United States v. Standard Oil

Document

By: United States Supreme Court

Date: May 23, 1966

Source: U.S. Supreme Court. United States v. Standard Oil, 384 US 224. May 23, 1966. 〈http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=384&invol=224〉 (accessed March 16, 2006).

About the Author: Established in 1789 by the U.S. Constitution, the Supreme Court of the United States is the highest federal judicial body court in the country. The court stands as the final authority of the law in the United States and is the ultimate guardian of the U.S. Constitution. It endeavors to provide equal justice under law for the American people.

INTRODUCTION

In the early days of industrialization in the United States, all kinds of waste oil would be discharged into rivers and streams with impunity. There was a general lack of awareness about water pollution control.

Various oil companies were engaged in oil exploration in the late nineteenth century and the early twentieth century. Due to the rapid increase in the demand for petroleum as fuel, there was a massive increase in the production of oil for use as gasoline.

Issues such as short-term economic gains, and beliefs like rapid economic and technical progress shared by industrialists and the government alike, took precedence over pollution and other environmental concerns. Discharge of waste and oil upstream became a major concern for fishing and other maritime activities downstream and in the coastal areas. Further, the use of petroleum additives also increased the risk of poisoning in rivers and other waters. Consequently, the Rivers and Harbors Act of 1899, one of the earliest environmental legislations, was enacted to prevent and make the discharge of any waste or refuse matter into rivers an unlawful act.

Standard Oil, a conglomerate trust of companies formed in 1863 by enterprising American tycoon J. D. Rockefeller, was one such entity that came under the scanner for disposing oil in river waters. Rockefeller had succeeded in monopolizing the refining and transportation segment of the oil industry in its early days in the United States.

United States v. Standard Oil Co. was a Supreme Court case (384 US 224) in which the United States was a litigant against Standard Oil of Kentucky—one of the many Standard Oil companies that marketed oil and gasoline to consumers in the states of Kentucky, Florida, Georgia, Alabama, and Mississippi. In 1966, Standard Oil of Kentucky was indicted for having released 100-octane gasoline fuel into the St. Johns River in Florida. However, the district court of Florida was of the view that commercially valuable gasoline did not constitute "refuse matter," and decided that the aviation gasoline discharged into the river did not violate the provisions of the Rivers and Harbors Act of 1899.

Subsequently, the United States approached the Federal Supreme Court, which reversed the decision and criminally indicted Standard Oil in this case. The case provides an insight into the awareness about pollution of rivers in the United States since the nineteenth century.

PRIMARY SOURCE

UNITED STATES V. STANDARD OIL CO.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA. Appellant was indicted for discharging gasoline into navigable waters in violation of the proscription in 13 of the Rivers and Harbors Act against discharge therein of "any refuse matter of any kind or description." The District Court dismissed the indictment on the ground that "refuse matter" does not include commercially valuable material. Held: The discharge of commercially valuable gasoline into navigable waters is encompassed by 13 of the Act. Pp. 225-230.

(a) Petroleum products, whether useable or not, when discharged into navigable waters constitute a menace to navigation and pollute rivers and harbors. P. 226.

(b) The Rivers and Harbors Act of 1899 was a consolidation of prior acts which enumerated various pollutants and impediments to navigation, drawing no distinction between valuable and valueless substances; the term "refuse matter" in the present Act is a shorthand substitute for the exhaustive list of substances found in the earlier Acts. Pp. 226-229.

(c) The word "refuse" includes all foreign substances and pollutants except, as provided in 13, those "flowing from streets and sewers and passing therefrom in a liquid state" into the watercourse. P. 230.

Reversed.

Nathan Lewin argued the cause for the United States. With him on the brief were Solicitor General Marshall, Assistant Attorney General Vinson and Beatrice Rosenberg.

Earl B. Hadlow argued the cause and filed a brief for appellee.

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

The question presented for decision is whether the statutory ban on depositing "any refuse matter of any [384 U.S. 224, 225] kind or description" in a navigable water covers the discharge of commercially valuable aviation gasoline.

Section 13 of the Rivers and Harbors Act provides:

"It shall not be lawful to throw, discharge, or deposit … any refuse matter of any kind or description whatever other than that flowing from streets and sewers and passing therefrom in a liquid state, into any navigable water of the United States …" 33 U.S.C. 407 (1964 ed.).

The indictment charged appellee, Standard Oil (Kentucky), with violating 13 by allowing to be discharged into the St. Johns River "refuse matter" consisting of 100-octane aviation gasoline. Appellee moved to dismiss the indictment, and, for the purposes of the motion, the parties entered into a stipulation of fact. It states that the gasoline was commercially valuable and that it was discharged into the St. Johns only because a shut-off valve at dockside had been "accidentally" left open.

The District Court dismissed the indictment because it was of the view that the statutory phrase "refuse matter" does not include commercially valuable oil. The United States appealed directly to this Court under the Criminal Appeals Act (18 U.S.C. 3731 (1964 ed.). We noted probable jurisdiction. 382 U.S. 807.

This case comes to us at a time in the Nation's history when there is greater concern than ever over pollution—one of the main threats to our free-flowing rivers and to our lakes as well. The crisis that we face in this respect would not, of course, warrant us in manufacturing offenses where Congress has not acted nor in stretching statutory language in a criminal field to meet strange conditions. But whatever may be said of the rule of strict construction, it cannot provide a substitute for common sense, precedent, and legislative history. We [384 U.S. 224, 226] cannot construe 13 of the Rivers and Harbors Act in a vacuum. Nor can we read it as Baron Parke would read a pleading.

The statutory words are "any refuse matter of any kind or description." We said in United States v. Republic Steel Corp., 362 U.S. 482, 491, that the history of this provision and of related legislation dealing with our free-flowing rivers "forbids a narrow, cramped reading" of 13. The District Court recognized that if this were waste oil it would be "refuse matter" within the meaning of 13 but concluded that it was not within the statute because it was "valuable" oil. That is "a narrow, cramped reading" of 13 in partial defeat of its purpose.

Oil is oil and whether useable or not by industrial standards it has the same deleterious effect on waterways. In either case, its presence in our rivers and harbors is both a menace to navigation and a pollutant. This seems to be the administrative construction of 13, the Solicitor General advising us that it is the basis of prosecution in approximately one-third of the oil pollution cases reported to the Department of Justice by the Office of the Chief of Engineers.

Section 13 codified pre-existing statutes:

An 1886 Act (24 Stat. 329) made it unlawful to empty "any ballast, stone, slate, gravel, earth, slack, rubbish, wreck, filth, slabs, edgings, sawdust, slag, or cinders, or other refuse or mill-waste of any kind into New York [384 U.S. 224, 227] Harbor"—which plainly includes valuable pre-discharge material.

An 1888 Act (25 Stat. 209) "to prevent obstructive and injurious deposits" within the Harbor of New York and adjacent waters banned the discharge of "refuse, dirt, ashes, cinders, mud, sand, dredgings, sludge, acid, or any other matter of any kind, other than that flowing from streets, sewers, and passing therefrom in a liquid state"—which also plainly includes valuable pre-discharge material. (Emphasis added.)

The 1890 Act (26 Stat. 453) made unlawful emptying into navigable waters "any ballast, stone, slate, gravel, earth, rubbish, wreck, filth, slabs, edgings, sawdust, slag, cinders, ashes, refuse, or other waste of any kind … which shall tend to impede or obstruct navigation." Here also valuable pre-discharge materials were included.

The 1894 Act (28 Stat. 363) prohibited deposits in harbors and rivers for which Congress had appropriated money for improvements, of "ballast, refuse, dirt, ashes, cinders, mud, sand, dredgings, sludge, acid, or any other matter of any kind other than that flowing from streets, sewers, and passing therefrom in a liquid state." (Emphasis added.) This Act also included valuable predischarge material.

The Acts of 1886 and 1888, then, dealt specifically with the New York Harbor; the scope of the latter was considerably broader, covering as it did the deposit of "any other matter of any kind." The Acts of 1890 and 1894 paralleled the earlier enactments pertaining to New York, applying their terms to waterways throughout the Nation.

The 1899 Act now before us was no more than an attempt to consolidate these prior Acts into one. It was indeed stated by the sponsor in the Senate to be "in accord with the statutes now in existence, only scattered … from the beginning of the statutes down [384 U.S. 224, 228] through to the end" (32 Cong. Rec. 2296), and reflecting merely "[v]ery slight changes to remove ambiguities." Id., p. 2297.

From an examination of these statutes, several points are clear. First, the 1894 Act and its antecedent, the 1888 Act applicable to the New York Harbor, drew on their face no distinction between valuable and valueless substances. Second, of the enumerated substances, some may well have had commercial or industrial value prior to discharge into the covered waterways. To be more specific, ashes and acids were banned whether or not they had any remaining commercial or industrial value. Third, these Acts applied not only to the enumerated substances but also to the discharge of "any other matter of any kind." Since the enumerated substances included those with a pre-discharge value, the rule of ejusdem generis does not require limiting this latter category to substances lacking a pre-discharge value. Fourth, the coverage of these Acts was not diminished by the codification of 1899. The use of the term "refuse" in the codification serves in the place of the lengthy list of enumerated substances found in the earlier Acts and the catch-all provision found in the Act of 1890. The legislative history demonstrates without contradiction that Congress intended to codify without substantive change the earlier Acts.

The philosophy of those antecedent laws seems to us to be clearly embodied in the present law. It is plain from its legislative history that the "serious injury" to our water-courses (S. Rep. No. 224, 50th Cong., 1st Sess., [384 U.S. 224, 229] p. 2) sought to be remedied was caused in part by obstacles that impeded navigation and in part by pollution—"the discharge of sawmill waste into streams" (ibid.) and the injury of channels by "deposits of ballast, steam-boat ashes, oysters, and rubbish from passing vessels." Ibid. The list is obviously not an exhaustive list of pollutants. The words of the Act are broad and inclusive: "any refuse matter of any kind or description whatever." Only one exception is stated: "other than that flowing from streets and sewers and passing therefrom in a liquid state, into any navigable water of the United States." More comprehensive language would be difficult to select. The word "refuse" does not stand alone; the "refuse" banned is "of any kind or description whatever," apart from the one exception noted. And, for the reasons already stated, the meaning we must give the term "refuse" must reflect the present codification's statutory antecedents.

The Court of Appeals for the Second Circuit in United States v. Ballard Oil Co., 195 F.2d 369 (L. Hand, Augustus Hand, and Harrie Chase, JJ.) held that causing good oil to spill into a watercourse violated 13. The word "refuse" in that setting, said the court, "is satisfied by anything which has become waste, however useful it may earlier have been." Id., p. 371. There is nothing [384 U.S. 224, 230] more deserving of the label "refuse" than oil spilled into a river.

That seems to us to be the common sense of the matter. The word "refuse" includes all foreign substances and pollutants apart from those "flowing from streets and sewers and passing therefrom in a liquid state" into the watercourse.

That reading of 13 is in keeping with the teaching of Mr. Justice Holmes that a "river is more than an amenity, it is a treasure." New Jersey v. New York, 283 U.S. 336, 342. It reads 13 charitably as United States v. Republic Steel Corp., supra, admonished.

We pass only on the quality of the pollutant, not on the quantity of proof necessary to support a conviction nor on the question as to what scienter requirement the Act imposes, as those questions are not before us in this restricted appeal.

SIGNIFICANCE

By the early 1900s, the growth in the maritime industry and relative abundance and cheapness of oil made it the chief source of power for ships in the United States. During this period there were numerous instances of the rampant discharge of oil into rivers and sewers, especially in the industrial cities of the United States. This would result in massive amounts of waste oil traveling downstream towards the river mouths and the coast.

As discussed, the Rivers and Harbors Act of 1899 was passed for the judicious and efficient use of water resources in the United States. Also, to prevent the growing menace of dumping waste and refuse into the river, section 13 was incorporated into the act to make the activity of discharging and disposing of any kind of waste or refuse into the waters illegal.

In 1966, Standard Oil of Kentucky was indicted in proscription of section 13 of the Rivers and Harbors Act. Although the District court ruled in favor of Standard Oil, the United States appealed directly to the Federal Supreme Court against this decision under the Criminal Appeals Act. While ruling against the district court's decision, the Supreme Court opined that this case was referred at a crucial phase in the country's history, when there was significant concern over matters like environmental and waste pollution that was significantly affecting America's rivers and lakes.

According to the Supreme Court, the district court's interpretation that the gasoline oil was not waste or refuse oil and was therefore valuable was actually a narrow and cramped interpretation of section 13. This interpretation partially defeated the purpose of the act. It also became important to examine the legislative history of this act. Section 13 of the Rivers and Harbors act consolidated earlier statutes like the 1894 Act (28 Stat. 363), the 1886 Act (24 Stat. 329), and the 1888 Act (25 Stat. 209).

Upon closely examining these statutes, it became clear that they did not distinguish between valuable and valueless substances. Parallel acts of 1890 and 1994 applied them to waterways in the entire country. Though some substances might have been valuable prior to discharging them into the waterways, the court said that oil spilled into a river rightly deserved the label of "refuse" and merited the application of section 13 of the act. The acts also applied them to the disposal of "any other matter of any kind."

It became clear that earlier legislations sought to remedy the dangers like pollution posed to rivers and navigation. In another case, United States v. Ballard Oil Co., 195 F.2d 369, The Court of Appeals for the Second Circuit had ruled that good oil caused to spill into a river or watercourse violated section 13.

The Supreme Court also cited another case—New Jersey v. New York, 283 U.S. 336, 342—wherein the presiding honorable justice had mentioned that rivers were more than amenities; they were actually a national treasure. It was held that the discharge of commercially valuable gasoline was included in section 13 of the act, and Standard Oil of Kentucky thus stood criminally prosecuted.

Following this criminal prosecution, it becomes important to examine the status of water pollution in America. The issue of pollution of rivers and streams has become more serious with each passing decade. Since the ruling, a number of various statutes were enacted to prevent this growing problem.

There was not enough legislation along with the Rivers and Harbors Act of 1899 and the Oil Pollution Act of 1924 to tackle the growing problem of oil discharge in streams and rivers. The issue of Standard Oil achieves considerable significance because until 1970, the environmental laws in the United States were considered weak.

However, since the 1970s there has been significant activity on the environmental front in the United States. A number of laws have been enacted to tackle the problem of water and environmental pollution. They include the National Environmental Policy Act (NEPA) of 1969, the Clean Air Act (CAA) of 1970, the Clean Water Act (CWA) of 1977, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, the Pollution Prevention Act (PPA) of 1990, the Resource Conservation and Recovery Act (RCRA) of 1976, the Safe Drinking Water Act (SDWA) of 1974, the Superfund Amendments and Reauthorization Act (SARA) of 1986, and the Toxic Substances Control Act (TSCA) of 1976.

FURTHER RESOURCES

Web sites

Henderson, Wayne. "How about those Crowns?" Petroleum Collectibles Monthly, June 2001. 〈http://www.pcmpublishing.com/articles/22.html〉 (accessed March 16, 2006).

Krantz, David, and Brad Kifferstein. "Water Pollution and Society." Earth and Society project for Geological Sciences 265, University of Michigan 1998. 〈http://www.umich.edu/∼gs265/society/waterpollution.htm〉 (accessed March 16, 2006).

Tarbell, Ida M. "The History of Standard Oil Company." from the book The History of The Standard Oil Company, New York: McClure, Phillips, and Co., 1904. Available online at 〈http://www.history.rochester.edu/fuels/tarbell/MAIN.HTM〉 (accessed March 16, 2006).