Opposition Brief — Miller v. United States

No. 85-484

CLERK

In the Supreme Court of the Untted States

OCTOBER TERM, 1985

JACK MILLER, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

CHARLES FRIED

Solicitor General

F’. HENRY HABICHT IT

Assistant Attorney General

ROBERT L. KLARQUIST

SARAH P. ROBINSON

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTION PRESENTED

Whether an individual defendant, as distinct from

a corporate defendant, may be held civilly liable for

violating Section 13 of the Rivers and Harbors Ap-

propriation Act of 1899, 33 U.S.C. 407.

(1)

TABLE OF CONTENTS

Opinions below 1

Jurisdiction

Statement

Conclusion

1

2

Argument 5

9

TABLE OF AUTHORITIES

Cases:

United States v. Joseph G. Moretti, Inc., 526 F.2d

1306 7, 8,9

United States v. Republic Steel Corp., 362 U.S.

EUR TIREraeelies ama oe area 6

United States v. Sexton Cove Estates, Inc., 526

EEE CN Fe CA . 7, 8,9

Wyandotte Transportation Co. v. United States,

889 U.S. 191 5, 6

Statute:

Rivers and Harbors Appropriation Act of 1899,

33 U.S.C. 401 e¢ seq.:

§ 10, 33 U.S.C. 403 8

§ 12, 33 U.S.C. 406 8

8

8

§ 18, 33 U.S.C. 407 .... 2,5

§ 16, 33 U.S.C. 411 ; 5,

(111)

TOS ei

‘c

oa

“ene = ie satel

roads

~ ; r et s 4

6 eae wi od oy ae ie che cil me > a Se ee Bea tp -

> ia : = =e oe ; Sty es ie

“ — wey 1 wa Lar

hy om £ w a m

2” at ts ~~ S =

— y Daa an as a -

Muipine cee

PI U7 tats € be

oe ie i ee

: ge ae

hat : tol =. Ce

: per epee) i ee Re Yo

- *

: et -

: (33 id ; :

i+) é > =

J iF

a ee ge

cee.

Pi as te :

? : ap : ot

‘ , t4 , ; 7 ~ rai poe a4 : ‘ «

7 iy -

‘ ty 4

e wo? é ’

aye eas ea .

y oe he be : * ‘

va. =

od ¢ r

Ms ye ,

Cama 2 : =

7 ‘i

i

}

'

a

’ ’

a =

‘ 2 + -

Iu the Supreme Court of the United States

OCTOBER TERM, 1985

No. 85-484

JACK MILLER, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-

6a) is reported at 763 F.2d 133. The opinion of the

district court (Pet. App. 7a-16a), issued orally, is

unreported.

JURISDICTION

The judgment of the court of appeals was entered

on June 38, 1985. On September 9, 1985, Justice

Marshall extended the time within which to file a

petition for a writ of certiorari to and including

September 23, 1985. The petition was filed on Sep-

tember 20, 1985. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(1).

(1)

2

STATEMENT

1. On July 19, 1977, the United States filed an

action in the United States District Court for the

Northern District of New York against Pollution

Abatement Services of Oswego, Ine. (PAS), alleging

continuing violations of Section 13 of the Rivers and

Harbors Appropriation Act of 1899, 33 U.S.C. 407,

which prohibits the dumping of refuse material into

navigable waters, or the depositing of refuse material

on the banks of navigable waters where it is liable to

be washed into them. The United States subsequently

filed an amended complaint, adding as defendants

H. Willard Pierce and Jack Miller, President and Vice-

President, respectively, of PAS. PAS, a New York

corporation, operated a liquid and solid waste disposal

service for industrial users at a site contiguous to

Wine Creek, a tributary of Lake Ontario. The United

States, in its complaint, charged PAS, Pierce, and

Miller with dumping refuse matter (oil, chemicals,

and other pollutants) into Wine Creek. The com-

plaint further charged that the defendants had been

storing thousands of drums of highly toxic chemicals

—including polychlorinated biphenols (PCBs), pesti-

cides, and hydrocarbons—on the banks of Wine Creek

(Pet. App. 2a-3a). The United States requested the

district court to enjoin the defendants from further

dumping and depositing refuse material and to enter

a decree requiring the defendants to remove certain

refuse material from PAS property and from the

banks of Wine Creek.

2. The district court held that PAS, Pierce, and

Miller violated Section 13 of the Rivers and Harbors

Act (Pet. App. 7a-16a). The court found that refuse

materials from the PAS facility were discharged into

Wine Creek and were deposited on the banks of Wine

3

Creek where they were likely to be washed into the

river. The court further found that Wine Creek and

Lake Ontario were navigable waters. In discussing

the liability of the two individual defendants, Pierce

and Miller, the court (id. at 9a-12a) stated:

During all the pertinent times involved in

this case, the defendants, H. Willard Pierce and

Jack Miller, were stock holders, directors and

officers of [PAS].

* * * * *

The individual defendants, by reason of their

respective positions and activities in [PAS], and

by reason of their activities, had the responsibil-

ity and the authority either to prevent, in the

first instance, or promptly to correct the viola-

tions complained of, and they failed to do so.

* * * * *

The personal responsibility of the individual de-

fendants arises out of the facts that demonstrate

that they were in a position to control the activi-

ties of [PAS] in such a manner as to have in

the first instance, not caused the pollutants to

flow into the navigable water, and in the second

instance, to have remedied the situation.

The testimony shows that [PAS] is a small,

closed corporation having, I believe four stock

holders whose interests were divided into three

thirty per cent interests with ten per cent inter-

est going to the attorney * * *. By the very

nature of the Corporation and its size, without

the definite proof that we iiad, I think you would

infer that there would be overlapping responsi-

bilities of the officers and managers who were

running the Company. It obviously was not so

departmentalized as to either of the defendants,

so that one of them would claim to be insulated

from the prohibited conduct. [Citation omitted.]

* * * * *

4

The liability on the part of the defendants

seems to be quite uncontrovertible.

In discussing the relief to be granted, the court

noted the defendants’ lack of technical and financial

resources and the ensuing likelihood that the defen-

dants would be unable to comply with a clean-up order.

Thus, while stating that Pierce and Miller were “the

responsibie individuals” (Pet. App. 13a), the district

court ordered the United States “to perform such

operations as are inimediately necessary” (ibid.) to

halt the pollution of Lake Ontario due to the PAS

facility. The court also ordered that a judgment be

entered against the defendants, jointly and severally,

for the cost of the clean-up operation, the dollar

amount to be left blank until the costs of clean-up

had been certified. The court further stated that the

parties could address the issue of the-reasonableness

of the dollar amount of the cost of the clean-up at the

trial of the permanent injunction. In March 1983,

following the United States’ clean-up operation, the

district court entered the amount of $411,269.10 as

the final judgment.’ Prior to the certification of ccsts,

PAS was dissolved by proclamation for nonpayment

of taxes (see Pet. App. 4a n.2), leaving Pierce and

Miller as the sole defendants. Pierce and Miller

appealed the judgment.

3. The court of appeals affirmed. It characterized

the sole issue on appeal as whether personal liability

may be imposed upon the individual defendants (Pet.

App. 4a), and added that the defendants had “mis-

takenly frame[d] the issue as whether corporate offi-

cers may be held civily liable for a corporate viola-

1 Pierce and Miller stipulated to the reasonableness of this

figure as the amount expended by the United States to comply

with the district court’s order, obviating the need for a trial.

5

tion of the Act” (id. at 5a; emphasis added). The

court of appeals held that individual corporate officers

may be held personally liable for their own personal

violations of the Rivers and Harbors Act. The court

pointed out (Pet. App. 5a) that Section 16 of the Act,

33 U.S.C. 411 (emphasis added), expressly provides

that “[e]very person and every corporation that s) ail

violate” the statute shall be held criminally liable for

such violation. The court then rejected the argu-

ment that civil penalties could not be levied under the

Act, relying on this Court’s decision to the contrary in

Wyandotte Transportation Co. v. United States, 389

U.S. 191 (1967), involving a corporate defendant.

The court of appeals reasoned that since Section 16,

by its own terms, contemplated violations by both

persons and corporations, and since civil remedies

had long been imposed under the Act, it followed that

a civil remedy could be imposed against individuals

who violated the Act.

ARGUMENT

The decision of the court of appeals is correct and

does not conflict with any decision of this Court or

another court of appeals. Accordingly, review by this

Court is not warranted.

1. Section 13 of the Rivers and Harbors Act, 33

U.S.C. 407, prohibits the discharge of any refuse into

any navigable waters of the United States or any

tributary of navigable waters. Section 13 also pro-

hibits depositing any material on the banks of a

navigable water or tributaries where it is likely that

such materia] will be washed into navigable waters.

The only express statutory remedy for violations

of Section 13 is contained in 33 U.S.C. 411 (part of

Section 16 of the Rivers and Harbors Act), which

6

provides for the assessment of criminal penalties

against “[e]very person and every corporation that

shall violate, or that shall knowingly aid, abet, au-

thorize, or instigate a violation of the provisions of

section[] 407.” This Court has, however, long held

that the United States may obtain appropriate relief

in a civil suit against a party who violates the Rivers

and Harbors Act. In United States v. Republic Steel

Corp., 362 U.S. 482, 491-493 (1960), this Court held

that courts may order injunctive relief to remedy

violations of the Act even where it contains no

express provisions for such injunctive relief. To hold

otherwise, the Court stated, would “impute to Con-

gress a futility inconsistent with the great design of

this legislation.” Jd. at 492. Similarly, in Wyandotte

Transportation Co. v. United States, 389 U.S. at 201-

205, the Court held that the United States could re-

cover the costs of removing a vessel which had been

carelessly sunk in navigable waters in violation of the

Act, The Court there affirmed the Fifth Circuit’s

holding that “the United States may assert in per-

sonam rights—to injunctive or declaratory relief or

damages—against those responsible.” Jd. at 193. In

so ruling, the Court applied the principle that civil

actions may be brought under penai statutes where

“criminal liability [is] inadequate to ensure the full

effectiveness of the statute which Congress had in-

tended.” Jd. at 202. The Court in Wyandotte thus

determined that Congress did not intend the “statu-

tory remedies and procedures [expressly mentioned in

the Rivers and Harbors Act] to be exclusive of all

others.” Jd. at 200.

2. Here, as the court of appeals pointed out, peti-

tioner does not deny that injunctive relief was ap-

7

propriate, and the sole issue is “whether personal

liability may be imposed upon the individual defen-

dants” (Pet. App. 4a). The court of appeals upheld

the district court’s determination that the two indi-

vidual defendants, including the petitioner, personally

violated the Section 13 prohibition against dumping

refuse in navigable waters. The court of appeals

stated that the liability of the petitioner “was bot-

tomed on [his] personal involvement in the firm’s

activities” (Pet. App. 5a), and correctly ruled that

“corporate officers who are personally involved in or

directly responsible for statutorily proscribed activ-

ity” (Pet. App. 6a) may be held civilly liable. This

conclusion necessarily follows from this Court’s hold-

ings, discussed above, that a party who violates the

Rivers and Harbors Act may be held civilly liable

for injunctive relief or for the costs of clean-up, and

from the fact that 33 U.S.C. 411, by its own terms,

contemplates violations both by corporations and by

individual persons.

3. Contrary to petitioner’s contention, the decision

of the court of appeals does not conflict with the Fifth

Circuit’s decisions in United States v. Sexton Cove

Estates, Inc., 526 F.2d 1293, 1800-1301 (1976), or

United States v. Joseph G. Moretti, Inc., 526 F.2d

1306, 1810-1311 (1976). In Sexton Cove, the Fifth

Circuit held:

A corporate officer may not be held civilly liable

for a corporate violation of the Rivers and Har-

bors Act unless either the Act itself authorizes

such liability, or there are sufficient allegations

and proof to permit negation of the corpcrate

form. The enforcement section of the statute

8

[33 U.S.C. 406] does not provide that an officer

of a corporation which violates Section 403 is

personally liable on any subsequent civil judg-

ment obtained against the corporation.'!

526 F.2d at 1300-1301 (emphasis added; footnote

omitted). Thus, as the court of appeals below cor-

rectly observed (Pet. App. 5a), the question decided

by the Fifth Circuit was whether a corporate officer

could be held liable for corporate violations of the

Rivers and Harbors Act, regardless of his degree of

personal involvement—.e., on a theory of derivative

liability.’ By contrast, the question in the present case

is whether a corporate officer may be held civilly liable

for his own personal violation of the Rivers and Har-

bors Act—.e., on a theory of direct, personal liability

—where his personal accountability for the violations

is “ ‘quite uncontrovertible’” (court of appeals opin-

ion at Pet. App. 3a, quoting district court holding at

2 Thus, Sexton and Moretti involved 33 U.S.C. 403 and its

enforcement section, 33 U.S.C. 406, rather than Sections 407

and 411. While not necessary to distinguish these cases from

the instant one, we note that 33 U.S.C. 411—unlike 33 U.S.C.

406—covers not only those who violate the underlying statu-

tory prohibitions, but also those “that shall knowingly aid,

abet, authorize, or instigate a violation.”

% That this is all the Fifth Circuit was addressing is further

demonstrated by footnotes 19 and 20 (526 F.2d at 1300-1301)

in Sexton, which also deal with such ipso facto liability, and

by the fact that the court’s opinion does not discuss the other-

wise rather obvious question of why personal liability should

be barred when the enforcement section at issue, 33 U.S.C.

406, applies to “persons” as well as “corporations.” Moreover,

it would have been odd, to say the least, for any court to hold

that an individual is immunized from personal liability be-

cause he is an officer of a corporation which is being held

liable. Nothing in the Fifth Circuit’s decisions suggests that

it contemplated such a holding.

9

Pet. App. 12a). There is, accordingly, no conflict

between the holding below and Sexton Cove or

Moretti.*

CONCLUSION

T:.: petition for a writ of certiorari should be

denied.

Respectfully submitted.

CHARLES FRIED

Solicitor General

F. HENRY HABICHT II

Assistant Attorney General

ROBERT L. KLARQUIST

SARAH P. ROBINSON

Attorneys

NOVEMBER 1985

4 Moretti was a companion case to Sexton Cove. The two

cases were decided on the same day, and Moretti cites only

Sexton Cove as authority and does not add to it. 526 F.2d at

1310-1311. Petitioner’s argument (Pet. 6-8) that on the

facts of those cases the Fifth Circuit could have dealt with

the issue of direct, rather than derivative, liability does not

gainsay the fact that it did not do sv.

W ov. &. GOVERNMENT PRINTING OFrice; 1985 491507 20050