United States v. Chotin Transp., Inc.

• Decision Date: 29 October 1986
• Docket Number: C-1-85-1535.,No. C-1-85-1082,C-1-85-1082
• Citation: 649 F. Supp. 356
• Parties: UNITED STATES of America, Plaintiff, v. CHOTIN TRANSPORTATION, INC., Defendant.
• Court: U.S. District Court — Southern District of Ohio

649 F. Supp. 356

UNITED STATES of America, Plaintiff, v. CHOTIN TRANSPORTATION, INC., Defendant.

Nos. C-1-85-1082, C-1-85-1535.

United States District Court, S.D. Ohio.

October 29, 1986.

Robert Behlen, Jr., Cincinnati, Ohio, for plaintiff.

William Ellis, Cincinnati, Ohio, for defendant.

ORDER

CARL B. RUBIN, Chief Judge.

This matter is before the Court on motions of the Plaintiff for Summary Judgment (C-1-85-1082, Doc. 7; C-1-85-1535, Doc. 5), Defendant's Responses (C-1-85-1082, Doc. 22; C-1-85-1535, Doc. 7), Plaintiff's Replies (C-1-85-1082, Doc. 24; C-1-85-1535, Doc. 9), and the Certified Administrative Records filed in both cases.

Plaintiff United States filed these consolidated actions to collect civil penalties from defendant Chotin Transportation, Inc., for the discharge of oil into navigable waterways. Defendant Chotin claims that the quantity of oil spilled was not harmful and that the penalties assessed were arbitrary and capricious.

For the reasons set forth below, the Court hereby grants Plaintiff's Motions for Summary Judgment.

I. FINDINGS OF FACT

Plaintiff filed the Complaint in C-1-85-1082 (Chotin I) on June 10, 1985. On August 22, 1985, plaintiff filed its Motion for Summary Judgment. (Chotin I, Doc. 7.) On October 2, 1986, defendant Chotin responded. (Chotin I, Doc. 22.) And on October 14, 1986, plaintiff replied. (Chotin I, Doc. 24.)

On September 16, 1985, plaintiff filed its Complaint in C-1-85-1535 (Chotin II). Plaintiff filed its Motion for Summary Judgment on November 4, 1985. (Chotin II, Doc. 5.) Chotin filed its memorandum in opposition on December 4, 1985. (Chotin II, Doc. 7.) And plaintiff replied on December 11, 1985. (Chotin II, Doc. 9.)

These actions were consolidated by Order of the Court on December 9, 1985. (Chotin I, Doc. 12.)

A. CHOTIN I

In Chotin I, on August 23, 1983, the tank barge CHOTIN 2084 was being loaded with unleaded regular gasoline at the Gulf Oil Corporation dock at Mile 486.6 of the Ohio River. During the loading operation, the tank overflowed and gasoline was discharged directly into the Ohio River in a quantity that may have been harmful.

In the Coast Guard Water Pollution Violation Report dated December 7, 1983, investigators reported that two sheens, approximately eight feet by 20 feet and six feet by six feet were observed when they arrived on the scene. They estimated that 20 gallons of gasoline were discharged into the Ohio River.

In its March 14, 1984, reply, Chotin noted that while the Coast Guard estimated the spill at 20 gallons, the Gulf Oil dockman and their tankerman estimated the spill to be one to two gallons in their statements. However, it did not challenge the Coast Guard report that two substantial sheens were created by the spill or the fact that the spill had occurred.

In Chotin I, C.G. Hill, a Coast Guard hearing officer, wrote to Chotin on February 10, 1984, advising defendant that he had been assigned to hear a case in which oil was discharged into navigable waters on August 23, 1983. He told Chotin that if the allegation were proved a civil penalty of up to $5,000 could be imposed. He enclosed a copy of the case file which was the basis for the allegation.

He wrote, "This letter is to advise you that civil penalty proceedings have begun and to offer you the opportunity for a hearing on the matter." A hearing, he said, would be conducted pursuant to 33 C.F.R. § 1.07. If Chotin wanted a hearing, Chotin was advised to submit a written request within 30 days. He also indicated that after reviewing the case file he had made a preliminary determination that a civil penalty of $1,500 would be appropriate.

On March 14, 1984, counsel for defendant Chotin wrote to the hearing officer and requested a reduction in the proposed penalty. Chotin did not request a hearing. On March 23, 1984, the Coast Guard hearing officer issued his decision in letter form. He found that oil had been discharged in a harmful quantity on August 23, 1984, and assessed a $1,500 civil penalty. Chotin was advised of its right to an administrative appeal.

In its appeal by letter dated April 13, 1984, Chotin indicated that while it did not deny that a spill of between one and 20 gallons occurred, it felt that the imposition of a civil penalty of $1,500 was an abuse of discretion by the hearing officer.

On December 5, 1984, Chotin's appeal was denied. "It is incorrect to compare the penalty in this case with penalties assessed in other cases. Each case rests on its own set of facts and the Hearing Officer must decide each case solely on the evidence before him."

B. CHOTIN II

In Chotin II, on May 19, 1984, the tank barge Chotin 2883 cracked a butt weld while entering Lock and Dam 27 at Mile 187.0 on the Upper Mississippi River. Approximately 1,440 gallons of gasoline were discharged into the river.

Chotin relies on a statement made by a Coast Guard investigator that in the opinion of the investigator the degree of impact of the incident was "negligible." (Administrative Record at 49.)

However, the investigator further reported that the quantity of gasoline was sufficient to create a visible sheen, sludge, or emulsion on or under the surface of the water. (Id.) His summary states, "Upon arrival of the pollution response team a visible sheen was present within a boomed area along side the vessel and gasoline was observed bubbling from beneath the waterline of the number 1 cargo tank of the barge." (Id. at 5.) He also reported that cleanup would not be necessary because the gasoline was being dissipated by the water current and winds. (Id. at 6 and 31.) It was also reported that thunder showers and strong winds aided in dissipating the product. (Id. at 17.) The Administrative Record contains color photographs of the gasoline in the water which clearly shows the sheen created by the gasoline. (Id. at 7-9.)

In Chotin II, C.G. Hill, the same Coast Guard hearing officer in Chotin I, on September 24, 1984, advised Chotin that he had received a report of an allegation that oil had been discharged into a navigable waterway and that if the allegation were proved that a civil penalty of up to $5,000 could be assessed.

Chotin was notified that no penalty would be assessed until Chotin was given an opportunity to respond to the charges. He sent Chotin a copy of the case file which was the basis of the allegation. He advised Chotin that if a hearing was desired, it should be requested within 30 days. He also told Chotin that on the basis of his review of the file, he had made a preliminary determination that $3,600 would be an appropriate penalty in this case for the discharge of 1,440 gallons of gasoline. (Chotin II Administrative Record at 50.)

On October 23, 1984, Chotin requested an extension of time until November 30, 1984, in which to respond. (Id. at 53.) The request was granted. (Id. at 54.) In its response, dated November 27, 1984, Chotin did not deny that the spill occurred, but offered reasons for mitigating the penalty. Chotin again did not request a hearing. (Id. at 55-56.)

The hearing officer considered the arguments presented by Chotin but decided to impose the $3,600 penalty because no new information of substance had been presented for his consideration. He advised Chotin of its right to an administrative appeal of his decision. (Id. at 58-59.)

On January 15, 1985, Chotin requested an administrative appeal. Chotin said, "While we do not deny that a discharge of approximately 1,440 gallons of gasoline occurred, we contend that an assessment of a $3,600.00 penalty by the Hearing Officer constitutes an abuse of discretion in that the penalty is highly disproportionate to the amount of the discharge." (Id. 60-61.)

On June 5, 1985, the appeal was denied. Again, it was stressed in the decision of the appeals officer, "Penalty amounts assessed in selected other cases do not provide any standard upon which to judge the assessment in this case. Each case must be judged upon its own facts and circumstances. The Hearing Officer must make a decision based upon the record of the case before him. 33 CFR 1.07-15(b)." (Id. at 66-67.)

II.

OPINION

The questions presented in this case are whether the decisions of the Coast Guard in imposing the civil penalties was supported by substantial evidence and whether the amounts of the penalties imposed were arbitrary and capricious.

Judicial review of a civil penalty imposed by the United States Coast Guard under 33 U.S.C. § 1321(b)(6) is limited to a review of the administrative record. The determination of the Coast Guard must be upheld if it is supported by substantial evidence in the record and if the assessment is neither arbitrary nor capricious. United States v. Healy Tibbitts Construction Co., 713 F.2d 1469, 1474-1476 (9th Cir.1983).

In Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971), the Supreme Court held:

De novo review of whether the Secretary's decision was "unwarranted by the facts" is authorized by 5 U.S.C. § 706(2)(F) in only two circumstances. First, such de novo review is authorized when the agency action is adjudicatory in nature and the agency factfinding procedures are inadequate. And, there may be independent judicial factfinding when issues that were not before the agency are raised in a proceeding to enforce nonadjudicatory agency action.

De novo review is not appropriate under 33 U.S.C. § 1321(b)(6) because the statute mandates adequate factfinding procedures. United States v. Healy Tibbitts Construction Co., 713 F.2d at 1474 n. 4; United States v. Texas Pipe Line Company, 528 F.Supp. 728, 732 (E.D.Okla.1978), aff'd, 611 F.2d 345 (10th Cir.1979); United States v. Atlantic Richfield Co., 429 F.Supp. 830, 837 (E.D.Pa.1977), aff'd, 573 F.2d 1303 (3d Cir.1978); United States v. Independent Bulk Transport, Inc., 394 F.Supp. 1319, 1323 n. 8 (S.D.N.Y.1975) (Frankel, J.). But see United States v. Delian Cruises, 505 F.Supp. 79 (E.D.La.198...