United States v. Chevron Oil Co.

Chevron Oil Company (Chevron) (defendant) owned an oil and gas producing structure in Lake Salvadore in Louisiana. In November 1972, from one-half barrel to one barrel of crude oil was discharged from a vent pipe associated with the structure because of an equipment malfunction. A Chevron employee corrected the malfunction and recovered about half a barrel of the crude oil. The employee noted that a slight sheen remained on the water, covering an area about 20 feet wide and 50 feet long. As required by law, Chevron informed the United States Coast Guard (Coast Guard) of the spill. Under 33 U.S.C. § 1321(b)(3), the discharge of oil in harmful quantities as determined by the president of the United States was prohibited. Section 1321(b)(4) empowered the president to issue rules setting out what quantities of oil were harmful. The president issued a regulation known as the sheen test, according to which discharges of oil that resulted in a film or sheen on the surface of the water would be considered harmful. Section 1321 also empowered the Coast Guard to assess civil penalties of up to $5,000 for discharge of oil. The Coast Guard held an administrative hearing, proposing that Chevron be fined $1,000. At the hearing, Chevron’s expert witness, John Mackin, testified that Chevron’s spill had no harmful effect, despite the presence of a sheen on the water. Mackin also testified that the sheen test was inappropriate to determine whether a spill was harmful. Nonetheless, the Coast Guard fined Chevron $1,000. The United States (the government) (plaintiff) ultimately sued Chevron in district court to collect the penalty. The government submitted an affidavit from Kenneth Biglane, an official of the Environmental Protection Agency, stating that small oil spills could harm the environment and concluding that the sheen test was appropriate. The district court ruled that the sheen test was reasonable and granted summary judgment for the government.