U.S. v. MV Sanctuary

Aug 25: In the U.S. Court of Appeals, Fourth Circuit, Case No. 07-2123. According to the Appeals Court, the main issue in the appeal is whether U.S. EPA may obtain an administrative warrant to carry out its authority under the Toxic Substances Control Act (TSCA), 15 U.S.C. § 2601 et seq., to inspect places containing regulated chemical substances. The Appeals Court ruled that EPA has such authority, and affirmed the district court’s issuance of a warrant authorizing the Agency to inspect the M/V Sanctuary for polychlorinated biphenyls (PCBs). The Appeals Court also affirmed the district court’s preliminary injunction order preventing the Sanctuary’s owner, Potomac Navigation, Inc., from moving a ship from the pier in Baltimore where it was docked.

The Appeals Court cites the relevant sections of TSCA and indicates TSCA provides EPA with inspection authority. Specifically, "[f]or purposes of administering [TSCA]," EPA "may inspect any establishment, facility, or other premises in which" substances regulated by the Act "are manufactured, processed, stored, or held before or after their distribution in commerce." 15 U.S.C. § 2610(a). In addition, this inspection authority reaches "any conveyance being used to transport" a regulated substance "in connection with distribution in commerce." Id. EPA’s inspection powers "extend to all things within the premises or conveyance inspected" that "bear[ ] on whether the requirements of [TSCA]" have been met with respect to regulated substances "within such premises or conveyance."

The Sanctuary, built in 1944, was once a U.S. Navy hospital ship. The ship was stricken from the Naval Vessel Reports in 1989, and the government sold the ship later that year to Project Life, Inc. (formerly Life International) for $10, with the stipulation that the ship would be used to provide humanitarian services. Project Life docked the Sanctuary at a Maryland Port Authority (MPA) pier in Baltimore, with the announced purpose of converting the ship into a facility for women suffering from addiction. The conversion was never accomplished, and Project Life failed to pay MPA dockage and related charges that became due. Later, sampling data showed that PCBs were present in paint coatings on the Sanctuary. Moreover, as EPA’s research revealed, it was likely that PCBs were in, or exposed on the surfaces of, other components, equipment, and materials on the ship. It was also likely that the PCBs would be in, or on the surfaces of, items that were not being maintained "in a totally enclosed manner."

In early November 2007, pursuant to its authority under TSCA, EPA requested permission from Potomac to inspect the Sanctuary for materials containing PCBs. Potomac denied EPA’s request. Shortly thereafter, EPA (1) applied to the district court for an administrative warrant authorizing the inspection, and (2) moved for a preliminary injunction to prohibit Potomac from moving the Sanctuary from the Baltimore pier until EPA could complete the inspection and determine whether enforcement action was necessary. The district court issued the warrant for the inspection of the Sanctuary and granted the preliminary injunction.

Potomac appeals, contending that the district court erred in (1) concluding that EPA has warrant authority under TSCA, (2) finding probable cause to support issuance of the administrative warrant, (3) concluding that the Sanctuary was a proper location for inspection under TSCA, (4) denying Potomac’s request for a Franks hearing, and (5) granting the preliminary injunction that enjoined the towage of the Sanctuary from Baltimore.

The Appeals Court concluded, "Given the serious health and environmental consequences associated with PCBs, the district court did not clearly err in finding that the balance of harms tipped sharply in favor of EPA (and the public interest). In short, the district court did not abuse its discretion in granting a preliminary injunction (of limited duration) that prevented the Sanctuary from being moved from the United States while EPA executed its inspection warrant and considered what, if any, regulatory or enforcement action was warranted."

Access the complete opinion (click here).