United States v. Rainey

• Decision Date: 27 June 2014
• Docket Number: No. 13–30770.,13–30770.
• Parties: UNITED STATES of America, Plaintiff–Appellant v. David RAINEY, Defendant–Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

757 F.3d 234

UNITED STATES of America, Plaintiff–Appellant
v.
David RAINEY, Defendant–Appellee.

No. 13–30770.

United States Court of Appeals,
Fifth Circuit.

June 27, 2014.

[757 F.3d 236]

Christopher Jackson Smith (argued), Trial Attorney, Stephan Edward Oestreicher, Jr., Sangita Katikineni Rao, Leo Rin Tsao, Esq., Assistant U.S. Attorney, Rohan Arun Virginkar, Trial Attorney, U.S. Department of Justice, Washington, DC, Jeffrey Goldberg, U.S. Department of Justice, New Orleans, LA, for Plaintiff–Appellant.

Brian Matthew Heberlig, Esq., Scott P. Armstrong, Bruce C. Bishop, Jessica Lynne Urban, Esq., Reid H. Weingarten, Esq. (argued), Steptoe & Johnson, L.L.P., Washington, DC, Michael W. Magner, Jones Walker LLP, New Orleans, LA, for Defendant–Appellee.

Mary Beth Walker, U.S. House of Representatives, Washington, DC, for Amicus Curiae.

Appeal from the United States District Court for the Eastern District of Louisiana.
Before JOLLY, GARZA, and HIGGINSON, Circuit Judges.

HIGGINSON, Circuit Judge:

Distilled, this appeal raises a pure question of statutory interpretation. Congress criminalizes obstructing “the due and proper exercise of the power of inquiry under which any inquiry or investigation is being had by either House, or any committee of either House or any joint committee of the Congress.” 18 U.S.C. § 1505. The defendant contends, and the district court agreed, that he cannot be prosecuted under § 1505 for obstructing a congressional-subcommittee investigation because a congressional subcommittee is not “any committee of either House.” We interpret the statutory class of “any committee of either House,” however, to include congressional subcommittees. We VACATE accordingly.

I.

This criminal prosecution stems from BP plc's (“BP”) response to the explosion on the Deepwater Horizon drilling rig on April 20, 2010. The defendant is David Rainey, BP's former Vice President of Exploration for the Gulf of Mexico. ¹

A.

Following the explosion, the United States Coast Guard coordinated the spill response by forming a “Unified Command” and installing Rainey as Deputy Incident Commander. Flow-rate estimates, stated in barrels of oil flowing from the well per day (“BOPD”), acted as the primary metric for gauging the spill's severity and therefore were integral to tailoring response efforts. Initially, the Unified Command estimated a flow-rate of 1,000 BOPD, but the National Oceanic and Atmospheric

[757 F.3d 237]

Administration (“NOAA”) suggested that the flow rate was in fact 5,000 BOPD. The NOAA accompanied its flow-rate estimate with a number of qualifiers, including that its methodologies were “highly unreliable,” that its estimate was accurate “to only an order of magnitude,” and that the actual flow rate could potentially exceed 5,000 BOPD by ten times. Acknowledging the NOAA estimate, the Unified Command raised its public estimate to 5,000 BOPD.

The NOAA estimate also inspired Rainey independently to research and conduct his own flow-rate estimates. Rainey surfed the internet for “mass-balance” estimates, which is a method to conduct oil-spill estimates based on observing oil floating on the water's surface. Rainey discovered two generally accepted mass-balancing techniques: the American Society for Testing and Materials (“ASTM”) method and the European (“Bonn”) method. Rainey's Bonn estimates were significantly higher than 5,000 BOPD, reaching upwards of 92,000 BOPD. As alleged in the indictment, Rainey's ASTM estimates did not conform to ASTM standards and were “manipulated to consistently arrive at or near a ‘best guess' of between 5,000 and 6,000 BOPD.” Aware of competing estimates, Rainey and other BP executives nevertheless maintained that 5,000 BOPD was the “best guess estimate.” Internally, by contrast, BP relied on expert teams using sophisticated methodologies that focused on the conditions at the seafloor. Subsurface engineers at BP sent Rainey their estimates, which estimated that flow rates ranged from 64,000 to 146,000 BOPD. Rainey also knew that other BP engineers estimated a range of 14,000 to 82,000 BOPD.

Conflict between BP's engineers and Rainey notwithstanding, BP stood by its 5,000 BOPD estimate and publicly rejected a professor's estimate that the flow rate was approximately 70,000 BOPD. Privately, it is alleged, a BP engineering supervisor sent an email to executives explaining that “[w]e should be very cautious standing behind a 5,000 BOPD figure as our modeling shows that this well could be making anything up to 100,000 BOPD depending on a number of unknown variables.” Rainey received this email, and it fell to him to draft a memorandum defending BP's allegiance to the 5,000 BOPD estimate. The “Rainey Memorandum,” as it is referred to in the indictment, selectively omitted evidence calling into question BP's 5,000 BOPD estimate and made material misrepresentations. Among other things, the Rainey Memorandum omitted Rainey's own Bonn estimates and represented that Rainey's own ASTM estimates were central to the Unified Command's decision to raise its estimate to 5,000 BOPD even though Rainey had not provided his ASTM estimates to the Unified Command in advance of the decision to raise the estimate. BP's estimate became harder to sustain, however, and the Unified Command created the “Flow Rate Technical Group,” which consisted of independent and government experts. The Flow Rate Technical Group estimated that the flow rate after the blowout was approximately 62,000 BOPD and was 53,000 BOPD at the time the well was shut.

Enter the House Subcommittee on Energy and Environment (the “Subcommittee”), which was a subcommittee of the Committee on Energy and Commerce of the House of Representatives of the United States Congress. The Subcommittee investigated the blowout and spill, and requested information from BP. In response to a Congressional request for briefing, Rainey informed the Subcommittee that 5,000 BOPD was the most accurate estimate. He explained that the “worst case”

[757 F.3d 238]

scenario was 60,000 BOPD, but that this scenario was not possible in part because it assumed removal of the blowout preventer from the wellhead. Rainey did not disclose his own Bonn estimates and other BP internal estimates indicating that the flow rate was higher than 5,000 BOPD.

Subsequently, the Subcommittee Chairman sent BP a letter accusing it of understating the flow rate and requested that BP respond to fifteen questions relating to its flow-rate calculations. Among other requests, the Subcommittee requested that BP explain what methodology supported its 5,000 BOPD estimate, that BP produce all of its documents that relate to its flow-rate estimates, and that BP provide its current estimate of the flow rate and its methodology supporting that estimate. Rainey was the primary source of flow-rate information for BP's response to the Subcommittee. Rainey was aware that everyone within the Flow Rate Technical Group agreed that 5,000 BOPD was too low, but he did not disclose this disagreement to BP's lawyers and other BP employees. Indeed, BP's response omitted key information which would have undercut its 5,000 BOPD estimate. The response did not include, among other things, Rainey's Bonn estimates that ranged up to 92,000 BOPD, key parts of the supervising engineer's estimates ranging up to 82,000 BOPD, the supervising engineer's email indicating concern with BP's 5,000 BOPD estimate, and the subsurface engineers' estimates ranging up to 146,000 BOPD. BP's response also appended Rainey's prior memorandum defending the 5,000 BOPD estimate.

B.

A federal grand jury indicted Rainey for one count of obstructing Congress in violation of 18 U.S.C. § 1505, and one count of making false statements in violation of 18 U.S.C. § 1001. Rainey moved to dismiss the obstruction count (count one) on four separate grounds. First, Rainey argued that § 1505 applies only to a duly authorized inquiry or investigation by a committee and that the Subcommittee Chairman was acting in his individual capacity rather than on behalf of a duly authorized committee investigation when he sent the relevant questionnaire to BP. Second, Rainey argued that the indictment failed properly to allege that he knew of the pending congressional investigation, which is an essential element of § 1505. Third, Rainey argued that § 1505 does not apply to the obstruction of subcommittee investigations. Fourth, Rainey argued that § 1505 was unconstitutionally vague.

On May 20, 2013, the district court dismissed the obstruction count on two alternative grounds. First, the district court determined that § 1505 did not apply to subcommittee investigations and, second, the district court ruled that the indictment did not allege that Rainey knew of the Subcommittee's investigation. On June 19, 2013, the Government moved the district court to reconsider its ruling. That same day a federal grand jury returned a superseding indictment. The district court subsequently denied reconsideration on June 21, 2013, and on July 19, 2013, the Government filed its notice of appeal.

II.

Three issues postpone our discussion of § 1505, as neither party thinks we should decide this appeal. Rainey moves to dismiss the Government's interlocutory appeal as untimely and, alternatively, as moot. The Government, for its part, requests that we hold the appeal in abeyance pending the district court's ruling on the superseding indictment. We deny all three motions.

[757 F.3d 239]

A.

In a criminal case, an affirmative appeal by the Government “shall be taken within thirty days after the decision, judgment or order has been rendered.” 18 U.S.C. § 3731. The district court dismissed count one on May 20, 2013, but on the thirtieth day after the dismissal, the Government moved the district court to reconsider its ruling. The Government filed its notice of appeal within thirty days after the district court denied its motion to reconsider, but sixty days after the initial dismissal. Rainey argues...