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United States v. Apex Oil Co.

Citation: 28 ELR 20462
No. 96-30342, 132 F.3d 1287/(9th Cir., 12/29/1997)

The court holds that a regulation barring the discharge of cargorelated oil residue (CROR) is ambiguous and, therefore, dismisses an indictment against an oil company for the discharge ofmuck produced by ship cleaning. Under the Act to Prevent Pollution from Ships, 33 C.F.R. § 151.10(c) prohibits the discharge of CROR from oil tankers. The court first holds that the oil company could not have fairly been on notice that the muck they discharged would be considered oil. The muck picked up by scraping ships' hulls is not refined petroleum or a useful petroleum product, and it can be regarded as simply discard waste and not as an oil residue. The government's interpretation of oil to include muck is not shown to be wrong, but a different interpretation of petroleum and of oil is equally plausible. The court next holds that the word residue is itself ambiguous and does not, as the government suggests, cure the ambiguity in the meaning of oil. The government argues that but for the original oil there would not be CROR, but it is not clear what CROR comprises—a remainder of the original oil or what is left when the original oil is removed leaving a waste that is no longer oil in any form. The court next holds that 33 C.F.R. § 151.10(c)'s definition of CROR deepens the regulation's ambiguity. The regulation's definition includes all oil residues mixed with oil cargo residues. The regulation is silent as to the distinction between an oil residue, an oil cargo residue, and CROR. The court then holds that the legislative history of the Act to Prevent Pollution from Ships, the policy of the statute, and the structure of the regulations do not resolve the ambiguity. Last, the court holds that because the legislation is ambiguous, the rule of lenity requires dismissal of the indictment.

Counsel for Plaintiff
Robert B. Ross, Ass't U.S. Attorney
U.S. Attorney's Office
888 SW 5th Ave., Ste. 1000, Portland OR 97204
(503) 727-1000

Counsel for Defendants
Marcus S. Topel
Topel & Goodman
832 Sansome St., 4th Fl., San Francisco CA 94111
(415) 421-6140

Before Hawkins and Merhige Jr.,* JJ.