US v. Oceanic: Two closely related corporate entities, Oceanic and Oceanfleet, had ships wherein the crews ignored the waste disposal procedures required by statute and international convention, and illegally dumped bilge water consisting of large quantities of oily pollutants into the ocean. Such waste must normally be incinerate onboard the vessel, or offloaded at port to a licensed hauler and disposal facility. The foregoing proper disposal must be recorded in a ship’s Oil Record Book. In this case, the appellants’ Oil Record Books were allegedly falsified. Both companies were charged in nine counts of obstruction, falsification of the Oil Record Book, witness tampering, and lying to the Coast Guard. The parties went to trial in South Carolina in September 2016. The two corporations, as well as two chief crew members, were found guilty on all counts. On appeal, Oceanic and Oceanfleet argued that the evidence was insufficient to prove corporate criminal liability. Oceanic was ordered to pay $675k in fines plus $225k in restitution to the Gray’s Reef National Marine Sanctuary Foundation; Oceanfleet was ordered to pay $1.35 million in fines plus $450k restitution to the same foundation. The companies’ ships were also prohibited from using US ports.
According to the Fourth Circuit, the evidence presented at trial proved that bilge water and sludge was discharged consistently during the appellants’ transoceanic journeys. Also, the Oil Record Books were falsified, and attempts to conceal the illegal activities were made. Two Coast Guard investigators testified that they had been tipped off by a spouse of one ship’s third engineer to the illegality. That engineer agreed to fully cooperate with investigators, which prompted a criminal investigation.
Under a theory of vicarious liability, the Fourth Circuit held that there was sufficient evidence for the guilty verdicts. The corporations were criminal liable for the illegal dumping activity taken by the chief and first engineers aboard their ships. The Fourth Circuit affirmed the convictions and sentences.