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Marine & Energy News Alert: Fifth Circuit Vacates Judgment of Greek Chief Engineer's Conviction for Failing to Maintain Oil Record Book

March 23, 2016

In December 2013, while in international waters, Matthaios Fafalios, a 65-year-old Greek chief engineer, noticed the bilge tank was almost full. Fearing the bilge water would damage engine components before it could be filtered properly through the ship’s oily water separator for disposal; Fafalios ordered that the oily bilge water be pumped directly into the ocean without treatment. To conceal his actions, Fafalios did not record this discharge in the vessel’s oil record book. The vessel arrived in New Orleans several weeks later and a whistleblower contacted the U.S. Coast Guard and informed them that the untreated bilge water had been pumped overboard. The U.S. Coast Guard conducted an investigation, which uncovered Fafalios’ actions.

The U.S. Government indicted Fafalios for:

  1. failing to maintain an oil record book, in violation of 33 U.S.C. § 1908 (a);
  2. obstruction of justice under 18 U.S.C. § 1505; and
  3. witness tampering under 18 U.S.C. §1512(b)(3).

Fafalios’ case went to trial in December 2014. Before the case was submitted to the jury, Fafalios filed a motion for judgment of acquittal concerning the indictment for “failing to maintain an oil record book” under 33 U.S.C. § 1908(a). In this motion, Fafalios urged that the government failed to prove he was a “master” of the ship, which Fafalios contended is an essential element of the offense. On December 16, 2014, Fafalios was convicted by a jury on all three charges.

Fafalios appealed only his conviction under 33 U.S.C. § 1908(a) for failure to maintain an oil record book. Section 1908(a) provides that “[a] person who knowingly violates [international treaty provisions], this chapter, or the regulations issued thereunder commits a class D felony.” Foreign flagged ships “may be prosecuted under 33 U.S.C. § 1908 only for violations that occur within the navigable waters of the United States, or while at a port or terminal under the jurisdiction of the United States.” The regulations at issue on appeal, which are promulgated by the Coast Guard, provide in relevant part:

[e]ach .. ship of 400 gross tons and above … shall maintain an Oil Record Book … Entries shall be made in the Oil Record Book on each occasion [that bilge water is discharged] … Each operation …shall be fully recorded without delay in the Oil Record Book so that all the entries in the book appropriate to that operation are completed. Each completed operation shall be signed by the person or persons in charge of the operations concerned and each completed page shall be signed by the master or other person having charge of the ship …The master or other person having charge of a ship required to keep an Oil Record Book shall be responsible for the maintenance of such record. 33 C.F.R. §§151.25(a), (e), (h), (j).

As noted above, Fafalios dumped the bilge water while the vessel was still in international waters. Although a violation of international law, the dumping in international waters did not allow for prosecution under the Act to Prevent Pollution from Ships. Consequently, the U.S. Government used the statute’s accompanying regulations to prosecute Fafalios for failure to maintain an accurate oil record once the ship entered U.S. waters.

Fafalios argued that under the plain language of this regulation, the government had to prove he was the “master or other person having charge” of the ship. According to Fafalios, the government failed to prove an element of the charged offense because it failed to offer any evidence showing he was the master of the vessel. The Fifth Circuit agreed finding that the regulations mention only the “master” of the ship as the individual “responsible” for maintaining the oil record book, which the Court found “plainly indicates that the responsibility does not extend to others on the vessel.”

To support its statutory interpretation of the subject regulation, the Court pointed to other record book obligations that explicitly contemplate liability for other crew members besides the Master. The Court noted, for example, that the subsection addressing the logging and signature requirements extends criminal liability to the ”person or persons in charge of the operations concerned,“ which the Court opined would extend to a chief engineer such as Fafalios.

The government conceded Fafalios was not the “master or other person having charge” of the vessel, but set forth the following arguments to contend why Fafalios nevertheless violated 33 C.F.R. § 151.25:

First, the government contended that Fafalios was the “person … in charge of the operations concerned [i.e., the dumping of bilge water], and thus had an obligation to record the dumping of the bilge water and sign the oil book entry. 33 C.F.R. § 151.25(h) (Each operation [i.e., dumping of bilge water] … shall be fully recorded without delay [and] shall be signed by the person or persons in charge of the operations concerned.”). The U.S. Government argued that the signing and recording obligations are “continuing in nature,” such that Fafalios’ failure to record a bilge water dumping became a prosecutable offense once Fafalios’ ship entered U.S. Waters.

The Fifth Circuit rejected this argument noting that the government’s argument “conflates a failure to ‘record’ a dumping in the oil record book with a failure to ‘maintain’ the oil record book going forward.” The Court explained that under 33 C.F.R. § 151(h), Fafalios no doubt was required to record the dumping of the untreated bilge water and Fafalios ignored that requirement when he failed to make such an entry. However, this action, the Court emphasized, occurred while Fafalios was still in international waters, and nothing in the regulations state that a failure to sign a record entry is a continuing offense that would carry over into U.S. waters.

Significant to the Court’s analysis was that the regulation imposed a duty to record and sign the operation “without delay.” The Court concluded that this “phrase implies that Fafalios committed the offense as soon as he failed to sign the record book [which was in international waters] and that the offense thus was completed before Fafalios entered U.S. waters [consequently, he could not be charged under the statute]." The Court stated “if the regulations were meant to impose a continuing duty on Fafalios, they could have done so with different language, for example by requiring that Fafalios, as chief engineer, ‘maintain’ the record book.”

Second, the government argued that in addition to imposing on the master a duty to maintain the regulations also impose a duty to maintain the record book on the ship itself under 33 C.F.R. § 151.25(a). The government argued that the ship’s duty to maintain the record book under 33 C.F.R. § 151.25(a) should apply to Fafalios individually, at least for the records he was required to sign as the chief engineer. The Court made short work of this argument noting “this argument is foreclosed by traditional rules of statutory construction, not to mention common sense.”

Third, the government argued that the Coast Guard has a well-known practice of enforcing the oil record book regulations against chief engineers and that this practice is entitled to at least some deference. The Court found this argument without merit and stated “the interpretation at issue is in no way inconsistent with prosecution of chief engineers.” The Court emphasized that chief engineers can be prosecuted for failure to sign an oil record book when that failure occurs on U.S.-flagged vessels or in U.S. waters; chief engineers may be prosecuted for aiding and abetting the failure to maintain an accurate record book; and chief engineers can be prosecuted for making false statements to a Coast Guard investigator (as Fafalios was).

Ultimately, the Court found that the Coast Guard’s past practices in applying its regulations “do not provide a convincing reason to deviate from the plain language of the regulation itself.”

Fourth, in what the Court labeled a “pure policy argument” and “an unusual argument to make with respect to the interpretation of a criminal statute,” the government argued that reading the regulation as imposing the duty to maintain the record book only on the master of the ship would allow chief engineers to falsify records and conceal their falsification from the master. In this scenario, according to the government, neither the chief engineer nor the master would be liable, since only “knowingly” violations are criminalized.

The Court was unpersuaded by this argument for several reasons: “First, even if this were true, contrived hypotheticals provide little reason to depart from the plain language of the statute and regulations. Second,…any Coast Guard investigation will likely involve asking the chief engineer whether the oil record book is accurate; any engineer who stands by his falsified records will expose himself to an obstruction charge, just as Fafalios did.”

In sum, the Fifth Circuit found the plain language of 33 C.F.R. § 151.25 states that only the “master or other person having charge of the ship” has a duty to maintain the record book. Because the government conceded Fafalios was not the “master or other person having charge” of the vessel, the Fifth Circuit vacated the judgment of conviction and remanded the case for entry of a judgment of acquittal regarding the charge under 33 U.S.C. § 1908(a).

Click here to review a PDF version of the Fifth Circuit's decision.