The Cost of Doing Business: Corporate Vicarious Criminal Liability for the Negligent Discharge of Oil under the Clean Water Act

Article excerpt

Abstract: In response to massive oil spills that damaged America's waters, devastated local economies, killed wildlife, and cost taxpayers millions in clean-up costs, Congress passed the Oil Pollution Act of 1990. The Act amended the Federal Water Pollution Control Act to allow for criminal prosecution of negligent oil discharges. This Comment argues that although the plain language of the Federal Water Pollution Control Act's negligent discharge provision is silent regarding corporate vicarious criminal liability, courts should give full effect to Congress's intent-to protect the health and safety of the public and the environment and to stop corporations from accepting oils spills as just another cost of doing business-and construe the negligent discharge provision to allow for vicarious liability. Doing so will not violate the due process rights of corporations because they are on notice of the stringent regulations surrounding oil pollution. Moreover, corporations are in the best position to prevent and deter negligent employee behavior that leads to oils spills in the first place.

INTRODUCTION

A thick layer of fog covered the San Francisco Bay area1 on November 7, 2007(2) when a bay pilot, Captain John Cota, boarded the Cosco Busan, a container ship operated by Fleet Management, Limited (Fleet).3 Cota and Fleet allegedly failed to prepare and review a passage plan prior to departure4 and guided the vessel out of the bay in visibility of less than a quarter mile.5 According to the third superseding indictment, the ship proceeded too quickly, and Cota and Fleet, in addition to making other navigational errors, failed to use the vessel's radar and electronic chart system properly.6 As a result, they "failed to navigate an allision free course,"7 and the vessel allided with a tower of the San Francisco-Oakland Bay Bridge,8 splitting open fuel tanks and spilling more than 50,000 gallons of diesel fuel and oil into the bay.9 The spill killed thousands of birds10 and left forty miles of beaches and shore contaminated. ' ' The National Transportation Safety Board estimated the cost of clean up at $70 million, ship repairs at $2.1 million and bridge repairs at $1.5 million.12

As a result of the spill, both Cota and Fleet were charged with negligent discharge of oil into navigable waters of the United States under the Federal Water Pollution Control Act, commonly known as the Clean Water Act (CWA).13 In prosecuting Fleet, the U.S. Government has relied on the civil negligence standard - failure to take due care applicable under the CWA negligent discharge provision in order to incorporate the agency principle of negligent supervision.14 Trial is scheduled for September 2009. 15 Fleet originally faced a maximum $200,000 fine for its CWA violations or twice the gross gain or loss caused by the violations under the Alternative Fines Act.16 Now, after a third superseding indictment alleging "approximately $20 million in pecuniary losses," Fleet faces a $40 million fine.17

Although the Government proceeded under a direct liability theory against Fleet, courts should also recognize a respondeat superior theory, which would hold corporations vicariously criminally liable for negligent oil discharges by their employees. The negligent discharge provision does not explicitly call for vicarious liability. However, the legislative intent behind the Oil Pollution Act of 1990 (OPA 9O),18 which amended the CWA, and the public welfare nature of the legislation support such an interpretation.19 Allowing prosecution under vicarious criminal liability would mean that when employees, such as crew members, are found guilty of negligent discharge of oil under the CWA, corporations, such as ship management corporations, vessel owners, and demise charterers, could also be subject to liability.20

Part I of this Comment briefly describes the CWA negligent discharge provision and examines the legislative history of the provision, as amended by OPA 90, including its public welfare nature and Congress's interest in holding corporations liable for oil spills. …