Petition for Writ of Certiorari — West Indies Transport Co. v. United States

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Supreme Court, U.S.

FILED

001747 may 18 200r

No. 00-__._-»« OP ICE. OF THE CLERK

In The

Supreme Court of the United States

WEST INDIES TRANSPORT CO., INC.,

WIT EQUIPMENT CO., INC., and

W. JAMES OELSNER,

Petitioners,

UNITED STATES OF AMERICA,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Third Circuit

PETITION FOR WRIT OF CERTIORARI

ALAN ELLIs

PeteR GOLDBERGER

Counsel of Record

PaMetaA A. WILK

Law Orrices OF ALAN ELLIS

50 Rittenhouse Place

Ardmore, PA 19003-2276

(610) 658-2255

Attorneys for Petitioner

May 2001

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

AE EE EE PN

QUESTIONS PRESENTED

1. In proceedings for execution of a criminal restitu-

tion judgment, does the “clear error and manifest injus-

tice” exception to the law of the case doctrine permit a

court to reconsider the legality of the restitution order

itself? -

2. In an environmental criminal case brought under

various provisions of title 33, U.S. Code:

e Does the pleading and proof of an aiding and

abetting theory under 18 U.S.C. § 2 make the case one

involving “an offense under this title [i.e., title 18, U.S.

Code],” within the meaning of 18 U.S.C. § 3663(a), the

restitution provision of the Sentencing Reform Act?

e Is the federal agency with responsibility to

attempt remediation of the public harm resulting from

the violations, to the extent that the perpetrators do not, a

“victim” of the offense within the meaning of 18 U.S.C.

§ 3663(a), the restitution statute?

LIST OF ALL PARTIES

The caption of the case in this Court contains the

names of all parties (West Indies Transport Co., Inc., WIT

Equipment Co., Inc., W. James Oelsner and the United

States). Witwater Corporation intervened in the action

below and was subject to the final order of the district

court, but its appeal was not consolidated with the peti-

tioners’ and remains pending in the court of appeals.

ili

TABLE OF CONTENTS

Page

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i ccs 66505646 064600405460550500000000 44 2

FEDERAL STATUTES INVOLVED....... hee k ears 2

STATEMENT OF THE CASE............-.0-.0200-- 6

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c. Statement of Lower Court Jurisdiction........ 12

REASONS FOR GRANTING THE WRIT ........... 12

The court below departed from proper standards

when it upheld the enforcement of a transparently

illegal restitution order, even though that order

was summarily upheld on direct appeal ......... 12

a. Notwithstanding a prior appellate affirmance, an

illegal sentence should always be subject to re-

examination when the government invokes the

court’s authority to enforce the judgment....... 13

TABLE OF CONTENTS - Continued

Page

The requirement of the sentence that peti-

tioners must pay “restitution” for the cost of

remediating environmental damage caused by

criminal violations of title 33, U.S. Code, is

plainly illegal, and the indictment’s averment

of aiding and abetting liability under 18 U.S.C.

§ 2 cannot bring the case within statutory lan-

guage limiting restitution to offenses under

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INDEX TO APPENDIX

Not-for-Publication Memorandum Opinion of

the Court of Appeals (Dec. 19, 2000)....... App. 1

District Court Memorandum and Order

(dated July 19, 1999, filed July 22, and entered

July 23, 1999), published as United States v.

West Indies Transport Co., 57 F.Supp.2d 198

(D.V.L. 1999)... ccccccccccsscccssecccessese App. 3

District Court unpublished opinion and order

denying reconsideration (dated March 24,

2000, filed March 29, entered on the docket

April 3, 2000) ............-eeeeeeeeeeceneee App. 16

District Court opinion and order (Dec. 16,

1998), published as United States v. West Indies

Transport Co., 35 F.Supp.2d 450 (D.V.I.

DO vk ncdececcdavecdatsaswennasenadadnans App. 38

Opinion on direct appeal (filed Oct. 15, 1997),

published as United States v. West Indies Trans-

port, Inc., 127 F.3d 299 (3d Cir. 1997) ........ App. 56

TABLE OF AUTHORITIES

Page

Cases

Arizona v. California, 460 U.S. 605 (1983)............. 15

Callanan v. United States, 364 U.S. 587 (1961) ........ 18

Christianson v. Colt Industries Operating Corp.,

GO UD CBO CRG oan sbcdssccecszatictouann 15, 16

Dobbs v. Zant, 506 U.S. 357 (1993) (per curiam)...... 15

Hughey v. United States, 495 U.S. 411 (1990) ......... 19

Nye & Nissen Corp. v. United States,

Be SA. GES CRG oc ccdccvasnensineaehageeees 18

Pereira v. United States, 347 U.S. 1 (1954) la ee acre whe 18

Pinkerton v. United States, 328 U.S. 640 (1946)........ 18

Standefer v. United States, 447 U.S. 10 (1980)......... 18

United States v. Felix, 503 U.S. 378 (1992)............ 18

United States v. Helmsley, 941 F.2d 71 (2d Cir. 1991) .... 19

United States v. Minneman, 143 F.3d 274

Cre Ga See a6 abacus onnacdescseseee 19

STATUTES AND RULES

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UAC. 6M... cc ee 4, 6, 12

TABLE OF AUTHORITIES - Continued

Page

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1 OK. 6 SNES i ois ck scicindcssseee 2

CURE 4... «io eee 16

33 U.S.C. §§ 403, 406, 1311, 1319(c)(1);

1319(c)(2)(A), 1411(a)(1), 1415(b)(1)..........0eeeee. 7

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Fed.R.Crim.P. 35(a) (former vers.) ..........s+e+e0:: 16

Re Bie FEF. SES. Be nc vccesscveckevescusseaetes 2

S.Ct. Rule 14.1(g)(ii) .........00ceeeceeeceeeeeeeeeees 12

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

WEST INDIES TRANSPORT CO., INC., WIT EQUIP-

MENT CO., INC., and W. JAMES OELSNER jointly peti-

tion this Court for a writ of certiorari to review the

judgment and memorandum opinion of the United States

Court of Appeals for the Third Circuit filed and entered

on December 19, 2000.

OPINIONS BELOW

The Third Circuit’s Memorandum Opinion (per

Greenberg, J., with Mansmann & Alito, JJ.) was filed

December 19, 2000. It is not yet noted in a table of the

Federal Reporter. A copy is App. 1. The district court’s

Memorandum and Order dated July 19, 1999 (filed July

22, and entered July 23, 1999) denying the petitioners’

motions, is App. 3. It is published as United States v. West

Indies Transport Co., 57 F.Supp.2d 198 (D.V.I. 1999) (Brot-

man, J.). This district court’s opinion and order denying

reconsideration is dated March 24, 2000; it was filed

March 29 and entered on the docket April 3, 2000. It is not

published; a copy is App. 16. An earlier opinion of the

district court deciding preliminary questions in this mat-

ter is published at 35 FSupp.2d 450 (D.V.L., filed Dec. 16,

1998). A copy is App. 38. The Third Circuit’s published

opinion on direct appeal is United States v. West Indies

Transport, Inc., 127 F.3d 299 (3d Cir. 1997). A copy is App.

56.

JURISDICTION

The judgment of the United States Court of Appeals

for the Third Circuit affirming the denial of petitioners’

motions to quash a writ of execution against a certain

vessel, in order to satisfy a joint and several order of

restitution in a criminal case, was filed and entered on

December 19, 2000. App. 1. On March 12, 2001, under No.

00A784, Justice Souter extended the time for filing this

petition on joint application of the three petitioners to

and including May 18, 2001. This petition is timely filed

on or before that date. Rules 13.1, 13.3, 30.1; 28 U.S.C.

§ 2101(c). Petitioners invoke this Court’s jurisdiction

under 28 U.S.C. § 1254(1).

FEDERAL STATUTES INVOLVED

The aiding and abetting provision of the federal

criminal code, 18 U.S.C., provides:

§ 2. Principals

(a) Whoever commits an offense against

the United States or aids, abets, counsels, com-

mands, induces or procures its commission, is"

punishable as a principal.

(b) Whoever willfully causes an act to be

done which if directly performed by him or

another would be an offense against the United

States, is punishable as a principal.

The Sentencing Reform Act of 1984, incorporating in this

respect the Victim Witness Protection Act of 1982, also

part of title 18, U.S. Code, provided in part, at the time of

the offenses involved, to wit, at the end of 1993:

NEE RANE BN Rina) 0H on Se handle

§ 3663. Order of restitution

(a)(1) The court, when sentencing a defen-

dant convicted of an offense under this title, or

under subsection (h), (i), (j), or (n) of section 902

of the Federal Aviation Act of 1958 (49 U.S.C.

1472), may order, in addition to or, in the case of

a misdemeanor, in lieu of any other penalty

authorized by law, that the defendant make res-

titution to any victim of such offense.

++ +

§ 3664. Procedure for issuance and enforcement

of order of restitution

+ + + +

(h) An order of restitution may be

enforced —

(1) by the United States -

(A) in the manner provided for

the collection and payment of fines in

subchapter B of chapter 229 of this title;

(B) in the same manner as a judg-

ment in a civil action; and

(2) by a victim named in the order to

receive the restitution, in the same man-

ner as a judgment in a civil action.

+ + * *

Subchapter B of chapter 229 of title 18, U.S. Code, pro-

vided, in pertinent part:

§ 3613. Civil remedies for satisfaction of an

unpaid fine

(a) Lien. - A fine... is a lien in favor of

the United States upon all property belonging to

the person fined. The lien arises at the time of

the entry of the judgment and continues until

the liability is satisfied, remitted, or set aside, or

until it becomes unenforceable pursuant to the

provisions of subsection (b).. . .

+ + & *

The provisions of sections 6323, 6331, 6332, 6334

through 6336, 6337(a), 6338 through 6343, . . . of

the Internal Revenue Code of 1954 (26 U.S.C. . . .)

and of section 513 of the Act of October 17, 1940,

54 Stat. 1190, apply to a fine and to the lien

imposed by section (a) as if the liability of the

person fined were for an internal revenue tax

assessment... .

+ + + +

(e) Alternative enforcement. — Notwith-

standing any other provision of this section, a

judgment imposing a fine may be enforced by

execution against the property of the person

fined in like manner as judgments in civil cases,

but in no event shall liability for payment of a

fine extend beyond the period specified in sub-

section (b) [i.e., 20 years].

At the time execution proceedings commenced, to wit, in

November 1998, the restitution enforcement provisions

read, in pertinent part:

§ 3664. Procedure for issuance and enforcement

of order of restitution

+ + + %

(m)(1)(A)(i)_ An order of restitution may be

enforced by the United States in the manner

provided for in subchapter C of chapter 227 and

subchapter B of chapter 229 of this title; or

(ii) by all other available and reason-

able means.

(B) At the request of a victim named in a

restitution order, the clerk of the court shall

issue an abstract of judgment certifying that a

judgment has been entered in favor of such

victim in the amount specified in the restitution

order. Upon registering, recording, docketing, or

indexing such abstract in accordance with the

rules and requirements relating to judgments of

the court of the State where the district court is

located, the abstract of judgment shall be a lien

on the property of the defendant located in such

State in the same manner and to the same extent

and under the same conditions as a judgment of

a court of general jurisdiction in that State.

+ + +

Subchapter C of chapter 227 and subchapter B of chapter

229 of title 18, U.S. Code, provide, in pertinent part:

§ 3574. Implementation of a sentence of fine

The implementation of a sentence to pay a fine

is governed by the provisions of subchapter B of

chapter 229.

§ 3613. Civil remedies for satisfaction of an

unpaid fine

(a) Enforcement. —- The United States may

enforce a judgment imposing a fine in accor- __

dance with the practices and procedures for the

enforcement of a civil judgment under Federal

law or State law. ...

“ meyer

+ + +

provisions of subchapter C of chapter 27 of this

title, or an order of restitution made pursuant to i

section 2248, 2259, 2264, 2327, 3663, 3663A, or

3664 of this title, is a lien in favor of the United

States on all property and rights to property of

the person fined as if the liability of the person

fined were a liability for a tax assessed under

the Internal Revue Code of 1986. The lien arises

on the entry of judgment and continues for 20

years or until the liability is satisfied, remitted,

set aside, or is terminated under subsection (b).

* 2 2 &

(f) Applicability to order of restitution. —

In accordance with section 3664(m)(1)(A) of this

title, all provisions of this section are available

to the United States for the enforcement of an

order of restitution.

STATEMENT OF THE CASE

This petition presents a basic question of legality in

the imposition and enforcement of a federal criminal

sentence. The Third Circuit affirmed an order of restitu-

tion that the governing statute forbids, and then affirmed

UMAR Aiton sete ain ta eA NL erent. ne Pacem

a dubious enforcement of that order against property not

owned by the defendant-petitioners.

a. Procedural History

The petitioners were convicted after a jury trial in the

District Court of the Virgin Islands for federal environ-

mental and immigration offenses, 33 U.S.C. §§ 403, 406

(Rivers and Harbors Act); 1311, 1319(c)(1), and

1319(c)(2)(A) (Clean Water Act); 1411(a)(1) and 1415(b)(1)

(Ocean Dumping Act). The indictment also alleged lia-

bility under 18 U.S.C. § 2, the aiding and abetting statute.

The petitioners were also convicted under 18 U.S.C.

§ 1546 (visa fraud) and 371 (conspiracy to defraud the

United States with respect to employment taxes on for-

eign workers and to commit visa fraud), and for “Corrupt

Organizations” (a local Virgin Islands RICO offense) in

violation of 14 V.I.C. § 604.

On January 5, 1996, Judge Brotman sentenced peti-

tioner Oelsner to serve concurrent terms aggregating 37

months’ imprisonment, to be followed by three years’

supervised release, and to pay special assessments,

$95,500 in fines and up to $1,440,450 in restitution (sub-

ject to rebate if the cost of pollution abatement proved to

be less), although the payee of that restitution was not

specified.1 The corporate petitioners were sentenced to

1 Neither the sentencing transcript nor the judgments say

expressly to whom the restitution is payable, but the court later

clarified that the United States is the recipient intended by the

district court. App. 47-48, 55. It is the Coast Guard which

undertook the salvage and clean-up operation, or at least the

supervision of that operation, which resulted from the

pay fines and restitution. As part of the judgment in the

criminal case against each of the three petitioners, the

district court declared that 16 enumerated vessels and

properties were “associated with the defendant

[Oelsner]” and were “subject to lien” for satisfaction of

the judgment. Included among these was the vessel “Wit-

tug.” Judgment was entered March 26, 1996.

On direct appeal, the Third Circuit affirmed in a

published opinion. App. 56. This Court denied certiorari.

United States v. West Indies Transport Co., et al., 522 U.S.

1052 (Jan. 12, 1998) (No. 97-931).

On April 16, 1996, the United States recorded a lien

against the Wittug at the Recorder of Deeds, Division of

St. Croix, to satisfy the $1.44 million judgment previously

entered against petitioner Oelsner. On November 9, 1998,

the government applied for a writ of execution on the

vessel Wittug. The same day, Witwater Corp., which was

not a criminal defendant and is not a petitioner herein,

filed an emergency motion to intervene, claiming it was

the owner of the Wittug. The district court issued the

requested writ on November 12. Shortly thereafter, the

defendants (petitioners herein) also opposed execution,

petitioners’ alleged environmental violations. (In fact most of

the work has been and is being done by the petitioners

themselves.) As the district court stated at sentencing, “[T]he

Coast Guard, after having given allowance to everything that

this defendant has done in terms of clean-up, finds that it

would . . . still take $1,440,450 to complete. I will accept that

figure.” Tr. at 87. No loss to any victim was incurred from the

visa fraud offenses, and no restitution was imposed on that

account or on account of the conspiracy to defraud, nor was

restitution part of the judgment of sentence on the one Virgin

Islands Code offense.

NIA ALAR Te PARE NRRL I di Daily ies rata

filing a motion to quash the writ of execution on various

grounds. Witwater also filed a civil action seeking the

same relief. The district court granted the motion to inter-

vene and scheduled a hearing. App. 38 (United States v.

West Indies Transport Co., 35 F.Supp.2d 450, 455, 458 (D.V.I.

1998)). After hearing, by opinion and order filed July 19,

1999, the district court denied petitioners relief on the

merits. App. 3 (United States v. West Indies Transport Co.,

57 F.Supp.2d 198 (D.V.I. 1999)). Petitioners timely sought

reconsideration, which was also denied. App. 16. On

appeal by petitioners, the Third Circuit again affirmed,

essentially adopting the decisions of the district court.

App. 1.

This petition followed. Witwater Corp.’s separate

appeal was not consolidated; it remains pending before

the Third Circuit.

b. Statement of Facts

The facts as related at trial are summarized in the

light most favorable to the verdicts, in the Third Circuit’s

decision on direct appeal, App. 56, as follows:

West Indies Transport, Inc. and WIT Equipment

Co. (collectively “West Indies Transport”) oper-

ated several businesses in Krum Bay, St.

Thomas, including a dry dock, ship repair facil-

ity, and barge towing company. West Indies

Transport’s chief operating officer was W. James

Oelsner. In 1987, West Indies Transport obtained

permits to use five barges as fixed docks for its

other vessels. In 1989, Hurricane Hugo seriously

damaged some of these barges, shifting them

from their permitted positions. West Indies

Transport did not attempt to repair, reposition,

or salvage these barges after the storm. Instead,

it used these barges as docks, repair facilities,

and housing for employees in their new

unauthorized locations. In the process, West

Indies Transport attached the barges perma-

nently to shore, constructed walkways and

ramps between the barges for use by vehicles

and employees, and wired them for electricity.

To staff its facilities, West Indies Transport

hired an overseas agent to recruit Filipino

workers. The Filipino workers were instructed

to apply for D-1 visas intended for non-immi-

grant foreign maritime crewmen, not the H-2

visas [allegedly] required by law. The “West

Indies Transport crewmen” never put to sea.

Instead, West Indies Transport housed them in a

converted shipping container on a barge and

used them as dock workers. The Filipino

workers were paid approximately $400 per

month for a 56-hour work week. By using

underpaid[,] illegal[,] foreign employees, West

Indies Transport was able to reduce significantly

its expenses for wages and wage taxes.

In the course of its repair operations, West

Indies Transport [allowed] several different

[objects and substances, which the indictment

described as] pollutants into the navigable

waters of the United States. Witconcrete Il, a

ferro-concrete barge, was heavily damaged in

Hurricane Hugo. The stern was partially

severed from the remainder of the barge,

attached only by metal reinforcing bars, known

as rebar. West Indies Transport did not attempt

to repair, break up, or salvage the damaged

stern. Instead, it cut the rebar by which the stern

was attached and dumped the stern into the bay.

Later, when West Indies Transport decided to

——T

move the barge, it cut additional protruding

pieces of rebar from the structure and dumped

them in the water. West Indies Transport also

sand-blasted the hull of a vessel moored in its

facility, causing paint chips and sand to fall into

Krum Bay near the main water intake for the St.

Thomas desalinization plant. The toilet system

on the Witrollon, the barge on which illegal Fili-

pino workers were housed, discharged raw sew-

age directly into the bay. West Indies Transport

also collected steel scrap from its repair opera-

tions and dumped it twelve miles out at sea

under cover of darkness. West Indies Transport

never obtained a permit for any of these pollu-

tion discharges.

App. 58-59 (127 F.3d at 303-04).

With respect to the enforcement of restitution, the

district court found, in part:

On April 19, 1999, a hearing was held, during

which the Court heard evidence concerning the

cost of the remediation that had been done and

that remained to be done. While the parties

agreed to the amount that Oelsner had

expended in performing part of the clean-up,

they disputed the amount of the projected cost

for the remaining remediation. In light of this

dispute, the Court declined to reduce the

amount of restitution due and Owing, stating

that “once the clean-up is complete, Oelsner

may move... to reduce the restitution amount

indicated in the Oelsner judgment. Until that

time, the amount will not be reduced.” United

States v. West Indies Transport Co., Inc., 57

F.Supp.2d. 198, 202 (D. Virgin Islands 1998).

App. 23.

c. Statement of Lower Court Jurisdiction Under

Rule 14.1(g)(ii)

The District Court of the Virgin Islands had subject

matter jurisdiction of the underlying criminal case under

48 U.S.C. § 1612(a), (c); the indictment alleged federal

offenses committed there. The court of appeals had juris-

diction under 28 U.S.C. § 1291.

REASONS FOR GRANTING THE WRIT

The court below departed from proper standards when

it upheld the enforcement of a transparently illegal

restitution order, even though that order was summarily

upheld on direct appeal.

The petitioners were sentenced, inter alia, to pay over

$1.4 million (to whom, the order did not say) to complete

the clean-up of environmental damage to Krum Bay, St.

Thomas, Virgin Islands. The federal sentencing statute

expressly disallows restitution as a penalty for title 33

offenses such as those for which petitioners were con-

victed, permitting restitution as part of the sentence, with

few and immaterial exceptions, only for title 18 offenses.

18 U.S.C. § 3663(a).2 The sentencing court declared that a

“lien would attach, presumably under 18 U.S.C. § 3613,° to

2 See Statutes Involved, p. 3 ante.

3 See Statutes Involved, pp. 4-6 ante. Differences between

the terms of this provision as framed at the time of the offense,

at the time of sentencing, and at the time of enforcement are not

material to the issues raised in this petition.

}

eel

each of 16 vessels with which petitioner Oelsner was

“associated.” The Third Circuit affirmed on direct appeal

on the unprecedented and indefensible basis that the

charging of 18 U.S.C. § 2(a) as a theory of liability in each

count made the title 33 convictions ones for offenses

under title 18, for which restitution could be ordered.

App. 88.

While the individual petitioner was still completing

his prison sentence, the government moved to enforce its

statutory lien by attaching and executing on one of the

listed vessels. The legal owner intervened, and the parties

litigated the validity of the lien enforcement action. A

hearing was held; petitioner Oelsner was able to partici-

pate by videoconference. The district court ordered the

lien enforced against the vessel. App. 3. After the district

court declined reconsideration, App. 16, the Third Circuit

summarily affirmed. App. 1. This Court should grant

certiorari and reverse, because the law of the case doc-

trine did not forbid the court below from reconsidering

its appellate decision to uphold the invalid restitution

order, and that illegal sentence should not be allowed to

stand.

a. Notwithstanding a prior appellate affirmance,

an illegal sentence should always be subject to

re-examination when the government invokes

the court’s authority to enforce the judgment.

At sentencing in 1996, the district court imposed

sentences on the three petitioners which included a

requirement to pay $1.4 million in “restitution.” Peti-

tioners challenged this part of the sentence on appeal,

pointing out that their convictions were not for any-

offense for which restitution is an authorized term of a

sentence. Under 18 U.S.C. § 3663(a), the district court,

“when sentencing a defendant convicted of an offense

under this title, or under subsection (h), (i), (j), or (n) of

section 902 of the Federal Aviation Act of 1958 (49 U.S.C.

1472), may order, in addition to . . . any other penalty

authorized by law, ihat the defendant make restitution to

any victim of such offense.” The offenses causing the

damage which the petitioners were ordered to pay the

cost of remediating were various violations of title 33,

U.S. Code, not of title 18 (nor of the specified sections of

title 49).4 The court of appeals nevertheless affirmed,

holding (in full) that:

Restitution is authorized only for violations of

Title 18 and some Title 49 provisions. See 18

U.S.C. § 3663. Defendants contend the trial court

erred by ordering restitution for title 33

offenses. Our review is plenary. [citation omit-

ted]

Defendants’ argument is meritless. Each

Title 33 offense also charged a violation of 18

U.S.C. § 2. Restitution is authorized for violation

of 18 U.S.C. § 2.

App. 88 (127 F.3d at 315).

4 Section 3663(a) was amended in 1996 to add certain drug

offenses to the list of crimes for which restitution could be

ordered, in connection with the creation of a new sort of

“community restitution” sentence, but those provisions cannot

be retroactive and in any event would have no applicability to

this case. Even under the current statute, there is no authority to

impose restitution as a penalty for any criminal violation of title

33.

In the enforcement proceedings, the district court

refused to reconsider the legality of the restitution order

or any issues decided on direct appeal.

Th[e] defendants’ present objections to the

amount of the restitution award are barred by

the mandate rule and the law of the case.[fn]

Under these doctrines, a district court is pre-

cluded from reconsidering issues that have been

decided either expressly or by necessary impli-

cation. [citations omitted]

[fn] The mandate rule “bars a district court from

‘reconsidering or modifying any of its prior

decisions that have been ruled on by the court

of appeals,’ ” [citations omitted], while the law

of the case doctrine precludes a district court

from reconsidering its own decisions in the

same case absent extraordinary circumstances.

[citation omitted]

App. 28; see also App. 44 (“a challenge to the validity of

the judgment exceeds the scope of a hearing on a writ”).

As noted, the court of appeals affirmed on this point.

App. 2 (“the district court acted in full conformity with

our prior opinion and thus we will affirm”).

In deferring to the “law of the case,” the courts below

overlooked this Court’s recognition that the rule must

give way “where the initial decision was ‘clearly erro-

neous and would work a manifest injustice.’ ” Christian-

son v. Colt Industries Operating Corp., 486 U.S. 800, 817

(1988), quoting Arizona v. California, 460 U.S. 605, 618 n.8

(1983). See also Dobbs v. Zant, 506 U.S. 357 (1993) (per

curiam) (summarily reversing for failure to apply “mani-

fest injustice” exception to law of the case rule). In any

event, “A petition for writ of certiorari can expose the

entire case to review.” Christianson, 486 U.S. at 817.

Exercise of the power to reconsider the “law of the

case” is particularly important where an illegal sentence

is involved. Under the Federal Rules prior to 1987, an

“illegal sentence” could be corrected “at any time.”

Fed.R.Crim.P. 35(a) (former vers.). Under the Sentencing

Reform Act, this judicial power is purportedly severely

restricted. Cf. 18 U.S.C. § 3582(c) (sentences of imprison-

ment). The remedy under 28 U.S.C. § 2255 has likewise

been restricted, and may not in any event be available to

grant relief which does not affect “custody.” Id. Accord-

ingly where, as here, the government chooses to invoke

the district court’s power to enforce and execute upon a

sentence which the defendant claims is flatly illegal, the

court should be encouraged to consider, not barred from

hearing, arguments raised defensively which demon-

strate the underlying unlawfulness of the term of the

sentence sought to be implemented. The district court’s

equitable power to issue and enforce a writ of execution

must not be exercised to perpetuate a clear error or to

perpetrate a manifest injustice, such as enforcement of an

illegal sentence.

For any of these reasons, this Court should grant the

writ to correct the clear error and to prevent the manifest

injustice in the court of appeals’ ruling on direct appeal

allowing restitution for the title 33 offenses.

Bedi. mp re

b. The requirement of the sentence that peti-

tioners must pay “restitution” for the cost of

remediating environmental damage caused by

criminal violations of title 33, U.S. Code, is

plainly illegal, and the indictment’s averment

of aiding and abetting liability under 18 U.S.C.

§ 2 cannot bring the case within statutory lan-

guage limiting restitution to offenses under

title 18.

The provision of the judgments in this case that each

of the three petitioners must pay up to $1.44 million in

restitution is patently illegal in at least two ways. First, it

is unauthorized by statute, because the offenses peti-

tioners committed did not fall under title 18 (or title 49).

Second, as amended to specify the United States as payee,

App. 47-48, 55, the judgment does not direct payment “to

any victim of such offense.” 18 U.S.C. § 3663(a). This

Court should grant certiorari to correct the court of

appeals’ blatant and illogical deviation from legality in

federal sentencing.

The lower court’s two-sentence disposition of this

claim completely misses the mark: “Each Title 33 offense

also charged a violation of 18 U.S.C. § 2. Restitution is

authorized for violation of 18 U.S.C. § 2.” App. 88. There

is no such thing in federal criminal law as a “violation of

18 U.S.C. § 2.” Section 2 of title 18 does not define an

offense that someone can commit; it is a general provision

stating most of the principles of individual liability that

federal law recognizes for the commission of other

federal offenses,> each of which is and must be defined

elsewhere in the U.S. Code:

§ 2. Principals

(a) Whoever commits an offense against

the United States or aids, abets, counsels, com-

mands, induces or procures its commission, is

punishable as a principal.

(b) Whoever willfully causes an act to be

done which if directly performed by him or

another would be an offense against the United

States, is punishable as a principal.

The main objective of this law, when enacted in 1909, was

to abolish the technical, common law distinctions

between accessories and principals, and between princi-

pals of different degree. Standefer v. United States, 447 US.

10, 16-20 (1980). The offense of which the aider and

abettor is guilty - in which he is a “principal,” in other

words - is the underlying crime, which may or may not

be found in title 18.

Section 2 itself does not define a crime at all. See Nye

& Nissen Corp. v. United States, 336 U.S. 613, 618-19 (1949)

5 The uncodified theory of substantive criminal liability is

that recognized in Pinkerton v. United States, 328 U.S. 640 (1946).

6 This is one of the ways that aiding and abetting differs

from conspiracy. To conspire to commit an offense is to commit

an entirely separate crime - one which may be found in title 18

(see 18 U.S.C. § 371) even if the object crime is not. See generally

United States v. Felix, 503 U.S. 378 (1992) (substantive crime and

conspiracy to commit it are two different offenses); accord,

Callanan v. United States, 364 U.S. 587, 593 (1961); Pereira v.

United States, 347 U.S. 1, 11-12 (1954); Pinkerton v. United States,

328 U.S. 640, 643-44 (1946).

(explaining aiding and abetting under § 2 as a “valid

theory” making the defendant “responsible” for

another’s criminal act). The courts below thus flatly vio-

lated the limitations of § 3663(a) when they imposed and

then affirmed the imposition of restitution in this case.

Other circuits do not allow the same deviation from the

terms of the restitution statute. See United States v. Minne-

man, 143 F.3d 274, 283-84 (7th Cir. 1998) (restitution not

authorized for title 26 offense, but can be ordered for

violation of 18 U.S.C. § 371 to commit that offense or

related “conspiracy to defraud the United States”); United

States v. Helmsley, 941 F.2d 71, 101 (2d Cir. 1991) (same).7

The restitution statute, as a law defining criminal

punishment, must be strictly construed and enforced,

with restitution limited to those offenses, and only in

those circumstances, allowed by Congress. Hughey v.

United States, 495 U.S. 411 (1990). Every defendant in

every federal criminal case is a “principal” of one sort or

another under § 2. The court of appeals’ casual reliance

on the reference to § 2 in each count of petitioners’

indictment thus eliminated the entire meaning of the

limiting introductory phrase of § 3663 by allowing resti-

tution for offenses not covered there, on a theory that

would apply to any and all federal charges.

The courts below also plainly erred by ordering and

enforcing restitution to be paid to a federal agency which

was not a “victim of such offense,” that is, the offense of

conviction. A governmental agency charged by law with

” Although there was a conviction for a conspiracy to

defraud the U.S. in an internal revenue matter in petitioners’

case (Count XII), no restitution was ordered in that regard.

remediating a public harm is not “victimized” by private,

illegal conduct which causes that harm. The agency’s

expenditures in fulfillment of its public duty are not

“losses” of a crime victim. The Coast Guard, in particular,

was not the “victim” of any criminal conduct which

caused pollution to Krum Bay. Petitioners could, perhaps,

have been fined with these costs in mind (in fact, very

substantial fines were levied against the corporations), or

have been required as a condition of supervised release

or of probation to participate in the clean-up (as they

have been actively doing in any event, as a way of reduc-

ing their residual obligation to pay under the district

court’s illegal order). They could not, however, have been

properly ordered to make “restitution.”

For these reasons, the Court should grant the

requested writ of certiorari. The judgment of the court

below upholding the seizure and sale of the Wittug must

be reversed, and the case remanded with directions to

strike the unlawful restitution requirements from the

petitioners’ judgments of sentence.

CONCLUSION

For the foregoing reasons, petitioners WEST INDIES

TRANSPORT CO., INC., WIT EQUIPMENT CO., INC.,

and W. JAMES OELSNER pray that this Court grant their

petition for a writ of certiorari to review the judgment

and memorandum of the United States Court of Appeals

for the Third Circuit upholding the district court's

enforcement of the lien for restitution.

Respectfully submitted,

ALAN ELLIs

Peter GOLDBERGER

Counsel of Record

Pameta A. WILK

Law Orrices OF ALAN ELLIS

50 Rittenhouse Place

Ardmore, PA 19003-2276

(610) 658-2255

Attorneys for Petitioner

May 18, 2001

crt

bell tet een

App. 1

UNREPORTED - NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

4 FOR THE THIRD CIRCUIT

No. 00-3449

UNITED STATES OF AMERICA

WEST INDIES TRANSPORT CO., INC.;

WIT EQUIPMENT, CO., INC. and

W. JAMES OELSNER,

Appellants

On Appeal from the District Court of the Virgin Islands

(Division of St. Thomas and St. John)

(D.C. Crim. No. 93-00195)

District Judge: Honorable Stanley S. Brotman

Submitted under Third Circuit LAR 34.1(a)

December 7, 2000

BEFORE: MANSMANN, ALITO, and

GREENBERG, Circuit Judges

(Filed: Dec. 19, 2000)

MEMORANDUM OPINION OF THE COURT

GREENBERG, Circuit Judge.

West Indies Transport Co., Inc., Wit Equipment Co.,

Inc., and W. James Oelsner appeal from an order entered

in the district court on April 3, 2000, denying Oelsner’s

App. 2

motion to quash or stay the government's writ of execu-

tion on the vessel Wittug and denying certain other relief.

The district court set forth the background of the matter

in its memorandum opinion accompanying the order. In

addition, we set forth the background in our opinion on

the direct appeal, see United States v. West Indies Transport

Co., 127 F.3d 299 (3d Cir. 1997), and the district court

described later proceedings in the case in its opinion in

United States v. West Indies Transport Co., 57 F. Supp.2d 198

(D.V.I. 1999).

We have carefully reviewed this matter and have

concluded that the district court acted in full conformity

with our prior opinion and thus we will affirm. In reach-

ing our result we emphasize our understanding that

while Oelsner is liable for the entire amount of restitution

ordered, nevertheless a rebate will be allowed for the

difference between the restitution amount and the ulti-

mate amount of the cleanup costs. Thus, the order for

restitution does not provide for payment of an excessive

amount.

The order of April 3, 2000, will be affirmed.

TO THE CLERK:

Please file the foregoing memorandum opinion.

App. 3

DISTRICT COURT OF THE VIRGIN ISLANDS

UNITED STATES of America and Government of

the Virgin Islands, Plaintiffs,

WEST INDIES TRANSPORT CO., INC., Wit

Equipment Co., Inc., and W. James Oelsner,

Defendants.

WITWATER CORPORATION, Petitioner,

MICHAEL E. MURPHY, in his capacity as Area Port

Director for the United States

Customs Service, Respondent.

No. CRIM. A. 93-195(STX).

No. CIV. A. 98-104(STT).

July 19, 1999.

James A. Hurd, Jr., United States Attorney, Curtis V.

Gomez, Assistant U.S. Attorney, Federal Building & U.S.

Courthouse, St. Thomas, VI, for U.S., Respondent Michael

E. Murphy.

Treston E. Moore, Moore & Dodson, St. Thomas, VI,

for Defendant W. James Oelsner.

Andrew C. Simpson, Bryant White & Barnes, P.C., St.

Croix, VI, for Petitioner Witwater Corporation.

OPINION ON DEFENDANTS’ MOTION TO QUASH

AND OPPOSITION TO WRIT OF EXECUTION

OPINION ON MOTION OF WITWATER

CORPORATION TO STAY OR

QUASH EXECUTION OF WRIT

OPINION ON PETITION FOR

ORDER OF MANDAMUS

App. 4

BROTMAN, District Judge.

Presently before the Court are the following motions:

(1) a motion filed by W. James Oelsner (“Oelsner”) on

behalf of all of the defendants to Criminal Action No.

93-195 to quash the writ of execution filed by the United

States in that action; (2) a motion filed by Witwater Cor-

poration (“Witwater”) to stay or quash the writ of execu-

tion filed by the United States in Criminal Action No.

93-195; and (3) a petition for order of mandamus filed by

Witwater in Civil Action No. 98-104.

I. FACTS AND PROCEDURAL BACKGROUND

On March 26, 1996, this Court entered a judgment

against Oeisner (“Oelsner Judgment”)! which imposed a

prison sentence and required Oelsner to pay $1,440,450.00

in restitution? and $95,500 in fines. See Opp’n of the

' The jury found Oelsner guilty of the following offenses:

(1) violation of the Clean Water Act, 33 U.S.C. § 1311(a), 33

U.S.C. § 1319(c)(2)(A), 18 U.S.C. § 2; (2) violation of the Rivers

and Harbor Act, 33 U.S.C. § 403, 33 U.S.C. § 406; (3) violation of

the Ocean Dumping Act, 33 U.S.C. § 1411(a)(1), 33 U.S.C.

§ 1415(b)(1), 18 U.S.C. § 2; (4) conspiracy to defraud the United

States, [18 U.S.C. § 371,] 26 U.S.C. §[§], 86[1](a)(3)[,

871(a)}(1)(A); and (5) fraud, misuse of visas, 18 U.S.C. § 2, 18

U.S.C. § 1546. See United States’ Opp’n, Attach. 2.

* With regard to the amount of restitution Oelsner was

required to pay, the judgment stated as follows:

The defendant shall pay restitution within Sixty (60)

days from today’s date provided, however, that if the

costs of these cleanup efforts are less than the amount

to which the Court made reference of $1,440,450.00,

credit will be given to the defendants to that extent.

App. 5

United States to the Emergency Mot. of Witwater Corpo-

ration to Intervene and to Stay or Quash Execution

(“United States’ Opposition”), Attach. 2. Also on March

26, 1996, this Court issued criminal judgments against

West Indies Transport, Inc. (“West Indies”) and WIT

Equipment Co., Inc. (“WIT Equipment”) in the same mat-

ter.> All three judgments contained identical lists of ves-

sels and real estate that the Court determined were

subject to liens. See id. Included in the list was the vessel

Wittug. See id.

On April 16, 1996, the United States recorded a lien

against the Wittug at the Recorder of Deeds, Division of

St. Croix to satisfy the $1,440,450.00 judgment previously

entered against Oelsner. See id., Attach. 3. On November

9, 1998, the United States applied for a writ of execution

on the Oelsner Judgment against the Wittug, serving

Oelsner with a copy of the application by mail on

November 10, 1998. Also on November 9, 1998, Witwater

filed an emergency motion to intervene and to stay or

quash execution of the writ. On November 12, 1998, this

Court issued the writ. On November 23, 1998, Oelsner

Any restitution payments made by defendants West Indies

Transport, Inc. and/or WIT Equipment Co., Inc. shall be applied

to reduce this amount accordingly. United States’ Opp’n,

Attach. 2.

* The Court ordered West Indies to pay $3,520,500.00 in

fines and $1,440,450.00 in restitution. The Court ordered WIT

Equipment to pay $1,520,500.00 in fines and $1,440,450.00 in

restitution. In both the West Indies and the WIT Equipment

judgments, the Court stated that any restitution payments made

either by the company not subject to the judgment or by Oelsner

would be applied to reduce the amount of restitution owed by

the company subject to the judgment.

App. 6

filed a motion to quash the writ of execution and to

obtain a hearing on the matter.*

In addition to attempting to intervene in the United

States’ case against Oelsner, Witwater filed its own action

regarding the Wittug. On May 22, 1998, Witwater filed a

petition for order of mandamus, alleging that it owns the

Wittug and that the United States Customs Service has

wrongfully denied the Wittug clearance to depart St.

Thomas, USVI where it is currently docked. See Pet. for

Order of Mandamus, § § 6, 7, 9, 17. On August 7, 1998,

the United States filed a motion to dismiss the petition,

arguing that the Court lacked jurisdiction to issue an

order of mandamus in such an action and that Witwater

failed to exhaust its administrative remedies before filing

the petition. On November 10, 1998, the Court heard

argument on this motion and ordered that the hearing

transcript be made part of the criminal action pending

against Oelsner as well as part of the mandamus action

Witwater initiated.

On December 16, 1998, the Court granted Oelsner’s

motion for a hearing on the writ of execution, permitting

Witwater to intervene in the hearing for the limited pur-

pose of challenging the writ. See United States v. West

Indies Transport Co., Inc., 35 F.Supp.2d 450, 455, 458

(D.V.I.1998). The Court stated that the hearing would be

held for the purpose of determining the identity of the

Wittug’s owner, the value of the Wittug, and the cost of

the remediation that remains to be done. See id. at 454,

+ Oeisner alone brought the motion to quash and to obtain a

hearing, stating that the other corporate defendants are defunct.

See Defs.’ Mot. to Quash at 1, n.1.

App. 7

458. At the same time, the Court denied the United States’

motion to dismiss the petition for order of mandamus

filed by Witwater in Civil Action No. 98-104. See id. at

457-58. Finally, the Court consolidated Criminal Action

No.93-195 and Civil Action No. 98-104 to the extent that

the hearing on the writ would be a joint hearing on the

question of the ownership of the Wittug. See id. at 458-59.

The hearing was held on April 19, 1999 at the U.S.

Attorney’s Office in St. Croix, USVI. Oelsner appeared at

the hearing via satellite transmission. On May 10, 1999,

Oelsner filed a memorandum in support of his motion to

reduce restitution.* See April 19, 1999 Hr’g Tr. at 104, 148

(giving parties leave to file post-hearing briefs clarifying

the issues addressed at the hearing).

II. DISCUSSION

A. REQUEST FOR RESTITUTION REDUCTION

Oelsner has asked the Court to reduce the amount of

restitution that is due and owing. See Defs.’ Mot. to

Quash, § 5; Def. Oelsner’s Mem. in Supp. of his Mot. to

Reduce Restitution. The Oelsner Judgment indicates that

“if the costs of [the United States’] cleanup efforts are less

than the [restitution] amount to which the Court made

reference of $1,440,450.00, credit will be given to the

defendants to that extent.” United States’ Opp’n, Attach.

2. The Act prohibits the use of a writ to execute judgment

> Oelsner initially requested that the Court reduce the

amount of restitution stated in the Oelsner Judgment in the

motion to quash the writ of execution.

App. 8

on property that exceeds in value the aggregate amount

of the judgment. See 28 U.S.C.A. § 3203(c)(2)(B)(i) (West

1994).

At the April 19, 1999 hearing, the Court permitted

Oelsner to introduce evidence regarding the cost of the

remediation that has been done and that remains to be

done. The parties agreed that Oelsner has spent $50,000

to date removing six vessels, specifically the Witislander,

the Witrollon, the Waterhaul, the Witbarge III, the Wit-

barge II, and the Witbridge. See Def.’s Ex. 49; April 19,

1999 Hr’g Tr. at 24. Oelsner testified that he has spent an

additional $20,000 to date preparing two additional ves-

sels for removal, specifically the M/V Mar and the Wit-

dock. See April 19, 1999 Hr’g Tr. at 47. Oelsner predicted

that the remaining remediation will cost approximately

$32,000. See Def. Oelsner’s Mem. in Supp. of his Mot. to

Reduce Restitution at 9. The United States disputes this

figure. See April 19, 1999 Hr’g Tr. at 90-91 (Commander

Brian Salerno, Commanding Officer of the Coast Guard

Marin Safety Office in San Juan, Puerto Rico, testifying

that it would cost more than $40,000 to “accomplish the

type of clean up contemplated by the site assessment for

the motor vehicle Mar and the WIT Dock”). In addition,

the United States points out that Oelsner has failed to

account for two vessels which he was required to remove:

the Witconcrete II and the Witcargo. See id. at 53-56; Def.’s

Ex. 22. According to Oelsner, the Army Corps of Engi-

neers removed the Witconcrete II; Oelsner has not reim-

bursed the Army Corps of Engineers for the expense it

incurred in removing the vessel. See April 19, 1999 Hr’g

Tr. at 54-55. Oelsner also testified that the Witcargo has

not been removed. See id. at 55.

App. 9

Because there is uncertainty surrounding the cost of

the remediation that remains to be done, the Court will

presently decline to reduce the amount of restitution that

is due and owing. Once the clean-up is complete, Oelsner

may move the Court to reduce the restitution amount

indicated in the Oelsner judgment. Until that time, the

amount will not be reduced.

B. MOTIONS TO QUASH THE WRIT OF EXECU-

TION

Both Oelsner and Witwater challenge the United

States’ right to execute judgment on the Wittug. They

argue that Witwater, not Oelsner, is the owner of the

vessel. The United States filed an application for a writ of

execution pursuant to the Federal Debt Collection Pro-

cedures Act of 1990 (“FDCPA”) which permits the United

States, as a judgment creditor, to levy pursuant to a writ

of execution upon “[a]ll property in which the judgment

debtor has a substantial nonexempt interest.” 28 U.S.C.

§ 3203(a) (West 1994). A writ of execution may be chal-

lenged by an individual or entity claiming an ownership

interest in the property. See United States v. Coluccio, 842

F.Supp. 663, 665 (E.D.N.Y. 1994) (resolving a challenge to

a writ of execution issued pursuant to the FOCPA where

ownership of the subject property was in dispute), vacated

on other grounds, 51 F.3d 337 (2nd Cir.1995). In such a

situation, the burden of proving ownership of the subject

property is borne by the claimant, not the judgment cred-

itor. See id. (analogizing to civil forfeiture laws). To prove

ownership, the claimant must do more than demonstrate

App. 10

that it is the record owner of the property; it must pro-

vide some evidence of control. See United States v. One

1982 Porsche 928, 732 FSupp. 447, 451 (S.D.N.Y.1990)

(“While ownership may be proven by actual possession,

dominion, control, title and financial stake, ‘[t]he posses-

sion of bare legal title to the res may be insufficient,’

absent other evidence of control or dominion over the

property.”); see also United States v. One 1945 Douglas C-54

(DC-4) Aircraft, (Appeal 2), 647 F.2d 864, 866 (8th

Cir.1981); United States v. One 1945 Douglas C-54 (DC-4)

Aircraft, (Appeal 1), 604 F.2d 27, 28-29 (8th Cir.1979);

United States v. One 1977 36 Foot Cigarette Ocean Racer, 624

F.Supp. 290, 294-95 (S.D.Fla.1985); United States v. One

1981 Datsun 280ZX, 563 F.Supp. 470, 474 (E.D.Pa.1983).

Ultimately, the claimant must prove that its alleged title

to the property is superior to the judgment creditor’s

right to execute judgment on the property. See, e.g., Baars

v. Creary, 23 Fla. 311, 314, 2 So. 662, 663 (stating that

“[t]he purpose of the [Florida] claim statute is to provide

a summary remedy for a stranger to an execution, who

claims title to the property levied on, to have the question

of the superiority of his alleged title, over the right to the

plaintiff in execution to subject it to the satisfaction of his

execution and judgment, settled.”).

The Court finds that Witwater has failed to satisfy its

burden of proof. Witwater presented sufficient evidence

at the April 19, 1999 hearing for the Court to conclude

that Witwater holds legal title to the Wittug. See Exs. B-1

(certified copy of the Wittug’s certificate of ownership),

B-2 (certified translation of the ownership certificate),

and B-3 (copy of the Wittug’s registry). Witwater, how-

ever, failed to present any evidence indicating that the

App. 11

Wittug is under its control. At the hearing, the United

States called as an expert witness John O’Connor

(“O’Connor”), who, in October of 1995, authored a report

for Price Waterhouse LLP that was used in Oelsner’s

sentencing. See April 19, 1999 Hr’g Tr. at 117. O’Connor

testified that, as of October 31, 1995, Oelsner was the

equitable owner of the Wittug. See id. at 129, 133 (Witwa-

ter is “one of several corporations that . . . held vessels

that rolled up to Challenger, which ultimately rolled up

to Oceanic and Finance, which was directed by Mr.

Oelsner.”). Thi¥” testimony is consistent with the Price

Waterhouse Report (“Report”), which the Court admitted

into evidence.®

that the proper foundation had not been laid and that the

document contained inadmissible hearsay. See April 19, 1999

Hr’g Tr. at 119, 149. The Court admitted the document over

Witwater’s objections. See id. at 149.

The Court finds that Witwater’s hearsay objections are

unfounded. O’Connor testified as to the information contained

in the Report, and Witwater cross-examined O’Connor

regarding his testimony. Witwater’s foundation objections are

equally without merit. An expert’s testimony is admissible even

where the facts or data on which he relies are not admitted into

evidence. See Fed.R.Evid. 703.

Where testimony or a piece of evidence may assist the trier

of fact, the rules of evidence favor the admission of that

testimony or evidence. See Kannankeril v. Terminix Int'l, Inc., 128

F.3d 802, 806 (3d Cir.1997). This preference holds true for expert

testimony and reports, the admissibility of which is governed

by Fed.R.Evid. 702. See id. Expert testimony and reports are

admissible if they are both reliable and relevant. See id.

O’Connor’s explanation of the sources he consulted in order to

prepare the Report are indicative of its reliability. See April 19,

1999 Hr’g Tr. at 121 (O’Connor reviewed “thousands of

App. 12

At the hearing, Witwater challenged O’Connor’s con-

clusion that Oelsner is the equitable owner of the Wittug

on two grounds. First, Witwater asked whether O’Connor

knew “whether or not Mr. Oelsner presently controls any

of the assets [O’Connor] found that [Oelsner] controlled

in October of ‘95.” Id. at 137-38. Where a judgment lien

has attached to property equitably owned by the judg-

ment debtor, a third party deriving its interest from the

equitable owner takes subject to the lien. See 46 Am.Jur.2d

Judgments § 401 (1994). Therefore, Witwater’s inquiry

into the present equitable owner of the Wittug is irrele-

vant. Second, Witwater asked whether O’Connor was

familiar with time charters, bare boat charters, and mar-

itime agency arrangements,” implying that Oelsner’s

documents including banking documents, legal documents,

appraisal documents, accounting documents, as well

as, ... interviewing Mr. Oelsner.”); Ex. G- 5 at 8-9 (“To complete

the work requested, I reviewed a significant number of

documents related to business transactions, corporate

structuring, corporate officers and statements made by W.

James Oelsner under oath and during my interview with

him. . .. The investigation/analysis conducted was clearly

dominated by review of corporate records. These records have

been received from Mr. Oelsner and third parties such as banks,

accountants, corporate officers, and others familiar with

Oelsner or his related companies. These corporate documents

were reviewed for signs of ownership, control,

interrelationships, and other attributes which may be

meaningful in determining the ownership of certain assets and

the validity of statements made by Mr. Oelsner with respect to

his ownership of properties and vessels.”).

7 The difference between a time charter and a bare boat

charter has been described as follows:

A demise [or bare boat] charterer is “one who

contracts for the vessel itself and assumes exclusive

App. 13

interest in the Wittug was not an ownership interest but

was the product of one of the foregoing. See April 19,

1999 Hr’g Tr. at 142-44. Despite the fact that the Court

gave the parties leave to file post-hearing briefs, see April

19, 1999 Hr’g Tr. at 148, Witwater presented no evidence

to the Court indicating that Oelsner and Witwater had

entered into a time charter or a bare boat charter agree-

ment with regard to the Wittug. The only evidence that

supports Witwater’s claim that Oelsner served as its

agent is O’Connor’s statement - confirmed by the Report

- that Oelsner frequently signed as agent for Challenger

Limited, the corporation that is the legal owner of Witwa-

ter Corporation. See id. at 145. The Court therefore con-

cludes that Oelsner is the equitable owner of the Wittug

and that this interest in the vessel is superior to the

interest claimed by Witwater Corporation as the vessel's

record owner.

The Court will order that judgment be executed on

the Wittug.* Where a statute describes in broad terms the

possession, control, command and navigation thereof

for a specified period,” Stephenson v. Star-Kist Caribe,

Inc., 598 F.2d 676, 679 (1st Cir.1979), in contrast to a

time or voyage charterer who “contracts not for the

vessel itself but for a specific service of the vessel,

such as carriage of goods, which is rendered by the

owner’s master and crew,” id.

McAleer v. Smith, 57 F.3d 109, 112-13 (1st Cir.1995). An agency

relationship exists among individuals or entities where there “is

a mutual interdependence of the finapcial credit and stability of

each of the parties, agent and owner.” Compagnia Maritima La

Empresa, S.A. v. Pickard, 320 F.2d 829, 832 (5th Cir.1963).

8 The Court is aware that judgment cannot be executed on

property that exceeds the amount of the judgment. See 28 U.S.C.

App. 14

property which is subject to levy, the statute is inter-

preted to include property in which the defendant’s own-

ership interest is equitable in nature.? See 30 Am Jur.2d

Executions and Enforcement of Judgments § 176 (1994).

The FDCPA is broadly drawn to subject to levy “{alll

property in which the judgment debtor has a substantial

nonexempt interest.” 28 U.S.C. § 3203(a) (West 1994). The

Court interprets this language to include that property in

which the judgment debtor’s interest is equitable.

§ 3203(c)(3)(B) (West 1994). In its December 16, 1998 opinion and

order, the Court instructed the parties that the April 19, 1999

hearing would be held for the purpose, among other-things, of

determining the Wittug’s value. See United States v. West Indies

Transport Co., Inc., 35 F.Supp.2d 450, 454, 458 (D.V.1.1998).

Despite this instruction, none of the parties has presented the

Court with any evidence regarding the Wittug’s value.

Therefore, the Court will assume that the value of the Wittug

does not exceed the amount of the judgment.

9 Equitable ownership has been described as follows:

An equitable estate, in its very conception, and asa

fact, requires the simultaneous existence of two

estates or ownerships in the same subject- matter,

whether that be real or personal, - the one legal,

vested in one person, and recognized only by courts

of law; the second equitable, vested in another

person, and recognized by courts of equity. These two

interests must be separate, and as a rule, must be held

by different persons; for if the legal estate and the

equitable estate both become vested in the same

person by the same right, then, as a general rule, a

merger takes place, and the legal estate alone

remains. ... [T]he ownership of the equitable estate is

regarded by equity as the real ownership, and the

legal estate is . . . no more than the shadow always

following the equitable estate.

1 Pomeroy’s Equity Jurisprudence § 147 (5th ed. 1941).

App. 15

C. PETITION FOR ORDER OF MANDAMUS

Witwater seeks an order of mandamus instructing

Michael E. Murphy (“Murphy”), in his capacity as Area

Port Director for the United States Customs Service, to

grant clearance to the Wittug to depart St. Thomas. See

Pet. for Order of Mandamus at 4. 28 U.S.C. § 1361 (West

1993) states that “district courts shall have original juris-

diction of any action in the nature of mandamus to com-

pel an officer or employee of the United States or any

agency thereof to perform a duty owed to the plaintiff.”

The Third Circuit has determined that this provision

“provide[s] relief only where a clear duty is owed the

plaintiff or there is an abuse of discretion.” Grant v.

Hogan, 505 F.2d 1220, 1225 (3d Cir.1974).

Murphy is under no obligation to release the Wittug

to Witwater. in fact, Murphy is prohibited from doing so.

A vessel that is subject to a lien in favor of the United

States may not be granted clearance to depart its port. See

34 O. Att’y Gen. 244 (1923). Having found that the United

States’ lien against the Wittug is valid and enforceable by

way of levy, the Court must deny Witwater’s petition for

order of mandamus.

III. CONCLUSION

For the foregoing reasons, the Court will deny

Oelsner’s request to reduce restitution, deny both

Oelsner’s and Witwater’s motions to quash the writ of

execution, and deny Witwater’s petition for order of

mandamus. The United States may proceed ‘to execute

judgment by levying on the Wittug.

App. 16

NOT FOR PUBLICATION

IN THE DISTRICT COURT OF THE VIRGIN ISLANDS

DIVISION OF ST. CROIX -and-

DIVISION OF ST. THOMAS AND ST. JOHN

UNITED STATES OF

AMERICA and

GOVERNMENT OF THE

VIRGIN ISLANDS,

Plaintiffs,

WEST INDIES

TRANSPORT CO., INC.,

WIT EQUIPMENT CO.,

INC., and W. JAMES

OELSNER,

Defendants.

WITWATER

CORPORATION,

Petitioner,

MICHAEL E. MURPHY,

in his capacity as Area

Port Director for the

United States Customs

Service,

Respondent.

Criminal Action No.

93-195 (STX)

OPINION ON

DEFENDANTS’

MOTION TO QUASH

WRIT OF EXECUTION

OPINION ON

MOTIONS OF

WITWATER

CORPORATION FOR

NEW TRIAL AND TO

SUPPLEMENT

[sic]

Civil Action No.

98-104 (STT)

App. 17

APPEARANCES:

James A. Hurd, Jr., Esq., United States Attorney

Curtis V. Gomez, Esq., Assistant U.S. Attorney

Federal Building & U.S. Courthouse

5500 Veteran’s Drive, Ste. 260

Charlotte Amalie

St. Thomas, VI 00802-6424

Attorneys for Plaintiff United States of America

Andrew L. Capdeville, Esq.

ANDREW L. CAPDEVILLE, P.C.

Nisky Center, Ste. 201

St. Thomas, VI 00804

Attorney for Defendant W. James Oelsner

Andrew C. Simpson, Esq.

BRYANT WHITE & BARNES, P.C.

47 King Street, 2nd Floor

Christiansted

St. Croix, VI 00820

Attorney for Petitioner Witwater Corporation

Curtis Gomez, Esq., Assistant U.S. Attorney

James S. Carroll, Esq., Assistant U.S. Attorney

Federal Building & U.S. Courthouse

5500 Veteran’s Drive, Ste. 260

Charlotte Amalie

St. Thomas, VI 00802-6424

Attorneys for Respondent Michael E. Murphy

BROTMAN, DISTRICT JUDGE (sitting by designa-

tion).

Presently before the Court are the following motions:

(1) a motion filed by W. James Oelsner (“Oelsner”) on

behalf of all of the defendants to Criminal Action No.

93-195 to either quash or stay the writ of execution on the

Wittug filed by the United States in that action; (2) a

motion filed by Witwater Corporation (“Witwater”) for a

App. 18

new trial or to alter the judgment rendered by this Court

in Criminal Action No. 93-195; and (3) a motion filed by

Witwater to supplement its above motion for new trial.

For the reasons discussed herein, each of these motions

will be denied.

I. FACTS AND PROCEDURAL BACKGROUND

On March 26, 1996, this Court entered a judgment

against Oelsner (“Oelsner Judgment”)? which imposed a

prison sentence and required Oelsner to pay $1,440,450.00

in restitution? and $95,500 in fines. Also on March 26,

1996, this Court issued criminal judgments against West

1 The jury found Oelsner guilty of the following offenses:

(1) violation of the Clean Water Act, 33 U.S.C. § 1311(a), 33

U.S.C. § 1319(c)(2)(A), 18 U.S.C. § 2; (2) violation of the Rivers

and Harbor Act, 33 U.S.C. § 403, 33 U.S.C. § 406; (3) violation of

the Ocean Dumping Act, 33 U.S.C. § 1411(a)(1), 33 U.S.C.

§ 1415(b)(1), 18 U.S.C. § 2; (4) conspiracy to defraud the United

States, [18 U.S.C. § 371,] 26 U.S.C. §[§] 86[(1](a)(3)L,

871(a)]}(1)(A); and (5) fraud, misuse of visas, 18 U.S.C. § 2, 18

U.S.C. § 1546. See United States’ Opp’n, Attach. 2.

2 With regard to the amount of restitution Oelsner was

required to pay, the judgment stated as follows:

The defendant shall pay restitution within Sixty (60)

days from today’s date provided, however, that if the

costs of these cleanup efforts are less than the amount

to which the Court made reference of $1,440,450.00,

credit will be given to the defendants to that extent.

Any restitution payments made by defendants West

Indies Transport, Inc. and/or WIT Equipment Co.,

Inc. shall be applied to reduce this amount

accordingly.

United States’ Opp’n, Attach. 2.

App. 19

Indies Transport, Inc. (“West Indies”) and WIT Equip-

ment Co., Inc. (“WIT Equipment”) in the same matter.3

All three judgments contained identical lists of vessels

and real estate that the Court determined were subject to

liens. See id. Included in the list was the vessel Wittug.

On April 16, 1996, the United States recorded a lien

against the Wittug at the Recorder of Deeds, Division of

St. Croix to satisfy the $1,440,450.00 judgment previously

entered against Oelsner. On November 9, 1998, the

United States applied for a writ of execution on the

Oelsner Judgment against the Wittug, serving Oelsner

with a copy of the application by mail on November 10,

1998. Also on November 9, 1998, Witwater filed an emer-

gency motion to intervene and to stay or quash execution

of the writ. On November 12, 1998, this Court issued the

writ. On November 23, 1998, Oelsner filed a motion to

quash the writ of execution (“first motion to quash”) and

to obtain a hearing on the matter.

In addition to attempting to intervene in the United

States’ case against Oelsner, Witwater filed its own action

regarding the Wittug. On May 22, 1998, Witwater filed a

petition for order of mandamus, alleging that it owns the

Wittug and that the United States Customs Service has

wrongfully denied the Wittug clearance to depart St.

3 The Court ordered West Indies to pay $3,520,500.00 in

fines and $1,440,450.00 in restitution. The Court ordered WIT

Equipment to pay $1,520,500.00 in fines and $1,440,450.00 in

restitution. In both the West Indies and the WIT Equipment

judgments, the Court stated that any restitution payments made

either by the company not subject to the judgment or by Oelsner

would be applied to reduce the amount of restitution owed by

the company subject to the judgment.

App. 20

Thomas, USVI where it is currently docked. On August YP

1998, the United States filed a motion to dismiss the

petition, arguing that the Court lacked jurisdiction to

issue an order of mandamus in such an action and that

Witwater failed to exhaust its administrative remedies

before filing the petition. On November 10, 1998, the

Court heard argument on this motion and ordered that

the hearing transcript be made part of the criminal action

pending against Oelsner as well as part of the mandamus

action Witwater initiated.

On December 16, 1998, the Court granted Oelsner’s

motion for a hearing on the writ of execution, permitting

Witwater to intervene in the hearing for the limited pur-

pose of challenging the writ. See United States v. West

Indies Transport Co., Inc., 35 F.Supp.2d 450, 455, 458 (D.N_J.

[sic] 1998). The Court stated that the hearing would be

held for the purpose of determining the identity of the

Wittug’s owner, the value of the Wittug, and the cost of

the remediation that remains to be done. See id. at 454,

458. At the same time, the Court denied the United States’

motion to dismiss the petition for order of mandamus

filed by Witwater in Civil Action No. 98-104. See id. at

457-58. Finally, the Court consolidated Criminal Action

No. 93-195 and Civil Action No. 98-104 to the extent that

the hearing on the writ would be a joint hearing on the

question of the ownership of the Wittug. See id. at 458-59.

The hearing was held on April 19, 1999 at the U.S.

Attorney’s Office in St. Croix, USVI. Oelsner appeared at

the hearing via satellite transmission. On May 10, 1999,

Oelsner filed a memorandum in support of his motion to

reduce restitution. See April 19, 1999 Hr’g Tr. at 104, 148

(giving parties leave to file post-hearing briefs clarifying

the issues addressed at the hearing).

App. 21

In an Opinion and Order dated July 19, 1999, the

Court denied the following motions: (1) Oelsner’s motion

to quash the writ of execution filed by the United States

in Criminal Action No. 93-195; (2) Witwater’s motion to

stay or quash the same writ of execution; and (3) Witwa-

ter’s petition for order of mandamus in Civil Action No.

98-104. In addition, the Court denied without prejudice

Oelsner’s motion to reduce the amount of restitution that

he owes pursuant to the judgment entered in Criminal

Action No. 93-195.

Now before the Court is (1) a second motion by

Oelsner to quash or stay the government's writ of execu-

tion; (2) motion by Witwater for a new trial or amend-

ment of the judgment rendered in Criminal Action No.

93-195; and (3) a second motion filed by Witwater to

supplement its original motion for new trial.

II. DISCUSSION

A. Defendants’ Motion to Quash or Stay the Gov-

ernment’s Writ of Execution on the Wittug*

Oelsner, on behalf of all defendants, requests relief

from the March 26, 1996 judgment ordering defendants to

* Defendant Oelsner has also filed a motion to quash the

Government's writ of execution on four additional vessels (“the

second writ”) - WITSERVICE, WITSERVICE Il, WITPOWER,

and WITPOWER II. In addition, Witservice Ltd. and Witpower

Ltd., two British Virgin Islands corporations have filed motions

for leave to intervene, claiming ownership of these vessels.

Because execution of the second writ may involve matters

separate and distinct from the instant motions concerning

execution on the Wittug, the Court leaves for another day

resolution of those motions.

App. 22

pay to the Government $1,440,450 (one million four-hun-

dred forty thousand four-hundred fifty dollars) in restitu-

tion. Specifically, Oelsner requests a second time that the

Court quash or stay the Government's writ of execution

on the Wittug, alleging the judgment is defective as a

matter of law. To support this relief, Oelsner argues that

(1) the judgment is not final, and thus the writ of execu-

tion against the Wittug is premature; (2) the judgment is

defective for the Court's failure to make specific findings

of fact with respect to the amount of restitution; (3) the

restitution award is excessive as it includes amounts for

Respecting the instant motion, on March 16, 2000, Oelsner

filed a submission titled, “Clarification of Pleadings and Reply

to Government’s Response to Defendants’ Motion to Quash or

Stay Execution” (“reply”). Therein, Oelsner states two

additional grounds, which were not raised in his original

supporting memorandum, for quashing the writ for the Wittug.

Specifically, Oelsner argues that (1) the Government is

attempting to execute on property that far exceeds the amount

of the restitution judgment and (2) the Government should be

estopped from executing on the judgment for allegedly

interfering with Oelsner’s remediation efforts. See Reply at 3-4.

The Court, however, will not consider these arguments as they

pertain to execution on the Wittug. First, these matters were not

set forth in the supporting memorandum but were raised for the

first time in defendants’ reply. See, eg., Gambino v. E.W. Morris,

134 F.3d 156, 161 n.10 (3d Cir. 1998); Schiffli Embroidery Workers

Pension Fund, 869 F. Supp. 278, 281 n.1 (D.N.J. 1994). Second,

Oelsner did not raise these challenges during his first motion to

quash or stay execution on the Wittug, which the Court denied

in an opinion dated July 22, 1999. These additional arguments,

as they relate to the Wittug, are accordingly barred by the law of

the case. See cases cited infra part II.A.3. Therefore, the Court

addresses herein only those arguments expressly raised by

Oelsner in his December 3, 1999 motion to quash the writ of

execution on the Wittug.

App. 23

losses unrelated to the offenses for which defendants

were convicted; and (4) the offenses for which defendants

were convicted constitute or are analogous to “no clear

victim” crimes and thus, the amount of restitution is

limited to the amount imposed by the Court for fines.

1. The Judgment is a Final Judgment

On March 26, 1996, the Court ordered the defendants

to pay $1,440,450 in restitution to offset the costs of

cleaning up their environmental damage, “provided,

however, that if the costs of these clean-up efforts are less

than . . . $1,440,450, credit will be given to the defendants

to that extent.” Tr. of Hearing, pp. 87-88. Pursuant to this

order, Oelsner moved for reduction of the restitution

amount on November 12 1998. On April 19, 1999, a

hearing was held, during which the Court heard evidence

concerning the cost of the remediation that had been

done and that remained to be done. While the parties

agreed to the amount that Oelsner had expended in per-

forming part of the clean-up, they disputed the amount of

the projected cost for the remaining remediation. In light

of this dispute, the Court declined to reduce the amount

of restitution due and owing, stating that “once the clean-

up is complete, Oelsner may move . . . to reduce the

restitution amount indicated in the Oelsner judgment.

Until that time, the amount will not be reduced.” United

States v. West Indies Transport Co., Inc., 57 F.Supp.2d. 198,

202 (D.Virgin Islands 1998).5

> To date, neither the Coast Guard nor defendant Oelsner

has informed the Court that remediation has been completed.

App. 24

Oelsner now challenges the finality of the Court's

order of restitution, claiming, “The fact that the original

Judgment issued at sentencing contained the contingency

that the amount of $1,440,450.00 would be subject to

setoff based on the actual cost of clean up, and the fact

that the July 19, 1999 order made the restitution amount

further contingent upon a setoff for the work performed

by the Defendants, make it clear that the Judgment is not

a “final judgment” for purposes of a civil collection.”

Defs.’ Supp. Br. at 3. Thus, Oelsner claims that the restitu-

tion order should be treated as a civil judgment governed

by civil judgments finality rules. Id. at 2-3 (“The Writ of

Execution filed in this proceeding effectively transformed

the criminal order of restitution into a civil judgment.”).

The Court of Appeals for the Third Circuit, however, has

determined that the civil enforcement of a criminal resti-

tution order does not “transform| ] that order into a civil

judgment.” United States v. Palma, 760 F.2d 475, 479 (3d

Cir. 1985) (holding that restitution order imposed under

Victim Witness Protection Act, 18 U.S.C. §§ 3579, consti-

tutes criminal penalty and therefore is “not subject to the

jury trial guarantee of the Seventh Amendment”). More-

over, in a published opinion, the Third Circuit upheld the

instant restitution order, finding that this Court did not

abuse its discretion. United States v. West Indies Transport,

Inc., 127 F.3d 299, 315 (3d Cir. 1997). In doing so, the

Third Circuit implicitly held that the order constituted a

final judgment authorizing appellate review. Id.

Moreover, in affirming the order of restitution, the

Third Circuit acknowledged that the restitution amount

was subject to reduction:

App. 25

The district court calculated restitution based on

Coast Guard estimates of the costs required to

clean defendants’ environmental damage. The

district court also ordered that if the ultimate

cost of the clean up is lower than the Coast

Guard estimate, any amount over the actual

costs shall be returned to the defendants.

Id. The Third Circuit concluded that “This sensible

approach appears appropriate and does not constituie an

abuse of discretion.” Id. Accordingly, this Court rejects

Oelsner’s argument that the restitution order lacks final-

ity, and therefore is defective as a matter of law.

2. Findings of Fact Respecting Restitution

Order

Oelsner also asserts that the Court failed tc make

appropriate findings when it ordered restitution. In

determining whether to order restitution, a court “shall

consider the amount of the loss sustained by any victim

as a result of the offense, the financial resources of the

defendant, the financial needs and earning ability of the

defendant and the defendant’s dependents, and [other

appropriate factors]. 18 U.S.C. § 3664, amended by 18

U.S.C. § 3664 (1996). Defendants did not include this

challenge in its appeal to the Third Circuit, which

affirmed the order of restitution. See West Indies Transport,

Inc., 127 F.3d at 315. Nor did defendants raise this issue at

the April 19, 1999 hearing on defendants’ first motion to

quash the government's writ. Accordingly, this argument

has been waived.

Moreover, notwithstanding defendants’ assertions to

the contrary, the Court, at sentencing, did issue findings

App. 26

as to the need for and amount of restitution, stating,

“IT]he Coast Guard, after having given allowance to

everything that this defendant has done in terms of clean-

up, finds that it would .. . still take $1,440,450 to com-

plete. I will accept that figure.” Tr. at 87. In addition, the

Court issued extensive findings respecting defendants’

ability to pay the restitution amount:®

Defendant W. James Oelsner has directed

and controlled all the assets held by all of the

corporations listed in Exhibit 27 of the financial

report of the Price, Waterhouse certified public

accountant, and I find that he is the owner of the

assets set forth below.

These assets include commercial boats val-

ued between $3 million and $5 million; real

estate located in St. Thomas, USVI; an expecta-

tion interest in insurance recoveries caused by

Hurricanes Hugo and Marilyn, the real estate

located in Oyster Bay, New York, valued

between $4.5 and 26 million. [ ]

6 In his reply, Oelsner asserts that the Court’s findings

concerning his ability to pay were erroneous, because the basis

for these findings, the report of John J. O’Connor, is “biased and

inaccurate.” Reply Br. at 5. Oelsner also challenges Mr.

O’Connor’s competency in admiralty law and further alleges,

“This] report even fails to comply with accounting standards

that govern his profession.” Id. To bolster these assertions,

Oelsner\attaches a report by Stanley I. Foodman, CPA, dated

March 16, 2000, which purports to reveal errors in Mr.

O’Connor’s report. See Reply Br., Ex. A. Oelsner’s reliance on

Foodman’s report, however, is too little too late. This report was

submitted for the first time with the reply on March 16, 2000,

almost four years after the Court’s judgment and findings, and

eleven months after the April 19, 1999 hearing on the first

motion to quash.

yea ea eS ee Eee ee! he oo

App. 27

I find that the defendants have the ability to

pay any restitution or fines which the Court

may order. [ ].

The Court further finds that the defendants

are able to earn substantial sums of money,

sums that are far in excess of the stated incomes

listed in the presentence report.

W. James Oelsner lists his salary as $80,000

per annum. However, expert testimony estab-

lished that the present costs of his lifestyle sig-

nificantly exceeds that salary.

Moreover, Exhibit 27 establishes that he reg-

ularly organizes and completes multi-million

dollar transactions in the shipping business.

Defendant Oelsner is in good health, and has

been actively engaged in his business. Barring

an unforseen change in circumstances, he

should be able to continue to work in his busi-

ness.

Finally, Defendant Oelsner has no financial

debts, and I find that he does have, as I stated,

had the earning capacity and the assets to pay

for any restitution of fines ordered in this case.

Tr. at 83-85. Therefore, defendants’ assertion that the

Court’s findings were insufficient is without merit.

3. Calculation of the Restitution Amount

As additional grounds for quashing the govern-

ment’s writ of execution on the Wittug, Oelsner chal-

lenges the Court’s method or process in calculating the

amount of the restitution award. Specifically, Oelsner

claims that the Court improperly included in the restitu-

tion judgment amounts for losses which do not directly

App. 28

relate to the conduct for which defendants were con-

victed. Moreover, Oelsner argues that the offenses for

which he was convicted constitute crimes having no clear

victim within the meaning of 18 U.S.C. § 3663, and thus

the restitution amount must be limited to the amount of

fines imposed by the Court.”

As previously mentioned, the Third Circuit has

affirmed the instant restitution order against challenges

by defendants concerning the restitution amount. See

United States v. West Indies, 127 F.3d at 315. In that appeal,

“Defendants . . . impl[ied], though they d[id] not clearly

argue, that the amount of restitution was excessive given

the amount of environmental damage caused by their

criminal conduct.” Id. The Third Circuit rejected defen-

dants’ argument, finding that the restitution award was

“appropriate and [did] not constitute an abuse of discre-

tion.” Id. Thus, defendants’ present objections to the

amount of the restitution award are barred by the man-

date rule and the law of the case.® Under these doctrines,

a district court is precluded from reconsidering issues

that have been decided either expressly or by necessary

implication. See, e[.]g., Bolden v. Septa, 21 F.3d 29, 31 (3d

7 As the Court ordered Oelsner to pay $95,500 in fines, he

argues that the restitution order is limited to.this amount.

8”’The ‘mandate rule’ bars a district court from

‘reconsidering or modifying any of its prior decisions that have

been ruled on by the court of appeals,’ ” Robert Billet Promotions,

Inc., 1998 WL 721081 at *5 (quotation omitted), while the law of

the case doctrine precludes a district court from reconsidering

its own decisions in the same case absent extraordinary

circumstances. See, e.g., General Refractories Co., 1998 WL 961380

at *4.

ee eee ee ae, eS

App. 29

Cir. 1994); Pension Benefit Guaranty Corp. v. White Consoli-

dated Industries, Inc., 1999 WL 680185 (W.D. Pa. July 21,

1999); General Refractories Co. v. Travelers Insur. Co., 1998

WL 961380 (E.D. Pa. Dec. 15, 1998); Robert Billet Promo-

tions, Inc. v. IMI Cornelius, Inc., 1998 WL 721081 (E.D. Pa.

Oct. 14, 1998). In concluding that the restitution award

was not excessive “given the amount of environmental

damage caused by [defendants’] criminal conduct,” the

Third Circuit necessarily determined by implication that

the restitution award properly related to losses caused by

defendants’ criminal conduct to which the government

was a victim eligible for recompense.?

Furthermore, defendants have waived these argu-

ments by failing to raise them during the April 19, 1999

hearing on their first motion to quash. While the law of

the case doctrine permits review of issues under extraor-

dinary circumstances, see Bolden v. Septa, 21 F.3d 29, 31

(3d Cir. 1994); Pension Benefit Guaranty Corp. v. White

Consolidated Industries, Inc., 1999 WL 680185 (W.D. Pa.

July 21, 1999); General Refractories Co. v. Travelers Insur.

Co., 1998 WL 961380 (E.D. Pa. Dec. 15, 1998); Robert Billet

Promotions, Inc. v. IMI Cornelius, Inc., 1998 WL 721081

(E.D. Pa. Oct. 14, 1998), the Court finds no such circum-

stances here.

° Assuming arguendo that the ruling by the Third Circuit

affirming the restitution order did not encompass defendants’

current challenges, defendants failed to expressly raise these

challenges on direct appeal, thereby waiving them. See Cowgill

v. Raymark Industries, Inc., 832 F.2d 798, 802 (3d Cir. 1987);

Pension Benefit Guaranty Corp., 1999 WL 680185 at *34.

App. 30

Based on the reasons stated above, defendants’

motion to quash or stay the government's writ of execu-

tion on the Wittug will be denied.

B. Witwater’s Motion for New Trial

Fed. R. Civ. P. 59(a) provides in pertinent part:

A new trial may be granted to all or any of the

parties and on all or part of the issues (2) in an

action tried without a jury, for any of the rea-

sons for which rehearings have heretofore been

granted in suits in equity in the courts of the

United States. On a motion for a new trial in an

action tried without a jury, the court may open

judgment if one has been entered, take addi-

tional testimony, amend findings of fact and

conclusions of law or make new findings and

conclusions, and direct the entry of a new judg-

ment.

A motion-for a new trial is not a proper vehicle for an

“unsuccessful party to ‘rehash’ the same arguments and

facts previously presented.” Keyes v. National Railroad Pas-

senger Corp., 766 F.Supp. 277 (E.D. Pa. 1991); see also Ball v.

Interoceanica Corp., 71 F.3d 73, 76 (2d. Cir. 1995) (“ ‘A trial

court should not grant a new trial merely because the

losing party can probably present a better case on another

trial.’ ”) (quotation omitted). Instead, such motion

‘should be based upon manifest error of law or mistake of

fact, and a judgment should not be set aside except for

substantial reasons.” 11 Charles A. Wright et al.,

MOORE'S [sic] FEDERAL PRACTICE & PROCEDURE

§ 2804, at 53 (2d ed. 1995). In considering a motion for

new trial, the trial judge is afforded wide discretion.

yy eee Pt ae eee ee Tee ee

App. 31

_ Keystone Floor Products Co. v. Beattle Mfg. Co., 432 F.Supp.

869, 877 (E.D. Pa. 1977).

‘Witwater asserts two separate bases in support of its

motion for new trial: (1) that the Court erred as a matter

of law in placing on Witwater the burden of proving

actual ownership and control of the Wittug and (2) that

the Court erred as a matter of fact in finding that Oelsner

had asserted sufficient control over the Wittug to obtain

equitable ownership thereof. These arguments are with-

out merit.

1. Allocation of Burden of Proof

In the July 19, 1999 Opinion, this Court stated as a

matter of law that any person or entity claiming an own-

ership interest in property in which the United States, as

judgment creditor, seeks to levy bears the burden of

proving such ownership. 57 F.Supp.2d 198 (citing to

United States v. Coluccio, 842 F.Supp. 663, 665 (E.D.N.Y.

1994), vacated on other grounds, 51 F.3d 337 (2d Cir. 1995)).

With regard to this burden, the Court explained that a

demonstration of legal title to the property was insuffi-

cient, as “the record owner of the property . . . [also] must

provide some evidence of control.” Id. Acknowledging

that Witwater did hold legal title to the Wittug, this Court

nonetheless found that Witwater had not satisfied its

burden of proof, as it presented no “evidence indicating

that the Wittug [was] under its control.” Id. In its four-

page brief in support of a new trial, Witwater asserts that

the Court committed prejudicial error in requiring Wit-

water “to disprove the Government's claim that Oelsner

App. 32

controlled the [Wittug].” Witwater’s Supp. Br. at unnum-

bered p. 2. Witwater argues that upon its proof of legal

title to the Wittug, the Court should have shifted to the

United States the ultimate burden of proving Oelsner’s

control of the vessel and resulting equitable title thereto.

Fatal to Witwater’s argument is its obvious failure to

provide any legal authority to support this position. A

motion for new trial carries with it a substantial burden.

Clearly, an unsubstantiated allegation that the Court

erred as a matter of law woefully fails to satisfy such

burden. In light of Witwater’s neglect to cite to any

authority to the contrary, this Court affirms its holding

with respect to burden allocation as set forth in the July

19, 1999 Opinion.

2. Evidence [C]oncerning Agency/Control

As alternative grounds for a new trial, Witwater

argues that the Court’s finding that Oelsner obtained

equitable ownership of the Wittug was inconsistent with

the weight of the evidence. First, Witwater argues that

certain exhibits submitted at the hearing demonstrate

that Oelsner was not the equitable owner of the Wittug.

Relying on Oelsner’s Exhibits 40, 41, 42, 46, 47 and

48,10 Witwater claims “[t]hese documents refute the Price-

10 Exhibit 40 is an affidavit of Carl Janson, whom Oelsner

alleges and the affiant claims is the owner of Oceanic and

Finance Corporation. This affidavit was taken in support of a

motion to dismiss claims filed in a separate, unrelated civil

action in the District of Puerto Rico.

oe eae ee a ee er Pe

Pere ee ee eee ee

App. 33

Waterhouse report claiming that Oelsner controlled Chal-

lenger Limited” and also establish that Oelsner acted as

agent of “many companies.” Witwater Supp. Br. at 2.

However, with the exception of exhibit 47, Witwater fails

to provide any explanation as to how these documents

“refute the Price-Waterhouse report” or establish

Oelsner’s role as agent, and the Court finds no indica-

tions of its own.!!

Exhibit 41 is a copy of a share certificate for West Indies

Transport Co., Inc. dated November 18, 1966, wherein Oceanic

and Finance Corporation is named the owner of 10 (ten) shares

of West Indies Transport capital stock.

Exhibit 42 is a copy of a share certificate for WIT Equipment

Co., Inc. dated August 10, 1992, wherein Americo Pagliughi is

named the owner of 10 (ten) shares.

Exhibit 46 is an addendum to an agreement entered into by

Continental Shipping Corp, Compania Columbiana de

Navegacion Maritima, and Oceanic Operations Corp. The

signature representing the interests of Oceanic Operations

Corp. reads, “W. James Oelsner.” The original agreement to

which the addendum applies has not been provided to the

Court.

Exhibit 47 is an agency agreement dated October 1, 1980

appointing West Indies Transport Co., Inc. as agent for West

Indies Transport LTDA., S.A. The signature, “W. James Oelsner”

appears on the line representing the interests of West Indies

Transport Co.

Exhibit 48 is an agency agreement dated October 1, 1994

appointing Puerto Rico Operations Inc. as agent for West Indies

Transport LTDA., S.A. Mr. Oelsner’s signature does not appear

anywhere in the agreement.

"It should be noted that it is hardly expeditious or

appropriate for the Court to sift, post-trial, through various

documents of record absent explication by the proponent

concerning the document’s specific relevance and contribution

App. 34

Exhibit 47, an agency agreement between West Indies

Transport LTD. and West Indies Transport Co., Inc., is the

only document for which Witwater provides any analysis,

the extent of which is as follows:

For example, Exhibit 47 establishes Oelsner’s

appointment as agent for West Indies Transport

LTD A.S.A., a company that “manages” Chal-

lenger Limited, Charter Transport Line, and

West Indies Transport, Co., Inc., among other

companies. It is undisputed that West Indies

Transport Company, Inc. acted as agent for the

Wittug in St. Thomas.

Id. at 3 (emphasis in original). From this, Witwater con-

cludes, “Clearly, Witwater did establish evidence of

agency relationship with Oelsner. This evidence also

refutes the perception of control in the nature of owner-

ship that is unsupported, but alluded to, in the Pricewa-

ter House Report.” (emphasis in original).

The Court, however, reviewed exhibit 47 before issu-

ing its June 19, 1999 Opinion and Order wherein it found

Oelsner to be the equitable owner of the Wittug. At that

time, the Court determined that exhibit 47 did not sup-

port a different conclusion, and the Court, now reviewing

the document a second time, finds no error in its original

determination.

Finally, Witwater seeks to supplement the record

with several exhibits which purport to demonstrate that

Oelsner acted as agent for Witwater. At the conclusion of

the April 19, 1999 hearing, the Court indicated that the

to the proponent’s legal argument. This Witwater has failed to

do.

App. 35

parties could submit post-hearing briefs. See April 19,

1999 Hearing Tr. at 148. Despite this invitation, Witwater

filed no post-hearing brief. Witwater now requests, some

time after issuance of the Court’s opinion determining

that Oelsner equitably owned the Wittug, that the Court

consider these new exhibits and grant a new trial. This

the Court declines to do. Witwater has provided no rea-

sons for failing to proffer these documents at the April 19,

1999 hearing. Nor were these documents provided, as

attachments to a post-hearing brief, to the Court for

review.'? By failing to present this evidence both at the

hearing and during the time allotted for the filing of post-

hearing briefs, Witwater foreclosed any opportunity it

may have had for the Court’s consideration of this evi-

dence. As a result, the Court will not review the new

exhibits.

C. Witwater’s Motion to Supplement its Motion

for New Trial

On November 9, 1999 Witwater filed a motion to

supplement its motion for new trial to include three

additional exhibits, which purported to establish the exis-

tence of an agency relationship between Oelsner and

Witwater, that are not part of the record. For the reasons

2 As explanation for failing to file a post-trial brief

containing these documents, Witwater states, “Witwater’s

counsel did not understand that post-trial briefing included

permission to supplement the record with additional evidence

(a somewhat unusual procedure) and a review of the record

does not indicate a specific invitation to add additional record

to the evidence.” Witwater’s Supp. Br. at 3.

App. 36

stated above, Witwater’s motion to include these docu-

ments, which were neither proffered at the April 19, 1999

hearing nor submitted with a post-hearing brief, will be

denied.

As Witwater has failed to present to the Court com-

pelling reasons justifying a new trial, its motion for a new

trial will be denied. Moreover, Witwater’s request to

amend the judgment also will be denied for failure to

present any arguments supporting this relief.

Ill. CONCLUSION

For the reasons stated herein, Defendants’ motion to

quash or stay the writ of execution on the Wittug will be

denied, Witwater’s motion for a new trial will be denied,

and Witwater’s motion to supplement its motion for a

new trial also will be denied. The Court will enter an

appropriate order.

Dated: March 24, 2000

/s/ S. Brotman |

HON. STANLEY S. BROTMAN

UNITED STATES DISTRICT JUDGE

(Sitting by Designation)

ATTEST:

ORINN F. ARNOLD

Clerk of the Court

By:

Deputy Clerk

cc: James A. Hurd, Jr., Esq., United States Attorney

Curtis V. Gomez, Esq., Assistant U.S. Attorney

Federal Building & U.S. Courthouse

5500 Veteran’s Drive, Ste. 260 ~

SABER PS He Fh “SPN gS aE SPS RS

App. 37

Charlotte Amalie

St. Thomas, VI 00802-6424

Andrew L. Capdeville, Esq.

ANDREW L. CAPDEVILLE, P.C.

Nisky Center, Ste. 201

St. Thomas, VI 00804

Andrew C. Simpson, Esq.

BRYANT WHITE & BARNES, P.C.

47 King Street, 2nd Floor

Christiansted

St. Croix, VI 00820

Curtis Gomez, Esq., Assistant U.S. Attorney

James S. Carroll, Esq., Assistant U.S. Attorney

Federal Building & U.S. Courthouse

5500 Veteran’s Drive, Ste. 260

Charlotte Amalie

St. Thomas, VI 00802-6424

App. 38

DISTRICT COURT OF THE VIRGIN ISLANDS,

Division of St. Croix.

UNITED STATES of America and Government

of the Virgi. Islands, Plaintiffs,

WEST INDIES TRANSPORT CO., INC., Wit Equipment

Co., Inc., and W. James Oelsner, Defendants.

WITWATER CORPORATION, Petitioner,

Vv.

MICHAEL E. MURPHY, in his capacity as Area Port

Director for the United States Customs Service,

Respondent.

CRIM. A. No. 93-195.

CIV. A. No. 98-104.

Dec. 16, 1998.

James A. Hurd, Jr., United States Attorney, Curtis V.

Gomez, Assistant U.S. Attorney, Charlotte Amalie, St.

Thomas, VI, for Plaintiff United States of America.

Treston E. Moore, Moore & Dodson, St. Thomas, VI,

for Defendant W. James Oelsner.

Andrew C. Simpson, Bryant White & Barnes, P.C., St.

Croix, VI, for Petitioner Witwater Corporation.

Curtis Gomez, Assistant U.S. Attorney, James S. Car-

roll, Assistant U.S. Attorney, Charlotte Amalie, St.

Thomas, VI, for Respondent Michael E. Murphy.

App. 39

OPINION ON DEFENDANTS’ MOTION TO QUASH

AND OPPOSITION TO WRIT OF EXECUTION AND.

DEFENDANTS’ MOTION TO STAY AND

CONSOLIDATE AND DEMAND FOR HEARING

OPINION ON MOTION OF WITWATER

CORPORATION TO INTERVENE AND TO STAY OR

QUASH EXECUTION OF WRIT OPINION ON

MOTION TO DISMISS

BROTMAN, District Judge, Sitting by Designation.

Presently before the Court are the following motions:

(1) a motion filed by W. James Oelsner (“Oelsner”) on

behalf of all of the defendants to Criminal Action No.

93-195 to quash the writ of execution filed by the United

States in that action and to be granted a hearing on this

matter; (2) a motion filed by Witwater Corporation

(“Witwater”) to intervene and to stay or quash the writ of

execution filed by the United States in Criminal Action

No. 93-195; and (3) a motion to dismiss filed by the

United States in Civil Action No. 98-104.

I. FACTUAL AND PROCEDURAL BACKGROUND

On March 26, 1996, this Court entered a judgment

against Oelsner (“Oelsner Judgment”)! which imposed a

} The jury found Oelsner guilty of the following offenses:

(1) violation of the Clean Water Act, 33 U.S.C. § 1311(a), 33

U.S.C. § 1319(c)(2)(A), 18 U.S.C. § 2; (2) violation of the Rivers

and Harbor Act, 33 U.S.C. § 403, 33 U.S.C. § 406; (3) violation of

the Ocean Dumping Act, 33 U.S.C. § 1411(a)(1), 33 U.S.C.

§ 1415(b)(1), 18 U.S.C. § 2; (4) conspiracy to defraud the United

States, [18 U.S.C. § 371,] 26 U.S.C. §[§] 86[1}(a)(3)[,

871(a)](1)(A); and (5) fraud, misuse of visas, 18 U.S.C. § 2, 18

U.S.C. § 1546. See United States’ Opposition, Attach. 2.

App. 40

prison sentence and required Oelsner to pay $1,440,450.00

in restitution? and $95,500 in fines. See Opposition of the

United States to the Emergency Motion of Witwater Cor-

poration to Intervene and to Stay or Quash Execution

(“United States’ Opposition”), Attach. 2. Also on March

26, 1996, this Court issued criminal judgments against

West Indies Transport, Inc. (“West Indies”) and WIT

Equipment Co., Inc. (“WIT Equipment”) in the same mat-

ter. All three judgments contained identical lists of ves-

sels and real estate associated with the defendants that

the Court determined were subject to liens. See id.

Included in the list was the vessel Wittug. See id.

On April 16, 1996, the United States recorded a lien

against the Wittug at the Recorder of Deeds, Division of

2 With regard to the amount of restitution Oelsner was

required to pay, the judgment stated as follows:

The defendant shall pay restitution within Sixty (60)

days from today’s date provided, however, that if the

costs of these cleanup efforts are less than the amount

to which the Court made reference of $1,440,450.00,

credit will be given to the defendants to that extent.

Any restitution payments made by defendants West

Indies Transport, Inc. and/or WIT Equipment Co.,

Inc. shall be applied to reduce this amount

accordingly.

United States’ Opposition, Attach. 2.

3 The Court ordered West Indies to pay $3,520,500.00 in

fines and $1,440,450.00 in restitution. The Court ordered WIT

Equipment to pay $1,520,500.00 in fines and $1,440,450.00 in

restitution. In both the West Indies and the WIT Equipment

judgments, the Court stated that any restitution payments made

either by the company not subject to the judgment or by Oelsner

would be applied to reduce the amount of restitution owed by

the company subject to the judgment.

ae ee ee ne ee

App. 41

St. Croix to satisfy the $1,440,450.00 judgment previously

entered against Oelsner. See id., Attach. 3. On November

9, 1998, the United States applied for a writ of execution

on the Oelsner Judgment against the Wittug, serving

Oelsner with a copy of the application by mail on

November 10, 1998. Also on November 9, 1998, Witwater

Corporation (“Witwater”) filed an emergency motion to

intervene and to stay or quash execution of the writ. On

November 12, 1998, this Court issued the writ. On

November 23, 1998, Oelsner filed a motion to quash the

writ of execution and to obtain a hearing on the matter.4

In addition to attempting to intervene in the United

States’ case against Oelsner, Witwater has filed its own

action regarding the Wittug. On May 22, 1998, Witwater

filed a petition for order of mandamus, alleging that it

owns the Wittug and that the United States Customs

Service has wrongfully denied the Wittug clearance to

depart St. Thomas, USVI where it is currently docked. See

Petition for-Order of Mandamus, §§ 6, 7, 9, 17. On August

7, 1998, the United States filed a motion to dismiss the

petition, arguing that the Court lacked jurisdiction to

issue an order of mandamus in such an action and that

Witwater failed to exhaust its administrative remedies

before filing the petition. On November 10, 1998, the

Court heard argument on this motion (“hearing”) and

ordered that the hearing transcript be made part of the

criminal action pending against Oelsner as well as part of

the mandamus action Wit vater initiated.

* Oelsner alone brings the motion to quash and to obtain a

hearing, stating that the other corporate defendants are defunct.

See Defendants’ Motion at 1, n. 1.

App. 42

II. DISCUSSION

A. DEFENDANTS’ MOTION TO QUASH AND

DEMAND FOR HEARING IN CRIMINAL

ACTION NO. 93-195

The writ of execution in this matter was applied for

and issued pursuant to the Federal Debt Collection Pro-

cedures Act of 1990, 28 U.S.C.A. § 3001 et seq. (“Act”)

which provides “the exclusive civil procedures for the

United States . . . to recover a judgment on a debt.” See

United States’ Opposition, Attach. 4, 5; 28 U.S.C.A.

§ 3001(a)(1) (West 1994). The Act permits the enforcement

of a judgment by writ of execution but requires that the

judgment debtor be notified of the writ and given 20 days

to request a hearing. See 28 U.S.C.A. § 3202(a),(b) (West

1994). When requesting a hearing, the judgment debtor

may also request that the Court quash the writ. See 28

U.S.C.A. § 3202(d) (West 1994). The issues that may be

addressed at the hearing are limited by the Act and

include “the probable validity of any claim of exemption

by the judgment debtor” and “compliance with any statu-

tory requirement for the issuance of the postjudgment

remedy.” 28 U.S.C.A. § 3202(d) (West 1994).

Oelsner filed his request for a hearing and to quash

the writ within 20 days after receiving notification of the

writ of execution. Oelsner makes several arguments in

support of his request. First, Oelsner argues that neither

he nor the other defendants to Criminal Action No.

93-195 owns the Wittug upon which the United States has

executed judgment. See Defendants’ Motion, § 2. Accord-

ing to both Oelsner and Witwater, the actual owner of the

vessel is Witwater. See id., § 3; Witwater’s Emergency

i oa tis

es ee ee ee

App. 43

Motion to Intervene and to Stay or Quash Execution

(“Witwater’s Emergency Motion”) at 2; Witwater’s Reply

at 1. The Act permits the United States to execute on

“{a]ll property in which the judgment debtor has a sub-

stantial nonexempt interest.” 28 U.S.C.A. § 3203(a) (West

1994). The Act defines “property” as “any present or

future interest, whether legal or equitable, in real, per-

sonal . . . , or mixed property, tangible or intangible,

vested or contingent, wherever located and however

held. ...” 28 U.S.C.A. § 3002(12) (West 1994). The United

States claims that Oelsner has an equitable interest in the

Wittug based on statements contained in a Price Water-

house report that was made a part of Oelsner’s sentenc-

ing hearing. See United States’ Opposition at 4. Oelsner

claims that neither he nor his co-defendants is the equita-

ble owner of the Wittug and disputes the present validity

of the Price Waterhouse report. See Defendants’ Motion,

§ 4.° Whether Oelsner is the equitable owner of the Wit-

tug is a question which must be resolved at a hearing on

the writ.

In his motion, Oelsner also requests that the hearing

provide a forum for determining the amount of restitu-

tion which is due and owing. Oelsner contends that the

restitution amount in the judgment was to have been

reduced to reflect his own remediation efforts. See id., 6 5.

The Oelsner Judgment indicates that “if the costs of [the

° Black’s Law Dictionary defines an equitable owner as

“{o]ne who is recognized in equity as owner of the property,

because real and beneficial use and title belong to him, even

though bare legal title is invested in another.” Deluxe Black’s

Law Dictionary 539 (6th ed.1990).

App. 44

United States’] cleanup efforts are less than the [restitu-

tion] amount to which the Court made reference of

$1,440,450.00, credit will be given to the defendants to

that extent.” United States’ Opposition, Attach. 2. The Act

prohibits the use of a writ to execute judgment on prop-

erty that exceeds in value the aggregate amount of the

judgment. See 28 U.S.C.A. § 3203(c)(2)(B)(i) (West 1994).

The cost of the remediation that remains to be done as

well as the value of the Wittug are issues which must be

resolved at a hearing on the writ.

In his motion, Oelsner also challenges the validity of

the March 26, 1996 judgment itself, arguing the judgment

violated Fed.R.Crim.P. 7(c)(2). See Defendants’ Motion,

§ 1. This rule prohibits a judgment of forfeiture in a

criminal proceeding unless the indictment or information

states the extent of the interest or property that is subject

to forfeiture. See Fed.R.Crim.P. 7(c)(2). Pursuant to 28

U.S.C.A. § 3202 (West 1994), a challenge to the validity of

a judgment exceeds the scope of a hearing on a writ.

Therefore, the Court cannot entertain argument regarding

this challenge when_it considers Oelsner’s other chal-

lenges to the writ of execution.®

6 Even if the Act permitted challenges to a judgment’s

validity to be made at a writ hearing, the Court would not

entertain Oelsner’s forfeiture argument because it is completely

devoid of merit. Forfeiture is a term of art used to refer to a

criminal defendant’s divestiture of property as a penalty for

violating certain statutes. See Deluxe Black’s Law Dictionary 650

(6th ed.1990). Criminal defendants who receive this penalty

must forfeit the property used in the commission of the crime as

well as property acquired from the proceeds of the crime. See id.

Forfeiture may not be imposed unless a statute specifically

provides for it. See United States v. Charles D. Kaier Co., 61 F.2d

——————————

App. 45

B. WITWATER’S MOTION TO INTERVENE IN

CRIMINAL ACTION NO. 93-195 AND TO

STAY OR QUASH THE WRIT OF EXECUTION

Even before this Court issued the writ of execution,

Witwater had filed a motion requesting that it be permit-

ted to intervene in the United States’ action against

Oelsner with regard to the then-anticipated writ. See

Witwater’s Emergency Motion at 1. In its motion, Witwa-

ter alleges that it is the legal owner of the Wittug and that

the writ therefore violates its due process rights. See id.;

Witwater’s Reply at 1. At the November 10, 1998 hearing,

the United States indicated that it had no objection to

Witwater’s intervention for the limited purpose of object-

ing to the writ of execution. See Hearing Transcript at

12-13. In the defendants’ motion, Oelsner indicates the

same. See Defendants’ Motion at 2. The Court will there-

fore grant Witwater’s motion to intervene for the limited

purpose of challenging the writ of execution issued in

Criminal Action No. 93-195.

In its motion to intervene, Witwater also requests

that the Court stay or quash the writ of execution it

issued on November 12, arguing that procedural defects

preclude execution pursuant to the writ. First, Witwater

argues that a criminal restitution judgment may not be

executed upon without the Court first conducting a sepa-

rate civil action to determine the amount of restitution

that is due and owing. See Witwater’s Emergency Motion

160, 162 (3d Cir.1932). The statutory provisions under which

Oelsner was convicted did not contain forfeiture penalties, nor

was the Court’s imposition of a fine and restitution in the nature

of a forfeiture.

App. 46

at 2-3. Second, Witwater argues that the United States

may not collect restitution from Oelsner because the resti-

tution order fails to identify the United States as the

restitution payee. See id. at 3. Finally, Witwater argues

that the United States failed to perfect its lien against the

Wittug. See id. at 3-4. The Court finds that these argu-

ments are without merit and will not permit them to be

raised at the hearing on the writ in which Witwater has

been given permission to participate.

The Act provides a means for the United States to

enforce either civil or criminal judgments pursuant to

which it is owed a debt. See 28 U.S.C.A. § 3002(8) (West

1994). The Act permits both civil and criminal judgments

to be enforced by any of the remedies described therein,

including the issuance of a writ of execution. See 28

U.S.C.A. § 3202(a) (West 1994). Contrary to Witwater’s

position, the Act does not contain any language indicat-

ing that a writ may not be issued to enforce a criminal

judgment until a civil judgment has been entered in the

same case. In fact, at the time Oelsner was sentenced, the

United States Code explicitly permitted criminal restitu-

tion orders to be enforced in the same manner as criminal

fines. See 18 U.S.C.A. § 3663(h) (West Supp.1996). The

imposition of a fine created a lien in favor of the United

States upon all property belonging to the person fined.

See 18 U.S.C.A. § 3613(a) (West Supp.1996). The lien arose

at the time the judgment was entered. See id. A fine, as

well as an order of restitution, could “be enforced by

execution against the property of the person fined in like

manner as judgments in civil cases.” 18 U.S.C.A. § 3613(e)

aaa EL Le

App. 47

(West Supp.1996).”7 The Court therefore concludes that

Witwater is mistaken in its assertion that a civil judgment

must follow a criminal judgment in order for a writ of

execution to issue pursuant to the Act.

While Witwater accurately points out that the Court’s

March 26, 1996 restitution order omits the payee’s name,

it incorrectly asserts that this omission prevents the

United States’ from executing on the judgment. Both the

sentencing hearing transcript and subsequent correspon-

dence indicate that the Court intended the payee to be the

United States because the United States Coast Guard

would be responsible for cleaning up the contaminated

site. See United States’ Opposition, Attach. 8 at 82-83

(“The Court finds that the cost of removal as originally

submitted to the Court by the Coast Guard was

$2,543,684.51.”); id., Attach. 9 (May 26, 1998 letter from

the Coast Guard to Richard Brown & Associates, Marine

Surveyor, regarding approval of plan for salvage of the

Marlago, one of the vessels listed in the Court’s March 26,

1996 judgment against Oelsner as subject to lien).

Fed.R.Crim.P. 36 permits the Court to correct omissions

like the one presently before the Court.§ Pursuant to this

7 Both 18 U.S.C.A. § 3663(h) and 18 U.S.C.A. § 3613(a), (e)

were amended by Pub.L. 104-132 which became effective in

cases in which the defendant was convicted on or after April 24,

1996. Because the Court entered Oelsner’s conviction on March

26, 1996, Oelsner was not affected by these amendments.

8 Fed.R.Civ.P. 36 states that “[c]lerical mistakes made in

judgments, orders or other parts of the record and errors in the

record arising from oversight oromission may be corrected by

the court at any time and after such notice, if any, as the court

orders.”

App. 48

rule, the Court will amend the March 26, 1996 judgments

against Oelsner, West Indies, and WIT Equipment to

include the United States as the restitution payee. The

Court will not quash the writ of execution based on its

failure to include the name of the payee in its original

restitution order.

Nor will the Court quash the writ based on Witwa-

ter’s argument that the United States’ lien against the

Wittug was never perfected. Pursuant to 18 U.S.C.A.

§§ 3663(h) and 3613(a), the entry of judgment against

Oelsner created a lien on the Wittug. The United States

perfected this lien by recording a notice of the lien on

April 16, 1996 at the Recorder of Deeds, Division of St.

Croix. See United States’ Opposition, Attach. 3.

C. UNITED STATES’ MOTION TO DISMISS

WITWATER’S PETITION FOR ORDER OF

MANDAMUS IN CIVIL ACTION NO. 98-104

Even before Witwater attempted te intervene in

Criminal Action No. 93-195, it filed a petition for order of

mandamus, claiming that it owned the Wittug and that

the United States Customs Service wrongfully denied the

Wittug clearance to depart St. Thomas, USVI where it was

- and still is - docked. The United States has moved to

dismiss Witwater’s petition, making two arguments in

support of its motion. First, the United States argues that

this Court lacks jurisdiction to issue an order of man-

damus in Witwater’s action.? The United States contends

9 Pursuant to Fed.R.Civ.P. 12(h)(3), a court must dismiss an

action “[wJhenever it appears by suggestion of the parties or

otherwise that the court lacks jurisdiction of the subject matter.”

App. 49

that a district court may only issue an order of man-

damus to compel a federal officer or employee to perform

a mandatory, rather than a discretionary, duty. See Mem-

orandum in Support of Motion to Dismiss (“United

States’ Dismissal Brief”) at 3. According to the United

States, the decision of the Port Director for the United

States Customs Service to grant or deny clearance to

depart a port is discretionary, not mandatory. See id. For

this reason, the United States argues that this Court lacks

jurisdiction to issue an order of mandamus compelling

the Port Director to grant the Wittug clearance to leave St.

Thomas. See id.

28 U.S.C.A. § 1361 (West 1993) states that “district

courts shall have original jurisdiction of any action in the

nature of mandamus to compel an officer or employee of

the United States or any agency thereof to perform a duty

owed to the plaintiff.” The Third Circuit has determined

that this provision confers jurisdiction “where a clear

duty is owed the plaintiff or there is an abuse of discre-

tion.” Grant v. Hogan, 505 F.2d 1220, 1225 (3d Cir.1974).

The law regarding the clearance of vessels bound for

foreign ports is laid out at 46 U.S.C.A.App. § 91, in the

federal regulations promulgated in accordance with this

section, 19 C.FR. § 4.0 et seq, and in numerous other

U.S.C.A. provisions. See, e.g., 8 U.S.C.A. § 1221 (West

Supp.1998) (lists of alien and citizen passengers arriving

and departing); 8 U.S.C.A. § 1253 (West Supp.1998) (fail-

ure of aliens to depart); 16 U.S.C.A. § 1376 (West 1985)

(unlawful taking of a marine mammal); 46 U.S.C.A.

§ 2110 (West Supp.1998) (failure to pay customs fee); 46

U.S.C.A. § 100 (West 1958) (failure to pay legal fee).

Pursuant to 46 U.S.C.A. app. § 91 (West Supp.1998), any

United States or foreign vessel “shall obtain clearance

App. 50

from the Customs Service before proceeding from a port

or place in the United States.” 19 C.F.R. § 4.61(a) (1998)

describes the procedure for obtaining clearance from the

Customs Service. 19 C.F.R. § 4.61(b) (1998) lists a number

of requirements with regard to which a port director must

verify compliance before granting clearance. As the other

U.S.C.A. provisions regarding vessel clearance make

clear, this list is not exhaustive.

Contrary to the United States’ position, a port direc-

tor’s duty to grant clearances is mandatory, not discre-

tionary. See 34 Op. Att’y Gen. 244 (1923).19 A port director

must comply with the statutes governing vessel clear-

ance, granting clearances unless some statutory authority

justifies his refusal to do so. See id.11 Whether Murphy

complied with his mandatory duty to grant clearances

when he denied clearance to the Wittug is the question

presented by Witwater’s petition. It is a question that is

within the jurisdiction of the Court to answer, pursuant

to 28 U.S.C.A. § 1361.

10 The Attorney General predicated this holding on the

1923 language of 46 U.S.C.A.App. § 91, specifically the

statement that the collector “shall grant a clearance for the

vessel and cargo.” See 34 Op. Att’y Gen. 244 (1923). While this

language is not [sic] longer part of the statute, the federal

regulations promulgated pursuant to the current statute contain

similar language, describing the procedure for obtaining

clearance and stating that “[c]learance shall be granted.” 19

C.F.R. § 4.61(a).

11 The Attorney General opinion cited for this proposition

also states that a customs official may deny a clearance if the

papers presented to him are not regular and legal on their face

or if the vessel is burdened with a lien in favor of the United

States. See 34 Op. Att’y Gen. 244 (1923).

App. 51

The second argument the United States makes in

support of its motion to dismiss Witwater’s petition is

that Witwater has failed to exhaust its administrative

remedies. The Supreme Court has determined that man-

damus relief is only available if “all other avenues of

relief” have been exhausted. Heckler v. Ringer, 466 U.S.

602, 616, 104 S.Ct. 2013, 2022, 80 L.Ed.2d 622 (1984). The

United States argues that Witwater should have protested

the port director’s decision to deny clearance to the

United States Court of International Trade in accordance

with 19 U.S.C.A. § 1514(a) (West Supp.1998). See United

States’ Dismissal Brief at 5.

As Witwater accurately asserts, however, 19 U.S.C.A.

§ 1514(a) does not apply to a port director’s decision to

deny clearance. See Puget Sound Freight Lines v. U.S., 36

C.C.P.A. 70, 77-78, 173 F.2d 578, 583 (1949) (holding that

the jurisdiction conferred upon the Customs Court, cur-

rently known as the Court of International Trade, and the

Court of Customs and Patent Appeals, currently the Fed-

eral Circuit, by 19 U.S.C.A. § 1514(a) “is limited to fees

and charges connected with the classification of merchan-

dise and the rate of duty imposed thereon”). This Court is

not aware of any administrative remedies which Witwa-

ter is required to pursue before petitioning for a writ of

mandamus.

The Court find that it has jurisdiction over Witwa-

ter’s petition pursuant to 28 U.S.C.A. § 1361 because the

port director owes Witwater a nondiscretionary duty to

grant the Wittug clearance and because Witwater was not

required to exhaust any other avenues of relief before

filing the current petition. The Court will therefore deny

the United States’ motion to dismiss.

App. 52

D. CONSOLIDATION OF CRIMINAL ACTION

NO. 93-195 AND CIVIL ACTION NO. 98-104

Fed.R.Civ.P. 42(a) gives the Court discretion to order

a joint hearing where two separate actions involving com-

mon questions of law or fact are pending before the

Court.!2 The purpose of this rule is to avoid unnecessary

cost and delay. See Mutual Life Ins. Co. v. Hillmon, 145 U.S.

285, 292, 12 S.Ct. 909, 911, 36 L.Ed. 706 (1892); Midwest

Community Council, Inc. v. Chicago Park Dist., 98 F.R.D.

491, 499 (N.D.I11.1983). The Court may order a joint hear-

ing at the request of a party or upon its own initiative. See

Ellerman Lines, Ltd. v. Atlantic & Gulf Stevedores, Inc., 339

F.2d 673 (3d Cir.1964). The joint hearing does not have the

effect of merging the two cases into a single case or

changing the rights of the parties, “for the suits retain

their separate identities and each requires the entry of a

separate judgment.” Miller v. U.S. Postal Service, 729 F.2d

1033, 1036 (5th Cir.1984); see also McKenzie v. U.S., 678

F.2d 571, 574 (5th Cir.1982); Midwest Community, 98 F.R.D.

at 499.

Because one of the issues which must be resolved in

both Criminal Action No. 93-195 and Civil Action No.

98-104 is the identity of the Wittug’s owner, the hearing

12 Fed.R.Civ.P. 42(a) states as follows:

When actions involving a common question of law or

fact are pending before the court, it may order a joint

hearing or trial of any or all the matters in issue in the

actions; it may order all the actions consolidated; and

it may make such orders concerning the proceedings

therein as may tend to avoid unnecessary costs or

delay.

a eel os Ao hk br eee a

App. 53

on the writ will serve as a joint hearing on both matters

for ‘1e purpose of determining the owner of the Wittug.

Witwater, Oelsner, and the United States will participate

in this hearing, ensuring the presence of all parties hav-

ing an interest in these actions. The joint hearing will

avoid the unnecessary cost and delay of duplicative pro-

ceedings on the issue of ownership.

III. CONCLUSION

For the foregoing reasons, the Court will grant

Oelsner’s request for a hearing on the writ of execution in

Criminal Action No. 93-195, grant Witwater’s motion to

intervene in the hearing for the limited purpose of chal-

lenging the writ, deny the United States’ motion to dis-

miss the petition for order of mandamus filed by

Witwater in Civil Action No. 98-104, and consolidate

Criminal Action No. 93-195 and Civil Action No. 98-104

to the extent that the hearing on the writ will become a

_ joint hearing on the question of ownership of the Wittug.

The Court will enter an appropriate order.

ORDER

THIS MATTER having come before the Court on the

following motions: (1) a motion filed by W. James Delsner

(“Oelsner”) on behalf of all of the defendants to Criminal

Action No. 93-195 to quash the writ of execution filed by

the United States in that action and to be granted a

hearing on this matter; (2) a motion filed by Witwater

Corporation (“Witwater”) to intervene and to stay or

quash the writ of execution filed by the United States in

App. 54

Criminal Action No. 93-195; and (3) a motion to dismiss

filed by the United States in Civil Action No. 98-104; and

THIS MATTER having come before the Court on its

own motion to consolidate Criminal Action No. 93-195

and Civil Action No. 98-104 pursuant to Fed.R.Civ.P. 42(a)

for the limited purpose of determining ownership of the

Wittug; and

The Court having reviewed the record and the sub-

missions of the parties; and

This Court having held a hearing on November 10,

1998 on the motion to dismiss in Civil Action No. 98-104,

the transcript of which was méde part of the record of

both that action and Criminal Action No. 93-195;

For the reasons set forth in the Court’s opinion of this

date;

IT IS this 16th day of December, 1998 HEREBY

ORDERED that the Oelsner’s motion for a hearing

on the writ of execution is GRANTED for the purpose of

determining the identity of the Wittug’s owner, the value

of the Wittug, and the cost of the remediation that

remains to be done;

IT IS FURTHER ORDERED that the Court set a

hearing date upon consultation with counsel;

IT IS FURTHER ORDERED that the hearing be held

via video conferencing or via such other means as the

Court orders;

IT IS FURTHER ORDERED that Witwater’s motion

to intervene in the hearing for the limited purpose of

challenging the writ is GRANTED;

- os as *

App. 55

IT IS FURTHER ORDERED that the United States’

motion to dismiss the petition for order of mandamus

filed by Witwater in Civil Action No. 98-104 is DENIED;

IT IS FURTHER ORDERED that Criminal Action

No. 93-195 and Civil Action No. 98-104 be CONSOLI-

DATED to the extent that the hearing on the writ will

become a joint hearing on the question of ownership of

the Wittug;

IT IS FURTHER ORDERED that the Court’s March

26, 1996 judgments in Criminal Action No. 93-195 against

Oelsner, West Indies Transport Co., Inc., and WIT Equip-

ment Co., Inc. be AMENDED pursuant to Fed.R.Crim.P.

36 to name the United States as the restitution payee.

No costs.

App. 56

United States Court of Appeals,

Third Circuit.

\ UNITED STATES of America

WEST INDIES TRANSPORT, INC.,

Appellant at No. 96-7063,

WIT Equipment Co., Inc., Appellant at No. 96-7064,

W. James Oelsner, Appellant at No. 96-7065.

Nos. 96-7063, 96-7064 and 96-7065.

Argued Dec. 9, 1996.

Decided Oct. 15, 1997.

Treston E. Moore (Argued), Charlotte Amalie, St.

Thomas, U.S. Virgin Islands, for Appellants.

Katherine W. Hazard (Argued), United States Depart-

ment of Justice, Washington, DC, David L. Atkinson, Office

of United States Attorney, Christiansted, St. Croix, U.S.

Virgin Islands, for Appellee.

Before SCIRICA, NYGAARD and McKEE, Circuit

Judges.

OPINION OF THE COURT

SCIRICA, Circuit Judge.

Defendants West Indies Transport, Inc., WIT Equip-

ment Co., and W. James Oelsner appeal their convictions

and sentences for visa fraud, environmental crimes, con-

spiracy, and racketeering. The district court had jurisdic-

tion under 48 U.S.C. § 16121 and 18 U.S.C. §§ 3231 and

1 48 U.S.C. § 1612(a) provides, in part: “The District Court |

of the Virgin Islands shall have the jurisdiction of a District

court of the United States... .”

App. 57

3241.2 We have jurisdiction under 28 U.S.C. § 1291.3 We

will affirm.4

48 U.S.C. § 1612(c) provides, in part: “The District Court of the

Virgin Islands shall have concurrent jurisdiction with the courts

of the Virgin Islands established by local law over those offenses

against the criminal laws of the Virgin Islands, whether felonies

or misdemeanors or both, which are of the same or similar

character or part of, or based on, the same act or transaction or

two or more acts or transactions connected together or

constituting part of a common scheme or plan, if such act or

transaction or acts or transactions also constitutes or constitute

an offense or offenses against one or more of the statutes over

which the District Court of the Virgin Islands has jurisdiction

pursuant to subsections (a) and (b) of this section.”

2 18 U.S.C. § 3231 provides, in part: “The district courts of

the United States shall have original jurisdiction, exclusive of

the courts of the States, of all offenses against the laws of the

United States.”

18 U.S.C. § 3241 provides: “The United States District Court for

the Canal Zone and the District Court of the Virgin Islands shall

have jurisdiction of offenses under the laws of the United States,

not locally applicable, committed within the territorial

jurisdiction of such courts, and jurisdiction, concurrently with

the district courts of the United States, of offenses against the

laws of the United States committed upon the high seas.”

28 U.S.C. § 1291 provides, in part: “The courts of appeals

(other than the United States Court of Appeals for the Federal

Circuit) shall have jurisdiction of appeals from all final

decisions of the district courts of the United States, the United

States District Court for the District of the Canal Zone, the

District Court of Guam, and the District Court of the Virgin

Islands, except where a direct review may be had in the

Supreme Court.”

4 In some instances, it is difficult for us to ascertain the

precise basis of the defendants’ claims for relief. We have

construed defendants’ brief in the most plausible fashion.

App. 58

I. Facts and Procedural History

West Indies Transport, Inc. and WIT Equipment Co.

(collectively “West Indies Transport”) operated several

businesses in Krum Bay, St. Thomas, including a dry

dock, ship repair facility, and barge towing company.

West Indies Transport’s chief operating officer was W.

James Oelsner. In 1987, West Indies Transport obtained

permits to use five barges as fixed docks for its other

vessels. In 1989, Hurricane Hugo seriously damaged

some of these barges, shifting them from their permitted

positions. West Indies Transport did not attempt to repair,

reposition, or salvage these barges after the storm.

Instead, it used these barges as docks, repair facilities,

and housing for employees in their new unauthorized

locations. In the process, West Indies Transport attached

the barges permanently to shore, constructed walkways

and ramps between the barges for use by vehicles and

employees, and wired them for electricity.

To staff its facilities, West Indies Transport hired an

overseas agent to recruit Filipino workers. The Filipino

workers were instructed to apply for D-1 visas intended

for non-immigrant foreign maritime crewmen, not the

H-2 visas required by law. The “West Indies Transport

crewmen” never put to sea. Instead, West Indies Trans-

port housed them in a converted shipping container on a

barge and used them as dock workers. The Filipino

workers were paid approximately $400 per month for a

56-hour work week. By using underpaid illegal foreign

employees, West Indies Transport was able to reduce

significantly its expenses for wages and wage taxes.

App. 59

In the course of its repair operations, West Indies

Transport discharged several different pollutants into the

navigable waters of the United States. Witconcrete II, a

ferro-concrete barge, was heavily damaged in Hurricane

Hugo. The stern was partially severed from the remain-

der of the barge, attached only by metal reinforcing bars,

known as rebar. West Indies Transport did not attempt to

repair, break up, or salvage the damaged stern. Instead, it

cut the rebar by which the stern was attached and

dumped the stern into the bay. Later, when West Indies

Transport decided to move the barge, it cut additional

protruding pieces of rebar from the structure and

dumped them in the water. West Indies Transport also

sand-blasted the hull of a vessel moored in its facility,

causing paint chips and sand to fall into Krum Bay near

the main water intake for the St. Thomas desalinization

plant. The toilet system on the Witrollon, the barge on

which illegal Filipino workers were housed, discharged

raw sewage directly into the bay. West Indies Transport

also collected steel scrap from its repair operations and

dumped it twelve miles out at sea under cover of dark-

ness. West Indies Transport never obtained a permit for

any of these pollution discharges.

Defendants were charged in a twenty-one count

indictment for visa fraud, environmental crimes, conspir-

acy, and racketeering. Five counts were dismissed on

motion of the government. A jury found defendants

guilty on the remaining sixteen counts. Defendants

moved for post-verdict judgment of acquittal, which the

district court denied. This appeal followed.

App. 60

Il. Visa Fraud

Defendants were convicted of aiding and abetting

visa fraud in violation of 18 U.S.C. § 2 and 18 U.S.C.

§ 1546.5 At trial, the district court instructed the jury that

defendants’ representations to U.S. immigration and State

Department officials verifying that Filipino workers hired

by West Indies Transport would be working as crewmen

aboard foreign flagged vessels were material as a matter

of law. These instructions were consistent with our deci-

sion in United States v. Greber, 760 F.2d 68 (3d Cir.), cert.

denied, 474 U.S. 988, 106 S.Ct. 396, 88 L.Ed.2d 348 (1985),

which held that when a defendant is tried for perjury the

issue of materiality is decided by the court.

Between verdict and sentencing, the United States

Supreme Court held that on a perjury charge under 18

U.S.C. § 1001, materiality must be submitted to the jury.

United States v. Gaudin, 515 U.S. 506, 115 S.Ct. 2310, 132

5 18 U.S.C. § 1546 provides, in part: “Whoever knowingly

makes under oath, or .. . knowingly subscribes as true, any false

statement with respect to a material fact in any application,

affidavit, or other document required by the immigration laws

or regulations prescribed thereunder, or knowingly presents

any such application, affidavit, or other document containing

such statement —- Shall be fined under this title or imprisoned

not more than five years, or both.” 18 U.S.C. § 2 provides: “(a)

Whoever commits an offense against the United States or aids,

abets, counsels, commands, induces or procures its commission,

is punishable as a principal. (b) Whoever willfully causes an act

to be done which if directly performed by him or another would

be an offense against the United States, is punishable as a

principal.”

App. 61

L.Ed.2d 444 (1995). “The Constitution gives a criminal

defendant the right to have a jury determine, beyond a

reasonable doubt, his guilt of every element of the crime

with which he is charged. The trial court’s refusal to allow

the jury to pass on the materiality of Gaudin’s false state-

ments infringed that right.” Id. at 522-23, 115 S.Ct. at 2320.

The rule announced in Gaudin applies retroactively to

this direct appeal. Johnson v. United States, 520 U.S. 461,

__, 117 S.Ct. 1544, 1549, 137 L.Ed.2d 718 (1997) (Gaudin

applies retroactively on direct review; citing Griffith v.

Kentucky, 479 U.S. 314, 328, 107 S.Ct. 708, 716, 93 L.Ed.2d

649 (1987)). Defendants contend that Gaudin requires a

new trial.

Defendants submitted to the district court proposed

jury instructions which took the issue of materiality away

from the jury, but now object to those same instructions.

For this reason, the government asks us to treat the

district court’s instructions as non-reviewable invited

error, under United States v. Console, 13 F.3d 641 (3d

Cir.1993), cert. denied, 513 U.S. 812, 115 S.Ct. 64, 130

L.Ed.2d 21 (1994) and Herman v. Hess Oil Virgin Islands

Corp., 524 F.2d 767 (3d Cir.1975). We decline to do so.

Where a defendant submits proposed jury instructions in

_reliance on current law, and on direct appeal that law is

declared constitutionally infirm, we will not apply the

invited error doctrine. Instead, we will review for plain

error under Fed.R.Crim.P. 52. See Johnson, at___ —___, 117

S.Ct. at 1548-49 (reviewing Gaudin error under plain error

standard where defendant, relying on current law later

declared unconstitutional, insisted at trial that materiality

was an issue for the court, not jury, to decide). Under

Rule 52, “before an appellate court can correct an error

App. 62

not raised at trial, there must be (1) error, (2) that is plain,

and (3) that affects substantial rights. If all three condi-

tions are met, an appellate court may then exercise its

discretion to notice a forfeited error, but only if (4) the

error seriously affects the fairness, integrity or public

reputation of the judicial proceedings.” Johnson, at __ —

__, 117 S.Ct. at 1549 (internal quotations and brackets

omitted; citing United States v. Olano, 507 U.S. 725, 732,

113 S.Ct. 1770, 1776-77, 123 L.Ed.2d 508 (1993)). As the

Supreme Court explained in Johnson, “in a case such as

this — where the law at the time of trial was settled and

clearly contrary to the law at the time of appeal — it is

enough that an error be ‘plain’ at the time of appellate

consideration.” Id. See also United States v. Retos, 25 F.3d

1220 (3d Cir.1994) (question is not whether error was

plain at time of trial, but whether it is plain based on

current law at time of direct appeal).

Failure to submit the issue of materiality to the jury

was error. Gaudin, at 522, 115 S.Ct. at 2320; Johnson, at ___,

117 S.Ct. at 1549. That Gaudin involved perjury under 18

U.S.C. § 1001 rather than 18 U.S.C. § 1546, the relevant

statute here, is not significant given the identical charac-

ter of the materiality element in both perjury statutes. See

Johnson v. U.S., 520 U.S. 461, 117 S.Ct. 1544, 137 L.Ed.2d

718 (1997) (applying Gaudin to case involving perjury

under 18 U.S.C. § 1623); United States v. DiRico, 78 F.3d

732 (1st Cir.1996) (applying Gaudin to perjury under 26

U.S.C. § 7206(1)).

A “plain” error is an error which is “clear” or

“obvious.” Johnson, at __, 117 S.Ct. at 1549; Olano, 507

U.S. at 734, 113 S.Ct. at 1777-78. Failure to send the issue

of materiality to the jury is, in light of Gaudin, obvious or

App. 63

clear and therefore “plain” error. Johnson, at __, 117 S.Ct.

at 1549.

To satisfy the “substantial rights” prong of the plain

error test, defendants usually must show that the error

was “prejudicial” — “It must have affected the outcome of

the district court proceedings.” Olano, 507 U.S. at 734, 113

S.Ct. at 1777-78; United States v. Turcks, 41 F.3d 893 (3d

Cir.1994) (same), cert. denied, 514 U.S. 1074, 115 S.Ct. 1716,

131 L.Ed.2d 575 (1995). Defendants bear this burden of

proof. Id. Defendants here have not brought to our atten-

tion any facts suggesting that a jury might have reached a

conclusion different from the district court on materiality.

Defendants presented no evidence at trial that their state-

ments were not material. More importantly, the govern-

ment introduced substantial evidence proving the

defendants’ representations were material. Indeed, had

immigration officials known the true facts behind the

Filipino workers’ applications for visas — defendants’

6 In Olano, the Supreme Court suggested that there might

be a “special category” of structural errors that can be corrected

under Rule 52 regardless of their effect on the outcome of the

trial, 507 U.S. at 735, 113 S.Ct. at 1778, but did not state what

types of cases might fall under this special category. In Johnson v.

U.S., 520 U.S. 461, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997), the

Supreme Court declined to address whether a Gaudin error falls

within this category. Our ruling in U.S. v. Retos, 25 F.3d 1220,

assumed but did not decide that this “special category,”

whatever its content, does not include cases where the district

court failed to instruct the jury on an essential element of the

offense. We agree with that assumption. But see United States v.

David, 83 F.3d 638 (4th Cir.1996) (failure to send issue of

materiality to jury falls within “special category” noted by

Supreme Court in Olano; reversal required regardless of effect

on outcome).

App. 64

intention to employ as dock workers illegally underpaid

foreign workers housed permanently on derelict barges —

the visas never would have been granted. For these rea-

sons, defendants have not met their burden of proving

that the failure to submit the issue of materiality to the

jury affected the outcome of the trial. See United States v.

Kramer, 73 F.3d 1067 (11th Cir.) (Gaudin error not revers-

ible plain error; defendant failed to show that error

affected outcome of trial), cert. denied, 519 U.S. 1011, 117

S.Ct. 516, 136 L.Ed.2d 405 (1996); United States v. Ross, 77

F.3d 1525 (7th Cir.1996) (Gaudin error not reversible plain

error; issue of materiality not seriously disputed at trial).

“When the first three parts of Olano are satisfied, an

appellate court must then determine whether the for-

feited error seriously affects the fairness, integrity, or

public reputation of judicial proceedings before it may

exercise its discretion to correct the error.” Johnson, at __,

117 S.Ct. at 1550 (internal quotations and brackets omit-

ted). Whether or not their substantial rights were

affected, defendants have not satisfied the fourth prong

of the Olano test. In Johnson, a case involving similar facts,

the Supreme Court observed that the evidence of mate-

riality was “overwhelming,” materiality was “essentially

uncontroverted at trial,” and the defendant had pre-

sented “no plausible argument” that her false statements

were “somehow not material.” Id. The Supreme Court

concluded: “On this record there is no basis for conclud-

ing that the error seriously affected the fairness, integrity

or public reputation of the judicial proceedings. Indeed, it

would be the reversal of a conviction such as this which

would have that effect... . No miscarriage of justice will

App. 65 :

result here if we do not notice the error, and we decline to

do so.” Id. (internal quotations omitted).

In the same manner, the evidence at trial that West

Indies Transport’s representations were material was

overwhelming and uncontroverted. On appeal, defen-

dants have not presented a plausible argument that their

statements were not material. The failure to submit mate-

riality to the jury did not seriously affect the fairness, %

integrity, or public reputation of the judicial proceedings. :

For these reasons, we will affirm the convictions on visa :

fraud.

Defendants contend their convictions for aiding and

abetting visa fraud must be reversed because the district

court did not instruct the jury that it must find “knowing.

subscription” or “knowing presentation” of false mate-

rial. Not only did defendants fail to request such an

instruction, their proposed instruction was remarkably

similar to that actually delivered by the district court.”

“Thus, if there was any error at all, it was ‘invited error’

and cannot now be a basis for reversal.” United States v.

Console, 13 F.3d 641, 661 (3d Cir.1993) (quoting Herman v.

Hess Oil Virgin Islands Corp., 524 F.2d 767, 772 (3d

Cir.1975)), cert. denied, 513 U.S. 812, 115 S.Ct. 64, 130

L.Ed.2d 21 (1994).

7 Compare defendants’ proposed instruction, requiring the

jury to find that “knowing false statement be made” to the

government, SA 1140, with actual instruction used, which

required the jury to find that false statements were “made” and

that the defendants “knew” that they were false, A 981.

App. 66

Defendants contend as a matter of law they could not

be convicted of aiding and abetting visa fraud because

the government conceded that immigrant workers who

presented false information to the INS at West Indies

Transport’s instigation lacked criminal intent. We review

de novo where the question is one of statutory interpreta-

tion. United States v. Schneider, 14 F.3d 876 (3d Cir.1994).

The aiding and abetting statute provides, inter alia,

that a defendant is liable if he willfully causes an act to be

done by another which would be illegal if he did it

himself. 18 U.S.C. § 2(b). For this reason, whether the

immigrant workers lacked criminal intent is irrelevant so

long as West Indies Transport intentionally caused them

to submit false information. As the Court of Appeals for

the Eleventh Circuit explained, “it is well established that

§ 2(b) was designed to impose criminal liability on one

who causes an intermediary to commit a criminal act,

even though the intermediary who performed the act has

no criminal intent and hence is innocent of the substan-

tive crime charged.” United States v. Tobon-Builes, 706 F.2d

1092, 1099 (11th Cir.), reh’g denied, 716 F.2d 914 (1983). See

also Springs v. First Nat. Bank of Cut Bank, 835 F.2d 1293

(9th Cir.1988) (“A person who causes the commission of

an offense is punishable as a principal even though the

person who commits the wrongful act violates no crimi-

nal statute because of lack of criminal intent or capac-

ity.”).

In United States v. Catena, 500 F.2d 1319 (3d Cir.), cert.

denied, 419 U.S. 1047, 95 S.Ct. 621, 42 L.Ed.2d 641 (1974), a

physician was convicted for presenting false Medicare

App. 67

claims to the United States. On appeal, the physician

argued that his conviction must be overturned because he

did not present the claims to the United States in person.

Rather, he submitted the false claims to two insurance

companies, which forwarded them to the United States

government. We affirmed his conviction, observing that

under “§ 2(b) a person may be convicted of causing a

false claim to be presented to the United States even

though he uses an innocent intermediary (in this case the

insurance carriers) to actually pass on the claims to the

United States.” Id. at 1323.

The Court of Appeals for the Ninth Circuit reached

the same conclusion in United States v. Causey, 835 F.2d

1289 (9th Cir.1987). In Causey, a tax protester was con-

victed for aiding and abetting tax evasion by helping

persons file false tax returns. On appeal, he argued the

government failed to prove that the persons actually sub-

mitting the false returns possessed criminal intent. The

court rejected this argument “because it is immaterial to

Causey’s conviction whether or not the taxpayers were

shown to have intended to file false tax returns.” Id. at

1291. “Under section 2(b) . . . the government need not

prove that someone other than the defendant was guilty

of the substantive crime. A person who causes the com-

mission of an offense is punishable as a principal even

though the person who completes the wrongful act vio-

lates no criminal statute because of lack of intent or

capacity. . . . Whether the taxpayers had guilty knowl-

edge in submitting the claims becomes irrelevant under

section 2(b).” Id. at 1291.

West Indies Transport’s arguments are indistinguish-

able from those rejected in Catena and Causey. When a

App. 68

defendant uses an innocent intermediary to present false

claims or make false statements to the government, the

criminal intent of the intermediary is not an element of

the offense. 18 U.S.C. § 2(b). For this reason, the district

court’s charge was not erroneous.

III. Environmental Crimes

Defendants were convicted of violating the Clean

Water Act, 33 U.S.C. § 1251 et seq., by (1) severing a 250-

ton concrete and rebar block from the stern of Witconcrete

Il, a ferrous concrete barge, and dumping it into Krum

Bay, St. Thomas; (2) severing approximately one hundred

pieces of rebar and attached concrete from the stern of

Witconcrete II and dropping it into Krause Lagoon; and (3)

conducting sandblasting operations on a floating barge

that projected sand and paint chip residue into Krum Bay.

The Clean Water Act generally prohibits discharging pol-

lutants into the navigable waters of the United States

without a permit. But it only regulates “discharges” of

pollutants from a “point source.” See 33 U.S.C. §§ 1311(a)

and 1362(12).8 Defendants contend as a matter of law

their conduct did not constitute discharge of a pollutant

8 33 U.S.C. § 1311(a) provides: “Except as in compliance

with this section and sections 1312, 1316, 1317, 1328, 1342, and

1344 of this title, the discharge of any pollutant by any person

shall be unlawful.” 33 U.S.C. § 1362(12) provides: “The term

‘discharge of a pollutant’ and the term ‘discharge of pollutants’

means (A) any addition of any pollutant to navigable waters

from any point source, (B) any addition of any pollutant to the

waters of the contiguous zone or the ocean from any point

source other than a vessel or other floating craft.”

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App. 69

from a point source. We review questions of statutory

interpretation de novo. United States v. Schneider, 14 F.3d

876 (3d Cir.1994).

Barges are “floating craft,” expressly included within

the definition of “point source.” 33 U.S.C. 1362(14).9 “Dis-

charges” include “any addition of any pollutant to navi-

gable waters from any point source.” Defendants concede

that Krum Bay and Krause Lagoon are navigabie waters

of the United States. Rebar, concrete, sand and paint

chips fall within the Clean Water Act’s broad definition of

“pollutant.” 33 U.S.C. § 1362(6).!° Therefore, cutting off

pieces of a ferro-concrete barge and dumping them in

Krum Bay and Krause Lagoon, or conducting sandblast-

ing on a floating craft and allowing the residue to fall into

Krum Bay, constitutes making an addition of a pollutant

to navigable waters of the United States from a point

source. Defendants’ conduct fell within the applicable

statutory definitions.

9 33 U.S.C. § 1362(14) provides: “The term ‘point source’

means any discernible, confined and discrete conveyance,

including but not limited to any pipe, ditch, channel, tunnel,

conduit, well, discrete fissure, container, rolling stock,

concentrated animal feeding operation, or vessel or other

floating craft, from which pollutants are or may be discharged.

The term does not include agricultural stormwater discharges

and return flows from irrigated agriculture.”

10 33 U.S.C. § 1362(6) provides, in part: “The term

‘pollutant’ means dredged spoil, solid waste, incinerator

residue, sewage, garbage, sewage sludge, munitions, chemical

wastes, biological materials, radioactive materials, heat,

wrecked or discarded equipment, rock, sand, cellar dirt and

industrial, municipal, and agricultural waste discharged into

water.”

App. 70

Appellants’ reliance on United States v. Plaza Health

Labs., Inc., 3 F.3d 643 (2d Cir.1993), cert. denied, 512 U.S.

1245, 114 S.Ct. 2764, 129 L.Ed.2d 878 (1994), does not alter

our conclusion. There, defendant removed containers

loaded with blood vials from his office, transported them

in his car, and carried them to the Hudson River, where

he deposited them during low tide in a bulkhead separat-

ing his home from the river. The United States Court of

Appeals for the Second Circuit refused to consider defen-

dant a “point source.” But Plaza offers no guidance here

because it focused almost exclusively on the application

of the Clean Water Act to human beings:

As the parties have presented the issue to us in

their briefs and at oral argument, the question is

‘whether a human being can be a point source.’

* * *

Human beings are not among the enumerated

items that may be a ‘point source’... . if every

discharge involving humans were to be consid-

ered a ‘discharge from a point source.’ the stat-

ute’s lengthy definition of ‘point source’ would

have been unnecessary.

+ * *

The Clean Water Act generally targets industrial

and municipal sources of pollutants, as is evi-

dent from a perusal of its many sections. . . . The

legislative history of the CWA... confirms the

act’s focus on industrial polluters.

* * *

We find no suggestion either in the act itself or

in the history of its passage that congress

intended the CWA to impose criminal liability

App. 71

on an individual for the myriad, random acts of

human waste disposal, for example, a passerby

who flings a candy wrapper into the Hudson

River, or a urinating swimmer. Discussions dur-

ing the passage of the 1972 amendments indi-

cate that congress had bigger fish to fry.

Id. at 647 (citations omitted). Congress intended a broad

definition of “point source:” “[t]he concept of a point

source was designed to further this [regulatory] scheme

by embracing the broadest possible definition of any

identifiable conveyance from which pollutants might

enter the waters of the United States.” United States v.

Earth Sciences, Inc., 599 F.2d 368, 373 (10th Cir.1979). Plaza

properly circumscribed the breadth of the “point source”

definition that the rebar was actually part of the Wit-

concrete II and does not alter the analysis. Before and after

the severance of the rebar, the Witconcrete II qualified as a

“vessel or other floating craft” within the parameters of

33 U.S.C. § 1362(14). The deliberate amputation of a por-

tion of the vessel did not destroy the Witconcrete II's

suitablity as a “point source.” Cf. Hudson Riverkeeper

Fund, Inc. v. Harbor at Hastings Assocs., 917 F.Supp. 251,

257 (S.D.N.Y.1996) (“[i]t would seem unlikely that Build-

ing 15 would fit into this interpretation of point source as

any discharge of material would not be deliberate or

systematic”). We see no error here.

Defendants were also convicted for discharging

untreated sewage into Krum Bay from a barge used to

house their workers, in violation of 33 U.S.C. §§ 1311(a)

App. 72

and 1319(c)(2)(A).1! Defendants correctly argue and the

government concedes that “sewage from vessels” is regu-

lated under 33 U.S.C. § 1322, not §§ 1311 and 1319. Thus,

if defendants’ barge falls within the statutory definition

of “vessel,” the conduct in question does not violate

§ 1311(a) and § 1319(c)(2)(A) and their convictions must

be reversed. Defendants maintain their barge on which

they housed Filipino workers is a vessel. We disagree.

33 U.S.C. § 1322(a)(1) defines “new vessel” and “exis-

ting vessel” to include “every description of watercraft or

other artificial contrivance used, or capable of being

used, as a means of transportation on water.” This defini-

tion contrasts vessels with “other floating craft,” a term

which the Clean Water Act does not define, but which

suggests by its terms and in the context of the statute an

artificial water-borne contrivance that, in contrast to a

vessel, is not used or capable of being used for transpor-

tation purposes. See 33 U.S.C. § 1362(12). At all relevant

times, the barge in question was moored permanently to

shore. It was used to house foreign workers, not as a

means of transport. Nor could the barge have been used

for transport. According to testimony at trial, defendants’

barge was half submerged in the water of Krum Bay, with

part of the hull resting on the bottom and with water

visible below decks. The barge could not be moved from

11 33 U.S.C. § 1311(a) provides:

“Except as in compliance with this section and

sections 1312, 1316, 1317, 1328, 1342 and 1344 of this

title, the discharge of any pollutant by any person

shall be unlawful.” Section 1319(c)(2)(A) provides for

criminal sanctions for “any person” who

“knowingly” violates § 1311.

eae Oar

‘

)

App. 73

its mooring. There was sufficient evidence therefore for

the trier of fact to conclude that the barge was not a

vessel within the meaning of the Clean Water Act.

Though we are not aware of any authority interpret-

ing the meaning of “vessel” under § 1322, our view is in

accord with long-standing interpretation of the term

“vessel” in other contexts. See Cope v. Vallette Dry-Dock

Co., 119 U.S. 625, 7 S.Ct. 336, 30 L.Ed. 501 (1887) (dry

dock attached to shore by large chains, with no means of

propulsion, and incapable of being used for navigation,

not a vessel; “The fact that it floats on the water does not

make it a ship or vessel.”); Kathriner v. UNISEA, Inc., 975

F.2d 657 (9th Cir.1992) (“[F]loating structures are not

classified as vessels in navigation if they are incapable of

independent movement over water, are permanently

moored to land, have no transportation function of any

kind, and have no ability to navigate.”).

33 U.S.C. § 1319(c)(2)(A) establishes criminal penal-

ties for anyone who “knowingly” violates 33 U.S.C.

§ 1311. Defendants contend the district court erred when

it failed to instruct jurors on the definition of “know-

ingly,” arguing that jurors might have been unaware that

an accidental discharge of pollutants was insufficient to

convict. Defendants did not raise this objection at trial, so

we review for plain error.

Despite defendants’ contention, the court instructed

jurors on the meaning of the term “knowingly.” It stated:

“An act is done knowingly if done voluntarily and inten-

tionally, and not because of mistake or accident or other

App. 74

innocent reason. The purpose of adding the word ‘know-

ingly’ is to insure that no one will be convicted for an act

done because of mistake, accident, or other innocent rea-

son.” There was no error here.

Defendants were convicted for violating the Rivers

and Harbors Act, 33 U.S.C. § 403, which provides, in part:

it shall not be lawful to build or commence the

building of any wharf, pier, dolphin, boom,

weir, breakwater, bulkhead, jetty, or other struc-

tures in . . . any water of the United States,

outside established harbor lines, or where no

harbor lines have been established, except on

plans recommended by the Chief of Engineers

and authorized by the Secretary of the Army.

Defendants contend the district court should have

dismissed this count because the government “did not

prove that the Defendants had knowingly built a pier,

wharf, or any other structure.”

Under longstanding precedent, the prohibition on

“build[ing] or commencing the building of any wharf,

pier . . . or other structures” contained in § 403 contem-

plates “the purposeful creation of something formulated

or designed, construction work in the conventional

sense.” United States v. Bigan, 274 F.2d 729, 732 (3d

Cir.1960). Thus, we have held that negligent creation of

an obstruction to navigation does not violate § 403. See id.

(negligently caused land slide resulting in blocked river

channel not a violation of § 403).

App. 75

At trial, the government presented evidence that

defendants intentionally strung together numerous dere-

lict barges to form a permanent dock for loading activ-

ities, repairs, and the housing of employees. West Indies

Transport permanently attached these barges together

and to land with rope and wire cable. The barges and

shore were connected by walkways defendants con-

structed out of metal and wood. The resulting wharfs

were wired for electricity and were substantial enough to

support significant loading and repair operations, includ-

ing the use of forklifts. This evidence provided sufficient

basis that defendants purposefully built an unauthorized

structure. This was not a case where an act of nature or

negligence resulted in an obstruction to navigation. It

was clear that defendants here intentionally built a large

dock to conduct their business activities.1

12 Consistent with the United States Supreme Court’s

directive to interpret 33 U.S.C. § 403 broadly, courts have

considered structures analogous to the barges at issue in the

instant case “obstructions.” See United States v. Republic Steel

Corp., 362 U.S. 482, 487, 80 S.Ct. 884, 887-88, 4 L.Ed.2d 903 (1960)

(“the Court .. . gave the concept ‘obstruction’ . . . a broad

sweep”), reh’g denied, 363 U.S. 858, 80 S.Ct. 1605, 4 L.Ed.2d 1739

(1960); Norfolk & Western Co. v. United States, 641 F.2d 1201, 1210

(6th Cir.1980) (“ ‘obstruction’ within the meaning . . . of the Act

is to be liberally construed”). Examples of like structures which

constitute “obstructions” include docks, piers, boat ramps, and

sunken vessels. See Great Am. Ins. Co. v. Tugs “Cissi Reinauer”,

933 F.Supp. 1205, 1219 (S.D.N.Y.1996) (finding a houseboat, that

served as a residence and was not moved for more than seven

months, constituted a “permanently moored vessel” and an

“unauthorized riparian ‘obstruction’ ” for purposes of § 403)

(citations omitted); United States v. Lambert, 915 F.Supp. 797, 804

(S.D.W.Va.1996) (“[t]he dock and its extension are ‘structures’

that obstruct the navigable capacity of the River. The River’s

App. 76

Defendants raise a second objection to their convic-

tions under 33 U.S.C. § 403, the Rivers and Harbors Act.

33 U.S.C. § 403 sanctions the construction of structures in

water of the United States only when those structures are

built “outside established harbor lines, or where no har-

bor lines have been established.” 33 U.S.C. § 403. The

district court did not instruct the jury that it must find

defendants built a structure outside har

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