United States v. LeBeouf Bros. Towing Co., Inc.

• Decision Date: 14 June 1974
• Docket Number: Civ. A. No. 73-915.
• Parties: UNITED STATES of America v. LeBEOUF BROS. TOWING CO., INC.
• Court: U.S. District Court — Eastern District of Louisiana

377 F. Supp. 558

UNITED STATES of America v. LeBEOUF BROS. TOWING CO., INC.

Civ. A. No. 73-915.

United States District Court, E. D. Louisiana.

June 14, 1974.

Allen van Emmerik, Admiralty & Shipping Section, Dept. of Justice, Washington, D. C., and Leonard P. Avery, Asst. U. S. Atty., New Orleans, La., for plaintiff.

Charles E. Lugenbuhl, Donald R. Abaunza, Thomas J. Grace, Lemle, Kelleher, Kohlmeyer & Matthews, New Orleans, La., for defendant.

Lawrence K. Benson, and John C. Christian, Milling, Benson, Woodward, Hillyer & Pierson, Austin W. Lewis, Liskow & Lewis, New Orleans, La., Richard B. Sadler, Jr., Provosty & Sadler, Alexandria, La., Clyde R. Brown, Shotwell, Brown & Sperry, Monroe, La., George J. Bailey, Bailey & Hollier, Lawrence E. Donohoe, Jr., Davidson, Meaux, Onebane & Donohoe, Lafayette, La., John T. Guyton, Hargrove, Guyton, Ramey & Barlow, Robert Roberts, III, Blanchard Walker, O'Quin & Roberts, Shreveport, La., amici curiae.

Donald R. Abaunza, Lemle, Kelleher, Kohlmeyer & Matthews, New Orleans, La., amicus curiae for Chotin Transportation, Inc.

Marshall Ballard, III, Burke & Ballard, New Orleans, La., amicus curiae for Penrod Drilling Co., Primal Boat Co. and Petrol Marine Co.

James G. Burke, Jr., Burke & Ballard, New Orleans, La., amicus curiae for Offshore Marine Service Assn.

Edwin K. Legnon, New Orleans, La., amicus curiae for Tidewater Marine Service, Inc. on behalf of its subsidiary, affiliated and related companies.

JACK M. GORDON, District Judge:

This case presents a question of first impression requiring the Court to decide the validity of the application of a section of the Federal Water Pollution Control Act prohibiting intentional discharge of oil into the navigable waters of the United States. The Court has concluded that the monetary sanction authorized pursuant to this statutory section at issue is invalid because, not withstanding its nomenclature, it is unmistakably a criminal penalty, and, as such, its imposition, from this set of facts, is barred by statutory immunity induced through compulsory self-reporting of oil discharges.

The Federal Water Pollution Control Act, Title 33, United States Code, Section 1151 et seq. (hereinafter referred to as the "WPCA" or "Act"), as amended by the Water and Environmental Quality Improvement Act of 1970,¹ similar to the subject matter it affects, is complex and detailed. A general survey of the entire section at issue, § 1161 of the Act, however, provides a useful analytic backdrop against which one may probe and evaluate. A panoply of legislative guidelines, in addition to the "civil" penalty paragraph sub judice, is contained in § 1161. The section promulgates, inter alia, rules governing notification of oil spillage,² removal of discharged oil and allocation of the cost incurred therein,³ exceptions to and limits of liability for the charged party,⁴ the administrative-enforcement phase of the WPCA,⁵ as well as criminal and civil penalties.⁶ Early recognition of the sundry concepts, crystallized through regulations of this section, paves the way for an improved understanding of the factual and resultant legal issues involved in this litigation.

The basic facts are not in dispute. The United States Coast Guard notified the defendant, LeBeouf Bros. Towing Co., Inc. (hereinafter referred to as "LeBeouf") that the government had proposed a penalty of $3,000 under § 1161(b)(5) of the WPCA against LeBeouf due to a gasoline spill by one of its vessels occurring on or about June 3, 1972. Shortly thereafter, a Coast Guard hearing was convened and the penalty assessed against the defendant for the June 3, 1972, spill was compromised to $2,500. Since the defendant denied the propriety of any penalty owed to the government, the matter was referred by the Coast Guard to the United States Attorney, who filed this lawsuit in order to collect the $2,500 penalty.

Sub-part (b)(4) of § 1161 of the Act sets forth the mandatory notification procedures activated by an unlawful discharge of oil into or upon the navigable waters of the United States; failure to notify the proper authorities results in the imposition of penal sanctions, although a complying party enjoys attendant immunity from criminal prosecution. This sub-section reads:

(4) Any person in charge of a vessel or of an onshore facility or an offshore facility shall, as soon as he has knowledge of any discharge of oil from such vessel or facility in violation of paragraph (2) of this subsection, immediately notify the appropriate agency of the United States Government of such discharge. Any such person who fails to notify immediately such agency of such discharge shall, upon conviction, be fined not more than $10,000, or imprisoned for not more than one year, or both. Notification received pursuant to this paragraph or information obtained by the exploitation of such notification shall not be used against any such person in any criminal case, except a prosecution for perjury or for giving a false statement.

The following paragraph, albeit self-described as a "civil" penalty, is the gravamen of the current litigation. Title 33, United States Code, Section 1161(b)(5) requires that:

(5) Any owner or operator of any vessel, onshore facility, or offshore facility from which oil is knowingly discharged in violation of paragraph (2) of this subsection shall be assessed a civil penalty by the Secretary of the department in which the Coast Guard is operating of not more than $10,000 for each offense. No penalty shall be assessed unless the owner or operator charged shall have been given notice and opportunity for a hearing on such charge. Each violation is a separate offense. Any such civil penalty may be compromised by such Secretary. In determining the amount of the penalty, or the amount agreed upon in compromise, the appropriateness of such penalty to the size of the business of the owner or operator charged, the effect on the owner or operator's ability to continue in business, and the gravity of the violation, shall be considered by such Secretary. The Secretary of the Treasury shall withhold at the request of such Secretary the clearance required by section 91 of Title 46, of any vessel the owner or operator of which is subject to the foregoing penalty. Clearance may be granted in such cases upon the filing of a bond or other surety satisfactory to such Secretary.

Defendant LeBeouf ostensibly complied with the notification proviso upon discovery of the gasoline spill and now argues that said self-disclosure provided the Coast Guard with sufficient data by which the latter could substantiate the so-called civil penalty of paragraph 5 subsequently assessed against defendant. Defendant maintains that this type of connexity between the two above quoted paragraphs makes both criminal in nature and invalidates paragraph 5 as being unconstitutional, and, accordingly, defendant has incorporated this logic into a motion to dismiss and/or for summary judgment. The gist of LeBeouf's position is relatively facile: paragraph 5 of the Act, although containing the appellation "civil penalty", prescribes a criminal penalty and ergo is a penal, not remedial provision. Defendant avers that the immunity granted in paragraph 4 perforce must extend to cover the succeeding paragraph, since, to do otherwise, defendant contends, would abrogate the constitutional protections afforded by the Fifth, Sixth, and Fourteenth Amendments to the United States Constitution and unduly would circumscribe the statutory immunity of paragraph 4.

The Court concurs with the legal postulate espoused by defendant that the penalty inflicted by section 1161, subsection b, paragraph 5 of the WPCA is infirm unless it comports with the use and derivative use immunity granted in paragraph 4.

It is readily discernible from a reading of paragraph 4 that its cardinal purpose is to induce the culpable party to notify the Coast Guard about any oil spillage. A party who does not issue the requisite notice, regardless of whether such omission was intentional or unintentional, subjects itself to multiple criminal penalties, and, the litigants before the Court do not contest the fact that this penalty, without pretense, is an unadulterated penal sanction. Of course, a party who heeds the self-disclosure mandate of paragraph 4 insulates itself from prosecution conterminous with the concomitant grant of immunity. The nub of disagreement focuses on the categorization of paragraph 5, that is, if the penalty authorized by paragraph 5 is civil in nature, as contended by the government, or is a criminal sanction, as averred by defendant and amici curiae. Moreover, the effect of a determination that paragraph 5 of section 1161 is criminal in nature would subject this penalty to legislative immunity limitations enumerated in paragraph 4.

Judicial determination as to the regulatory or penal character of a statute is invariably a difficult task. A concise test frequently articulated by the courts in determining whether a particular provision of legislation is civil or criminal in character is whether the legislative aim in providing the sanction was to punish the party for engaging in the activity involved or to regulate the activity in question. See, Telephone News-System, Inc. v. Illinois Bell Telephone Company, 220 F.Supp. 621 (N.D. Ill.1963), aff'd, 376 U.S. 782, 84 S.Ct. 1134, 12 L.Ed.2d 83 (1964); United States v. Futura, Inc., 339 F.Supp. 162 (N.D.Fla.1972). The problem of interpretation in the instant situation is compounded by the absence of any clear and persuasive legislative history showing whether the particular sanction in question was intended to punish, although part of an overall regulatory scheme. Where legislative history offers ambiguous guidelines to statutory construction, then certain other factors must be considered determinative. The Supreme Court in Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168, 83 S.Ct. 554, 567, ...