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United States v. General Motors Corp.

ELR Citation: 6 ELR 20248
Nos. No. H-74-314, 403 F. Supp. 1151/8 ERC 1707/(D. Conn., 01/20/1976)

A finding that the defendant was free from material negligence in the discharge of about 7,000 gallons of oil is not a defense to liability under the Federal Water Pollution Control Act Amendments of 1972 (FWPCA), 33 U.S.C. §1321(b)(6), ELR 41101, but it will support only the imposition of a nominal penalty of one dollar. On April 18, 1973, vandals opened the unlocked storage valves at defendant's closed manufacturing plant in Bristol, Connecticut, releasing 6,000 to 8,000 gallons of No. 6 fuel oil. After defendant notified state and federal agencies of the spill, under 33 U.S.C. §1321(b)(5), 10 days of recovery operations prevented all but about 25 gallons of oil from reaching the Pequabuck River. After an informal hearing, the Coast Guard notified the defendant that a $1,200 civil penalty under 33 U.S.C. §1321(b)(6) would be imposed.

Actions of a third party are no defense to civil penalties under 33 U.S.C. §1321(b)(6), even though such a defense may be against the cleanup costs of a discharger of hazardous substances, 33 U.S.C. §1321(f)(2), and against the monetary penalty in lieu of cleanup costs where the discharged substance is non-removable, 33 U.S.C. §1321(b)(2)(B)(ii)-(iv). The court need not reach the issue of whether the defendant is entitled to statutory immunity as a "person in charge" under 33 U.S.C. §1321(b)(5). See United States v. Mobil Oil Corp., 464 F.2d 1124, 2 ELR 20456 (5th Cir. 1972); Comment, Compelled Self-Disclosure and Civil Penalties: The Limits of Corporate Immunity in Oil Spill Cases, 55 B.U.L. Rev. 112 (1975).

As to defendant's assertion that the penalty is criminal in nature, it is true that no criminal penalties can be assessed in administrative proceedings, Kennedy v. Mendoza-Martinez, 372 U.S. 144 (1963). Congress may, however, provide for the imposition of civil administrative fines. Helvering v. Mitchell, 303 U.S. 391 (1938). In determining whether the penalty provided in 33 U.S.C. §1321(b)(6) is penal or regulatory, the court distinguishes United States v. LeBoeuf Bros. Towing Co., 337 F. Supp. 558 (E.D. La. 1974), which found criminal a fine under its predecessor provision. This court is of the view that Congress may impose both a reporting requirement and a civil penalty for an environmentally-harmful act, and that the Fifth Amendment privilege against self-incrimination does not apply to corporations. George Campbell Painting Corp. v. Reid, 392 U.S. 286 (1968). In addition, LeBoeuf neglects to analyze decisions upholding notification requirements in other regulatory schemes. See California v. Byers, 402 U.S. 424 (1971). Furthermore, the loose reading given the immunity statute by the LeBoeuf court conflicts with the traditionally strict construction of such provisions. See Heike v. United States, 227 U.S. 131 (1913). It is also clear that Congress did not require the criminal immunity provisions to apply to the civil penalty portion of the FWPCA.

Under the seven-part Mendoza-Martinez test, the penalty of 33 U.S.C. §1321(b)(6) cannot be said to be criminal. (1) No affirmative disability or restraint is created, such as denial of federal employment. United States v. Lovett, 328 U.S. 303 (1946). (2) Money penalties here serve a remedial rather than a punitive function. Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 518 F.2d 990 (5th Cir. 1975). (3) The statute has no scienter requirement, unlike its predecessor construed in LeBeouf, 33 U.S.C. §1161(b)(5) (1970). (4) The traditional aims of punishment, retribution, and deterrence are served by civil penalties to the extent that prevention is more economical than carelessness. The government may assess monetary penalties, within constitutional limits, to control those matters within the competence of the federal government. Atlas Roofing, supra. (5) While it is true that the behavior to which the civil penalty applies is already a crime under the Refuse Act, 33 U.S.C. §§407, 411, ELR 41141, this factor in isolation leaves ambiguous the nature of §1321(b)(6). (6) The alternative purpose of punishment does not displace the penalty's primary rationale of eliminating oil spills. (7) The sanction is not excessive since it varies according to the gravity of the violation.

Since this is a de novo review, the court can consider whether the administratively-imposed sanction conforms to the facts brought out at trial, Cross v. United States, 512 F.2d 1212 (4th Cir. 1975), irrespective to the parties' stipulation to the facts. In fixing the penalty, and in view of the size of defendant, consideration need not be given to the first two of the three statutory factors, which are size of the business, effect on the business's ability to continue, and gravity of the violation, since they are concerned with driving small enterprises out of business through inordinate fines. Coast Guard policy on the gravity of the violation lists the factors of degree of culpability, prior record of the responsible party and the amount of oil discharged. The only possible negligence of defendant was in leaving the valves unlocked, which at the time did not violate any regulatory standard of due care. Also, the amount of oil was not so great as to prevent its being removed from the environment in a short time. Applying these factors, the court will assess only nominal damages of one dollar against the defendant.

The full text of this opinion is available from ELR (14 pp. $1.75, ELR Order No. C-1024).

Counsel for Plaintiff
Henry S. Cohn, Assistant U.S. Attorney
U.S. Courthouse
Hartford CT 06101
(203) 244-2570

Counsel for Defendant
Ralph Dixon
Robert P. Knickerbocker Jr.
Day, Berry & Howard
12th Floor, 1 Constitution Plaza
Hartford CT 06103
(203) 278-1330

Clarie, C.J.