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Blowing The Whistle On Water Polluters

The BP Deepwater Horizon oil spill in April, 2010 was the largest in U.S. history, releasing over 200 million gallons of oil into the Gulf of Mexico. In November, 2012, BP announced that it would plead guilty to 14 criminal charges and $1.25 billion in fines. Preceding the BP disaster, Exxon Valdez emptied approximately 11 million gallons of oil off the coast of Alaska, resulting in a $150 million fine, the largest ever at that time for an environmental crime. But what many people do not realize is that intentional dumping of oil and other pollutants is just as problematic as the highly publicized oil spills, like BP and Exxon Valdez, that captivate our nation’s attention. With roughly 88,000 commercial vessels operating worldwide, ocean shipping accounts for approximately half of all marine pollution. Some have estimated, for example, that illegal dumping of sludge and oily bilge water, residue generated by a ship’s engine, annually results in as much as eight times the amount of pollution generated by the Exxon Valdez spill.

Two lesser-known federal statutes provide the possibility of hefty awards for any whistleblower that discloses information to the Government leading to a conviction for pollution of U.S. waters: the Act to Prevent Pollution from Ships (“APPS”) and the Rivers and Harbors Act of 1899. Together, these statutes cover a broad range of conduct, not just related to the illegal dumping of oil, but to the release of any pollutant into the air or U.S. waters. Under what is commonly referred to as these statutes’ “bounty provisions,” whistleblowers can receive up to 50% of any fine levied as a result of a conviction. Although the APPS leaves the court with discretion as to the exact award amount, the Rivers and Harbors Act explicitly mandates that a whistleblower must receive 50% of any fine unless the conviction results from a multicount indictment.

A whistleblower’s potential recovery under these statutes can thus be significantly greater than that provided for by the False Claims Act, under which awards range from between 15-30% of any recovery by the Government depending on a variety of factors. With the availability of fines as high as $25,000 per day for violations of the APPS and Rivers and Harbors Act, whistleblower awards can also quickly reach the million dollar mark. In addition, unlike the APPS and many other environmental statutes, which often require willful or knowing violations, the Rivers and Harbors Act is a strict liability criminal statute. Although the Government is responsible for prosecuting a violation of either statute, whistleblowers are entitled to retain counsel to protect their right to an award, both by participating in legal proceedings, including the examination of witnesses, as well as by taking various actions to collect the whistleblower’s award.

The most oft-invoked section of the Rivers and Harbor Act is known as the Refuse Act, 33 U.S.C. § 407, which imposes misdemeanor criminal liability for the discharge of “refuse” into U.S. navigable waters or on their banks without a permit. Reasoning that “[m]ore comprehensive language would be difficult to select,” the Supreme Court has interpreted the term “refuse” to include “all foreign substances and pollutants apart from those ‘flowing from streets and sewers and passing therefrom in a liquid state’ into the watercourse.” See U.S. v. Standard Oil Co., 384 U.S. 224 (1996). The Exxon Valdez case resulted in a plea of guilty to violations of the Refuse Act. Other sections of the Rivers and Harbors Act that also trigger its bounty provision prohibit the obstruction of marine transportation in U.S. waterways by, for example, sinking or unlawfully anchoring a ship, floating loose timbers, or impairing U.S. marine improvements, such as jetties, bulkheads, wharfs, and piers. 33 U.S.C. §§ 408, 409, 414, 415.

The APPS imposes class D felony liability on any person who knowingly violates the MARPOL Protocol (the International Convention for the Prevention of Pollution from Ships), Annex IV to the Antarctic Protocol, or the APPS and its implementing regulations. MARPOL regulates all forms of pollution from ships, including emissions into the air. While courts have held that the pollution of international waters (as opposed to U.S. waters) is not within the jurisdiction of the United States, the APPS can nevertheless be used to deter such conduct by prosecuting intentional failures to maintain accurate oil record books. In February of 2011, for example, a seaman docked in the port of Baltimore turned over hundreds of cell phone photographs to the U.S. Coast Guard showing that his employer illegally dumped oil by hooking up a hose, known as a “magic pipe,” to bypass required oil distillation equipment and had then falsified records to conceal this misconduct. The employer ultimately pleaded guilty and agreed to pay approximately $1 million in fines, half of which was paid to the whistleblower.

By some accounts, 10-15% of the worldwide commercial shipping fleet is estimated to illegally dump using these “magic pipes,” which one Department of Justice attorney who frequently prosecutes these cases has called “an epidemic.” Since the bounty provision was added to the APPS in 1987, a growing number of these cases have been prosecuted across the country in port cities like Baltimore. Whistleblowers under the APPS and the Refuse Act have included not only seamen, but also cruise ship passengers and other individuals who had cause to believe a violation of either statute had occurred.