Judicial Aids to Navigation: Charting the Boundaries of … · 2015. 10. 2. · 11 LINSIN AND GLASNER (DO NOT DELETE) 10/1/2015 4:41 PM 156 U.S.F. MARITIME LAW JOURNAL [Vol. 27 No

11 LINSIN AND GLASNER (DO NOT DELETE) 10/1/2015 4:41 PM

Judicial Aids to Navigation: Charting the Boundaries of Environmental Criminal Enforcement in the Maritime Sector

GREGORY F. LINSIN & ARIEL S. GLASNER*

I.INTRODUCTION ........................................................................................ 154 II. THE ACT TO PREVENT POLLUTION FROM SHIPS .................................. 155 III. THE COAST GUARD’S AUTHORITY UNDER APPS TO IMPOSE

CONDITIONS FOR RELEASE OR RE-ENTRY OF A VESSEL ................ 156 A. Watervale Marine Co., Ltd. v. United States Department of

Homeland Security .................................................................. 157 1. Procedural Background...................................................... 158 2. The District Court’s Decision ............................................ 161

i.Justiciability Under the APA ........................................... 161 ii. The Court’s Analysis of § 1908(e) ............................... 164

3. The Effect of the Court’s Holding in Watervale Marine ... 166 B. Angelex Ltd. v. United States .................................................. 166

1. Procedural Background...................................................... 166 2. The Fourth Circuit’s Decision ........................................... 168

i.Jurisdiction Under the APA ............................................. 169 ii. Admiralty Jurisdiction ................................................. 170

3. The Significance of the Courts’ Holdings in Angelex

and Watervale Marine ....................................................... 171 C. Wilmina Shipping AS v. United States Department of

Homeland Security .................................................................. 171 1. Procedural Background...................................................... 172 2. The District Court’s Decision ............................................ 174

i. The Applicable Statutory Framework .......................... 174

* Gregory F. Linsin is a partner at Blank Rome LLP. Mr. Linsin concentrates his practice in the

areas of white collar criminal law and environmental criminal litigation involving shore-based

and maritime clients, environmental compliance, and internal corporate compliance

investigations. Prior to joining Blank Rome LLP, Mr. Linsin served for more than 25 years with

the United States Department of Justice, including as Special Litigation Counsel for the

Environmental Crimes Section. In the interests of disclosure, Mr. Linsin represented a number of

the defendants in certain cases that are discussed in this article, including Sanford, Ltd., Efploia

Shipping Co., Fleet Management Ltd., and Cardiff Marine Inc.

Ariel S. Glasner is an associate at Blank Rome LLP. Mr. Glasner concentrates his practice in

the areas of white collar criminal law and government investigations.


154 U.S.F. MARITIME LAW JOURNAL [Vol. 27 No. 2

ii. Judge Jackson’s Analysis of the Applicable

Statutory Framework ................................................... 176 3. The Effect of the Court’s Holding in Wilmina Shipping ... 178

IV. CRIMINAL LIABILITY WITH RESPECT TO SPECIFIC MARITIME

ENFORCEMENT ACTIONS: UNITED STATES V. KALUZA ..................... 179 A. Individual Employees Charged with Violations of

Seamans’ Manslaughter Statute ............................................... 181 B. Dismissal of Ship Officers’ Manslaughter Charges ................ 182 C. The Court’s Reasoning in Kaluza ............................................ 183 D. The Significance of the Court’s Dismissal of 11 Counts in

Kaluza ...................................................................................... 185 V. LIMITATIONS ON THE AMOUNT OF CRIMINAL PENALTIES AND

STANDARDS FOR WHISTLEBLOWER AWARDS ................................ 185 A. The Application of the Alternative Fines Act and Civil

Forfeiture Proceedings: United States v. Sanford Ltd. ............ 186 1. The Alternative Fines Act .................................................. 186

i. The Meaning of “Gross Gain” and “Derived From” ... 188 ii. The Meaning of “Undue Complication” ...................... 189

2. Civil Forfeiture Proceedings .............................................. 191 3. The Significance of the Court’s Holdings in Sanford ........ 192

B. Equitable Factors Considered in the Granting of Awards to

Whistleblowers ........................................................................ 192 VI. CONCLUSION ....................................................................................... 195

I. INTRODUCTION

Recent decisions in several federal district and appellate courts have

addressed and resolved a number of key issues regarding the procedural

and substantive scope of the government’s environmental criminal

enforcement authority concerning maritime operations in the United States.

Some of the decisions resolve issues that have been the subject of

numerous prior judicial challenges; and some address questions of first

impression that will likely help to guide future enforcement actions under

the relevant maritime statutes. Taken together, these judicial opinions

establish boundaries that the U.S. Coast Guard, federal prosecutors, and

maritime practitioners, as well as commercial vessel owners and operators,

should understand.

This article provides a comprehensive review of these court decisions

that have affected a broad sweep of issues related to the environmental


2014-2015] JUDICIAL AIDS TO NAVIGATION 155

criminal maritime enforcement program, including the standards that apply

to the Coast Guard’s shipboard investigation of potential environmental

criminal violations, the applicability of the 176 year old Seaman’s

Manslaughter Statute to the operation of offshore drill ships, the potential

amount of a criminal penalty for violations of the marine environmental

statutes, and the standards that should guide judicial awards to

whistleblowers. As discussed below, opinions have been issued in three

cases, Watervale Marine Co., Ltd. v. United States Department of

Homeland Security,1 Angelex Ltd. v. United States,2 and Wilmina Shipping

AS v. United States Department of Homeland Security.3 These opinions

have clarified the extent of the U.S. Coast Guard’s authority to detain

vessels and crew members and to bar foreign-flagged vessels from entering

the navigable waters of the United States during the pendency of or

immediately following a preliminary shipboard investigation of potential

environmental offenses. An opinion issued in United States v. Kaluza4 has

clarified the standards that govern individual criminal liability for deaths

resulting from maritime casualties. A memorandum opinion issued in

United States v. Sanford Ltd5 defined limitations on the criminal penalties

that the government may seek to impose against organizational defendants

convicted of violating environmental maritime laws or regulations. Finally,

a number of cases have addressed the standards that should govern judicial

awards to individual whistleblowers in criminal maritime enforcement

actions.

II. THE ACT TO PREVENT POLLUTION FROM SHIPS

The most significant federal law that provides criminal penalties for

environmental violations in the maritime sector is the Act to Prevent

Pollution from Ships (“APPS”).6 Congress enacted APPS to implement

two international marine pollution treaties, the 1973 International

1. Watervale Marine Co., Ltd. v. United States Department of Homeland Security, Civil

Action No. 12-cv-0105, 2014 WL 3563159 (D.D.C. July 18, 2014).

2. Angelex Ltd. v. United States, 723 F.3d 500 (4th Cir. 2013).

3. Wilmina Shipping AS v. United States Department of Homeland Security, 934

F.Supp.2d 1 (D.D.C. 2013).

4. United States v. Kaluza, Criminal Action No. 12-265, 2013 WL 6490341 (E.D. La.

Dec. 10, 2013).

5. United States v. Sanford Ltd., No. 11-352 (D.D.C. 2012).

6. Act to Prevent Pollution from Ships of 1980, 33 U.S.C. §§ 1901-1915 (2012).

https://a.next.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000546&cite=33USCAS1901&originatingDoc=I81e84e92b40b11e08b05fdf15589d8e8&refType=LQ&originationContext=document&transitionType=DocumentItem&contextData=(sc.Search)



Convention for the Prevention of Pollution from Ships7 and the Protocol of

1978 Relating to the International Convention for the Prevention of

Pollution from Ships.8 Together, these treaties are known as “MARPOL,”

to which there are over 150 signatories, including the United States.9

Because MARPOL is not self-executing, each signatory must enact

domestic legislation implementing MARPOL’s provisions.10 Under APPS,

a person who “knowingly violates the MARPOL Protocol . . . [APPS], or

the regulations issued thereunder” is guilty of a felony.11 The United States

Coast Guard has promulgated regulations to implement APPS.12

III. THE COAST GUARD’S AUTHORITY UNDER APPS TO IMPOSE

CONDITIONS FOR RELEASE OR RE-ENTRY OF A VESSEL

The courts’ decisions in Watervale Marine13 and Angelex14 addressed

the scope of the Coast Guard’s authority to impose conditions for granting

departure clearance to a foreign-flagged vessel following a shipboard

7. Nov. 2, 1973, 1340 U.N.T.S. 184.

8. Feb. 17, 1978, 94 Stat. 2297, 1340 U.N.T.S. 61.

9. United States v. Sanford, 880 F.Supp.2d 9, 11 (D.D.C. 2012).

10. Id. at 11–12. See also International Convention for the Prevention of Pollution from

Ships, Nov. 2, 1973, 1340 U.N.T.S. 184, and Protocol of 1978 relations to the International

Convention for the Prevention of Pollution from Ships [collectively MARPOL] art. 1(1), Feb. 17,

1978, 1340 U.N.T.S. 63. There are six annexes to MARPOL. Annex I concerns prevention of

pollution by oil from operational measures and accidental discharges. Annex II details the

discharge criteria and measures for the control of pollution by noxious liquid substances carried

in bulk. Both of these annexes entered into force on October 2, 1983. Annex III, which became

effective on July 1, 1992, contains general requirements for the prevention of pollution by

harmful substances carried by sea in packaged form. Annex IV entered into force on September

23, 2003, and concerns the requirements to control pollution of the sea by sewage from seas.

Annex V deals with different types of garbage from ships and specifies the distances from land

and the manner in which they may be disposed of. It first became effective on December 31,

1988. A revised Annex V was adopted in July 2011 and became effective on January 1, 2013.

Annex VI sets limits on air emissions pollution from ships. This annex first became effective on

May 19, 2005. A revised version became effective on January 1, 2013. See International

Convention for the Prevention of Pollution from Ships (MARPOL), INTERNATIONAL MARITIME

ORGANIZATION, http://www.imo.org/About/Conventions/ListOfConventions/Pages/International-

Convention-for-the-Prevention-of-Pollution-from-Ships-(MARPOL).aspx (last visited Jan. 19,

2015). The United States has not ratified Annex III or Annex IV of the Convention.

11. 33 U.S.C. § 1908(a) (2012).

12. See 33 C.F.R. pt. 151, subpart A (2015).


Action No. 12-cv-0105, 2014 WL 3563159 (D.D.C. July 18, 2014).

14. Angelex Ltd. v. United States, 723 F.3d 500 (4th Cir. 2013).

http://www.imo.org/About/Conventions/ListOfConventions/Pages/International-Convention-for-the-Prevention-of-Pollution-from-Ships-(MARPOL).aspx

http://www.imo.org/About/Conventions/ListOfConventions/Pages/International-Convention-for-the-Prevention-of-Pollution-from-Ships-(MARPOL).aspx



investigation that identified a probable violation of APPS. The court’s

decision in Wilmina Shipping AS15 addressed the related issue of the Coast

Guard’s authority to impose conditions for re-entry of a foreign-flagged

vessel into a U.S. port following an inspection that identified an APPS

violation onboard. Taken together, these decisions firmly establish that the

Coast Guard has broad, unreviewable discretion to establish both financial

and non-financial conditions for granting departure clearance for detained

foreign-flagged vessels suspected of APPS violations, and also to set

specific conditions for re-entry of foreign-flagged vessels into U.S. ports

following a determination that an APPS violation occurred onboard. The

court’s opinion in Watervale Marine is particularly significant in that it

applied case authority promulgated by the D.C. Circuit Court of Appeals,

generally considered the most authoritative appellate court to review

federal agency actions. Angelex is also significant as it represents the first

direct appellate opinion concerning the Coast Guard’s authority to detain

foreign-flagged vessels under 33 U.S.C. § 1908(e). Both Watervale

Marine and Angelex are certain to be considered carefully in any future

challenge to the scope of the Coast Guard’s authority in this area. We now

examine the courts’ holdings in each of these three cases in turn.

A. Watervale Marine Co., Ltd. v. United States Department of

Homeland Security

In Watervale Marine, the United States District Court for the District

of Columbia concluded that the Coast Guard has virtually unfettered

authority to determine the conditions that must be met by the vessel owner

or operator before granting departure clearance to a detained vessel

suspected of unlawful conduct. The specific issue raised in the case was

whether a district court has the ability, under the Administrative Procedure

Act (“APA”),16 to review the lawfulness of conditions imposed by the

Coast Guard under its APPS authority.

15. Wilmina Shipping AS v. United States Department of Homeland Security, 934

F.Supp.2d 1 (D.D.C. 2013).

16. Administrative Procedure Act, 5 U.S.C. §§ 701, et seq. (2012).



1. Procedural Background

The plaintiffs in this case owned and operated four vessels that were

docked in New Orleans, Louisiana and Mobile, Alabama17 when they

separately became the subject of whistleblower complaints alleging that the

vessels’ crews had falsified the vessels’ Oil Record Books (“ORBs”).18

Following shipboard investigations, the Coast Guard determined that it had

reasonable cause to believe that the crew members of each of the four

vessels had violated APPS. Based on those findings, the Coast Guard

requested U.S. Customs and Border Protection to withhold the vessels’

departure clearance from their respective ports pursuant to the Coast

Guard’s authority under 33 U.S.C. § 1908(e).19

Section 1908(e) of APPS provides that the Coast Guard is permitted to

grant clearance to a vessel that the agency has reasonable cause to believe

is subject to a fine or civil penalty under APPS in exchange for the “filing

of a bond or other surety satisfactory to the Secretary [of the Department of

Homeland Security].”20

If any ship subject to the MARPOL Protocol . . . or this chapter,

its owner, operator, or person in charge is liable for a fine or civil

penalty under this section, or if reasonable cause exists to believe

that the ship, its owner, operator, or person in charge may be

subject to a fine or civil penalty under this section, the Secretary

of the Treasury, upon the request of the Secretary [of the

Department of Homeland Security], shall refuse or revoke the

clearance required by section 60105 of title 46. Clearance may be

17. Plaintiffs Watervale Marine Co., Ltd. and Ilios Shipping Co., S.A. owned and operated

the M/V AGIOS EMILIANOS. Plaintiffs Achillea Navigation Corp. and Cleopatra Shipping

Agency Ltd. owned and operated the M/V STELLAR WIND. Plaintiffs Mercator Lines

(Singapore) Pte, Ltd. and Target Ship Management Pte, Ltd. owned and operated the M/V

GUAREV PREM. Lastly, plaintiffs Bulkers Holdings, Inc. and Odysea Carriers S.A. owned and

operated the M/V POLYNEOS. See Complaint at 3, Watervale Marine Co., Ltd. v. United States

Department of Homeland Security, Civil Action No. 12-cv-0105 (KBJ) (D.D.C. July 18, 2014),

ECF No. 1, 2012 WL 4889454 [hereinafter Watervale Marine Complaint].


Action No. 12-cv-0105, 2014 WL 3563159, at *3 (D.D.C. July 18, 2014).

19. Watervale Marine Complaint, supra note 17, at ¶¶ 16, 27, 37, 46.

20. 33 U.S.C. § 1908(e) (2012).



granted upon the filing of a bond or other surety satisfactory to

the Secretary.21

In accordance with this subsection, the vessel owners each entered

into negotiations with the Coast Guard while their respective vessels were

being detained in order to obtain clearance for their release. The Coast

Guard sought both the posting of a monetary bond and the execution of a

security agreement before agreeing to grant any of the vessels their

departure clearance.22 The security agreement, which was substantially

similar for each of the four vessels, imposed a number of non-financial

conditions, including requirements that specific crew members remain

within the jurisdiction while the Coast Guard’s APPS investigation was

pending, that the vessel owners, inter alia, pay wages, housing and

transportation costs for those crew members required to remain in the

jurisdiction, and that the vessel owners encourage the crew to cooperate

with the government’s criminal investigation.23

The vessel owners all obtained departure clearance for their respective

vessel by posting bond and by executing a security agreement with the

Coast Guard.24 After the vessels were released, the vessel owners and

operators initiated the Coast Guard’s administrative appeals process to

challenge the security agreements as a condition of release.25 All of the

vessel owners’ and operators’ requests for reconsideration of the security

agreement as a condition of release were denied at the first level of the

administrative appeals process.26 Following this denial, the vessel owners

and operators for the four vessels (collectively, the “plaintiffs”) filed a

complaint in federal court under the APA against the U.S. Department of

Homeland Security and the U.S. Coast Guard (collectively, the

“defendants”). The complaint asserted that the remaining steps of the four-

step administrative appeals process were futile and that therefore the

plaintiffs had exhausted the administrative appeals process.27 The

21. 33 U.S.C. § 1908(e) (2012).

22. Watervale Marine, Civil Action No. 12-cv-0105, 2014 WL 3563159, at *4.

23. Id.

24. Id.

25. Id. at *5.

26. Id. at *5.

27. See Watervale Marine Complaint, supra note 17, at ¶ 96. At the time the plaintiffs’

complaint was filed, the administrative appeal for the Agios Emilianos was pending before the



plaintiffs’ complaint further stated that the Coast Guard lacked the statutory

authority to require the plaintiffs to enter into security agreements in order

to obtain departure clearances for the vessels.28 As the basis for this

assertion, the plaintiffs alleged that “[i]n demanding the terms of the

Security Agreements, the Defendants purport to rely on the APPS,

specifically 33 U.S.C. § 1908(e)” but that this statute did not authorize the

“Coast Guard to demand anything more than the posting of a bond or other

financial surety in order to grant a vessel Customs clearance to depart the

United States.”29 Relying on the APA for their cause of action, the

plaintiffs’ complaint then asserted essentially that the Coast Guard’s

imposition of non-financial conditions under the security agreements

constituted conduct that was arbitrary and capricious, contrary to the

plaintiffs’ constitutional right and in excess of the Coast Guard’s statutory

authority.30

In response to the plaintiffs’ complaint, the defendants filed a motion

for summary judgment, arguing that the Coast Guard has complete

discretion under § 1908(e) to choose the type of “surety” that is required

for the release of a detained vessel, including the imposition of non-

financial conditions.31 The defendants further argued that the Court lacked

jurisdiction to consider the plaintiffs’ complaint on the grounds that the

determination as to the conditions for granting a vessel clearance under §

1908(e) was committed wholly to the agency’s discretion.32 The plaintiffs

then filed a cross-motion for summary judgment, noting that the “central

question that gives rise to this action” is “whether 33 U.S.C. § 1908(e)

limits the Coast Guard to conditioning the granting of Customs clearance to

a vessel detained pursuant to AAPS to the posting of a bond or other

financial surety.”33

Area Commander (the third step in the appellate process), and the appeals for the other three

vessels were pending before the District Commander (the second step in the appellate process).

See also id. at ¶¶ 81, 84, 87, 90.

28. See id. at ¶ 107.

29. Id. at ¶¶ 108, 109 (emphasis in original).

30. Id. at ¶¶ 112–114 (referring to 5 U.S.C. § 706).

31. See United States’ Memorandum in Support of its Motion for Summary Judgment at

21, Watervale Marine, Civil Action No. 12-cv-0105, 2014 WL 3563159 (No. 13-1).

32. Id. at 18–21.

33. See Plaintiffs’ Response in Opposition to the Defendants’ Motion for Summary

Judgment and Plaintiffs’ Cross-Motion for Summary Judgment at 4, n.3, Watervale Marine, Civil

Action No. 12-cv-0105, 2014 WL 3563159 (No. 16-1).



2. The District Court’s Decision

In a memorandum opinion filed on July 18, 2014, Judge Ketanji

Brown Jackson decided squarely in favor of the Coast Guard and granted

the defendants’ motion for summary judgment while denying the plaintiffs’

cross-motion for summary judgment.34 Judge Jackson held that 33 U.S.C.

§ 1908(e) “commits entirely to the agency’s discretion the matter of when

and under what circumstances the Coast Guard may grant departure

clearance to a vessel detained” under APPS and that therefore, “the Coast

Guard’s decision to require the challenged security agreements is

nonjusticiable.”35 The opinion concludes that the Coast Guard has

essentially unlimited discretion under § 1908(e) to determine the conditions

that must be met before the agency will grant departure clearance to a

detained vessel suspected of violating APPS.

i. Justiciability Under the APA

Judge Jackson explained that while it was clear that the Court

possessed subject matter jurisdiction over the dispute at issue,36 that was

not sufficient to make the matter “justiciable,” i.e., “capable of being

disposed of judicially.”37 The Court added that though there is a statutory

presumption in favor of judicial review of agency decisions under the APA,

the reviewability presumption is overcome under § 701(a)(2) if the

challenged agency action concerns a matter that is otherwise committed to

34. On September 19, 2014, the defendants filed a notice of appeal in the United States

Circuit Court of Appeals for the District of Columbia. The sole issue that the defendant-

appellants raised was whether the district court erred, as a matter of law, in concluding that

judicial review of the Coast Guard’s authority, interpretation and actions under 33 U.S.C. §

1908(e) is precluded. See Appellants’ Preliminary Statement of the Issue to be Raised on Appeal,

Watervale Marine Co. Ltd. v. U.S. Dep’t of Homeland Security, Case No. 14-5203 (D.C. Cir.

September 19, 2014) (No. 1513273). [Final briefs have been submitted by the parties; however,

no decision has been issued as of the date this article went to print.].


36. Judge Jackson determined that the Court had subject matter jurisdiction because the

dispute presented a federal question “regarding whether the Coast Guard has misinterpreted and

misapplied the statutory provision that authorizes the detention and release of vessels.” Id. at *6.

He also noted that the Court had jurisdiction because the prerequisites to the Court’s exercise of

subject matter jurisdiction under the APA were met: (1) final agency action had been taken

because the parties had entered into a security agreement and the ships were no longer detained at

port; and (2) the plaintiffs had exhausted their administrative remedies. Id. at *6, n.8.

37. Id. at *7.



agency discretion by law.38 Judge Jackson explained that the exception to

justiciability set forth under § 701(a)(2) is a “very narrow one,”39 and noted

that the Supreme Court has identified only two scenarios in which it

applies. The first scenario is where statutes “are drawn in such broad terms

that in a given case there is no law to apply” and the second scenario is

when the statute is drawn “so that a court would have no meaningful

standard against which to judge the agency’s exercise of discretion.”40

Asserting that the instant case presented an “issue of first

impression,”41 Judge Jackson noted that the only two other cases that

considered the justiciability of § 1908(e) as it related to the departure

clearance conditions that the Coast Guard imposed on vessels suspected of

APPS violations, Angelex and Giuseppe Bottiglieri Shipping Co. S.P.A. v.

United States42 were inapposite. The Court explained that those cases did

not consider the justiciability of § 1908(e) under the APA; rather, they

considered vessel owners’ emergency motions requesting that the “court

step into the shoes of Coast Guard officials and not only select the terms of

the ‘bond or other surety’ but also order the vessels’ release.”43 Judge

Jackson also differentiated Watervale Marine from the two prior cases by

noting that, under D.C. Circuit case authority, several additional factors

that were not evaluated in either Angelex or Giuseppe Bottiglieri must be

considered in determining whether a matter is justiciable or whether it has

been committed to agency discretion by law.44

Judge Jackson then summarized the legal framework set forth by the

D.C. Circuit for evaluating justiciability under § 701(a)(2) of the APA.

Under this framework, three general categories of factors are considered by

38. Id. (citing 5 U.S.C. § 701(a)(2)).

39. Id. (citing Hi-Tech Furnace Systs., Inc. v. FCC, 224 F.3d 781, 788 (D.C. Cir. 2000)).

40. Id. (citing Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 410 (1971) and

Heckler v. Chaney, 470 U.S. 821, 830 (1985)).

41. Id. at *1.

42. Giuseppe Bottiglieri Shipping Co. S.P.A. v. United States, 843 F.Supp.2d 1241 (S.D.

Ala. 2012).

43. Watervale Marine, Civil Action No. 12-cv-0105, 2014 WL 3563159, at *7. Put

another way, in Angelex and in Guiseppe Bottiglieri, the court was asked to “make a decision that

has been statutorily delegated to the Coast Guard (i.e., whether the vessels should be cleared and

under what circumstances).” Id. at *10. In Watervale Marine, the Court was asked to decide

“whether the Coast Guard acted within the scope of its statutory authority when the agency

determined that the vessels should be released subject to certain conditions.” Id.

44. Id. at *9.



a court in determining whether a matter is justiciable: “(1) ‘the nature of the

administrative action at issue’; (2) ‘the language and structure of the statute

that supplies the applicable legal standards for reviewing the action’; and

(3) Congress’s intent to commit the matter fully to agency discretion as

evidenced by, among other things, the statutory scheme.”45

With respect to this first category, Judge Jackson noted that the

“nature of the administrative action” refers to “certain categories of

administrative decisions” that are considered presumptively unreviewable,

such as when an agency refuses to take an enforcement action or when an

agency takes an action related to a sensitive matter of national security.46

With respect to the second set of factors, the language and structure of

the statute, Judge Jackson explained that this referred to the application of

the “canons of statutory construction to determine whether the statute

provides standards for the agency to apply and for the courts to review.”47

In this regard, only if there is no “judicially manageable standard” by

which to judge the agency’s action is meaningful judicial review

considered “impossible.”48

Lastly, Judge Jackson explained that the third category of factors in

determining whether a court considers a matter to have been committed to

agency discretion by law, whether the statutory scheme evidences

Congress’s intent to commit the matter totally to agency discretion,

requires an “evaluation of the language and structure of the statutory

section at issue” and “consideration of the function and purpose of the

statute as a whole.”49 Such an evaluation is accomplished through an

analysis of other portions of the statute, consideration of whether the statute

provides alternative avenues for the aggrieved party to obtain relief, and a

determination whether a “deferential attitude on the part of Congress”

45. Id. (citing Sierra Club v. Jackson, 648 F.3d 848, 855 (D.C. Cir. 2011); Sec’y of Labor

v. Twentymile Coal Co., 456 F.3d 151, 156 (D.C. Cir. 2006); Dickson v. Sec’y of Defense, 68

F.3d 1396, 1404 (D.C. Cir. 1995)).

46. Id.

47. Id. (referring to , 718 F.3d 974, 976–77 (D.C. Cir. 2013)).

48. Id. at *9 (quoting Steenholdt v. FAA, 314 F.3d 633, 638 (D.C. Cir. 2003)).

49. Id. at *10.



toward the agency’s decision making in this area permeates the “overall

structure” of the statute.50

ii.The Court’s Analysis of § 1908(e)

After summarizing this legal framework, Judge Jackson applied it to

an analysis of § 1908(e) of APPS. The Court first concluded that § 1908(e)

was not presumptively unreviewable under § 701(a)(2) of the APA,

reasoning that the Coast Guard’s decision with respect to the granting of

departure clearance was not sufficiently similar to other agency decisions

that had been held to be unreviewable “by nature,” such as a decision

whether or not to initiate an enforcement action.51

Judge Jackson then found that despite the fact that § 1908(e) was not

unreviewable “by nature,” the language and structure of § 1908(e) provided

no meaningful or judicially manageable standards for the Court to apply.52

In reaching this conclusion, Judge Jackson rejected the plaintiffs’ assertion

that the use of the disjunctive “or” in the phrase “bond or other surety”

required release conditions to be limited to “financial terms” and to only

“one such surety.”53 Rather, the Court explained, “by virtue of section

1908(e)’s use of the term ‘may’ in the statement ‘[c]learance may be

granted upon the filing of a bond or other surety satisfactory to the

Secretary[,]’ the statute evidences no congressional intent to require the

agency to release the vessel even if a satisfactory ‘bond or other surety’ is

posted.”54 Because of this use of the word “may” in § 1908(e), Judge

Jackson held that under the text of the statute, Congress provided the Coast

Guard with the discretion to determine both what “bond or other surety”

would be sufficient to impose as a condition of departure clearance, and

whether or not to release the vessel under any conditions, financial or

otherwise.55 In this respect, Judge Jackson viewed the bond or other surety

as a “necessary but not sufficient prerequisite for departure clearance” and

held accordingly that the statute provides “no standards for a court to use to

50. Id. (referring to Twentymile Coal, 456 F.3d at 158–59; Marshall Cnty. Health Care

Auth. v. Shalala, 988 F.2d 1221, 1224 (D.C. Cir. 1993); Inv. Co. Inst. v. FDIC, 728 F.2d 518, 526

(D.C. Cir. 1984)).

51. Id. at *11.

52. Id. at *11–13.

53. Id. at *12.

54. Id. at *13 (emphasis in original).

55. Id.



determine whether the agency has improperly continued to withhold

clearance even after the ‘bond or other surety’ condition is satisfied.”56

Lastly, Judge Jackson considered the third and final set of factors set

forth under the D.C. Circuit’s applicable legal framework for determining

justiciability. The Court concluded that the overall structure of APPS

weighed in favor of his finding that § 1908(e) was non-justiciable.57 Judge

Jackson reasoned, first, that the fact that APPS authorizes the Coast Guard

to use its discretion to “engage in a variety of measures” to enforce against

MARPOL violations “demonstrates Congress’s recognition of the Coast

Guard’s particular expertise when it comes to investigating and prosecuting

such violations.”58 Judge Jackson further explained that § 1904 of APPS

provides an “alternative avenue for relief for unwarranted detention of a

vessel” because it allows a cause of action for compensation due to a

vessel’s unreasonable detention.59 The Court considered this to be further

evidence that Congress did not intend for there to be judicial review of the

Coast Guard’s decision to withhold departure clearance under the APA.60

Lastly, Judge Jackson noted that in contrast to the very specific regulations

governing Customs’ exercise of its own departure clearance authority, the

absence of standards governing the Coast Guard’s decision to grant the

release of a vessel underscored that “Congress intended to commit fully to

the Coast Guard the matter of whether and under what circumstances

Plaintiffs’ vessels must have been released.”61

56. Id. Judge Jackson further noted that the word “may” in a statute does not, in and of

itself, mean that the matter is committed to agency discretion by law, but that the use of the word

“may” in the instant case resulted in this conclusion because there was “absolutely” no other

guidance offered as to how the Coast Guard should exercise the discretion that the word “may”

afforded it. Id. (referring to Robbins v. Reagan, 780 F.2d 37, 45 (D.C. Cir. 1985)).

57. Id. at *13–14.

58. Id. at *13 (referring to 33 U.S.C. §§ 1903 (granting discretion to the Secretary to

“administer and enforce” MARPOL), 1904(a) (granting the Coast Guard the discretion to

designate persons who may issue required certificates under MARPOL), and 1907(a) (providing

that the Coast Guard “shall use all appropriate and practical measures” to detect environmental

law violations and “shall establish adequate procedures” to investigate them)).

59. Id. at *13. Section 1904(h) provides as follows: “A ship unreasonably detained or

delayed by the Secretary acting under the authority of this chapter is entitled to compensation for

any loss or damage suffered thereby.” 33 U.S.C. § 1904(h) (2012).


61. Id. at *14. While Judge Jackson concluded that the Coast Guard’s decision to grant

departure clearance under § 1908(e) was not justiciable, he noted that his holding did not preclude

a court from considering “constitutional” challenges to the Coast Guard’s departure clearance



3. The Effect of the Court’s Holding in Watervale Marine

Watervale Marine holds unambiguously that the Coast Guard has

unfettered discretion to deny departure clearance or to determine the

conditions under which it will grant departure clearance to detained vessels

suspected of APPS violations under 33 U.S.C. § 1908(e). The Court’s

decision in this case is particularly significant because of the fact that it was

brought as a cause of action under the APA rather than as an appeal from

the denial of an emergency petition for a vessel’s release, and also because

Judge Jackson’s decision is premised on the application of D.C. Circuit

case authority, which is considered persuasive authority with respect to

judicial review of federal agency actions. For these reasons, Watervale

Marine is likely to be given deference by other district courts in any future

challenges to the Coast Guard’s authority under 33 U.S.C. § 1908(e).

B. Angelex Ltd. v. United States

As in Watervale Marine, the Fourth Circuit Court of Appeals in

Angelex concluded that the district court lacked the authority to review the

Coast Guard’s decision with respect to the granting of departure clearance

to a vessel suspected of unlawful conduct. However, as indicated above,

the circumstances under which the Angelex appeal arose and the

application of legal authority differed significantly from Watervale Marine.

In addition, Angelex involved a challenge only to the amount of the surety

or bond required by the Coast Guard rather than to the non-financial

conditions imposed under the terms of a security agreement. Nevertheless,

the Angelex decision constitutes strong additional authority for the

proposition that the Coast Guard’s exercise of its discretion to establish

conditions for granting departure clearance under 33 U.S.C. § 1908(e) is

not judicially reviewable.


Angelex involved the government’s appeal from a district court order

granting petitioner-appellees’ emergency petition for relief. The petitioner-

appellees in Angelex included the ocean-going bulk cargo carrier, M/V

ANTONIS G. PAPPADAKIS (“Pappadakis”, or the “vessel”), and

demands, including constitutional due process claims that challenge unconscionable clearance

conditions. Id. at *17.



Angelex Ltd. (“Angelex”), the vessel owner.62 The government’s appeal to

the Fourth Circuit arose out of a routine Port State Control inspection of the

Pappadakis in April 2013 in Norfolk, VA. During the inspection, the Coast

Guard discovered that the Pappadakis crew had likely acted in

contravention of APPS by bypassing the vessel’s oily water separator and

discharging oily bilge water overboard without recording the discharge in

the vessel’s ORB.63 Immediately following the Coast Guard’s inspection,

the Coast Guard informed Angelex that, as a result of the agency’s

findings, the vessel’s clearance to depart Norfolk had been withheld.64

In accordance with § 1908(e), the Coast Guard and counsel for

Angelex attempted, but were unsuccessful, to negotiate a security

agreement.65 Subsequently, Angelex elected to file an emergency petition

in the Eastern District of Virginia seeking immediate release of the vessel

or the determination of an appropriate bond. Among other things, the

emergency petition specifically sought an order from the district court to

fix an amount of security for release of the Pappadakis that was less than

the $2.5 million bond that the Coast Guard had insisted upon.66

After holding a hearing to consider Angelex’s emergency petition, the

district court urged the parties to resolve their dispute without the court’s

intervention. The parties met and agreed to a $1.5 million bond, subject to

Coast Guard Headquarters’ approval, in exchange for the vessel’s

clearance; however, when the court reconvened, the government attorney

advised the court that in the interim, Coast Guard Headquarters had refused

to approve the $1.5 million amount.67

Following Coast Guard Headquarters’ rejection of the bond

agreement, the district court issued a memorandum opinion granting the

emergency petition.68 The court first found that it had subject matter

jurisdiction to review the Coast Guard’s actions both under the APA and

62. Angelex Ltd. v. United States, Civil No. 2:13cv237, at 2 (E.D. Va. May 8, 2013).

Angelex contracted with a third party, Kassian Maritime Navigation Agency, Ltd. (“Kassian”), to

serve as the vessel’s operator. See Angelex Ltd. v. United States, 723 F.3d 500, 503 (4th Cir.

2013).

63. See Angelex, 723 F.3d at 503.

64. Id.

65. Id.

66. Id.

67. Id. at 504.

68. Angelex, Civil No. 2:13cv237, at 2.



pursuant to the court’s “admiralty jurisdiction.”69 The district court then

held that the Coast Guard acted unconstitutionally and outside its statutory

authority by demanding excessive bond for clearance and by insisting that

any security agreement include certain non-monetary conditions.70

Accordingly, the court ordered Angelex to post a surety bond in the amount

of $1.5 million and established a number of other non-monetary bond

conditions for Angelex to satisfy in exchange for obtaining clearance for

the Pappadakis to depart Norfolk.71

The government immediately appealed the district court’s order to the

Fourth Circuit on the grounds that the district court was incorrect in finding

that it possessed subject matter jurisdiction to review the Coast Guard’s

actions.72

2. The Fourth Circuit’s Decision

The Fourth Circuit decided in favor of the Coast Guard’s appeal,

holding that the district court erred in granting Angelex’s emergency

69. Id. at 6.

70. Id. at 14.

71. Id. at 16.

72. On May 22, 2013, Angelex, Kassian and the vessel’s chief engineer were indicted on

multiple charges, including conspiracy to illegally discharge oily water into the sea, presentation

of a falsified ORB and obstruction of justice. See Indictment, United States v. Kassian, Case No.

2:13-cr-0070 (E.D. Va. 2013), ECF No. 12. Angelex and Kassian were ultimately acquitted of

the charges but the vessel’s chief engineer was convicted. See Kassian, Case No. 2:13-cr-0070,

ECF Nos. 94, 97. At trial the jury received the standard instruction regarding corporate liability,

i.e., that the jury could find the company vicariously liable for the action of its employees

provided that the employees were acting “within the scope” of their employment and “for the

intended benefit” of the employer. In Kassian, however, all of the witnesses testified that any

illegal conduct occurring on board the vessel was hidden from Angelex and Kassian and that it

was done without any intent to benefit either Angelex or Kassian. The defense also established

that such conduct was in violation of the vessel’s “zero tolerance” pollution prevention policies

and procedures, which included a prohibition against bypassing the vessel’s oily water separator.

See George M. Chalos & Brian P. Sparkman, A “Game Changer”: The Failed Prosecution of the

Owner & Manager of the M/V ANTONIS G. PAPPADAKIS, Chalos & Co., P.C., International

Law Firm (undated), available at http://www.shipping2014.com/postprogram

/Wednesday/Glen/George%20Chalos%20CMA%20legal%20panel%20paper%202014.pdf (last

visited on May 15, 2015). This testimony appears to explain why the chief engineer was

convicted but Angelex was acquitted. The outcome of this case suggests that vessel owners and

operators may be less likely to face criminal liability if they can demonstrate that the appropriate

policies and procedures were in place to prohibit unlawful conduct aboard the vessel and that

those procedures were implemented and enforced by the senior officers on the vessel and by

company’s shoreside managers.

http://www.shipping2014.com/postprogram/Wednesday/Glen/George%20Chalos%20CMA%20legal%20panel%20paper%202014.pdf

http://www.shipping2014.com/postprogram/Wednesday/Glen/George%20Chalos%20CMA%20legal%20panel%20paper%202014.pdf



petition because it lacked subject matter jurisdiction to review the Coast

Guard’s actions.73

i.Jurisdiction Under the APA

The Fourth Circuit first focused its attention on § 701(a)(2) of the

APA which, as discussed in detail above, proscribes judicial review when

the relevant statute provides that agency action is committed entirely to

agency discretion. The Court held that § 1908(e) qualified as such a

statute. In reaching this conclusion, the Court reasoned that § 1908(e)

grants the Coast Guard “broad discretion to deny bond altogether, and it

can dictate the terms of any bond that it may accept.”74 The Court added

that the language of § 1908(e) “does not provide any ‘judicially

manageable standards’ by which to review the Coast Guard’s actions.”75

According to the Fourth Circuit’s opinion, this is because the statute offers

no guidelines as to when clearance should be granted under APPS, and

because Congress did not establish any standards or parameters for the

form or amount that a bond or other surety should take.76

The Fourth Circuit further held that the district court erred in ruling

that it possessed subject matter jurisdiction under 5 U.S.C. § 706 of the

APA.77 This section authorizes federal courts to review agency actions for

an “abuse of discretion.”78 The Fourth Circuit concluded that § 706 did not

apply, reasoning that where a statute is drawn so that a court would have no

meaningful standard against which to judge the agency’s exercise of

discretion, § 701(a)(2) is controlling.79

73. Following the appellate court’s decision, Angelex filed a civil cause of action against

the United States in United States District Court for the District of Columbia seeking

compensation for the “unreasonable detention” of the PAPPADAKIS. See Angelex Ltd. v. United

States, Civil Action No. 1:15-cv-00056-RC (D.D.C. Jan. 14, 2015). The case is presently

pending a decision on the government’s motion to dismiss Angelex’s complaint. See id. (No. 6).

74. Angelex, 723 F.3d at 507.

75. Id.

76. Id.

77. Id.

78. 5 U.S.C. § 706(2)(A) (2012).

79. Angelex, 723 F.3d at 507.



ii. Admiralty Jurisdiction

After clarifying that the district court lacked subject matter jurisdiction

to review the Coast Guard’s bond decision for the Pappadakis under the

APA, the Fourth Circuit also reversed the district court’s holding that it was

entitled to review the Coast Guard’s actions pursuant to the district court’s

in rem admiralty jurisdiction. Section 1333(1) to Title 28 of the United

States Code confers district courts with jurisdiction over “[a]ny civil case

of admiralty or maritime jurisdiction.”80 Among other things, such

admiralty jurisdiction applies to actions in rem.81 The district court

concluded that the Coast Guard’s withholding of departure clearance for

the Pappadakis without an agreement on the amount of the bond was

tantamount to “an arrest” of the vessel in rem and that the court accordingly

had authority to review the Coast Guard’s actions under its admiralty

jurisdiction.82

The Fourth Circuit flatly disagreed with the district court’s conclusion.

In its memorandum opinion, the Fourth Circuit held that the Coast Guard’s

withholding of the Pappadakis’s departure clearance was not tantamount to

an attachment pursuant to a civil action, such as a maritime lien that is

given to a creditor by law as security for a debt or claim.83 On the contrary,

the Court reasoned, the Coast Guard was properly withholding the

departure clearance pursuant to its authority under § 1908(e).84

The Fourth Circuit also noted that Angelex mischaracterized the

surety bond as “stand[ing] in place of the Vessel for the potential criminal

fine or civil penalty imposed.”85 The Court held that the purpose of the

surety bond was to act as consideration for the United States’ agreement

not to cause the arrest of the vessel; it was not intended to stand in place of

the vessel for the potential fine imposed.86 The Court also rejected

Angelex’s legal argument that the Coast Guard’s withholding of clearance

was equivalent to an “arrest” that was done to provide the government

80. 28 U.S.C. § 1333(1) (2012).

81. See Supplemental Rules for Certain Admiralty and Maritime Claims, FED. R. CIV. P.,

Rule E(1).

82. Angelex, Civil No. 2:13cv237, at 11.

83. Angelex, 723 F.3d at 509.

84. Id.

85. Id.

86. Id. at 509–10.



“with the ability to obtain financial security for a potential fine or

penalty.”87 The Court explained that, on the contrary, the withholding of

clearance for the Pappadakis was not an offense to the ship itself, but was a

discretionary action on the part of the Coast Guard under APPS.88

3. The Significance of the Courts’ Holdings in Angelex and

Watervale Marine

The Fourth Circuit’s ruling in Angelex is the first appellate court

review of a challenge to the Coast Guard’s authority under 33 U.S.C. §

1908(e), and the panel’s decision holds emphatically that the agency has

broad discretion to establish the bond conditions for granting departure

clearance to a vessel detained for suspected APPS violations. Taken

together, the decisions in Angelex and Watervale Marine demonstrate that,

regardless of the procedural posture, future challenges to the Coast Guard’s

exercise of its discretion under § 1908(e) are likely to be viewed with

skepticism by the courts, and the agency’s decision regarding the

conditions required for departure clearance will be accorded substantial

deference, unless they rise to the level of unconscionable actions giving

rise to a constitutional due process claim.89

C. Wilmina Shipping AS v. United States Department of Homeland

Security

In contrast to the courts’ holdings in Watervale Marine and Angelex,

in Wilmina Shipping the Court offered a more restrained view of the Coast

87. Id. at 510.

88. Id. at 507–08. In addition to ruling that the district court lacked subject matter

jurisdiction to review the Coast Guard’s bond decision, the Fourth Circuit weighed in on the

merits of the arguments that the petitioner-appellees made before the district court. Specifically,

the Court rejected petitioner-appellees’ arguments that the higher bond amount insisted upon by

the Coast Guard violated the Coast Guard’s statutory authority under § 1908(e) as well as

Angelex’s constitutional due process rights. Id. at 508. With respect to the Coast Guard’s

statutory authority, the Court opined that the bounds of § 1908(e) are “quite limitless.” Id.

Accordingly, the Coast Guard “may demand a low bond, a high bond, or may refuse to grant

clearance altogether.” Id. Moreover, if the Coast Guard requests that clearance be refused or

revoked, under § 1908(e), “it is mandatory that such action occur.” Id. Finally, as to Angelex’s

claim that the Coast Guard’s actions were unconstitutional, the Fourth Circuit dismissed this

claim as a poorly concealed attempt to have the court engage in a direct review of the specific

bond conditions sought by the Coast Guard in order to allow the Pappadakis to depart the port.

Id.




Guard’s enforcement authority stemming from the agency’s APPS-related

investigations of foreign-flagged vessels docked in U.S. ports.

Nevertheless, like Watervale Marine and Angelex, the Court’s opinion in

Wilmina Shipping greatly clarified the Coast Guard’s ability to impose

significant conditions for re-entry on a vessel suspected of violating APPS.

Specifically, the Court held that the Coast Guard has the authority to bar a

foreign-flagged vessel from U.S. waters where the agency has found

reasonable cause to believe that the vessel’s crew had committed APPS

violations. The Court clarified, though, that the Coast Guard must inform

the vessel owner or operator of the conditions that must be satisfied in

order for the vessel to restore its compliance certification and be permitted

to re-enter U.S. waters. The Court further held that the Coast Guard’s

authority to bar a foreign-flagged vessel from U.S. waters does not extend

to the exclusion of the vessel for a set period of time, without providing the

vessel’s owner or operator a path for reinstatement of its certificate of

compliance.90


Wilmina Shipping arose out of a Port State Control inspection by the

Coast Guard of the M/T Wilmina (“Wilmina”), a Norwegian-flagged

oceangoing tank vessel, in May 2010 while the vessel was docked at the

Port of Corpus Christi. During the inspection, the Coast Guard issued the

vessel a certificate of compliance, which stated that “the ship has been

examined and found to be in compliance with all applicable U.S. and

international marine safety and environmental protection standards.”91

Following a report from a former member of the Wilmina’s engine

department that the vessel’s crew had bypassed its pollution control

equipment and discharged oily bilge waste directly overboard, the Coast

Guard re-boarded the Wilmina later the same evening. During this

subsequent investigation, the Coast Guard found that the ship’s oily water

separator was inoperable, that the vessel had failed to maintain engine

room alarms to signal when there was a certain level of oil in the water to

90. See Wilmina Shipping, 934 F.Supp.2d 1 (D.D.C. 2013).

91. Id. at 3.



be discharged, and that the ship had failed to maintain proper records in its

ORB.92

Based upon the findings of its investigation, the Coast Guard issued a

Captain of the Port Order that revoked the Wilmina’s certificate of

compliance due to its “willful noncompliance with MARPOL and APPS.”93

“[U]nder the authority of 33 U.S.C. § 1228,” the order banned the Wilmina

from entering the port until after the ship had developed and implemented

an acceptable Environmental Compliance Plan (“ECP”) and completed one

year of successful audits under the vessel’s ECP or, in the alternative, until

after three years had passed. 94 The Coast Guard Office of Vessel

Activities subsequently issued an order extending the conditions of the ban

imposed under the Captain of the Port Order to exclude the Wilmina from

entering all U.S. ports and U.S. navigable waters.95 The vessel’s owner,

Wilmina Shipping AS (“Wilmina Shipping”), and its technical manager,

Wilhelmsen Marine Services AS (“Wilhelmsen”) (collectively, the

“plaintiffs”), sought to have the Coast Guard orders dismissed through the

Coast Guard’s administrative appeals process but were unsuccessful. The

plaintiffs then filed a complaint against the Coast Guard and the United

States Department of Homeland Security (collectively, the “defendants”) in

United States District Court for the District of Columbia, asserting that the

defendants lacked the statutory authority under the Port and Waterways

Safety Act (“PWSA”)96 to issue the orders.97 In response to the plaintiffs’

complaint, the defendants filed a motion for summary judgment to have the

complaint dismissed.98 The plaintiffs filed a cross-motion for summary

judgment requesting the Court to enjoin the Coast Guard from excluding

92. Id. at 4. Although evidence establishing reasonable cause to believe that a MARPOL

violation occurred often results in a criminal referral to the U.S. Department of Justice, no

criminal referral was made in this case for reasons that do not appear in the public record.

93. Id.

94. Id. at 2, 4.

95. Id. at 4–5.

96. Port and Waterways Safety Act, 33 U.S.C. §§ 1221, et seq. (2012).

97. See Complaint, Wilmina Shipping AS v. U.S. Dep’t. of Homeland Sec., Case No. 11-

2184 (D.D.C. December 9, 2011), ECF No. 1. The plaintiffs’ complaint further alleged that the

plaintiffs did not receive the due process required under the law when the Coast Guard revoked

the Wilmina’s certificate of compliance without a pre-deprivation hearing, and that the Coast

Guard’s findings following its investigation of the Wilmina were arbitrary and capricious and

improperly based upon information provided by an unreliable whistleblower.

98. See Motion for Summary Judgment, Wilmina Shipping, Case No. 11-2184 (D.D.C.

June 7, 2012), ECF No. 13.



the Wilmina from U.S. waters and from withholding the vessel’s certificate

of compliance.99

2. The District Court’s Decision

In a memorandum opinion, District Court Judge Amy Berman Jackson

denied in part and granted in part the defendants’ motion for summary

judgment and the plaintiffs’ cross-motion for summary judgment.100 Judge

Jackson specifically ruled that the Coast Guard was authorized to prohibit

the Wilmina from entering U.S. ports and navigable waters until it

developed and implemented an acceptable ECP and successfully completed

one year of audits; however, the Coast Guard’s authority did not extend to

the agency’s ban of the Wilmina for a period of time without providing a

path for reinstatement of its certificate of compliance.101

i. The Applicable Statutory Framework

The principal question that Judge Jackson considered was whether the

Coast Guard’s reliance on “the authority of 33 U.S.C. § 1228” in the

Captain of the Port Order authorized it to ban the Wilmina from entering

U.S. waters until it successfully implemented an ECP and completed one

year of audits or until a period of three years passed. Section 1228 of Title

33 to the United States Code is a provision of the PWSA that is titled

“Conditions for entry to ports in the United States.” Subsection (a) of §

1228 specifically states that “[n]o vessel, subject to the provisions of

chapter 37 of Title 46, shall operate” in U.S. waters if it meets any one of

99. See Plaintiffs’ Response in Opposition to the Defendants’ Motion for Summary

Judgment and Plaintiffs’ Cross-Motion for Summary Judgment in Wilmina Shipping, Case No.

11-2184 (D.D.C. July 20, 2012), ECF No. 20.

100. Aside from resolving the question of whether the Coast Guard possessed the statutory

authority to issue the orders excluding the Wilmina from U.S. ports and navigable waters, Judge

Jackson’s memorandum opinion concluded that no due process violation occurred when the

Wilmina’s certificate of compliance was revoked. On December 22, 2014, Judge Jackson issued

a memorandum opinion ruling in favor of the Coast Guard’s motion for summary judgment on

the merits of the Coast Guard’s investigation’s findings. Judge Jackson specifically concluded

that the evidence in the administrative record supported the Coast Guard’s order requiring the

plaintiffs to develop and implement an environmental compliance plan that was acceptable to the

Coast Guard and to have a year of satisfactory audits before the ship would be allowed to reenter

U.S. waters. See Wilmina Shipping AS v. U.S. Dep’t of Homeland Security, Case No. 11-2184,

2014 WL 6765439, at *1–2 (D.D.C. December 2, 2014).

101. Wilmina Shipping, 934 F.Supp.2d at 12–15.



seven conditions.102 Those conditions include, inter alia, (1) a history of

accidents, pollution incidents, or serious repair problems that create a

reason to believe that the vessel may be unsafe; (2) a failure to comply with

any applicable regulation under chapter 37 of Title 46 to the United States

Code; and, (3) the discharge of oil or hazardous material in violation of

United States law or an international law to which the United States is a

signatory (such as APPS).103 Subsection (b) further authorizes the

Secretary of Homeland Security to determine “to the satisfaction of the

Secretary” when a vessel that was in violation of a condition of subsection

(a) “is no longer unsafe or a threat to the marine environment, and is no

longer in violation of any applicable law, treaty, regulation or condition.”104

In addition to § 1228 under the PWSA, Judge Jackson considered the

applicable sections of chapter 37 of Title 46 to the United States Code,

which is included by reference in § 1228(a) and which addresses the

“Carriage of Liquid Bulk Dangerous Cargoes.” She noted that, like § 1228,

46 U.S.C. § 3711 also governed the Coast Guard’s “granting, withdrawal,

and restoration of permission”105 for foreign-flagged vessels to enter U.S.

waters, providing as follows:

A foreign vessel to which this chapter applies may operate on the

navigable waters of the United States, or transfer oil or hazardous

material in a port or place under the jurisdiction of the United

States, only if the vessel has been issued a certificate of

compliance by the Secretary. The Secretary may issue the

certificate only after the vessel has been examined and found to

be in compliance with this chapter and regulations prescribed

under this chapter. The Secretary may accept any part of a

certificate, endorsement, or document, issued by the government

of a foreign country under a treaty, convention, or other

international agreement to which the United States is a party, as a

basis for issuing a certificate of compliance.106

102. 33 U.S.C. § 1228(a) (2012).

103. Id.

104. 33 U.S.C. § 1228(b) (2012).

105. Wilmina Shipping, 934 F.Supp.2d at 10.

106. Id. at 7 (citing 46 U.S.C. § 3711(a)).



Subsection (c) of § 3711 further states that a certificate of compliance

shall be suspended or revoked if the Secretary of Homeland Security “finds

that the vessel does not comply with the conditions under which the

certificate was issued.”107 Finally, under 46 U.S.C. § 3712, the Coast

Guard is required to notify the owner or operator of a vessel when a vessel

is found to be out of compliance and must also state to the owner or

operator “how compliance may be achieved.”108

ii. Judge Jackson’s Analysis of the Applicable Statutory Framework

In her memorandum opinion, Judge Jackson observed that the

question of whether the Coast Guard was authorized under 33 U.S.C. §

1228 to ban the Wilmina from U.S. waters under the particular conditions

the agency imposed in the Captain of the Port Order was a matter of first

impression.109 She explained that this was because the plain text of §

1228(a) only listed the conditions that were cause for the Coast Guard

excluding a foreign-flagged vessel from entering U.S. waters but did not

establish exactly how the Coast Guard was expected to administer this

prohibition.110

To reach a determination regarding the scope of the Coast Guard’s

authority, Judge Jackson first considered the plaintiffs’ assertion that §

1228(a) limited the Coast Guard’s authority to ban a foreign-flagged vessel

from entering U.S. waters only when the vessel met one of the seven

conditions enumerated in that subsection and when the vessel was in

“imminent danger of colliding with another vessel, alluding with bridge or

structure, running aground, exploding or catching fire.”111 Judge Jackson

rejected this contention on the grounds that nothing in the language of §

1228(a) or in the statute’s legislative history limited its applicability to

“exigent circumstances.”112 She further declined to adopt the plaintiffs’

argument that the Coast Guard’s enforcement authority under the PWSA

107. Id. (citing 46 U.S.C. § 3711 (c)).

108. Id. (citing 46 U.S.C. § 3712).

109. Id. at 9.

110. Id. at 9.

111. Id. at 10.

112. Id.



was limited to the civil and criminal penalties listed in 33 U.S.C. § 1232113

and that the Coast Guard exceeded this authority by imposing particular

conditions in the Captain of the Port Order not enumerated in § 1232.114

Judge Jackson then considered whether 33 U.S.C. § 1228 authorized

the Coast Guard to require the Wilmina to implement an ECP and to

successfully complete one year of audits before permitting the vessel to re-

enter U.S. waters. She concluded that it did. Relying on the language of §

1228(b) allowing a vessel to prove to the “satisfaction of the Secretary”

that it is no longer unsafe or a threat to the marine environment,” Judge

Jackson reasoned that, “Congress left it to the Coast Guard to use its

expertise as the regulatory agency entrusted with the administration of the

statute to determine when a ship may reenter U.S. waters.”115 Judge

Jackson further noted that her reading of § 1228(b) was reinforced by 46

U.S.C. § 3712, which authorized the Secretary of Homeland Security to

inform the owner or operator of a vessel found not to be in compliance

“how compliance may be achieved.”116

In contrast to her conclusion that 33 U.S.C. § 1228 authorized the

Coast Guard to require the Wilmina to implement an ECP and complete

one year of successful audits before being permitted to re-enter U.S.

waters, Judge Jackson held that the same statute did not extend the Coast

Guard’s authority to order, in the alternative, that the Wilmina be excluded

from U.S. waters for three years. Judge Jackson reached this conclusion by

first considering the language of § 1228(b). She found that this subsection

requires that the Coast Guard’s exclusion of foreign-flagged vessels from

U.S. waters under § 1228(a) be terminated when an owner or operator

“demonstrates that the safety hazard or threat or violation that gave rise to

the prohibition no longer exists.”117 This is because that section expressly

provides that a vessel “shall not” be subject to the conditions for entry “if

the owner or operator of such vessel proves, to the satisfaction of the

Secretary, that such vessel is no longer unsafe or a threat to the marine

113. 33 U.S.C. §1232 (2012) provides that anyone who has been found to have violated the

PWSA is liable for a civil penalty up to $25,000 per violation. Section 1232 further provides that

any person who “willfully and knowingly” violates the PWSA commits a felony.

114. Wilmina Shipping, 934 F.Supp.2d at 11–12.

115. Id. at 13.

116. Id. at 14.

117. Id. at 15.



environment, and is no longer in violation of any applicable law, treaty,

regulation or condition, as appropriate.”118

Judge Jackson also considered the meaning of 46 U.S.C. §§ 3711 and

3712 in her analysis. She first explained that the permissive language of §

3711 indicated that the Coast Guard is not in fact required to issue a

certificate of compliance but “may” do so if it determines that a ship

complies with applicable laws.119 Once the Coast Guard has decided to

revoke a certificate of compliance that it has issued, however, Judge

Jackson held that the language of § 3712 made it mandatory for the Coast

Guard to notify the owner or operator of a vessel found not to be in

compliance and to state to the owner or operator precisely “how

compliance may be achieved.”120

Based on the language of both 33 U.S.C. § 1228(b) and of 46 U.S.C. §

3712, Judge Jackson held that if the Coast Guard revokes a vessel’s

certificate of compliance, “it must advise the owners of what they need to

do to have the certificate reinstated.”121 By simply ordering that the

Wilmina be excluded from re-entry into U.S. waters for a period of three

years, the Coast Guard failed to adhere to this rule. Accordingly, Judge

Jackson concluded that the Coast Guard exceeded the scope of its authority

under 33 U.S.C. § 1228 when it excluded the Wilmina from U.S. waters for

three years without providing a path for reinstatement of its certificate of

compliance.122

3. The Effect of the Court’s Holding in Wilmina Shipping

Wilmina Shipping clarifies that, based on evidence of what the Captain

of the Port Order termed “willful noncompliance with MARPOL and

APPS,” the Coast Guard has authority under the PWSA to withdraw a

vessel’s certificate of compliance and establish specific conditions to be

met before the certificate will be reinstated and the vessel permitted to re-

enter U.S. waters. The Court’s ruling, though, places clear limits on the

scope of that authority and clarifies that such restrictions may not be

118. Id. at 13 (citing 33 U.S.C. § 1228(b)).

119. Id. at 14–15.

120. Id. at 15.

121. Id. (emphasis added).

122. Id.



imposed for set periods of time without providing a clear path for

reinstatement of the certificate.

IV. CRIMINAL LIABILITY WITH RESPECT TO SPECIFIC MARITIME

ENFORCEMENT ACTIONS: UNITED STATES V. KALUZA

In addition to the Coast Guard’s significant role in investigating

foreign-flagged vessels docked in U.S. ports for potential APPS violations,

environmental criminal maritime enforcement actions often involve the

application of more traditional criminal laws and regulations, some of

which are specific to the maritime industry. In United States v. Kaluza,123

the United States District Court for the Eastern District of Louisiana, in

another case of first impression, delineated the categories of crew members

who can be viewed as potential defendants under the Seaman’s

Manslaughter Statute when fatal maritime casualties occur on a mobile

offshore drilling unit (“MODU”).

On April 20, 2010, a gas release and subsequent explosion occurred

on the MODU Deepwater Horizon oil rig working on the Macondo

exploration well for British Petroleum (“BP”) in the Gulf of Mexico.

Eleven people on the rig were killed in the explosion. The Deepwater

Horizon blowout resulted in an extraordinary amount of litigation,

including thousands of private civil causes of action for damages, a federal

civil law suit to determine liability for the explosion and federal criminal

charges against BP and four individual employees.124 With respect to the

123. United States v. Kaluza, Criminal Action No. 12-265, 2013 WL 6490341 (E.D. La.

2013).

124. In 2012, BP reached a settlement with approximately 100,000 private claimants against

the company regarding approximately $8 billion in damages. In January 2013, Transocean also

agreed to plead guilty to a misdemeanor charge of violating the Clean Water Act, to pay a total of

$1.4 billion in civil and criminal fines and penalties and to be on probation for a period of five

years. Under the civil settlement, Transocean agreed to implement court-enforceable strictures in

its drilling operations, including certification of maintenance and repair of blowout preventers

before each new drilling job, consideration of process safety risks and personnel training related

to oil spills and responses to other emergencies. Also, in February 2013, a three phase civil trial

began with the DOJ, Gulf states and private individuals acting as plaintiffs against BP,

Transocean, and Halliburton. The purpose of the trial was to assess liability for the blowout of

BP’s Macondo Well. Following the second phase of the trial, the judge issued a finding of fact

that BP should be held responsible for a net discharge of 3.19 million barrels of oil. See Findings

of Fact and Conclusions of Law, Phase Two Trial, In re: Oil Spill by the Oil Rig “Deepwater

Horizon” in the Gulf of Mexico, on April 20, 2010, MDL 2179, 2010 AMC 1977, (E.D. La. Jan.

15, 2015) (No. 14021). The final penalty phase of this trial commenced on January 20, 2015, and

concluded on February 2, 2015. See Minute Entry for proceedings held before Judge Carl



federal criminal charges, BP reached a settlement with the U.S. Department

of Justice pursuant to which it agreed to pay over $4 billion in fines and

other payments and to plead guilty to 11 counts of felony manslaughter

related to the deaths of the 11 workers who worked on the Deepwater

Horizon rig, one count of felony obstruction of Congress, and criminal

violations of the Clean Water and Migratory Treaty Acts.125

Among the individual employees charged, two BP employees were

indicted for obstruction of justice and for lying to federal investigators. One

of these employees, BP drilling engineer Kurt Mix, was convicted on one

count of obstruction of justice in December 2013; however, he was granted

a new trial in June 2014 owing to juror misconduct.126 The other

employee, BP vice president of exploration David Rainey, was acquitted of

charges that he obstructed a Congressional subcommittee investigation and

made false statements to Congress about the amount of oil spewing into the

gulf.127

Barbier, In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20,

2010, (E.D. La. Feb. 2, 2015) (No. 14132). Prior to the issuance of Judge Barbier’s penalty

determination, on July 2, 2015, BP disclosed that it had reached agreements in principle with the

United States and state and local governments for a settlement of all remaining claims arising out

of the Deepwater Horizon oil spill. BP to Settle Federal, State and Local Deepwater Horizon

Claims for up to $18.7 Billion With Payments to be Spread Over 18 Years, BP Press Release, July

2, 2015, http://www.bp.com/en/global/corporate/press/press-releases/bp-to-settle-federal-state-

local-deepwater-horizon-claims.html. The agreements in principle provide that BP will pay $5.5

billion in total Clean Water Act fines; $8.1 billion (including $1 billion already paid) for natural

resource damages and restoration; and $5.9 billion to settle claims by state and local governments

for economic damages. Id. As of the date this article went to print, a consent decree

incorporating the agreements in principle has yet to be submitted for public comment and then for

court approval. See Statement by Attorney General Loretta E. Lynch on the Agreement in

Principle with BP to Settle Civil Claims for the Deepwater Horizon Oil Spill, DOJ Press Release,

July 2, 2015, http://www.justice.gov/opa/pr/statement-attorney-general-loretta-e-lynch-

agreement-principle-bp-settle-civil-claims.

125. At the same time, BP also resolved civil securities fraud charges brought by the SEC in

exchange for a settlement of $525 million. See Sec. & Exch. Comm’n v. BP p.l.c., Civil Action

No. 2:12-cv-2774 (E.D. La. Dec. 10, 2012) (No. 5).

126. See Order and Reasons, United States v. Mix, Criminal Action No. 12-171 (E.D. La.

June 12, 2014). The district court’s ruling granting Mix a new trial was upheld on appeal. See

United States v. Mix, No. 14-30837, 2015 WL 3972275 (5th Cir. June 30, 2015).

127. See United States v. Rainey, Criminal Action No. 2:12-cr-00291-KDE-DEK-1 (E.D. La.

June 5, 2015) (No. 504). The charges against Rainey arose from testimony that he provided to the

U.S. House Subcommittee on Energy and Environment in May 2010. The district court

dismissed the obstruction of justice charge against Rainey ahead of trial on the grounds that (1)

the Congressional inquiry at issue did not reflect a “due and proper exercise of the power of

inquiry” by a Congressional subcommittee as required under 18 U.S.C. § 1505; and (2) the

http://www.bp.com/en/global/corporate/press/press-releases/bp-to-settle-federal-state-local-deepwater-horizon-claims.html

http://www.bp.com/en/global/corporate/press/press-releases/bp-to-settle-federal-state-local-deepwater-horizon-claims.html

http://www.justice.gov/opa/pr/statement-attorney-general-loretta-e-lynch-agreement-principle-bp-settle-civil-claims

http://www.justice.gov/opa/pr/statement-attorney-general-loretta-e-lynch-agreement-principle-bp-settle-civil-claims



A. Individual Employees Charged with Violations of Seamans’

Manslaughter Statute

Two other BP employees, Robert Kaluza and Donald Vidrine, were

also charged with criminal conduct resulting from the deaths of the 11

employees aboard the Deepwater Horizon. BP, as the legal operator of the

Macondo well, did not own the rigs that drilled Macondo nor did it operate

the rigs. However, BP maintained an engineering team to design the

wells.128 BP also employed a “wells team leader” who was accountable for

safety and operation of the rig, as well as two “well site leaders” (“WSLs”),

the top BP employees on board the Deepwater Horizon. The WSLs were

responsible for supervising the implementation of BP’s drilling plans and

procedures.129 Both Kaluza and Vidrine were WSLs aboard the Deepwater

Horizon at the time of the blowout on April 20, 2010.

In addition to returning charges for involuntary manslaughter and

violation of the Clean Water Act, a federal grand jury in the Eastern

District of Louisiana indicted Kaluza and Vidrine with 11 violations of the

Seaman’s Manslaughter Statute under 18 U.S.C. § 1115.130 That statute

provides as follows:

Every captain, engineer, pilot, or other person employed on any

steamboat or vessel, by whose misconduct, negligence, or

inattention to his duties on such vessel the life of any person is

destroyed . . . shall be fined under this title or imprisoned not

more than ten years, or both.131

requests for information that served as the basis for the obstruction of justice charge did not fall

within the scope of the Congressional subcommittee’s investigation. See Rainey, Criminal Action

No. 2:12-cr-00291-KDE-DEK-1 (June 1, 2015) (No. 494). Rainey was also acquitted after a jury

trial of the charge that he made false statements to Congress. See id. (June 5, 2015) (No. 504).

128. United States v. Kaluza, Criminal Action No. 12-265, 2013 WL 6490341, at *6 (E.D.

La. Dec. 10, 2013).

129. Id.

130. Indictment as to Robert Kaluza and Donald Vidrine, United States v. Kaluza, Case No.

2:12-cr-00265 (E.D. La. 2012), ECF No. 3. By charging the defendants with 11 counts under

both the Involuntary Manslaughter statute, 18 U.S.C. § 1112 (requiring proof of gross negligence)

and the Seaman’s Manslaughter Statute (requiring proof of only simple negligence), the

government apparently anticipated that there could be jurisdictional and/or coverage challenges to

the application of the Seaman’s Manslaughter Statute to WSLs aboard a MODU operating some

50 nautical miles offshore in the Gulf of Mexico.

131. 18 U.S.C. § 1115 (2012) (emphasis added).



Kaluza and Vidrine sought the dismissal of the charges against them

in a motion to dismiss filed in May 2013.132 In a judicial order filed on

December 10, 2013, Judge Stanwood Duval, Jr. in the U.S. Court for the

Eastern District of Louisiana denied the defendants’ motion as to the counts

charging involuntary manslaughter and violation of the Clean Water Act,

but dismissed the charges under the Seaman’s Manslaughter Statute.133

Following the government’s interlocutory appeal of the District Court’s

order of dismissal, the U.S. Court of Appeals for the Fifth Circuit affirmed

Judge Duval’s ruling dismissing the seaman’s manslaughter charges.134

B. Dismissal of Ship Officers’ Manslaughter Charges

In dismissing the Seaman’s Manslaughter Statute charges against

Kaluza and Vidrine, Judge Duval provided a comprehensive analysis of the

class of people to whom that manslaughter statute applies. Ultimately,

Judge Duval concluded that the statute only applies to individuals who are

involved in the “navigation” or “maritime operations” of a vessel and that

therefore, it did not apply to Kaluza and Vidrine.135 With respect to the

Deepwater Horizon, Judge Duval found that the individuals who were

involved in the navigation of the vessel were certain members of the

vessel’s “marine crew.”136 As WSLs, Kaluza and Vidrine were part of a

132. See Motion to Dismiss, Kaluza, Case No. 2:12-cr-00265 (E.D. La. May 30, 2013), ECF

No. 51.

133. See Kaluza, Criminal Action No. 12-265, 2013 WL 6490341. In rejecting the

defendants’ jurisdictional challenge to all of the counts in the Indictment, the Court found that the

Deepwater Horizon, “when connected and attached to the OCS through its drilling mechanisms

and is performing exploration and production of mineral resources, is ‘erected’ on the OCS” for

federal jurisdictional purposes under the Outer Continental Shelf Lands Act (“OCSLA”), 43

U.S.C § 1333(a)(1). Id. at *17.

134. See United States v. Kaluza, 780 F.3d 647, 656–69 (5th Cir. 2015). The appellate

court affirmed the dismissal of the seaman’s manslaughter charges on substantially the same

grounds as the lower court. See id. The Court further declined to consider whether the district

court erred in deciding that the Deepwater Horizon qualified as an OCSLA situs because the

issue was not properly appealed to the Court. See id. at 656. A trial on the remaining charges

against Kaluza and Vidrine has been scheduled for February 6, 2016. See Kaluza, Criminal

Action No. 2:12-cr-00265 (No. 143).

135. Id. at *28.

136. Id. at *26.



separate “drilling crew” aboard the vessel, and were thus not within the

class of persons to whom the statute applied.137

C. The Court’s Reasoning in Kaluza

Neither Kaluza nor Vidrine served as a captain, engineer or pilot of

the Deepwater Horizon rig. Accordingly, the focus of the Court’s analysis

was on the meaning of the catchall phrase in the first clause of § 1115,

“other person employed.” The defendants argued that under principles of

statutory interpretation “other person employed” only included those

positions of “responsibility for the marine operations, maintenance, and

navigation of the vessel.”138 They further contended that because their

responsibilities as WSLs did not relate to the navigation of the Deepwater

Horizon and were not in any way “marine-related,” they did not fall under

this interpretation of “other person employed.”139 By contrast, the

government argued that the plain language of “other person employed”

applied to “all” persons employed on the rig, and therefore clearly included

WSLs.140

Judge Duval began his analysis by determining that the plain meaning

of “other person employed” was ambiguous because both parties’

interpretation of the phrase was reasonable; i.e., the phrase could mean

“all” persons employed on the vessel, or it could include some amount less

than “all” persons.141 He then sought to derive the contextual meaning of

“other persons employed” in § 1115 through the application of the canons

of statutory construction.

Judge Duval first applied the principle of ejusdem generis, which

holds that “[w]hen general words follow an enumeration of persons or

things, such general words are not to be construed in their widest extent.”142

Rather, the general words “are to be held as applying only to persons or

things of the same general kind or class as those specifically mentioned.”143

Judge Duval concluded that the listed categories in § 1115, which included

137. Id.

138. Id. at *18.

139. Id.

140. Id.

141. Id. at *19.

142. Id. at *19–20 (quoting Hilton v. Sw. Bell Tel. Co., 936 F.2d 823, 828 (5th Cir. 1991)).

143. Id. (quoting Hilton, 936 F.2d at 828).



a captain, engineer and pilot, all “suggest a class of important persons

dealing with the function and navigation of the vessel” and that based on

the idea of ejusdem generis, any “other person employed” must refer to

individuals belonging to such a class.144

In applying the principle of ejusdem generis, Judge Duval rejected the

government’s argument in favor of the converse principle ex abundant

cautela. This principle is employed when Congress has included specific

examples before general language “out of an abundance of caution.”145

Judge Duval held that this principle was inapplicable based on the

“common sense” that if Congress was concerned about the inclusion of

“all” persons employed on the vessel, it would have simply said so.146 He

also explained that the principle was not appropriate in the criminal context

because “[a]s with arguments concerning vague language in criminal

statutes, the government’s broad construction of the phrase risks running

afoul of substantive due process requirements by failing to convey with fair

notice which persons might be included within the statute’s ambit.”147

The Court next examined the legislative history behind § 1115 to

further derive its contextual meaning. Following a thorough review of case

authority related to § 1115 dating back to the time of its enactment, the

Court concluded that “the case law applying the statute reflects the intent of

Congress in passing the statute: to hold accountable those persons

responsible for the marine operations and navigation of the vessel.”148

Indeed, the Court found that every case applying § 1115 from the time of

its enactment had applied to a defendant responsible for performing “some

marine-related function,” i.e., related to the navigation or marine operation

of the vessel.149

Judge Duval concluded his analysis of the contextual meaning of

“other person employed” under § 1115 by applying the rule of lenity. The

rule of lenity stands for the proposition that “criminal statutes are to be

construed strictly in favor of the defendant” so that they provide “fair

warning of the boundaries of criminal conduct.”150 The Court found that

144. Id. at *21.

145. Id.

146. Id. at *22.

147. Id.

148. Id. at *25.

149. Id.

150. Id. at *27.



the narrower interpretation of the phrase “other persons employed” to

include only those persons involved in marine operations or navigation

properly favored the defendants under the rule of lenity and that without

any further indication from Congress that the phrase was intended to apply

to “all” persons employed on the vessel, the WSLs did not fall under the

statute’s reach.151

D. The Significance of the Court’s Dismissal of 11 Counts in Kaluza

As the Fifth Circuit held that the defendants had not properly appealed

the district court’s ruling concerning the application of the OCSLA, it

remains premature to evaluate the ultimate significance of the district

court’s ruling on this specific issue. Nevertheless, Judge Duval’s dismissal

of the seaman’s manslaughter charges, and the Fifth Circuit’s affirmance of

his ruling, provides substantial clarity as to the crew members who are

potentially liable under the Seaman’s Manslaughter Statute. Indeed, the

limited reach of this statute suggests that the Department of Justice must

exercise caution in its charging decisions when considering criminal

enforcement actions against individuals employed on drillships or in other

areas of the maritime industry following catastrophic incidents.

V. LIMITATIONS ON THE AMOUNT OF CRIMINAL PENALTIES AND

STANDARDS FOR WHISTLEBLOWER AWARDS

The final stage of an environmental criminal enforcement action

involves the imposition of a penalty for the offense or offenses that the

targeted individual or entity has been found to have committed. A

memorandum opinion issued by the Court in United States v. Sanford

Ltd.152 clarified the circumstances under which it is appropriate for the

government to pursue civil forfeiture or a fine under the Alternative Fines

Act against a company convicted of a maritime offense as well as the

potential amount of the fine that may be imposed. In addition, a number of

recent cases involving the granting of individual whistleblower awards in

APPS prosecutions have provided some guidance as to the factors that may

be relevant to the government’s decision to request a whistleblower award

and to a court’s decision to grant such an award. Together, these cases

151. Id. at *28.

152. United States v. Sanford Ltd., Case No. 11-352 (D.D.C. 2012).



serve to clarify the limited circumstances under which forfeiture may be

appropriate in an environmental criminal prosecution, establish the

boundaries for application of the Alternative Fine Act for defendants

convicted of environmental criminal wrongdoing in the maritime sector,

and provide guidance concerning the appropriate standards for

consideration of whistleblower awards under the APPS statute.

A. The Application of the Alternative Fines Act and Civil Forfeiture

Proceedings: United States v. Sanford Ltd.

1. The Alternative Fines Act

In sentencing organizational defendants, a court typically may impose

one of two fine amounts. First, the court may fine the defendant pursuant

to the statutorily prescribed maximum fine for the type of offense charged,

which for most felonies is $500,000 per offense.153 Alternatively, the court

may impose a fine under the Alternative Fines Act, which provides that:

If any person derives pecuniary gain from the offense, or if the

offense results in pecuniary loss to a person other than the

defendant, the defendant may be fined not more than the greater

of twice the gross gain or twice the gross loss, unless imposition

of a fine under this subsection would unduly complicate or

prolong the sentencing process.154

Following a U.S. Coast Guard inspection in Pago Pago, American

Samoa, the U.S. government detained the New Zealand-flagged fishing

vessel F/V SAN NIKUNAU (“Nikunau”) and three of its crew members in

connection with alleged violations of APPS. Subsequently, on December

6, 2011, a grand jury returned a seven count indictment in the U,S. District

Court for the District of Columbia against Sanford Ltd. (“Sanford”), the

owner and operator of the Nikunau for violations of APPS and obstruction

of justice.155 On January 5, 2012, a grand jury returned a superseding

indictment containing the identical charges as the initial indictment, but

153. 18 U.S.C. § 3571(c)(3) (2012).

154. 18 U.S.C. § 3571(d) (2012) (emphasis added).

155. Indictment as to Sanford Ltd., United States v. Sanford Ltd., Case No. 1:11-cr-00352

(D.D.C. Dec. 6, 2011), ECF No. 1.



adding two former Chief Engineers of the Nikunau as individual defendants

to certain counts.156

The superseding indictment that was returned against Sanford also

contained an introductory paragraph alleging that Sanford earned revenues

of over $24 million for the fish cargoes offloaded from the Nikunau on

certain voyages and that this amount would serve as the basis for the

imposition of an alternative criminal fine against Sanford. Specifically, the

superseding indictment stated as follows:

Sanford Ltd. gained, during the time period relevant in this

indictment, revenues of $24,862,954.89 for the offload of fish

cargo from the F/V San Nikunau in American Samoa, even

though the vessel was not in compliance with international and

United States law and therefore could have been prevented from

entering American Samoa and offloading fish cargo . . . all of

which constitutes a gain pursuant to the Alternative Fines Act, 18

U.S.C. § 3571, and is forfeitable pursuant to 18 U.S.C. §§

981(a)(1)(C) & 1956(c)(7)(E).157

Sanford filed a motion in limine challenging the admissibility of the

government’s evidence purporting to show that the company earned over

$24 million in revenues from the offloading of fish cargo from the

Nikunau. In its opposition to the motion, the government asserted that such

evidence was in fact admissible at trial because it was relevant to (1)

proving the defendants’ financial motives for committing the charged

conduct and (2) determining the appropriate amount of “gross gain” that

was “derive[d] . . . from the offense” under the Alternative Fines Act.158

While U.S. District Court Judge Beryl Howell agreed that general evidence

of monetary proceeds was admissible for the purpose of proving motive,

she reached a different conclusion with respect to the government offering

the $24 million figure as a basis for determining the appropriate criminal

156. Superseding Indictment as to Sanford Ltd., Rolando Ong Vano and James Pogue,

Sanford, Case No. 1:11-cr-00352 (January 5, 2012), ECF No. 22 [hereinafter Superseding

Indictment].

157. Id. at 3–4.

158. Memorandum Op., Sanford, Case No. 1:11-cr-00352 (July 19, 2012), ECF No. 171 at

5.



fine to impose against Sanford.159 In her memorandum opinion resolving

the parties’ dispute on this point, Judge Howell substantially clarified the

application of the Alternative Fines Act to sentencing proceedings in

maritime enforcement actions.

Judge Howell first noted that in Sanford’s case, a conviction on all

seven felony counts would result in a statutory maximum fine of

$3,500,000.160 By contrast, if the government were to pursue a fine amount

under the Alternative Fines Act with $24,862,954.89 as the amount of the

“gross gain” derived from the charged offenses, then the total possible

amount of the fine would have far exceeded the statutory maximum.

Because the potential alternative fine exceeded the statutory maximum,

Judge Howell applied the Supreme Court’s ruling in Southern Union Co. v.

United States161 and held that the government could only seek an

alternative fine based on the $24 million figure if the jury found beyond a

reasonable doubt that that amount constituted a “gross gain” to Sanford that

was “derive[d] . . . from” the charged offenses.162 Judge Howell added that

in order to avoid the danger of unfair prejudice to Sanford presented by the

evidence of the $24,045,930.79, the government had to “provide to the jury

sufficient context for the $24,045,930.79 figure—vis-à-vis the proper

definitions of ‘gross gain’ and ‘derive[d] . . . from’” to admit it for the

purpose of establishing or calculating “gross gain.”163

i. The Meaning of “Gross Gain” and “Derived From”

Judge Howell’s memorandum opinion then addressed the meaning of

“gross gain” and “derive[d] . . .from” under the Alternative Fines Act, as

these terms are not expressly defined under the statute. Focusing first on

the term “gross gain,” she explained that this was an ambiguous term

because it was unclear whether it referred to “total income” from all

sources before deductions, exemptions or other tax reductions, or whether

159. Id. at 6–10.

160. Id. at 12.

161. In Southern Union, the Court held that, based on the rule promulgated in Apprendi v.

New Jersey, 530 U.S. 466 (2000), any fact that increases the amount of a criminal fine “beyond

the prescribed statutory maximum must be submitted to a jury and proved beyond a reasonable

doubt.” See Southern Union v. United States, 132 S. Ct. 2344, 2349–51 (2012).


13.

163. Id.



it constituted a “net profit” amount related to the “excess of receipts over

expenditures or of sale price over cost.”164 To further clarify its meaning,

Judge Howell examined the use of the term “gross gain” in the U.S.

Sentencing Guidelines, the legislative history behind 18 U.S.C. § 3571(d),

and the application of the term “gross gain” in other cases.165 Based on this

analysis, she concluded that the term “gross gain” means any additional

before-tax profit to the defendant that derives from the relevant conduct of

the offense.166

Judge Howell then examined the meaning of the term “derive[d] . . .

from,” which presented the issue of the causal nexus that is required

between a monetary amount and a charged offense.167 In defining this

term, Judge Howell relied upon the court’s reasoning in United States v. BP

Products North America, Inc.168 In that case, the court found that

“derive[d] . . . from” mandated that “gain or loss be both factually and

proximately caused by the defendant’s acts.”169 Judge Howell ruled that

this proximate causation standard was the appropriate standard to apply to

§ 3571(d). That is, the term “derive[d] . . . from” requires the government

to prove that a “given monetary amount (either a gain or a loss) was

proximately caused by the conduct of the charged offense in order to

qualify as a ‘gross gain’ under § 3571(d).”170

ii. The Meaning of “Undue Complication”

Finally, Judge Howell explained that a threshold issue before

application of the alternative fine provision of § 3571(d) was whether the

imposition of the “gross gain” measure of a criminal fine would “unduly

complicate or prolong the sentencing process.” In such a case, the

alternative fine becomes unavailable and the statutory maximum of

164. Id. at 13–14.

165. Id. at 14–16.

166. Id. at 18.

167. Id. at 18.

168. United States v. BP Products North America, Inc., 610 F.Supp.2d 655 (S.D. Tex.

2009).

169. Memorandum Op. in Sanford, Case No. 1:11-cr-00352 (July 19, 2012), ECF No. 171

at 19.

170. Id.; see also id. at 23 (“in order to qualify as ‘gross gain’ that is ‘derive[d] . . . from’

the charged offenses, it will be the government’s burden to prove to the jury beyond a reasonable

doubt that any before-tax profits earned by Sanford were earned as a proximate result of the

charged offenses”).



$500,000 per offense applies instead.171 Again, Judge Howell turned

toward the BP Products case as instructive. In that case, the court

discussed the circumstances in which calculating an alternative fine might

be inappropriate:

[F]or example, if determining the amount of the defendant’s gain

were to require a protracted hearing that would last longer than

the trial, the judge could decline to base the fine on the

defendant’s gain. The court’s determination as to whether

imposing a fine based on defendant’s gain or victim’s loss is

discretionary, and the committee is confident that federal judges

will not abuse this discretion.172

Judge Howell agreed with the court’s holding in BP Products that “in

determining whether a ‘gross gain’ determination would meet the threshold

[of causing undue complication], [a court] should consider three factors: (1)

whether there are multiple victims; (2) whether the causation issues are

disputed; and (3) whether disputed future losses are involved.”173

Notably, in her memorandum opinion, Judge Howell did not rule on

whether allowing the government to seek a fine under § 3571(d) would

“unduly complicate or prolong” the trial. Instead, she directed the

government to submit to the Court, before the commencement of the trial,

the number of witnesses and kinds of evidence it intended to present to the

jury regarding the “gross gain” that Sanford “derive[d] . . . from” the

charged offenses.174 Following the issuance of Judge Howell’s

memorandum opinion, the government notified the Court that it had elected

not to pursue an alternative fine under 18 U.S.C. § 3571(d), and instead

only intended to use the proceeds of $24,045,930.79 as evidence of

motive.175

171. Id. at 21.

172. Id. at 21–22 (quoting H.R. REP. NO. 98-906 at 17).

173. Id. at 22 (quoting BP Products, 610 F. Supp. 2d at 691).

174. Id. at 23.

175. See Notice of Election not to Pursue an Alternative Fine, Sanford, Case No. 1:11-cr-

00352 (July 23, 2012), ECF No. 179.



2. Civil Forfeiture Proceedings

The superseding indictment that was returned against Sanford further

asserted that the purported revenues of over $24 million that Sanford

earned for the fish cargoes offloaded from the Nikunau on certain voyages

were subject to civil forfeiture proceedings under 18 U.S.C. §§

981(a)(1)(C) and 1956(c)(7)(E).176 Notably, the government’s decision to

pursue civil forfeiture proceedings against Sanford appears to mark the first

time that the government has sought forfeiture of revenues in a vessel

pollution prosecution. In its reply to the government’s opposition to its

motion in limine, Sanford asserted that the jury would be required to

consider separately the government’s forfeiture allegations after the guilt

phase of the trail.177 The government disagreed, arguing that because it

only sought a money judgment, the determination of the amount of the

money judgment was reserved for the Court.178

In considering this dispute, Judge Howell examined Fed. R. Crim. P.

32.2, which governs criminal forfeiture procedures.179 Subsection (b)(1)(a)

of that rule states that when the government seeks forfeiture of a “personal

money judgment, the court must determine the amount of money that the

defendant will be ordered to pay.”180 Moreover, subsection (b)(5)(B) of

this Rule provides that when “a party timely requests to have the jury

determine forfeiture,” the government must submit a Special Verdict Form

“asking the jury to determine whether the government has established the

requisite nexus between the property and the offense committed by the

defendant.”181

Referencing case authority from other jurisdictions, Judge Howell

observed that several Circuits had held that Fed. R. Crim. P. 32.2(b)(5)

does not apply to money judgments.182 She also stated that the language of

176. Superseding Indictment, supra note 157, at 3–4.

177. See Reply to Gov’t’s Opposition to Def. Sanford Ltd.’s Motion in Limine, Sanford,

Case No. 1:11-cr-00352 (June 27, 2012), ECF. No. 156, at 5, n.3.

178. See Gov’t’s Pre-Trial Memorandum Regarding Forfeiture, Sanford, Case No. 1:11-cr-

00352 (July 2, 2012), ECF No. 160, at 3.

179. See Memorandum Op., Sanford, Case No. 1:11-cr-00352 (July 19, 2012), ECF No. 171

at 4, n.1.

180. FED. R. CRIM. 32.2(b)(1)(A).

181. FED. R. CRIM. 32.2(b)(5)(B).


5, n.1.



Rule 32.2 suggested that it is “within the Court’s discretion to either submit

the nexus question to the jury or determine the question itself.”183 Judge

Howell however did not resolve the dispute. Instead, she held that in light

of her holding in the memorandum opinion that the jury would have to

determine whether any “gross gain” was “derive[d] . . . from” the charged

offenses, as well as the amount of that gain, she invited the parties to be

prepared to address before the close of the government’s case-in-chief

whether 32.2(b)(5) applies to money judgments and, if it does apply,

whether the Court should exercise its discretion to have the jury determine

both the “gross gain” question as well as the nexus question under Rule

32.2.184 Following the issuance of the Court’s memorandum opinion, the

government elected not to pursue its forfeiture claim against Sanford.185

3. The Significance of the Court’s Holdings in Sanford

Remarkably, the Superseding Indictment in Sanford, in an APPS

prosecution involving a single fishing vessel, demonstrated the

government’s intention to seek civil forfeiture of nearly $25 million dollars

plus a criminal fine calculated under the Alternative Fines Act of nearly

$50 million dollars. Following Judge Howell’s rulings, which clarified the

substantial burden of proof the government would need to meet in order to

prevail on those claims, the government announced its intention to abandon

both claims.186 In light of the rulings in Sanford, the government may have

reason to reconsider the wisdom of seeking such extraordinary criminal

penalties in the context of the typical APPS prosecution.

B. Equitable Factors Considered in the Granting of Awards to

Whistleblowers

Convictions under APPS often result in the payment of individual

whistleblower awards.187 Such payments are made pursuant to the criminal

penalty provision in APPS, 33 U.S.C. § 1908(a):

183. Id.

184. Id.

185. See Sanford Ltd.’s Response to the Sentencing Memorandum of the United States,

Sanford, Case No. 1:11-cr-00352 (January 2, 2013), ECF No. 229, at 9.

186. At sentencing, the Court ultimately imposed a criminal fine of $1.9 million dollars

against Sanford. See Minute Entry, Sanford, Case No. 1:11-cr-00352 (January 11, 2013).

187. Over the past 20 years, a total of more than $19 million dollars has been awarded by

courts to individual crew members who disclosed information of MARPOL violations to U.S.



A person who knowingly violates the MARPOL Protocol . . .

[APPS], or the regulations issued thereunder commits a class D

felony. In the discretion of the Court, an amount equal to not

more than ½ of such fine may be paid to the person giving

information leading to conviction.188

Notably, there is no case law specifically addressing a court’s exercise

of its discretion to award a monetary payment under the whistleblower

provision of APPS.189 The legislative history for the statute is also silent as

to the factors to be considered when determining the appropriateness of an

award.190 Nevertheless, a number of recent cases have suggested that case-

specific equitable factors can influence the discretionary decision of federal

prosecutors to recommend a whistleblower award and the determination of

an award amount by courts, including whether the whistleblower (1)

followed internal reporting controls before notifying the government of a

purported APPS violation, (2) misled shoreside managers of the company

regarding the existence of a potential MARPOL violation on the vessel,

and (3) was motivated by personal financial gain and therefore delayed

authorities. See, e.g., United States v. Herm. Dauelsberg GmbH & Co., KG, Case No. 2:14-cr-

00200 (C.D. Cal. 2014) ($500,000 award); United States v. Diana Shipping, Case No. 2:13-

00040-MSD-DEM (E.D. Va. 2014) ($150,000 award); United States v. Columbia

Shipmanagement (Deutschland) GmbH and Columbia Shipmanagement Ltd., Case No. 2:13-cr-

00205-SDW (D. N.J. 2013) ($1 million award); United States v. Aquarosa Shipping, Case No.

1:11-cr-00671-MJG (D. Md. 2012) ($462,500 award); United States v. Target Ship Management

Pte. Ltd., Case No. 1:11-cr-00368 (S.D. Ala. 2012) ($250,000 award); United States v. Odysea

Carriers, S.A., Case No. 2:12-cr-00105 (E.D. La. 2012) ($183,000 award); United States v. Ilios

Shipping Co., Case No. 2:11-cr-00286-JCZ-SS (E.D. La. 2012) ($350,000 award); United States

v. Noka Shipping Company Ltd., Case No. 2:11-cr-00534 (S.D. Tx. 2011) ($250,000 award);

United States v. Ionia Management, Case No. 3:07-cr-00134-BA (D. Ct. 2011) ($1.9 million

award); United States v. Overseas Shipholding Corp., Case No. 1:06-cr-10408-RGS (D. Mass.

2007) ($437,500 award); United States v. Wallenius Ship Management Pte. Ltd., Case No. 3:06-

cr-002130-JAG (D.N.J. 2006) ($2.5 million award); Unites States v. OMI Corporation, Case No.

2:04-cr-00060-KSH (D.N.J. 2004) ($2.1 million award); United States v. HAL Beheer BV, A98-

108 CR(HRH) (D. Alaska 1998) ($500,000 award).

188. 33 U.S.C. § 1908(a) (2012) (emphasis added).

189. See Efploia Shipping Co. S.A.’s Opposition to Gov’t’s Motion for Whistleblower

Award, United States v. Efploia Shipping Co. S.A., Case No. MJG-11-0652 (D. Md. Jan. 24,

2012), ECF No. 6, at 3 [hereinafter Efploia Opposition].

190. Id.



reporting the violation in other port States until the vessel entered a U.S.

port.

In United States v. Efploia Shipping Co. S.A.,191 the vessel manager,

Efploia Shipping, opposed the government’s motion for a whistleblower

award on the grounds that the whistleblower failed to report illegal

discharges from the vessel, the M/V AQUAROSA, to his supervisors

pursuant to company policy and to the company’s internal reporting

controls, which the company reviewed with its employees on a regular

basis.192 The defendant further asserted that the whistleblower intentionally

failed to report the unlawful conduct aboard the M/V AQUAROSA to port

state authorities in other jurisdictions prior to the vessel’s arrival in the

United States because he was motivated by the possibility of personal

financial gain under 33 U.S.C. § 1908(e).193

Though the court in Efploia Shipping has yet to rule on the pending

motion for an award, a consideration of these same equitable factors in

other recent cases appears to have resulted in a reduction of the fine amount

or even no fine at all. For instance, in United States v. Fleet Management

Ltd., Case No. 6:10-cr-00051 (S.D. Tex. 2010), the government had

requested an award in the amount of $500,000, but the court decided to

grant an award of only $200,000 after defense counsel argued at the

sentencing hearing that the whistleblower had failed to follow company

policies for reporting MARPOL violations and had misled the vessel’s

managers regarding the existence of MARPOL deficiencies on the

vessel.194 Similarly, in United States v. Cardiff Marine, Inc., Case No.

1:11-cr-00058-MJG-1 (D. Md. 2011), the defendant argued that an award

was not warranted because the whistleblower had ignored the company’s

internal reporting requirements before notifying the U.S. Coast Guard of

the unlawful discharge of oily waste aboard the M/V CAPITOLA. Though

the government did not disclose the basis for its decision, ultimately no

whistleblower award was sought by the government in that case.

191. Efploia Shipping Co. S.A., Case No. MJG-11-0652.

192. See Efploia Opposition, supra note 190, at 15–16.

193. Id. In the parallel criminal prosecution, United States v. Aquarosa Shipping, Case No.

1:11-cr-00671-MJG (D. Md. 2012), the vessel owner did not object to the award and the

whistleblower received an award of $462,500.

194. See Minute Entry for Contested Sentencing Hearing, Fleet Mgmt., Case No: 6:10-cr-

0051 (S.D. Tex. Sept. 9, 2010).



In the absence of statutory guidance or legislative history, the outcome

of Fleet Management and Cardiff Marine, as well as the defendant’s

opposition to a whistleblower award in Efploia Shipping, indicate that the

referenced equitable factors can provide useful guidance in evaluating the

propriety of whistleblower award determinations under APPS. Careful

consideration of these factors can help ensure that the availability of such

financial awards does not work to undermine the effectiveness of the vessel

operator’s SMS policies or the statutory objective of preventing pollution

from ships.

VI. CONCLUSION

The judicial decisions discussed in this article have clarified and, in

some cases, limited, the scope of the U.S. government’s authority to pursue

environmental criminal enforcement actions in the maritime sector. The

cases have also helped to resolve issues concerning the extent of agency

discretion, the scope of the potential financial penalties, and the standards

that should govern the consideration of financial awards to whistleblowers.

A thorough understanding of the legal reasoning that was applied in each of

these cases and their outcomes offers valuable guidance to government

authorities who are weighing prosecutive decisions in future vessel

pollution investigations. The cases also contain valuable lessons for

maritime counsel, as well as companies and individuals that operate in the

maritime sector concerning the potential risks of noncompliance with

environmental regulatory requirements.

Documents

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