United States v. DSD Shipping

UNITED STATES OF AMERICA v. DSD SHIPPING, A.S., DANIEL PAUL DANCU, BO GAO,XIAOBING CHEN, and XIN ZHONG Defendants.

CRIMINAL NO. 15-00102-CG-B

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

September 15, 2015

ORDER

This matter is before the Court on DSD Shipping, A.S.'s motion to dismiss certain counts of the indictment and to compel an election of certain multiplicitous counts (Doc. 131) and the United States' response (Doc. 145). Three other Defendants, Xiobing Chen (Doc. 132), Xin Zhong (Doc. 136), and Daniel Paul Dancu (Doc. 140), filed motions to adopt the motion to dismiss. The Court granted the motions to adopt as to Xiabong Chen and Xin Zhong (Doc. 139) and Daniel Paul Dancu (Doc. 141).¹ For the reasons stated herein, Defendants' motion is due to be DENIED.

I. BACKGROUND

On November 3, 2014 and November 12, 2014, the M/T Stavanger Blossom docked at the Port of Lake Charles, Louisiana and the PlainsTerminal in Mobile, Alabama, respectively. (Doc. 145, p. 2). The M/T Stavanger Blossom is a 56,172 gross ton ocean-going oil tanker sailing under the flag of Singapore. Id. DSD Shipping, A.S. owns the M/T Stavanger Blossom. Id. At both stops Defendants made available their Oil and Garbage Record Books to the Coast Guard. Id.

Based on information received from a crewmember, the Mobile division of the Coast Guard found it necessary to investigate undocumented oil-contaminated bilge water and plastic discharge of the M/T Stavanger Blossom. The alleged discharges were reported to have occurred while the M/T Stavanger Blossom was on the high seas. The Coast Guard found no entries recording any direct discharges of oily-water in the Oil Record Book. Id. Instead, the Coast Guard found that the Chief Engineer and Fourth Engineer recorded in the Oil Record Book that the vessel discharged bilge waste using the proper pollution control device. Also, the Coast Guard found no entries regarding plastic discharge on the high seas in the Garbage Record Book. Id. The Coast Guard uncovered further evidence alleging that senior engine department officers obstructed the Coast Guard's investigation by urging subordinate crewmembers to withhold information and lie to Coast Guard inspectors. Id.

Based upon the Oil and Garbage Record Books, investigation, and crew interviews, the Coast Guard issued two detainable deficiencies for inaccurate Oil and Garbage Record Books and routinely discharging large quantities ofuntreated oil-contaminated bilge wastes directly into the ocean.

On April 30, 2015, a federal grand jury returned a seven-count indictment (hereinafter, the "Alabama Indictment") against Defendants. (Doc. 1). The Alabama Indictment includes charges of conspiracy (18 U.S.C. § 371), the knowing failure to maintain an accurate Oil Record Book and Garbage Record Book (33 U.S.C. § 1908(a)), obstruction of justice (18 U.S.C. §§ 1505 and 1519), and witness tampering (18 U.S.C. § 1512(b)). Subsequently, on June 11, 2015, a federal grand jury for the Western District of Louisiana returned a three-count indictment (hereinafter, "Louisiana Indictment") against Defendants, which includes charges of the knowing failure to maintain an accurate Oil Record Book (33 U.S.C. § 1908(a)), obstruction of justice (18 U.S.C. §§ 1505 and 1519), and aiding and abetting (18 U.S.C. § 2). (C.N. 15-cr-179-CB-B, Doc. 1, Exh. 2).

In the present motion, Defendants raise three arguments. (Doc. 131). First, Defendants argue that both indictments fail to state a violation upon which the United States can prosecute because the alleged discharges and failure to document took place on the high seas. Id. at 10. Second, Defendants argue that certain counts within both indictments fail to provide adequate notice of essential facts necessary to prepare a defense. Id. at 27. Third, Defendants argue that, in the alternative, the Court should compel the United States to elect the charges it seeks to pursue due to multiplicity. Id. at 28. The Court disagrees with each argument and will address each inturn.

II. THE ACT TO PREVENT POLLUTION FROM SHIPS

A. Jurisdiction of the United States Under the Act to Prevent Pollution from Ships

A "district court [is] required to dismiss [an] indictment if it fails to allege facts that constitute a prosecutable offense." United States v. Cure, 804 F.2d 625, 627 (11th Cir. 1986). Thus, the issue is whether the United States has jurisdiction to prosecute either the alleged unauthorized discharge that occurred on the high seas or any attendant record book violations that occurred at that time, or whether the United States has jurisdiction to enforce its laws regarding the alleged false statements contained within the record books made available to the Coast Guard during Defendants' entries into the Port of Lake Charles, Louisiana and the Port of Mobile Alabama. Based on the following, the Court answers the later in the affirmative.

The 1973 International Convention for the Prevention of Pollution from Ships and the Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships are two treaties generally referred to as "MARPOL." MARPOL's regulations are implemented under the Act to Prevent Pollution from Ships (hereinafter, the "APPS"), 33 U.S.C. §§ 1901 to 1905. The APPS makes acts in violation of MARPOL, the APPS, or "the regulations issued thereunder" unlawful. 33 U.S.C. § 1907(a). The APPS also provides criminal sanctions for knowing violations. 33 U.S.C. § 1908(a).

In order to police certain actions, the APPS requires that each vesselmaintain record books. Two such record books are relevant to this case. First, the APPS states that "[e]ach oil tanker of 150 gross tons and above . . . shall maintain an Oil Record Book." 33 C.F.R. § 151.25(a). A ship's crew is required to make entries into an Oil Record Book whenever there is disposal of oil residue, 33 C.F.R. § 151.25(d)(3), or "[d]ischarge overboard or disposal otherwise of bilge water that has accumulated in machinery spaces," 33 C.F.R. § 151.25(d)(4). Each event "shall be fully recorded without delay in the Oil Record Book . . . [and] signed by the person or persons in charge of the operations concerned." 33 C.F.R. § 151.25(h). The Oil Record Book is to be maintained and kept so that it is "readily available for inspection." 33 C.F.R. § 151.25(j), (k).

Second, the APPS requires that each vessel maintain a written record of the garbage "[d]ischarge[d] into the sea." 33 C.F.R. § 151.55(a). When garbage is discharged into the sea, the Garbage Record Book must indicate the date and time of the discharge, longitude and latitude of the ship, category of garbage involved, and estimated amount of garbage discharged. 33 C.F.R. § 151.55(d). Recordation in the Garbage Record Book applies to plastics, operational wastes, and other specifically listed wastes a vessel may generate. 33 C.F.R. § 151.55(e).²

Defendants aver that when these provisions use the word "maintain,"it merely recites "what types of vessels are required to keep Oil and Garbage Record Books." (Doc. 131, p. 16). Any substantive duties relating to the books are included later in the regulation. Id. at 19. In other words, Defendant advances the notion that physical possession is all that is required and accuracy of the entry is not a consideration in maintaining the required record book. (Doc. 148, p. 6) ("Properly understood, the word 'maintain' simply means to keep, and it is used merely to define what types of vessels must keep record books."). Additionally, Defendants argue that a record book violation is only completed upon failing to make an entry, which would bar prosecution by the United States if such an entry were required on the high seas. (Doc. 131, p. 15). Thus, the only option the United States would have in such a situation is to refer the matter to the flag state. Id. at 17. Such an interpretation ignores the most natural reading of the statute and strains credulity.

"In the context of a regulation imposing record-keeping requirements, the duty to 'maintain' plainly means a duty to 'maintain' a reasonably complete and accurate record." United States v. Ionia Mgmt. S.A., 555 F.3d 303, 309 (2d Cir. 2009) (emphasis in original). "[I]gnoring the duty to [accurately] maintain puts the regulation at odds with MARPOL and Congress' clear intent under the APPS to prevent pollution at sea according to MARPOL." United States v. Jho, 534 F.3d 398, 403 (5th Cir. 2008). "If the record books did not have to be [accurately] 'maintained' while in the ports ornavigable waters of the Unites States, then a foreign-flagged vessel could avoid application of the record book requirements simply by falsifying all of its record book information just before entry into a port or navigable waters." Id.

Thus, a violation of Section 151.25 or Section 151.55 of the APPS occurs when entry is made into United States waters with a fictitious record book made available for inspection and not when the pollution itself, or even the record book violation, occurs. See Id. at 404 ("[T]he 'gravamen' of the action was "not the pollution itself, or even the Oil Record Book violation occurring at that time, but the misrepresentation in port."); Ionia, 555 F.3d at 309 (holding that the APPS's requirement that ships "maintain" an Oil Record Book, 33 C.F.R. § 151.25, mandates that these ships "ensure that their ORBs are accurate (or at least not knowingly inaccurate) upon entering the ports or navigable waters of the United States"); see also United States v. Sanford, Ltd., 880 F. Supp. 2d 9, 19 (D.D.C. 2012) (holding the same); United States v. Petraia Mar., Ltd., 483 F. Supp. 2d 34, 39 (D. Me. 2007) (holding the same).

Although there are no Eleventh Circuit opinions directly on point, the Court finds the holding and reasoning of United States v. Royal Caribbean Cruises, Ltd., 11 F. Supp. 2d 1358 (S.D. Fla. 1998), persuasive. In Royal Caribbean, the United States indicted Royal...