Craig H. Allen, Proving Corporate Criminal Liability for Negligence in Vessel Management and Operations: An Allision-Oil Spill Case Study, 10 Loy. Mar. L.J. 269 (2012), https://digitalcommons.law.uw.edu/faculty-articles/81
Loyola Maritime Law Journal
corporate criminal liability, oil spills
Maritime policy analysts often invoke the "vessel safety net" metaphor to explain the independent, but overlapping, risk management roles and responsibilities of the vessel master and crew, owner and charterer, operating company, classification society, flag state and port states. Oil spills from the 2002 M/T Prestige break up off the coast of Galicia, Spain, the 2007 M/V Cosco Busan bridge allision in San Francisco Bay and the 2010 Deepwater Horizon debacle in the Gulf of Mexico, among others, demonstrate that any or all of the components of that safety net may come under scrutiny following a marine casualty, possibly leading to civil and even criminal liability.
Some might be tempted to dismiss or downplay the issue of corporate criminal liability as inconsequential, because of the often heard complaint that corporations cannot be imprisoned and any fine is so small as to be a mere cost of doing business. However, close inspection of what some refer to as the Alternative Fines Act suggests it would be naive to trivialize the prospect of corporate criminal liability. That statute increases the maximum fines that may be imposed under the Clean Water Act, and other statutes, to as much as twice the amount of the pecuniary loss that the violation caused to other persons. While the $10 million criminal fine eventually imposed on the Cosco Busan operator as a result of a plea agreement might not seem particularly remarkable by today's civil or criminal liability standards, with an incident like the Deepwater Horizon, which resulted in clean up costs and damage claims in the billions, the "pecuniary loss" formula could result in a truly astronomical fine. Evidence developed during the criminal investigation might also lead to collateral consequences, including loss of opportunity for the ship owner or operator to limit liability under the U.S. Limitation of Liability Act or the Oil Pollution Act of 1990, loss of or ineligibility for government contracts" and, for publicly traded corporations, a potentially embarrassing requirement to disclose to shareholders information regarding enforcement actions and potential liabilities. Finally, some violations render the involved vessel subject to forfeiture.
This article examines one particular aspect of the emerging development: the potential criminal liability of the vessel owner or operator, typically a corporation, for a discharge of oil in violation of the Clean Water Act. Recent cases have demonstrated that the owner's or operator's criminal liability may be based on either vicarious liability for the criminal acts of a mariner employed by the owner or operator or on a direct liability theory. Civil liability based on vicarious liability is nothing new. But vicarious criminal liability remains somewhat controversial. However, because vicarious criminal liability is relatively easy to establish, this article will only briefly examine the duties relevant to a vicarious liability theory before turning to the alternative direct liability theory for what some refer to as "negligent management." It does so by examining the possible means by which the direct criminal liability of the operator of the Cosco Busan might have been established, had the case gone to trial.