United States v. Matthaios Fafalios ( 2016 )

Case: 15-30146 Document: 00513421851 Page: 1 Date Filed: 03/14/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 15-30146 United States Court of Appeals
Fifth Circuit
FILED
UNITED STATES OF AMERICA, March 14, 2016
Lyle W. Cayce
Plaintiff - Appellee Clerk
v.
MATTHAIOS FAFALIOS,
Defendant - Appellant
Appeal from the United States District Court
for the Eastern District of Louisiana
Before JOLLY and JONES, Circuit Judges, and MILLS, * District Judge.
E. GRADY JOLLY, Circuit Judge:
Matthaios Fafalios appeals his conviction for failing to maintain an oil
record book aboard a foreign-flagged merchant sea vessel, in violation of 33
U.S.C. § 1908(a) and 33 C.F.R. § 151.25. Fafalios moved for a judgment of
acquittal under Rule 29 of the Federal Rules of Criminal Procedure. For the
following reasons, we reverse the district court’s denial of Fafalios’s Rule 29
motion. We vacate the judgment of conviction, and remand this action for
entry of a judgment of acquittal.
* District Judge of the Northern District of Mississippi, sitting by designation.
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I.
Fafalios is a 65-year-old Greek citizen who has been a merchant seafarer
for over forty years. Most recently, Fafalios was the chief engineer on the M/V
Trident Navigator, a merchant cargo ship registered under the flag of the
Marshall Islands. Like many large cargo ships, the Trident Navigator
gradually collects water in the base of the ship, which is referred to as the
“bilge.” Bilge water must be dumped periodically to prevent it from overtaking
the engine rooms and other on-board machinery. Because bilge water often
mixes with oil runoff from the ship’s engine room, various international
treaties require that the water be filtered before it is returned to the sea.
Under the implementing federal statute, the Act to Prevent Pollution from
Ships (APPS), and its accompanying regulations, all discharges of bilge water
are to be documented in an “oil record book.” See 33 U.S.C. § 1908(a); 33 C.F.R.
§ 151.25(a). As chief engineer, Fafalios was responsible for making record book
entries regarding the dumping of bilge water.
In December 2013, while in international waters, Fafalios noticed that
the Trident Navigator’s bilge tank was almost full. Fearing that the bilge
water would damage engine components before it could be properly filtered for
disposal, Fafalios ordered that the oily bilge water be pumped directly into the
ocean without treatment. To conceal his actions, Fafalios did not record this
bilge water dumping in the Trident Navigator’s oil record book. Several weeks
later, the Trident Navigator arrived at port in New Orleans. Soon after the
ship’s arrival, a whistleblower contacted the U.S. Coast Guard and informed
them that the untreated bilge water had been pumped overboard. The Coast
Guard conducted an investigation, which uncovered Fafalios’s actions.
The government indicted Fafalios for failing to maintain an oil record
book, in violation of 33 U.S.C. § 1908(a); obstruction of justice under 18 U.S.C.
§ 1505; and witness tampering under 18 U.S.C. § 1512(b)(3). Fafalios’s case
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went to trial in December 2014. Before the case was submitted to the jury,
Fafalios moved for a judgment of acquittal under Rule 29 of the Federal Rules
of Criminal Procedure. Fafalios’s Rule 29 motion concerned only the charge
for failing to maintain an oil record book in violation of 33 U.S.C. § 1908(a).
Fafalios urged that the government had failed to prove that he was the
“master” of the ship, which, according to Fafalios, is an element of the offense.
The district court reserved ruling on this motion until a later time.
The jury convicted on all three charges on December 16, 2014. Fafalios
renewed his Rule 29 motion. The district court denied the motion. Fafalios
appealed to this court, and challenges only his conviction under 33 U.S.C.
§ 1908(a) for failure to maintain an oil record book.
II.
Fafalios’s Rule 29 motion asserted that the government failed to offer
evidence regarding an element of the statute of conviction. 1 This court reviews
de novo a district court’s denial of a motion for a judgment of acquittal, and
views the evidence in the light most favorable to the government. United
States v. Dickinson, 632 F.3d 186, 188–89 (5th Cir. 2011).
III.
As stated, Fafalios appeals only his conviction under 33 U.S.C. §1908(a)
for “failure to maintain a record book.” Section 1908(a) states that “[a] person
who knowingly violates [international treaty provisions], this chapter, or the
regulations issued thereunder commits a class D felony.” Foreign-flagged
1In characterizing Fafalios’s appeal as a challenge to the sufficiency of the evidence,
we reject the government’s contention that Fafalios’s Rule 29 motion was actually an
untimely attack on the indictment, and thus should be reviewed for plain error. Fafalios does
not contend that the indictment categorically fails to state an offense, but instead that the
government failed to prove the elements of the offense alleged. That Fafalios knew at the
time the indictment was served that the government would likely be unable to prove its case
does not convert his Rule 29 motion into an untimely attack on the indictment.
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ships may be prosecuted under 33 U.S.C. § 1908 only for violations that occur
within the navigable waters of the United States, or while at a port or terminal
under the jurisdiction of the United States. 33 U.S.C. § 1902(a); see also United
States v. Jho, 534 F.3d 398, 403 (5th Cir. 2008).
Because Fafalios dumped the dirty bilge water while the Trident
Navigator was still in international waters, that action, although a violation of
international law, did not allow for prosecution under APPS. Thus, the
government relied on the statute’s accompanying regulations to prosecute
Fafalios for failure to maintain an accurate oil record book once the ship
entered U.S. waters. See 33 U.S.C. § 1908(a) (stating that an individual who
“knowingly violates . . . the regulations issued thereunder commits a class D
felony”). The regulations, which are promulgated by the Coast Guard, state in
relevant part that:
[e]ach . . . ship of 400 gross tons and above . . . shall maintain an
Oil Record Book . . . . Entries shall be made in the Oil Record Book
on each occasion [that bilge water is discharged]. . . . Each
operation . . . shall be fully recorded without delay in the Oil
Record Book so that all the entries in the book appropriate to that
operation are completed. Each completed operation shall be signed
by the person or persons in charge of the operations concerned and
each completed page shall be signed by the master or other person
having charge of the ship. . . . The master or other person having
charge of a ship required to keep an Oil Record Book shall be
responsible for the maintenance of such record.
33 C.F.R. §§ 151.25(a), (e), (h), (j).
Fafalios contends that, under the plain language of the regulations, only
the “master or other person having charge of [the] ship” is responsible for the
continued maintenance of the oil record book. According to Fafalios, the
government’s failure to offer any evidence showing that he was the “master” of
the Trident Navigator means that the government failed to prove an element
of the charged offense.
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This court interprets regulations in the same manner as statutes,
looking first to the regulation’s plain language. Lara v. Cinemark USA, Inc.,
207 F.3d 783, 787 (5th Cir. 2000). “Where the language is unambiguous, we
do not look beyond the plain wording of the regulation to determine meaning.”
Anthony v. United States, 520 F.3d 374, 380 (5th Cir. 2008) (citing Copeland v.
Comm’r, 290 F.3d 326, 332–33 (5th Cir. 2002)); see also S.D. ex rel. Dickson v.
Hood, 391 F.3d 581, 595 (5th Cir. 2004) (“We have consistently held that a
regulation should be construed to give effect to the natural and plain meaning
of its words.”). Furthermore, the court “consider[s] the regulation as a whole,
with the assumption that the [agency at issue] intended each of the
regulation’s terms to convey meaning.” Lara, 207 F.3d at 787 (citing Bailey v.
United States, 516 U.S. 137, 143–45 (1995)).
We agree with the appellant that, under the plain language of the
regulations, only the “master or other person having charge of the ship” is
responsible for maintenance of the oil record book. Section 151.25 asserts that
each ship is required to maintain an oil record book, and then immediately
thereafter explicitly and exclusively designates the “master” of the ship as the
individual “responsible” for maintaining such a record book. See 33 C.F.R.
§§ 151.25(a), (j). The regulations mention only the “master” when assigning
responsibility for maintaining the oil record book, which plainly indicates that
the responsibility does not extend to others on the vessel. See Thompson v.
Goetzmann, 337 F.3d 489, 499 (5th Cir. 2003) (invoking the “well-known
interpretative canon, expressio unius est exclusio alterius—‘the expression of
one thing implies the exclusion of another’”).
Our conclusion is bolstered by the fact that, with respect to other record
book obligations, the regulations explicitly contemplate liability for a crew
member in Fafalios’s position. The subsection addressing the logging and
signature requirements extends criminal liability to the “person or persons in
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charge of the operations concerned.” See 33 C.F.R. § 151.25(h); see also BFP v.
Resolution Trust Corp., 511 U.S. 531, 537 (1994) (“‘[I]t is generally presumed
that Congress acts intentionally and purposely when it includes particular
language in one section of a statute but omits it in another’” (quoting Chicago
v. Envtl. Def. Fund, 511 U.S. 328, 338 (1994)). 2
The government concedes that Fafalios was not the “master or other
person having charge” of the Trident Navigator, but offers several reasons why,
it its view, Fafalios nevertheless violated 33 C.F.R. § 151.25. First, the
government contends that Fafalios was the “person . . . in charge of the
operations concerned [i.e., the dumping of bilge water],” and thus had an
obligation to record the dumping of dirty bilge water and sign the oil book
entry. See 33 C.F.R. § 151.25(h) (Each operation [i.e., dumping of bilge
water] . . . shall be fully recorded without delay [and] shall be signed by the
person or persons in charge of the operations concerned.”). According to the
government, the signing and recording obligations found in the regulations are
continuing in nature, such that Fafalios’s failure to record a bilge water
dumping became a prosecutable offense once Fafalios’s ship entered U.S.
waters.
In making this argument, the government conflates a failure to “record”
a dumping in the oil record book with a failure to “maintain” the oil record book
going forward. Under 33 C.F.R. § 151.25(h), Fafalios no doubt was required to
record the dumping of the untreated bilge water; Fafalios ignored that
requirement when he failed to make such an entry. This action, however,
occurred while Fafalios was still in international waters, and nothing in the
regulations indicates that a failure to sign a record entry is a continuing
That BFP concerns interpretation of a statute instead of a regulation does not affect
2
its value. As stated, absent a special exception, this court interprets regulations in the same
manner as it does statutes. See Anthony, 520 F.3d at 380.
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offense. In fact, our past precedents show that a failure to sign an oil record
book while still in international waters, standing alone, is not a violation of
either APPS or its attendant regulations. See Jho, 534 F.3d 398.
The facts in Jho are similar to the facts of this case. Like Fafalios, the
defendant in Jho was a chief engineer who failed to sign the oil record book
after an improper bilge-water discharge. The defendant’s ship later entered
U.S. waters. After the ship docked in a U.S. port, the defendant was charged
with aiding and abetting the failure to maintain the oil record book under 33
U.S.C. § 1908(a) and 33 C.F.R. § 151.25. See id. at 401; id. at 402 n.1. The
district court dismissed the indictment on the ground that the unrecorded
dumping occurred outside U.S. waters. Id. at 402.
The Fifth Circuit reversed the district court’s dismissal. The Jho court
emphasized that 33 C.F.R. § 151.25 criminalizes a failure to maintain oil
record books and that, upon entering U.S. waters, a foreign-flagged vessel may
expose itself to liability by carrying with it knowingly inaccurate oil record
books. At no point, however, did the Jho court suggest that the defendant’s
mere failure to sign the book while still in international waters was an
independent ground for liability. In fact, the Jho court explicitly held that
“Jho[’s] argume[nt] that he is not the ‘master or other person having charge of
[the] ship’ . . . is inapposite [because] the government charged Jho with aiding
and abetting the oil record book offense[] [of failure to maintain].” Jho, 534
F.3d at 402 n.1.
Beyond Jho, several independent reasons support the conclusion that
Fafalios’s failure to sign the record book is not a continuing offense. First, the
regulation imposes a duty to record and sign the operation “without delay.”
This phrase implies that Fafalios committed the offense as soon as he failed to
sign the record book and that the offense thus was completed before Fafalios
entered U.S. waters. If the regulations were meant to impose a continuing
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duty, they could have done so with different language, for example by requiring
that Fafalios, as chief engineer, “maintain” the record book. Cf. id. at 403
(“[W]e read the requirement that an oil record book be ‘maintained’ as
imposing a duty upon a foreign-flagged vessel to ensure that its oil record book
is accurate (or at least not knowingly inaccurate) upon entering the ports of
navigable waters of the United States.”).
The government also argues that, even assuming that Fafalios’s position
as the “person in charge of the operations concerned” does not independently
subject him to criminal liability for failure to complete and sign an oil record,
the regulations separately required that Fafalios “maintain” an accurate oil
record book once the ship entered U.S. waters. Specifically, the government
points out that, in addition to imposing on the master a duty to “maintain” the
oil record book, the regulations also impose a duty to “maintain” the record
book on the ship itself. 33 C.F.R. § 151.25(a) (“Each . . . ship of 400 gross tons
and above . . . shall maintain an Oil Record Book.”). According to the
government, the ship’s duty to maintain the record book applies to Fafalios
individually, at least for the records he must sign as the chief engineer.
Of course, in making this argument, the government must account for
the fact that 33 C.F.R. § 151.25 uses the word “maintain” twice in close
proximity, stating that “[e]ach . . . ship of 400 gross tons and above . . . shall
maintain an Oil Record Book” and that “[t]he master or other person having
charge of a ship required to keep an Oil Record Book shall be responsible for
the maintenance of such record.” See 33 C.F.R. §§ 151.25(a), (j). The
government contends that the word “maintain” has a different meaning in
subsection (a), when discussing the ship itself, than it does in subsection (j),
when discussing the “master” of the ship individually. According to the
government, the only duty to “maintain” the record book—in the sense of
keeping it accurate—attaches to the ship (and thus, to anyone on the ship who
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is charged with signing the record book). Conversely, when the regulation
states that the master must “maintain” the record book, it simply means that
he is in charge of the physical custody of the record book, not that he bears any
special duty to ensure that the record book is accurate.
This argument is foreclosed by traditional rules of statutory
construction, not to mention common sense. Nothing in 33 C.F.R. § 151.25
suggests that “maintain” should have two totally different meanings as the
word is used in the regulations. A longstanding canon of statutory construction
holds that “‘identical words used in different parts of the same act are intended
to have the same meaning.’” United States v. Cooper, 135 F.3d 960, 962 (5th
Cir. 1998) (quoting Atlantic Cleaners & Dyers, Inc. v. United States, 286 U.S.
427, 433 (1932)). Furthermore, the rule of lenity cautions against adopting the
government’s strained reasoning regarding why the duty to “maintain” the oil
record book should extend to Fafalios. See United States v. Kaluza, 780 F.3d
647, 669 (5th Cir. 2015) (stating that the rule of lenity requires that
“ambiguous criminal laws be interpreted in favor of the defendants subjected
to them” (internal quotations omitted)). Finally, even ignoring the portion of
the regulation regarding the master’s obligations, the government offers no
convincing explanation for why § 151.25(a)’s requirement that the ship
maintain a record book should be delegated to Fafalios specifically, especially
given that the ship itself may be held liable in rem for any violation of the
regulations, and thus have a bond fixed on it and its departure clearance
withheld pending payment of a fine. See 33 U.S.C. § 1908(d). 3
3 The government also argues that “maintain” must have two different meanings
because, if the requirement that the master “maintain” the record book meant that he must
ensure that it was accurate, then there would be no reason to require the master to sign the
record book. This contention is without merit. Requiring the master to physically sign the
record book increases the odds that the master would detect any irregularities and makes
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Next, the government argues that the Coast Guard has a well-known
practice of enforcing the oil record book regulations against chief engineers and
that this practice is entitled to at least some deference. This argument is
without merit, however, given that the interpretation at issue is in no way
inconsistent with prosecutions of chief engineers. As stated, chief engineers
can be prosecuted for failure to sign an oil record book when that failure occurs
on U.S.-flagged vessels or in U.S. waters. They apparently may be prosecuted
for aiding and abetting the failure to maintain an accurate record book, as the
defendant in Jho was. They can be prosecuted for making false statements to
a Coast Guard investigator, as Fafalios was. Chief engineers on foreign-
flagged vessels cannot, however, be prosecuted simply for having previously
failed to maintain an oil record book once a ship enters U.S. waters, since 33
C.F.R. § 151.25 assigns that duty explicitly and exclusively to the “master or
other person having charge of the ship.” The Coast Guard’s past practices in
applying its regulations do not provide a convincing reason to deviate from the
plain language of the regulation itself.
Finally, in what amounts to a pure policy argument—an unusual
argument to make with respect to the interpretation of a criminal statute—the
government argues that reading the regulation as imposing the duty to
maintain the record book only on the “master” of the ship would allow chief
engineers to falsify records and conceal their falsification from the master. In
this scenario, according to the government, neither the chief engineer nor the
master would be liable, since only “knowing” violations are criminalized. We
are unpersuaded. First, even if this were true, contrived hypotheticals provide
little reason to depart from the plain language of the statute and regulations.
proving his involvement in any fraud easier. This provides ample reason to require the
master to sign even though he is already obliged to ensure the accuracy of the record.
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Second, as has already been explained, any Coast Guard investigation will
likely involve asking the chief engineer whether the oil record book is accurate;
any engineer who stands by his falsified records will expose himself to an
obstruction charge, just as Fafalios did. 4
IV.
In sum, the plain language of 33 C.F.R. § 151.25 states that only the
“master or other person having charge of the ship” has a duty to maintain the
record book. The government concedes that Fafalios was not the “master or
other person having charge” of the Trident Navigator. Accordingly, the district
court’s denial of Fafalios’s Rule 29 motion is REVERSED. The judgment of
conviction is VACATED, and this case is REMANDED for entry of a judgment
of acquittal regarding the charge under 33 U.S.C. § 1908(a).
REVERSED, VACATED, and REMANDED.
4 The court also notes that it is the Coast Guard’s regulations, and not APPS itself,
that limits the scope of prosecution here. If the Coast Guard remains concerned that 33
C.F.R. § 151.25 creates a loophole for individuals such as Fafalios, the agency could amend
its regulations in accordance with the applicable procedures.
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