We write to bring to your attention a recent decision by the United States Court of Appeals for the Sixth Circuit, reinstating a jury verdict which found that a vessel crew’s failure to immediately report a hazardous condition aboard their vessel to the United States Coast Guard amounted to a knowing or willful criminal violation of the Ports and Waterways Safety Act. Owners and operators of vessels that operate in U.S. waters should ensure that all of their crews and operations personnel are well-aware of the requirement to immediately notify the Coast Guard of any hazardous conditions or casualties.
Regulations promulgated under the Ports and Waterways Safety Act require that any hazardous condition onboard a vessel operating in U.S. waters be immediately reported to the nearest Coast Guard office:
Whenever there is a hazardous condition either aboard a vessel or caused by a vessel or its operation, the owner, agent, master, operator, or person in charge shall immediately notify the nearest Coast Guard Sector Office or Group Office. (Compliance with this section does not relieve responsibility for the written report required by 46 CFR 4.05–10.) 33 CFR 160.215
The term “hazardous condition” is defined broadly, to include “any condition that may adversely affect the safety of any vessel …”:
Hazardous condition means any condition that may adversely affect the safety of any vessel, bridge, structure, or shore area or the environmental quality of any port, harbor, or navigable waterway of the United States. It may, but need not, involve collision, allision, fire, explosion, grounding, leaking, damage, injury or illness of a person aboard, or manning-shortage. 33 CFR 160.204
The negligent failure to report a hazardous condition in violation of these regulations may be penalized with civil penalties. 33 U.S.C. § 1232(a). A willful or knowing failure to make such reports may be prosecuted criminally as a Class D felony. Criminal charges could be brought against the employee responsible for reporting such condition and his employer. 33 U.S.C. § 1232(b). 33 U.S.C. § 1232(b). In addition, a vessel used in the violation of such regulations may be subject to in rem liability. 33 U.S.C. § 1232(c).
Canal Barge case
The Canal Barge case (U.S. v. Canal Barge Company, Sixth Circuit Court of Appeals, January 7, 2011, attached) involved criminal charges brought against the owners of a barge, its shoreside manager, and two employee tug boat captains for failure to immediately report a hazardous condition to the Coast Guard. The hazardous condition in question was a crack in the vessel’s hull, from which some of the cargo of benzene leaked. The captain on duty reported the crack and leak to the shoreside manager and ordered the crack patched with soap. The shoreside manager suggested more substantial (but not permanent) patching of the crack. Another captain working on the tug became aware of the crack and the repairs. No one reported the crack to the Coast Guard until the patch failed while the barge was being handled by another tug boat company four days later.
The Coast Guard brought three criminal charges against the barge owner, the shoreside manager, and both captains: 1) willful failure to report the hazardous condition; 2) negligent failure to report the hazardous condition; and, 3) conspiracy to violate the reporting requirement regulation. The jury found all defendants guilty of willful failure to report the hazardous condition, but acquitted the defendants of the negligence and the conspiracy charges. The trial court subsequently acquitted the defendants on the ground that the failure to report took place in a different judicial district from the one in which charges were filed.
The Sixth Circuit overturned the acquittal, finding that the failure to immediately report a hazardous condition is a continuing violation, and therefore the charges could be brought in any district through which the barge passed before the Coast Guard was notified.
Perhaps more importantly, the Sixth Circuit also ruled that the fact that the individual defendants were aware of the crack but failed to report it was sufficient evidence to support a finding that the crew had knowingly and willfully failed to report the crack in the hull. In support of this conclusion, the Court noted the very hazardous nature of a benzene leak, the decades of maritime experience of each of the individual defendants, the fact that the company’s vessel response plan required reporting a spill or threat of spill, the reporting training received by all of the company captains, and the failure of the tug crew to log the leak or the repairs. The Court held that these facts were sufficient to support the jury’s finding that the failure to report was a knowing or willful violation, rather than a simple mistake.
In addition, the Court specifically ruled that such actions by the employees of the barge company supported a finding of criminal liability against the company. In addition to the factors discussed above, the Court found that employees of the barge owner defendant acted with the intent to benefit the company because reporting the leak immediately would have caused delays for offloading and repairs that would have cost the company time and money. Such intent to benefit the company was sufficient to support the finding of guilt against it.
What can a vessel operator take away from this case?
1) The Coast Guard and the United States Department of Justice have the statutory authority to criminally charge individuals and companies for failure to immediately report hazardous conditions to the Coast Guard when they believe the company or crew knowingly or willfully failed to do so.
2) Vessel owners and operators must ensure that all of their crews and operations personnel are trained in the US reporting requirements, and that such requirements are made part of response plans and training audits.
3) Vessel owners and operators must reiterate with crews that they should err on the side of reporting if there is any question as to whether a particular circumstance should be reported.
4) Vessel owners and operators should try to foster good working relationships with the Coast Guard office in the area of their operations so as to ease communications between the vessels and Coast Guard.
Please do not hesitate to contact us if you have any questions about the topics discussed in this brief, or if we can be of any assistance otherwise.
This information has been prepared by Keesal, Young & Logan for informational purposes only and is not legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between you and Keesal, Young & Logan. You should not act upon this information without seeking professional counsel.