C. § 835 which was based on the Acts of March 4, 1909, c. 321, §§ 233, 235 and 236, 35 Stat. 1135, 1136; March 4, 1921, c. 172, 41 Stat. 1445; October 9, 1940, c. 777, § 6, 54 Stat. 1028 (§§ 383, 385 and 386 of former Title 18). In order to constitute a violation of former section 835, a specific wrongful intent to violate a regulation covering the shipment of explosives or other dangerous articles must be proven. United States v. Chicago Express, 235 F.2d 785 (7th Cir. 1956); St. Johnsbury Trucking Company v. United States, 220 F.2d 393 (1st Cir. 1955). In 1960 Congress considered changes in the section which would eliminate any requirement that there must be a knowing violation of the regulations. After deliberation, no changes were made and the section was continued in its previous form but was renumbered as section 834. See, United States v. International Minerals and Chemical Corp., 402 U.S. 558, 91 S.Ct. 1697, 29 L.Ed.2d 178 (1971).

In 1966, the functions of the ICC relating to explosives and other dangerous materials, which functions were delegated to it under 18 U.S.C. §§ 831-835, were transferred to DOT. 49 U.S.C. § 1655(e)(4).

The Hazardous Materials Transportation Control Act of 1970, P.L. 91-458, Title III, §§ 302-303 (formerly 49 U.S.C. §§ 1761 and 1762), continued in effect the provisions of 18 U.S.C. §§ 831-835 and made additional provisions authorizing the Secretary of Transportation to evaluate the hazards involved in the transportation of hazardous materials, to recommend steps for the control of movement of such materials and to report to the President and Congress concerning these matters.

In 1971, in the case of United States v. International Minerals and Chemical Corp., supra, it was held that it was not required for a conviction under section 834 to show that the defendant knew of the regulation where dangerous products are involved. "* * * Where * * * dangerous or deleterious devices or products or obnoxious materials are involved, the probability of regulation is so great that anyone who is aware that he is in possession of them or dealing with them must be presumed to be aware of the regulation." Id., at 565, 91 S.Ct. at 1702.

The Transportation Safety Act of 1974, P.L. 93-633, section 113(g) of which expressly repealed the Hazardous Materials Transportation Control Act of 1970, became law January 3, 1975. Title I of that Act is entitled the "Hazardous Materials Transportation Act" and is codified as 49 U.S.C. §§ 1801-1812. Section 1809 sets forth penalties and contains civil and criminal subsections. Section 1809(a) provides for the civil penalty and section 1809(b) for the criminal penalty.⁴

The effect, if any, of these penalties upon those authorized under section 834 is the pith of this present question, for the resolution of which a review of the legislative history of P.L. 93-633 is necessary.

As indicated in the Report of the House's Interstate and Foreign Commerce Committee, No. 93-1083, which accompanied the House Bill H.R. 15223 when it was introduced, there were three basic purposes for enacting P.L. 93-633.

"The basic purpose of Section 5 of H.R. 15223 is threefold. First, the present authority to regulate the shippers and carriers of hazardous materials is expanded to cover manufacturers of the containers and packages in which such substances are transported. Second, civil penalties and injunctive relief are added to the criminal penalties to which violators of hazardous materials regulations are subject under present law. Third, certain specific statutory delegations of authority to entities (the Federal Aviation Administration, the Federal Railroad Administration, and the Federal Highway Administration) within DOT are eliminated and such authority is consolidated in the Secretary of Transportation."⁵

There was no other provision for criminal penalties in the House proposal. The House Report did contain the following reference to 18 U.S.C. §§ 831-835:

"Except for the changes set forth above, the Committee's main intent was to retain intact the authority over Hazardous Materials Transportation that presently exists under statutes such as the Federal Aviation Act, the Department of Transportation Act, and the provisions of 18 U.S.C. 831-835. The Committee notes that there is presently pending before the Judiciary Committee a separate bill, H.R. 14629 (introduced by Mr. Kuykendall on May 7, 1974) which would bring the relevant provisions of Title 18 into conformity with H.R. 15223.⁶

"Section 5(a) amends the Hazardous Materials Transportation Control Act of 1970 by adding a new section 304. The new Section 304(a) provides definitions of several terms used in Section 304. The definitions generally parallel those in 18 U.S.C. 831."⁷ (Underscoring added.)

The Senate proposal, S. 4057, provided for the imposition of civil penalties in the maximum amount of $10,000 on any person who violated a provision of the Act or any regulation issued under it. Further, it would have made it a crime, punishable by a fine of $25,000 or imprisonment for five years, to knowingly violate a provision of the Act or a regulation issued under it.

As set out in Senate Conference Report No. 93-1347, dated December 13, 1974, the conference substitute which was enacted into law was made with the following considerations:

"PENALTIES

"House bill

"The House bill provided for the imposition of civil penalties (1) on carriers and shippers in a maximum amount of $2,000 for each violation of an applicable regulation, except that if the violation by the carrier or shipper is a continuing one each day of violation shall be considered a separate offense, and (2) in a maximum amount of $10,000 for each violation of a regulation applicable to the manufacture, fabrication, marking, maintenance, reconditioning, repair, testing, and distribution of packages or containers that may be used for the transportation of hazardous materials. Such civil penalties were to be recovered in an action brought by the Attorney General in Federal district court, with authority in the Secretary to compromise the amount.

"Senate amendment

"The Senate amendment provided for the imposition of civil penalties on any person (except an

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