Ionia Judgment Strengthens Trend Rejecting Limitations on Litigation from Oil Discharges

Another court rejects international law defenses to MARPOL prosecution

In a key decision that builds upon recent precedent from other United States courts, the appellate court in United States v. Ionia Management S.A., 2009 U.S. App. LEXIS 902 (2d Cir. Conn. Jan. 20, 2009) rejected the defendant’s international law challenges to its prosecution under the domestic MARPOL statute for failing to maintain an accurate oil record book (“ORB”) while in United States waters and affirmed the defendant’s conviction on all counts. The judgment in the Ionia case is the latest example of a developing international trend in judicial decisions which have rejected efforts to limit the scope of domestic civil and criminal litigation arising from oil discharge events based on principles of customary international law and the provisions of international maritime treaties.

Ionia Management S.A., the operator of the M/T Kriton, was convicted on all fifteen counts in the indictment, including thirteen counts under the Act to Prevent Pollution from Ships, 33 U.S.C. §1901, et seq. (“APPS”), which is the MARPOL implementing legislation in the United States. The indictment charged that the engine room crew, under the direction of the Chief Engineers, routinely discharged oily waste water into the high seas through a “magic hose” designed to bypass the vessel’s Oily Water Separator. The crew then made false entries in the Oil Record Book (“ORB”) to conceal these discharges and the falsified ORB was aboard the ship when it visited four separate ports in the United States. Following a jury trial, Ionia was convicted on all counts and sentenced to pay a criminal fine of $4.9 million.

On appeal, the Second Circuit followed the reasoning and conclusions of the Fifth Circuit in United States v. Jho, 534 F.3d 398 (5th Cir. 2008). The Second Circuit held that the APPS regulation which requires ships to maintain an ORB, 33 C.F.R. § 151.25, imposes an obligation that “ships ensure that their ORBs are accurate (or at least not knowingly inaccurate) upon entering the ports or the navigable waters of the United States.” The court went on to hold that this requirement fully complies with the requirements of international law, and is not contrary to the law of the flag doctrine as embodied in UNCLOS. In fact, the Second Circuit concluded that the requirements of the cited regulation were necessary to the advancement of the aims of treaties governing international pollution in the marine environment because they facilitated the monitoring of compliance with those international treaties.

The decision by the Second Circuit in the Ionia case is consistent with a developing international trend in judicial decisions rejecting efforts to restrict civil and criminal litigation arising from oil discharge events based on the provisions of international treaties. The Court of First Instance in Paris in the Erika decision last year rejected the arguments of TOTAL SA that it was subject to the liability limitations contained in the Convention on Limitation of Liability for Maritime Claims. The Erika court also rejected the arguments of several other defendants that the French criminal statute concerning pollution, which provides for criminal sanctions based on a finding of negligence, was contrary to MARPOL and UNCLOS. In a similar ruling, the European Court of Justice in a ruling issued on June 3, 2008 rejected arguments advanced by INTERTANKO and other plaintiffs that the European Union’s Ship-Source Pollution Directive 2005/35, which requires Member States to enact criminal laws for oil spills based on “serious negligence,” was contrary to UNCLOS and MARPOL.

Collectively, these decisions illustrate a trend to construe domestic environmental statutes in a manner that is not inconsistent with international Conventions and to give full force to domestic legislation, even when the application of the domestic laws results in more severe sanctions against a broader class of defendants than is contemplated by the relevant international Conventions.