United States v. Allied Towing Corporation

No. 77-1403 (4th Cir. July 12, 1978)

Affirming the lower court, the Fourth Circuit Court of Appeals holds that a corporation which reports oil spills to the Coast Guard pursuant to § 311(b)(5) of the Federal Water Pollution Control Act is not entitled to the Fifth Amendment privilege against self-incrimination in a subsequent prosecution for the same oil spills under § 311(b)(6). The court rejects the corporation's argument that the penalties are criminal in nature and protected under the use-immunity provision of § 311(b)(5). The court agrees with the conclusion reached by other courts that the penalty is civil in nature, and the statutory immunity therefore does not apply.

Counsel for Appellant
Robert L. O'Donnell, Morton H. Clark
Vandevanter, Black, Meredith & Martin
2050 Virginia Nat'l Bank Bldg., 1 Commercial Plaza Norfolk VA 23510
(804) 622-3281

Counsel for Appellee
Harland F. Leathers; Barbara Allen Babcock, Ass't Attorney General; Morton Hollander, Chief, Appellate Section
Civil Division
Department of Justice, Washington DC 20530
(202) 739-3301

William B. Cummings, U.S. Attorney
117 S. Washington St., Alexandria VA 22314
(703) 557-9100

[8 ELR 20673]

Per curiam:

Allied Towing Corporation appeals from a judgment entered against it by the district court in the amount of $12,500.00 covering 14 separate civil penalties assessed by the Coast Guard pursuant to provisions of the Federal Water Pollution Control Act, 33 U.S.C. § 1321(b)(6).¹ The penalties were assessed against [8 ELR 20674] Allied because of spills of petroleum products which occurred between May 1, 1974 and May 9, 1975. In each case notice of the spill was given to the Coast Guard either by Allied or at its direction as required by 33 U.S.C. § 1321(b)(5) which provides:

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 or a hazardous substance from such vessel or facility . . . 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.

Allied admits the factual allegation of each spill, but contends that the penalties assessed against it were criminal in nature and under the use immunity provision of § 1321(b)(5) the information provided by its notification compliance was improperly used by the government as the basis of its complaint. Allied further contends that the use of such information was violative of its rights under the Fifth and Fourteenth Amendments to the Constitution.

Allied's constitutional argument is patently without merit since a corporation is not entitled to the Fifth Amendment privilege against self-incrimination, California Bankers Ass'n v. Shultz, Secretary of the Treasury, et al., 416 U.S. 21 (1974), and accordingly, the scope of use immunity under § 1321(b)(5) is solely a matter of statutory construction. On this point, in United States v. LeBeouf Bros. Towing Co., Inc., 537 F.2d 149 [6 ELR 20708] (1976), the Fifth Circuit rejected an argument similar to that of Allied, stating:

The immunity provision, by its terms, extends only to "criminal" cases, while Congress in the very next paragraph expressly labeled the sanction in 33 U.S.C. § 1161(b)(5) about which Le Beouf complains a "civil penalty." Only the most compelling demonstration of a contrary legislative intent would persuade us to ignore the plain words of the statute. The wording is unequivocal; by it Congress cannot have intended to extend immunity to civil cases, regardless of their "nature."

Id. at 152 [6 ELR 20708, 20709]. A like conclusion has been reached by the district courts who have had occasion to consider the question. Tug Ocean Prince, Inc. v. United States, 436 F. Supp. 907, 924 (S.D.N.Y. 1977); United States v. General Motors Corporation, 403 F. Supp. 1151, 1157-1163 [6 ELR 20248] (D. Conn. 1975); United States v. Eureka Pipeline Company, 401 F. Supp. 934, 937-941 [6 ELR 20088] (N.D. W. Va. 1975).

We agree with the conclusion reached in these cases that the penalty is "civil" in nature and, accordingly, the statutory immunity does not apply. The judgment of the district court is affirmed.

AFFIRMED.

1. 33 U.S.C. § 1321(b)(6) reads in pertinent part as follows:

Any owner, operator, or person in charge of any onshore facility or offshore facility from which oil or a hazardous substance is discharged . . . shall be assessed a civil penalty by the Secretary of the department in which the Coast Guard is operating of not more than $5,000 for each offense. Any owner, operator, or person in charge of any vessel from which oil or a hazardous substance is discharged . . . shall be assessed a civil penalty by the Secretary of the department in which the Coast Guard is operating of not more than $5,000 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.

[8 ELR 20674]

Widener, J. concurs:

I join in the opinion of the court, but emphasize that different considerations might well arise in the application of 33 U.S.C. §§ 1321(b)(5) and (b)(6) to an individual as contrasted to a corporation.