The owner of a bulk cargo ship cannot recover damages from the federal government after the government detained the ship for almost six months while investigating whether the ship had illegally dumped oil into the sea, the D.C. Circuit ruled Friday (Nov. 2).
In April 2013, a Maltese ship known as the Antonis G. Pappadakis arrived at the port of Norfolk, VA carrying a load of coal. During an inspection, Coast Guard agents found evidence that the ship was violating a federal environmental statute aimed at preventing ships from discharging contaminants. The Coast Guard believed the ship was using a device known as a “magic pipe” that can covertly dump oil residue into the ocean.
The federal government detained the ship while it investigated, brought an indictment, and proceeded to trial. During that time, the government agreed to allow the ship to leave port if the companies that owned and operated the ship would post a $2.5 million bond and meet several nonmonetary conditions. The companies protested, saying they could not meet the bond demand because they were strapped for cash and the ship was under a hefty mortgage.
Ultimately, the ship’s chief engineer was convicted of violating the environmental statute, but the ship’s owner and operator were acquitted. The owner, Angelex, Ltd., then sued the federal government under a section of the statute that allows ship owners to recover damages if they are unreasonably detained.
A district judge granted summary judgment to the government, and in Angelex v. United States, the D.C. Circuit affirmed. Judge Tatel (joined by Judges Millett and Williams) first disposed of Angelex’s argument that the nearly six-month detention of the ship was unauthorized due to a lack of evidence against the company. The government obtained a valid indictment, Tatel wrote, and that was enough to authorize the detention.
Next, the court rejected Angelex’s argument that the $2.5 million bond demand was unreasonable in light of the company’s dire financial straits. The company forfeited that argument by failing to enter any specific financial documents into the record before the district judge, Tatel said.
“Angelex’s omission of those documents is fatal,” he wrote. “Without them, the district court had no way of assessing whether the Coast Guard’s $2.5 million demand reasonably took account of the information those documents contained.”
According to Tatel’s opinion, this was the first time in the nearly 40-year history of the anti-dumping statute that a federal appeals court has weighed in on the section of the statute that gives shipping companies the ability to recover damages for unreasonable detentions.
