United States v. Eureka Pipeline Company

Citation401 F. Supp. 934
Decision Date08 October 1975
Docket NumberCiv. A. No. 74-7-P.
CourtU.S. District Court — Northern District of West Virginia
PartiesUNITED STATES of America, Plaintiff, v. EUREKA PIPELINE COMPANY, Defendant.

COPYRIGHT MATERIAL OMITTED

James F. Companion, Wheeling, W. Va., for plaintiff.

John R. Morris, Parkersburg, W. Va., for defendant.

MEMORANDUM ORDER

MAXWELL, Chief Judge.

This civil action was filed on May 7, 1974 by the Plaintiff, United States of America, to recover sums which it claims are due and owing from the Defendant, Eureka Pipeline Company, as a result of twelve violations of Section 1321(b)(3)1 of the Federal Water Pollution Control Act (FWPCA), as amended 1972, 33 U.S.C. § 1251 et seq., which prohibits "the discharge of oil or hazardous substances into or upon the navigable waters of the United States . . .." The twelve original violations occurred between October 23, 1972 and February 3, 1973. On March 8, 1975, the Plaintiff amended its complaint to include seven additional violations during the periods of July 7, 1973 to September 5, 1973. The Defendant admits the occurrence of all nineteen of the violations alleged.

In compliance with 33 U.S.C. § 1321(b) (5)2 all violations were reported by the Defendant to the appropriate authorities as required by paragraph (5). Upon review and pursuant to 33 U.S.C. § 1321(b) (6)3 a total of $9,900.00 has been assessed against the Defendant. The Defendant has refused to pay these penalties claiming that paragraph (6) is unconstitutional on its face and/or as applied and has filed Motions to Dismiss and/or for Summary Judgment with respect to all said violations.

Defendant alleges several grounds upon which the statute here in question is unconstitutional. These shall be considered seriatim.

Defendant first attacks the statute by stating that the reporting requirement of paragraph (5) results in self-incrimination in violation of the Fifth Amendment to the United States Constitution, when the information so gathered is later used to impose fines or penalties under paragraph (6).

While the information received pursuant to paragraph (5) may not be used in a criminal case against the person reporting the discharge, Defendant claims that the use of this information to assess what is referred to as a "civil penalty" reaches the same result. Thus, Defendant claims, the immunity granted by paragraph (5) should be extended to cover the penalty imposed by paragraph (6) which it claims is also penal in nature.

The fact that Congress in enacting the legislation here under scrutiny chose to call the penalty "civil" must be given great weight. "When Congress has characterized the remedy as civil and the only consequence of a judgment for the Government is a money penalty, the courts have taken Congress at its word." United States v. J. B. Williams Company, Inc., 498 F.2d 414, 421 (2d Cir. 1974). But the forms ascribed to the penalty by a label must not be the sole criterion upon which a decision as to its true meaning turns. The Court must be concerned with substance also. This was emphasized by Chief Justice Warren, when speaking for the Court in Trop v. Dulles, 356 U.S. 86, 78 S.Ct. 590, 2 L.Ed.2d 596 (1958); he said, "How simple would be the tasks of constitutional adjudication and of law generally if specific problems could be solved by inspection of labels pasted on them!"

A review of the substance of a congressional statute necessarily begins with consideration of the legislative history to uncover any indications of legislative intent. Telephone News System, Inc. v. Illinois Bell Tele. Co., 220 F. Supp. 621 (N.D.Ill.1963). Such a review in this instance fails to reveal conclusively whether Congress intended this penalty to regulate or prevent discharges, which would evidence a civil sanction, or to provide punishment for the conduct in order to punish the offender and deter others, in which case the sanction would be penal in nature. Telephone News, supra.

While nothing in the legislative history explicitly indicates whether Congress intended the penalty imposed by paragraph (6) to be penal or civil in nature there are certain implicit indications which are helpful to an understanding of its intent.

The congressional policy relating to the Act is stated in 33 U.S.C. § 1251(a) as follows: "The objective of this chapter is to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." This indication of a desire to keep the Nation's waters free from pollutants was further buttressed when Congress stated: "The Congress hereby declares that it is the policy of the United States that there should be no discharges of oil or hazardous substances into or upon the navigable waters of the United States . . .." 33 U.S.C. § 1321(b) (1).

This language from these two sections of the FWPCA points up the great concern of Congress over the problem of water pollution and indicates a desire to reduce the pollution level already existing as well as to prevent future discharges which might add to the problem. This is made even more clear when it is remembered that the predecessor to the FWPCA was passed by Congress just after two great oil catastrophes had occurred with the Torrey Canyon incident off the coast of England and France in 1967 and the Santa Barbara blowout in 1969.

One remaining implicit indication of congressional intent with regard to the penalty under paragraph (6) is important. In October of 1972 certain amendments were enacted with respect to the FWPCA. 33 U.S.C. § 1161(b)(5), which then became 33 U.S.C. § 1321(b)(6), was changed in two important respects. Where before the amendments a civil penalty could only be imposed when an owner or operator "knowingly discharged" into the navigable waters of the United States substances in violation of the Act, the amendment deleted this element of scienter. Further, where the civil penalty which could be assessed under § 1161(b) (5) was $10,000 for each offense the same amount as the criminal penalty for failure to give notice of an unlawful discharge under § 1161(b)(4), the amendment reduced the amount of the maximum civil penalty to $5,000 for each offense.

These changes, the Court believes, evidence a desire on the part of Congress to move away from the appearances of criminality which could have been ascribed to § 1161(b)(5). That the Congress had reason for its concern is affirmed by the finding in United States v. LeBeouf Bros. Towing Co., Inc., 377 F.Supp. 558 (E.D.La.1974), that the penalty imposed by § 1161(b)(5) was penal in nature.

As indicated above, the only reflections of legislative intent which appear from the legislative history of the Act are implicit. Congress did not spell out its intent with regard to the penalty here in question. Where a review of the legislative history fails to disclose whether Congress intended the penalty to be penal or civil in nature the Supreme Court has enunciated some important factors for consideration in determination of the meaning to be ascribed to the penalty. Thus, in Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168, 83 S.Ct. 554, 568, 9 L.Ed.2d 644 (1963), the Court outlined the following factors:

Whether the sanction involves an affirmative disability or restraint, whether it has historically been regarded as a punishment, whether it comes into play only on a finding of scienter, whether its operation will promote the traditional aims of punishment — retribution and deterrence, whether the behavior to which it applies is already a crime, whether an alternative purpose to which it may rationally be connected is assignable for it, and whether it appears excessive in relation to the alternative purposes assigned. . . .

Consideration of the penalty at issue with regard to these factors reveals the following:

The penalty appears to involve an affirmative disability or restraint. It is like that imposed for a violation of Section 204 of the Economic Stabilization Act of 1970 which states, "Whoever willfully violates any order or regulation under this title shall be fined not more than $5,000." This penalty was found to impose an affirmative disability or restraint by the court in United States v. Futura, 339 F.Supp. 162 (N.D.Fla. 1972).

While monetary penalties have traditionally been regarded as a form of criminal punishment, Futura, supra, their collection as a civil remedy is widely accepted. And where collection of the penalty is to be effectuated through a "distinctly civil procedure", congressional intent to impose a civil rather than criminal sanction is clear. Helvering v. Mitchell, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917 (1938). As indicated in footnote 3, supra, the assessment is first made by the Secretary of the department in which the Coast Guard is operating. Then if payment is not recovered, a civil action, such as that before the Court, is instituted by the attorney for the United States.

As earlier indicated, while 33 U.S.C. § 1161(b) (5) required scienter before the penalty could be imposed, the 1972 amendments dropped this requirement from § 1321(b) (6).

Language from the Senate Committee which considered the Amendments of 1972 indicates that deterrence was to be one result of the penalty imposed by paragraph (6). The committee wrote, "The Committee believes that the discharge of such substances should be subject to penalty even though clean up is not practicable. In this way, each carrier or handler evaluates the risk of discharge and determines whether or not the potential penalty is worth the risk." Pub.L. No. 92-500, § 311, 1972 U.S. Code Cong. and Admin.News, p. 3732. However, the fact that the penalty will deter unlawful discharges of oil does not, without more, render it criminal in nature. Monetary penalties imposed for infractions of statutes of the United States have often been viewed as civil in nature rather than criminal, especially where their purpose is to regulate the activity...

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    ...Bulk Transport, Inc., 394 F.Supp. 1319 (S.D.N.Y.1975) (scope of judicial function under (b)(6)). See also United States v. Eureka Pipeline Company, 401 F.Supp. 934 (N.D.W.Va.1975); and United States v. Mar-Tee Contractors, 8 E.R.C. 1925 None of the above cases offers any support to defendan......
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    ...in finding the penalty civil. United States v. General Motors Corp., 403 F.Supp. 1151 (D.Conn.1975); United States v. Eureka Pipeline Co., 401 F.Supp. 934 (N.D.W.Va. 1975); United States v. Independent Bulk Transport, Inc., 394 F.Supp. 1319 (S.D.N.Y. 1975); United States v. W. B. Enterprise......
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