COALEX REPORT 114

	Coalex Report 114

This is the Office of Surface Mining's library of COALEX Research Reports. COALEX is a database of mining and reclamation information, including the Surface Mining Law and regulations, maintained in LEXIS-NEXIS -- a commercial, on-line research service. These reports have been compiled under a cooperative agreement between the Office of Surface Mining and the Interstate Mining Compact Commission, which represents most U.S. coal producing states. The following report includes an analysis of a specific issue requested by a state regulatory authority with responsibility for carrying out the Surface Mining Law. Copies of the research reports and attachments are available to the public, upon request. For additional information, or to obtain copies of the listed attachments, contact Ron Tarquinio by phone at (202) 208-2882 or by e-mail at rtarquin@osmre.gov.

                   
COALEX STATE INQUIRY REPORT - 114
May 16, 1989

Miles Franklin, Esquire
Natural Resources and Environmental Protection Cabinet
Department of Law - 5th Floor
Capitol Plaza Tower
Frankfort, Kentucky 40601

TOPIC: SURVIVAL OF CIVIL PENALTIES

INQUIRY: Are civil penalties abated upon a permittee's death or do they survive to be assessed
against the individual's estate?

SEARCH RESULTS: Research was conducted using both COALEX and LEXIS. One federal decision
directly on point was identified. Several related federal decisions and one American Law Reports
Annotation were also identified. A list of the materials and the topics they address follow. Copies
are enclosed.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

U.S.A. v ELIZABETH CARTER EDWARDS AND ELIZABETH CARTER EDWARDS, EXECUTRIX OF
THE ESTATE OF JOSEPH CARTER, 667 F. Supp. 1204 (W.D. Tenn. 1987).
   This case concerns violations of the Rivers and Harbors Act of 1899 and the Clean Water Act of
1977. When one defendant, Joseph Carter, died Elizabeth Carter Edwards, in her capacity as the
Executrix of his estate, was substituted as a party defendant. The court determined that the civil
penalty was penal in character, did not survive Carter's death and could not be assessed against
his estate. The opinion provides an excellent overview of relevant case law which is summarized
below:


1. According to SCHREIBER v SHARPLESS, 110 U.S. 76 (1884), actions on "penal statutes" (in this
case, copyright infringement) do not survive the death of the defendant. This 19th century case
was determined by common law since no relevant federal statutes existed and is "still the law".
The court in USA v EDWARDS went on to show that the civil penalty at issue was "penal".


2. The factors used to determine if actions are "penal" were established in MURPHY v
HOUSEHOLD FINANCE CORP., 560 F.2d  206 (6th Cir. 1977). They are: "(1) whether the purpose
of the statute was to redress individual wrongs or more general wrongs to the public; 2) whether
recovery under the statute runs to the harmed individual or to the public; and 3) whether the
recovery authorized by the statute is wholly disproportionate to the harm suffered."

In this bankruptcy case, the court held that the actions were remedial not penal, therefore, the
trustee of the estate has standing to sue under the Truth in Lending Act (TILA), i.e., the cause of
action was "transferable".  To reach his conclusions the court analyzed whether a TILA action
would survive the death of a debtor plaintiff and concluded that the action would survive.


3. In applying the first factor from the MURPHY case, the court in USA v EDWARDS cited to
another TILA case, PORTER v HOUSEHOLD FIN. CORP., 385 F. Supp. 336 (S.D. Ohio 1974),
which found that "[t]he true test is whether the wrong to be remedied or punished is primarily to
an individual or to the State." TILA actions redress wrongs to individuals; Clean Water Act
provisions for civil penalties redress wrongs to the general public. 


4. Regarding the second factor, EDWARDS held that Clean Water Act penalties are "...paid to the
government and not to any individual...[I]n antitrust, patent/copyright infringement, securities
fraud, and truth in lending actions, where the penalty survives the wrongdoer's death, any
recovery of the so called 'penal' damages is paid to the injured party and not the government."


5. Finally, the "enhanced [treble] damages" and civil penalty provisions in federal statutes other
than the Clean Water Act, e.g., antitrust, patent and securities fraud actions as well as civil fraud
penalties in tax cases, were determined not to be penal and, therefore, survived a defendant's
death.  In contrast, the treble damages provision of the Emergency Price Control Act of 1942, the
purpose of which was to protect the general public during wartime, was held to be penal.  In the
EDWARDS case, it is difficult to determine the amount of the "harm suffered", therefore, the
"disproportionate harm" factor "does not appear to be critical" here.


Also see SMITH v NO. 2 GALESBURG CROWN FINANCE CORP., 615 F.2d 407 (7th Cir. 1980), and
Annotation "Survivability of Action Brought Under Truth In Lending Act", 53 A.L.R. Fed. 431
(1988), included as attachments.


ATTACHMENTS
A.   U.S.A. v EDWARDS, 667 F. Supp. 1204 (W.D. Tenn. 1987)   
B.   SCHREIBER v SHARPLESS, 110 U.S. 76 (1884)    
C.   MURPHY v HOUSEHOLD FIN. CORP., 560 F.2d  206 (6th Cir. 1977)        
D.   PORTER v HOUSEHOLD FIN. Corp., 385 F. Supp. 336 (S.D. Ohio 1974)
E.   SMITH v NO. 2 GALESBURG CROWN FIN. CORP., 615 F.2d 407 (7th Cir. 1980) 
F.   Annotation "Survivability of Action Brought Under Truth In Lending Act", 53 A.L.R. Fed.
     431 (1988)


Research conducted by: Joyce Zweben Scall

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