of the congressional plan. Any advantage which a corporation might receive from the immunity provision, as was feared by the court in Skil, is more than offset by the possible benefits to the community attendant to early knowledge of the pollution.
The Government next contends that even if corporations are entitled to section 1161(b) (4) immunity, the defendant does not qualify for such immunity here because it has not been shown that the particular individual who reported the pollution for defendant was James Fish, who stated in his affidavit that he was in effect the top person at the facility. Further, it nowhere appears that Mr. Fish himself authorized the report on the pollution. The Government is concerned, particularly in view of Government Regulations discouraging reports of de minimis oil discharges,
that reports on pollution under section 1161(b) (4) be made by persons of major responsibility. The Government cites testimony before Congress which expresses fear of putting lower level employees in the position of deciding whether to report their company for pollution.
The Government's argument loses strength in the wake of this Court's holding that the defendant corporation was the "person in charge" making the report here. Under universal concepts of the law of agency, a person who has actual or apparent authority to perform an act may legally act for a principal. Gizzi v. Texaco, Inc., 437 F.2d 308, 309-310 (3d Cir. 1971), cert. denied, 404 U.S. 829, 92 S. Ct. 65, 30 L. Ed. 2d 57 (1971); Demarco v. Edens, 390 F.2d 836, 844 (2d Cir. 1968); Lind v. Schenley Industries, Inc., 278 F.2d 79, 85 (3d Cir. 1960), cert. denied, 364 U.S. 835, 81 S. Ct. 58, 5 L. Ed. 2d 60 (1960); Napolitano v. Eastern Motor Express, 246 F.2d 249, 252 (3d Cir. 1957). Thus, presumably, any of a number of personnel could have effectively reported on behalf of defendant.
This Court is aware that the law places the burden of proof of an agent's actual or apparent authority to bind a principal on the party asserting the authority. Frank Sullivan Co. v. Midwest Sheet Metal Works, 335 F.2d 33, 40 (8th Cir. 1964); Burke v. Mesta Machine Co., 79 F. Supp. 588, 615 (W.D. Pa. 1948). Under this law a burden would rest on defendant to show that the individual reporting here had authority to report. But this is not a case in which defendant asserts that its agent created a contract or discharged a business duty. All that is alleged is that the Government received due notice of the pollution. The giving of notice here does not appear to be an act which a reasonable recipient of the notice would believe required high corporate position. Further, the law is well established that a person ". . . with whom an agent deals can reasonably believe that the agent has power to bind his principal if the principal knowingly permits the agent to exercise such power." Continental-Writ Electronics Corp. v. Sprague Electric Co., 329 F. Supp. 959 (E.D. Pa. 1971)
Thus, the burden on defendant here should not be a heavy one, especially since the Government does not contest the fact that it had notice and the affidavit of Mr. Fish implies that the giving of notice was official company policy. Still, the Federal Regulations and legislative history expressing Government concern with possible reports of de minimis pollution are strong enough to require that defendant show that the specific reports here were made by, under the direction, or with consent in each specific instance of an individual who could reasonably be said to be "in charge" -- though not necessarily in sole charge or the highest ranking individual -- at the site.
Such a showing may be made through further affidavits, and this Court will give both parties an opportunity for a hearing on this issue prior to trial.
Assuming that this Court does find defendant to be entitled to immunity on the information it supplied to the Government, the Court cannot at this stage order a dismissal of the Information on the seven questioned counts.
The court in United States v. United States Steel, supra, wisely, in view of the endorsement of "use" immunity in Kastigar v. United States, 406 U.S. 441, 92 S. Ct. 1653, 32 L. Ed. 2d 212 (1972), held that section 1161(b) (4) immunity is "use" immunity only. To allow such immunity to be "transactional" in scope would dangerously jeopardize the objective of the Water Pollution Control Act to set up a deterrent against prospective polluters. Since the immunity here has the scope of "use" immunity only, the path is open to the Government to show that its evidence was obtained independently of the defendant's disclosures.
Defendant would have this Court hold a separate hearing on the issue whether the Government's evidence is sufficiently independent of defendant's reports so as not to run afoul of the statutory immunity. The Government contests the request for a hearing on the basis that a hearing would "require disclosure of the Government's theory of the case as well as the pretrial presentation of its evidence." The Government avers that the question could be decided during the course of the trial.
This Court finds the Government's contention to be the more sound. It would be most expeditious for the Court to be offered evidence on this issue in the course of the trial. United States v. Knox, 396 U.S. 77, 83 n. 7, 90 S. Ct. 363, 24 L. Ed. 2d 275 (1969), held that the issue whether a criminal defendant had filed a false statement with the Government unwillingly or because of duress would be most appropriately determined under Rule 12(b) (1) of the Federal Rules of Criminal Procedure
at the trial. The same logic governs this case. The burden remains with the Government to show that its evidence is free of the immunity. Murphy v. Waterfront Comm'n, 378 U.S. 52, 79 n. 18, 84 S. Ct. 1594, 12 L. Ed. 2d 678 (1964), reaffirmed in Kastigar v. United States, supra at 460 of 406 U.S. 441, 92 S. Ct. 1653, 32 L. Ed. 2d 212. The defendant is hereby given leave to reopen its motion to dismiss the seven counts when the Government's case is concluded. See United States v. Dooling, 406 F.2d 192, 197 (2d Cir. 1969).
Defendant, lastly, moves this Court to dismiss count 2 of the indictment, charging defendant with oil and alkaline waste pollution of the Arthur Kill on or about September 15, 1971. Defendant alleges, citing the Coast Guard Report on the pollution involved in count 2, that the pollution was deposited only on the bank of the waterway, and that under 33 U.S.C. § 407, such pollution can be made the subject of a prosecution only if it has a direct impediment on commerce. The relevant part of section 407 provides:
. . . it shall not be lawful to deposit, or cause, suffer, or procure to be deposited material of any kind in any place on the bank of any navigable water, or on the bank of any tributary of any navigable water, where the same shall be liable to be washed into such navigable water, either by ordinary or high tides, or by storms or floods, or otherwise, whereby navigation shall or may be impeded or obstructed. [Emphasis supplied.]