DISTRICT COURT REJECTS CHALENGES TO THE 

ASSESSMENT OF A CIVIL PENALTY

Written by Robert Bruce

On July 26, 2010, the Honorable Judge Coar of the U.S. District 

Court for the Northern District of Illinois issued his Memorandum 

Opinion and Order in the case of Egan Marine Corporation v. Allen. 

In this case, the plaintiff, Egan Marine Corporation (Egan), raised 

several challenges against a $21,000.00 penalty assessed for six 

violations involving the failure to have tank barges properly 

inspected. Egan asserted that the Coast Guard’s civil penalty process 

denied it due process because it was not afforded a hearing before an 

impartial fact finder, it did not have a meaningful opportunity to 

question Coast Guard witnesses, and the penalty was not assessed 

in a timely manner. Judge Coar rejected these assertions. He stated 

that Egan’s argument, that the civil penalty process was not 

impartial because the penalty was assessed by the same agency that 

brought the charges against it, was frivolous. Judge Coar also stated 

that Egan’s subjective opinion that the Coast Guard could not be 

impartial did not give Egan the right to bypass the Coast Guard’s 

administrative process and have the case tried in district court 

instead. Judge Coar also stated that the hearing officer’s 

determination that the evidence did not prove some of the charges 

showed that the hearing officer was capable of impartial judgments. 

Regarding the claim that Egan had been denied a meaningful 

opportunity to question Coast Guard witnesses, Judge Coar found 

that Egan had not raised this issue in its appeal to the Commandant 

of the Coast Guard, and that the record did not support Egan’s claim 

that it was not advised of its right to request witnesses because the 

record included correspondence in which Egan was advised of the 
regulations governing civil penalty hearings. Those regulations 

explain the right to request witnesses. 

On the issue of timeliness of the assessment of the civil penalty, 

Judge Coar rejected the claim because Egan did not show that it was 

prejudiced by any relevant delay in assessing the penalty. He found 

that Egan offered only speculation that certain Coast Guard 

witnesses may have been unavailable and noted that Egan never 

even tried to have Coast Guard witnesses testify at its hearing. 

Finally, Judge Coar rejected Egan’s claim that the civil penalty 

violated the Excessive Fines Clause of the Eighth Amendment. Egan 

asserted that the $21,000.00 penalty was excessive because it 

violated the Coast Guard’s own guidelines and because the Coast 

Guard did not consider Egan’s ability to pay the penalty. The judge 

found that Egan had not raised these issues in its appeal to the 

Commandant of the Coast Guard. Additionally, he found that the 

guidelines relied upon by Egan were only recommendations and that 

they did not apply to a case such as this where one party was 

charged with a series of recurring violations. Judge Coar also noted 

that the assessed penalty was only about one/ninth of the maximum 

penalty that could have been assessed. With respect to ability to pay, 

the judge found that Egan had not offered any information about 

ability to pay at its hearing. 

Ultimately, Judge Coar found that the Coast Guard action assessing 

the civil penalty was supported by substantial evidence and was not 

arbitrary and capricious. He granted the United States’ motion for 

summary judgment and dismissed the case.