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United States of America v. Sanford

May 14, 2012

UNITED STATES OF AMERICA,
v.
SANFORD, LTD., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Beryl A. Howell

MEMORANDUM OPINION

Pending before the Court are motions to dismiss Counts One through Five of the Superseding Indictment filed by defendants Sanford, Ltd. and James Pogue. The defendants are charged in seven counts with violating federal laws when they allegedly discharged oil-contaminated sludge and bilge waste into the ocean. They now move to dismiss Counts One, Two and Four of the Superseding Indictment for failure to state a claim and inadequate notice, ECF No. 71; and to dismiss Counts Three and Five on grounds that these counts are duplicitous. ECF No. 64. The defendants, and Sanford individually, have further moved to dismiss Counts Two, Three, Four, and Five, or to require election of them, arguing, for various reasons, that the Counts are multiplicitous. ECF Nos. 64, 68. For the reasons explained below, all of the defendants' motions are DENIED.

I.BACKGROUND*fn1

On January 5, 2012, a grand jury returned a Superseding Indictment charging three Defendants -- Sanford Ltd. ("Sanford"), a shipping company that owns and operates the fishing vessel F/V San Nikunau; and two individuals, James Pogue and Rolando Ong Vano, who served at different times as the Chief Engineer of the ship -- with violating federal criminal laws when they allegedly discharged oil-contaminated sludge and bilge waste into the ocean and falsified records relating to these discharges. Superseding Indictment, ECF No. 22. The investigation that led to these charges arose from a United States Coast Guard inspection of the F/V San Nikunau at Pago Pago, American Samoa in July 2011. The government has charged the defendants in seven counts with: (1) conspiracy, in violation of 18 U.S.C. § 371; (2) failure to maintain an accurate oil record book ("ORB") on or about July 9, 2010, in violation of 33 U.S.C. § 1908(a),*fn2 18 U.S.C. § 2, and 33 C.F.R. § 151.25; (3) falsification of records relating to a fishing voyage ending on or about July 9, 2010, in violation of 18 U.S.C. § 1519; (4) failure to maintain an accurate ORB on or about July 14, 2011, in violation of 33 U.S.C. § 1908(a), 18 U.S.C. § 2, and 33 C.F.R. § 151.25; (5) falsification of records relating to a fishing voyage ending on or about July 14, 2011, in violation of 18 U.S.C. § 1519; (6) obstruction of justice, in violation of 18 U.S.C. §§ 1505 and 2; and (7) unlawful discharge of oil waste on or about July 15, 2011, in violation of 33 U.S.C. §§ 1907(a) and 1908(a), 18 U.S.C. § 2, and 33 C.F.R. § 151.10(b).

Pursuant to the Court's Scheduling Order, the defendants filed a number of pretrial motions on March 22, 2012, on which the Court heard oral argument on April 20, 2012.*fn3 See Minute Order dated Feb. 15, 2012. Following oral argument, for reasons stated on the record, the Court denied six of the defendants' pretrial motions: defendant Sanford's Motion to Obtain Information Regarding the Identity of the Unnamed Co-Conspirators, ECF No. 61; Motion to Dismiss or in the Alternative to Strike as Surplusage the Forfeiture Claim, ECF No. 69; and Motion to Dismiss the Superseding Indictment for Prosecutorial Misconduct, ECF No. 72; defendant Pogue's Motion for Severance, ECF No. 66; and the defendants' Motion to Produce the Legal Instructions Provided to the Grand Jury, ECF No. 62; and Motion to Dismiss APPS Counts, ECF No. 63.

Still pending before the Court are three motions: the defendants' motions to dismiss Counts One, Two and Four, ECF No. 71, and to dismiss Counts Three and Five of the Superseding Indictment, ECF No. 64; and defendant Sanford's Motion to Dismiss Counts Two and Four or to Require Election of One of Them, ECF No. 68.*fn4 Each of these motions is addressed below.

II.DEFENDANTS' MOTION TO DISMISS COUNTS ONE, TWO AND FOUR FOR FAILURE TO STATE AN OFFENSE

The defendants have moved to dismiss Counts Two and Four of the Superseding

Indictment, arguing that these Counts fail to state an offense, or, in the alternative, that the defendants had inadequate notice of the controlling regulations. ECF No. 71. The defendants further contend that Count One, charging conspiracy, should also be dismissed for the same reasons. Id. As explained below, the Court disagrees and the defendants' motion is denied.

A.Legal Standard

Pursuant to Federal Rule of Criminal Procedure 12(b)(3), "at any time while the case is pending, the court may hear a claim that the indictment . . . fails to invoke the court's jurisdiction or to state an offense." The operative question is whether the allegations, if proven, would be sufficient to permit a jury to find that the crimes charged were committed. United States v. Bowdin, 770 F. Supp. 2d. 142, 146 (D.D.C. 2011). When considering a motion to dismiss for failure to state an offense, the court "is limited to reviewing the face of the indictment and, more specifically, the language used to charge the crimes." United States v. Sunia, 643 F. Supp. 2d 51, 60 (D.D.C. 2009) (quoting United States v. Sharpe, 438 F.3d 1257, 1263 (11th Cir. 2006) (emphasis in original)); Bowdin, 770 F. Supp. 2d. at 145-46 ("A motion to dismiss an indictment challenges the adequacy of an Indictment on its face. Thus, the indictment must be viewed as a whole and the allegations must be accepted as true at this stage of the proceedings."). "Adherence to the language of the indictment is essential because the Fifth Amendment requires that criminal prosecutions be limited to the unique allegations of the indictments returned by the grand jury." Sunia, 643 F. Supp. 2d at 60 (quoting United States v. Hitt, 249 F.3d 1010, 1016 (D.C. Cir. 2001)). The court must "presume the allegations of the indictment to be true, and may not dismiss an indictment on a determination of facts that should have been developed at trial." Id. (internal citations and quotation marks omitted).

Federal Rule of Criminal Procedure 7(c)(1) provides that "[t]he indictment or information must be a plain, concise, and definite written statement of the essential facts constituting the offense charged . . . ." The indictment must set forth "the elements of the offense intended to be charged and sufficiently apprise the defendant of what he must be prepared to meet." United States v. Pickett, 353 F.3d 62, 67 (D.C. Cir. 2004) (quoting Russell v. United States, 369 U.S. 749, 763 (1962)). A valid indictment must therefore: "(1) allege the essential facts constituting the offense, (2) allege each element of the offense, so that fair notice is provided, and (3) be sufficiently distinctive that a verdict will bar a second prosecution for the same offense." United States v. Martinez, 764 F. Supp. 2d 166, 170 (D.D.C. 2011) (quotations and citations omitted).

B.The Defendants' Motion to Dismiss Counts Two and Four of the Superseding Indictment for Failure to State a Claim is Denied Count Two of the Superseding Indictment charges defendants Sanford and Pogue with falsification of records, in violation of 33 U.S.C. § 1908(a), relating to a fishing voyage ending on July 9, 2010; and Count Four charges defendants Sanford and Vano with a violation of the same law relating to a fishing voyage ending on July 14, 2011. Both of these counts allege, in relevant part, that the defendants: maintained an Oil Record Book that (1) failed to disclose overboard discharges of oily bilge waste without the use of a properly functioning Oil Water Separator and oil monitoring equipment and falsely stated the Oil Water Separator was used when in fact it was not; and (2) failed to account for internal transfers of oily bilge waste from machinery spaces to other areas of the ship [in violation of 33 U.S.C. § 1908(a), 18 U.S.C. §2, and 33 C.F.R. § 151.25].

Superseding Indictment, ECF No. 22, at 13, 15.

The defendants contend that Counts Two and Four should be dismissed for three reasons. First, the defendants contend that Counts Two and Four fail to allege that the controlling regulation, 33 C.F.R. § 151.25, "impose[s] a recordmaking duty which the defendants failed to carry out." Defs.' Mot. Dismiss Counts Two and Four, ECF No. 71, at 5. According to the defendants, § 151.25 imposes "the duty to make an ORB entry [] only [for] waste accumulated in machinery spaces" and "[t]he omission of the limiting language of the regulation [from Counts Two and Four] is a fatal defect." Id. at 6 (emphasis added); id. at 9 ("Counts Two and Four do not allege that the discharges fell within the limiting element of the regulation, and as a result, Counts Two and Four should be dismissed."). Second, the defendants contend that the Superseding Indictment charges them with failing to account for "internal transfers" of oily bilge waste, for which the regulation does not impose a recordation requirement. Id. at 9-10. Finally, the defendants contend that the term "machinery spaces" in the controlling regulation, 33 C.F.R. § 151.25(d)(4), is undefined and ambiguous, which warrants dismissal of Counts Two and Four because the defendants did not have constitutionally sufficient notice of the conduct proscribed or required under the regulation. Id. at 10-11. These challenges to the Superseding Indictment are addressed seriatim below.

1.Failure to Reference "Machinery Spaces" in Paragraph Two of Counts Two and Four Does Not Render the Counts Defective

The defendants contend that Counts Two and Four must be dismissed for failure to state an offense because they do not contain the requisite allegation that the defendants failed to record discharge of bilge waste accumulated in "machinery spaces." The defendants argue that they are under no duty to record discharges of bilge waste that has accumulated in locations other than "machinery spaces." Id. at 6. Although the defendants are correct that paragraph two of Counts Two and Four does not use the term "machinery spaces" in alleging that the defendants "failed to disclose overboard discharges of oily bilge waste without the use of a properly functioning Oil Water Separator . . . and falsely stated the Oil Water Separator was used when in fact it was not." Superseding Indictment, ECF No. 22, at 13, 15. The omission in this paragraph of the term "machinery spaces" does not, however, render Counts Two and Four invalid.

An indictment is valid if it sets out all elements of the offense and sufficiently apprises the defendants of the charges against them. Pickett, 353 F.3d at 67. As the government notes, Counts Two and Four sufficiently allege the criminal charge for which the government seeks to hold the defendants liable, namely, failure to maintain an accurate ORB in violation of 33 U.S.C. § 1908(a). Counts Two and Four charge that the defendants "(1) knowingly, (2) violated a regulation promulgated pursuant to APPS and MARPOL, that is, they failed to (accurately) maintain an Oil Record Book for the F/V San Nikunau, as required pursuant to 33 C.F.R. 151.25." Gov't Opp'n Mot. Dismiss Counts Two and Four, ECF No. 95, at 5. On its face, the Superseding Indictment contains the requisite elements of the charged offenses and is therefore not deficient. Indeed, contrary to the defendants' argument that Counts Two and Four are lacking, these counts supplement the barebones of the requisite elements to inform the defendants of additional details of the charges against them. The indictment describes the type of waste that was the subject of the inaccurate reporting, i.e., 'oily bilge waste,' and the natureof the misrepresentations that were made, including inaccuracies in the ORB involving the failure to record discharges without the use of a working Oil Water Separator. Superseding Indictment, ECF No. 22, at 12-13, 15.

Moreover, the information about the charges in Counts Two and Four is further supplemented by incorporation of Part D of the Superseding Indictment, which sets forth the legal and regulatory framework underlying the charged offenses. Both Counts Two and Four expressly state in paragraph one that "Sections A through D of this Indictment are specifically incorporated and re-alleged herein." Id. at 12 (Count Two, ¶ 1), 15 (Count Four, ¶ 1). Section D describes oily bilge waste in detail, id. Part D, ¶ 2, and states that "APPS regulations require that [ships subject to the regulation] maintain a record known as an Oil Record Book in which all disposals of oil residue and the discharge overboard or disposal otherwise of bilge water and sludge that have accumulated in the machinery spaces must be recorded." Id. Part D, ¶ 3 (emphasis added). Thus, these two challenged counts include a description of the conduct required under the controlling regulation and sufficiently inform the defendants of the regulation's recordation requirement. The omission of the term "machinery spaces" from paragraph two of Counts Two and Four is therefore of no consequence. See United States v. Palumbo Bros., Inc., 145 F.3d 850, 860 (7th Cir. 1998) ("In reviewing the sufficiency of an indictment, a court should consider each challenged count as a whole and should refrain from reading it in a hypertechnical manner.") (internal quotation marks omitted).

The defendants rely on United States v. Safavian, 528 F.3d 957 (D.C. Cir. 2008), in support of their argument that Counts Two and Four must be dismissed because the "failure to disclose" allegation is not predicated upon a legal duty to disclose. Defs.' Reply in Supp. Mot. Dismiss Counts Two and Four, ECF No. 113, at 3. In Safavian, the defendant was charged, inter alia, with violation of 18 U.S.C. § 1001(a)(1), which makes it a crime when one "knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact." 528 F.3d at 963. The D.C. Circuit reversed the conviction after concluding that the defendant was charged with concealing information from an agency ethics office regarding an overseas golfing trip with a lobbyist that he had "no legal duty to disclose." Id. at 965. This case is inapposite. The government argued in Safavian that the defendant's duty to disclose information was imposed upon him not by statute or regulation, but by "standards of conduct for government employees," which provided fourteen "general principles" of behavior. Id. at 964. The Circuit concluded that these standards were "vague" and that the "ethical principles" embodied in them did not impose a clear duty on an executive employee to disclose information. Id. at 964-65. Here, the defendants' duty to record entries in the ORB is prescribed by specific Coast Guard regulations. There is no question that the defendants were under a legal duty to record accurate information in the ORB, and that this underlying duty is set forth specifically in Part D, which is incorporated in Counts Two and Four.

The defendants additionally rely on United States v. Pickett, 353 F.3d 62 (D.C. Cir. 2004), United States v. San Diego Gas and Elec. Co., No. 06-cr-065, 2006 U.S. Dist. LEXIS 84856 (S.D. Cal. Nov. 21, 2006) and United States v. Sunia, 643 F. Supp. 2d 51 (D.D.C. 2009), in support of their argument that Counts Two and Four should be dismissed, but reliance on these cases is also misplaced. In each of those cases, the government failed to allege an element essential to the offense for which the defendants were charged. In Pickett, the defendant was a Capitol Hill Police Officer who appealed from a jury verdict finding him guilty of making a false statement in violation of 18 U.S.C. § 1001. The D.C. Circuit reversed his conviction, holding that the indictment failed to allege that the defendant's false statement was in connection with a Congressional investigation or review, which was an essential element of the offense. Pickett, 353 F.3d at 67; 18 U.S.C. § 1001(c)(2). The Court concluded that, absent any allegation regarding the defendant's conduct falling within the category of conduct proscribed by the statute, the indictment did not state an offense.

In the remaining cases, San Diego Gas and Sunia, relied upon by the defendants, the government similarly failed to allege in the indictment a required element of the charged offense. In San Diego Gas the government failed to allege that the material at issue contained more than one percent of asbestos, as required by the statute. San Diego Gas and Elec. Co., 2006 U.S. Dist. LEXIS 84856, at *30-39. In Sunia, the government failed to appropriately allege the mens rea requirement of the offense and the court dismissed the charge because there were "no allegations giving rise to an inference that the defendants knew they were obstructing [an agency] proceeding as required to allege an offense under [18 U.S.C. ] § 1505." Sunia, 643 F. Supp. 2d at 80.

The situation before this Court is distinguishable from Pickett, San Diego Gas, and Sunia. In this case, the Superseding Indictment alleges that the defendants falsified records relating to the discharge of bilge waste, which, as described in Section D, accumulated in machinery spaces. The Superseding Indictment includes all the elements of the charged offenses, namely that the defendants knowingly violated a regulation promulgated under APPS. As the government appropriately notes, "[i]n the present case, by alleging that the defendants had knowingly failed to maintain an accurate oil record book as required under the regulations, the government has already provided information that is essential to the offense." Gov't Opp'n Mot. Dismiss Counts Two and Four, ECF No. 95, at 9. The Superseding Indictment further provides a description of oily bilge waste, and notes that the requirement to record under 33 C.F.R. § 151.25(d)(4) is limited to waste that has "accumulated in the machinery spaces." Superseding Indictment, ECF No. 22, Part D, ¶¶ 2-3. Thus, the Superseding Indictment properly alleges violations of 33 U.S.C. § 1908(a) in Counts Two and Four, and provides the defendants with sufficient information to understand the charges against them, prepare a defense, and be protected against retrial on the same charges.*fn5

2.Counts Two and Four Do Not Fail To State an Offense Regarding "Internal Transfers" of Bilge Waste

The defendants contend that Counts Two and Four should be dismissed because these Counts allege, in part, that the defendants "failed to account for internal transfers of oily bilge waste from machinery spaces to other areas of the ship," but the controlling regulation, 33 C.F.R. § 151.25, imposes no requirement to account for such "internal transfers of oily bilge waste." Defs.' Mot. Dismiss Counts Two and Four, ECF No. 71, at 9-10. According to the defendants, the Superseding Indictment therefore "alleges a failure to do something that the charged regulation does not require them to do, and for that reason, it fails to state an offense." Id. at 10. The Court concludes that this argument is erroneous.

Section 151.25(d)(4) requires entries "be made in the Oil Record Book on each occasion . . . whenever . . . the following [takes] place . . .[d]ischarge overboard or disposal otherwiseof bilge water that has accumulated in machinery spaces." 33 C.F.R. § 151.25(d)(4). The government argues that the term "disposal otherwise" necessarily includes the internal transfer of bilge waste from machinery spaces to other parts of the ship. Gov't Opp'n Mot. Dismiss Counts Two and Four, ECF No. 95, at 10. Although the term "disposal" is not defined in the regulation, the government contends that "it is axiomatic that 'disposal' of 'oily bilge waste' necessarily begins with its transfer from the bilge to a different part of the ship, either for discharge or for storage, which, in the context of a ship at sea with no shore location to off-load the waste, would constitute temporary disposal." Id.

The defendants disagree. They argue that the term "internal transfer" is referenced only in another subpart of the regulation, § 151.25(e)(2), which requires oil tankers to make ORB entries for "internal transfer of oil cargo during voyage." The defendants contend that omission of the reference to "internal transfers" in subpart (d) "creates the presumption" that there is no recordation requirement for internal transfers of bilge waste for ships subject to subpart (d). Defs.' Reply in Supp. Mot. Dismiss Counts Two and Four, ECF No. 113, at 5. The defendants further argue that "in context it is clear that 'disposal otherwise' means transfer to a reception facility" because "[d]isposal is clearly used by Coast Guard regulations to mean removing material from the ship, and not, . . . moving it within the ship." Id. at 5-6. These arguments are not persuasive and the defendants' hyper-technical parsing of the language of the regulation is unhelpful.

First, the defendants' argument is essentially that directives to record an "internal transfer" provided in one part of the regulation must be provided in identical language in other parts of the regulation. Yet, this argument ignores that different parts of the regulation have different scopes of coverage. Specifically, subpart (e) applies only to oil tankers and the reference to "internal transfer" in subpart (e)(2) pertains to oil cargo, which, unlike bilge waste, is a valuable commodity. Thus, the recordation requirement for movement of this valuable oil cargo within a ship is appropriately described as an "internal transfer" since such cargo would not be subject to "discharge overboard or disposal otherwise," the term used to describe the recordation requirement for "bilge water that has accumulated in machinery spaces." While the term "internal transfer" presumably could have been used to describe the recordation requirement for movement of oil contaminated bilge water within a ship, use of the different term of "disposal otherwise" is consistent with the fact that such bilge water is not valuable cargo and certainly does not compel the conclusion urged by the defendants that no recordation requirement applies to the movement of such bilge water within the ship. At the same time, use of the term "internal transfer" in subpart (e)(2) does not preclude the government from using the same phrase in a descriptive fashion in the Superseding Indictment to refer to "disposal otherwise" of bilge waste.

Second, the logical reading of subpart (d) supports, rather than refutes, the government's contention that "disposal otherwise" references internal transfers of bilge waste from machinery spaces to other parts of the ship. The regulation creates a recording requirement for "discharge overboard or disposal otherwise" of such waste. "Disposal otherwise" must mean removal of bilge waste from machinery spaces to other parts of the ship, before it is "discharged overboard" and removed from the ship. If "disposal otherwise" did not mean internal transfers, the inclusion of this language would serve no purpose in the regulation. Consequently, when read in context, "disposal otherwise" of bilge waste accumulated in machinery spaces can only be interpreted as a reference to "internal transfers" of bilge waste from machinery spaces to other parts of the ship for ...


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