Issue Preclusion

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7^th Circuit Court of Appeals

Case Name: United States of America v. Egan Marine Corporation et al

Case No.: 15-2477; 15-2485

Officials: EASTERBROOK and ROVNER, Circuit Judges, and SHADID, District Judge

Focus: Issue Preclusion

Barge EMC‐423 exploded on January 19, 2005, while under way between Joliet and Chicago with a cargo of clarified slurry oil. The blast threw deck‐ hand Alex Oliva into the water; he did not survive. Contending that Dennis Egan, master of the tug Lisa E that had been pushing the barge, had told Oliva to warm a pump using a propane torch, the United States obtained an indictment charging Egan and the tug’s owner (Egan Marine Corp.) with violating 18 U.S.C. §1115, which penalizes maritime negligence that results in death, plus other statutes that penalize the negligent discharge of oil into navigable waters. After a bench trial, Judge Zagel found that the prosecution had established, beyond a reasonable doubt, that Egan gave the order to Oliva, that the torch caused the explosion, that Oliva died as a result, and that the barge released oil as a further result. That such an order, if given, was negligence (or worse) no one doubted; open flames on oil carriers are forbidden by Coast Guard regulations and normal prudence. The court sentenced Egan to six months’ imprisonment, a year’s supervised release, and restitution of almost $6.75 mil‐ lion. Egan Marine was placed on probation for three years and ordered to pay the same restitution, for which it and Egan are jointly and severally liable. The criminal prosecution was the second trial of these al‐ legations. Two years before the grand jury returned its indictment, the United States had filed a civil suit against Egan Marine seeking damages on the same theory: that Egan directed Oliva to warm the pump using a torch, whose flame caused an explosion, a death, and an oil spill. That case, too, went to a bench trial. And Judge Leinenweber, who heard the evidence, determined that the United States had not proved its claim. 2011 U.S. Dist. LEXIS 138087 (N.D. Ill. Oct. 13, 2011) at *11 (“the Government did not prove, by a pre‐ ponderance of the evidence, that Alex Oliva was using a propane torch on the cargo pump of the EMC 423 at the time of the incident”). The United States did not appeal from that adverse decision but instead pressed forward with this criminal prosecution. Egan and Egan Marine sought the benefit of issue preclusion (collateral estoppel), arguing that the United States should not be allowed to contend that they are guilty be‐ yond a reasonable doubt after Judge Leinenweber found that the proof did not show culpability even by a preponderance of the evidence. But Judge Zagel rejected this contention.

Reversed and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.