In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 15‐2477 & 15‐2485
UNITED STATES OF AMERICA,
Plaintiff‐Appellee,
v.
EGAN MARINE CORPORATION and DENNIS MICHAEL EGAN,
Defendants‐Appellants.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 10 CR 33 — James B. Zagel, Judge.
____________________
ARGUED DECEMBER 5, 2016 — DECIDED DECEMBER 12, 2016
____________________
Before EASTERBROOK and ROVNER, Circuit Judges, and
SHADID, District Judge.*
EASTERBROOK, Circuit Judge. Barge EMC‐423 exploded on
January 19, 2005, while under way between Joliet and Chica‐
go with a cargo of clarified slurry oil. The blast threw deck‐
hand Alex Oliva into the water; he did not survive. Contend‐
* Of the Central District of Illinois, sitting by designation.
2 Nos. 15‐2477 & 15‐2485
ing that Dennis Egan, master of the tug Lisa E that had been
pushing the barge, had told Oliva to warm a pump using a
propane torch, the United States obtained an indictment
charging Egan and the tug’s owner (Egan Marine Corp.)
with violating 18 U.S.C. §1115, which penalizes maritime
negligence that results in death, plus other statutes that pe‐
nalize the negligent discharge of oil into navigable waters.
After a bench trial, Judge Zagel found that the prosecu‐
tion had established, beyond a reasonable doubt, that Egan
gave the order to Oliva, that the torch caused the explosion,
that Oliva died as a result, and that the barge released oil as
a further result. That such an order, if given, was negligence
(or worse) no one doubted; open flames on oil carriers are
forbidden by Coast Guard regulations and normal prudence.
The court sentenced Egan to six months’ imprisonment, a
year’s supervised release, and restitution of almost $6.75 mil‐
lion. Egan Marine was placed on probation for three years
and ordered to pay the same restitution, for which it and
Egan are jointly and severally liable.
The criminal prosecution was the second trial of these al‐
legations. Two years before the grand jury returned its in‐
dictment, the United States had filed a civil suit against Egan
Marine seeking damages on the same theory: that Egan di‐
rected Oliva to warm the pump using a torch, whose flame
caused an explosion, a death, and an oil spill. That case, too,
went to a bench trial. And Judge Leinenweber, who heard
the evidence, determined that the United States had not
proved its claim. 2011 U.S. Dist. LEXIS 138087 (N.D. Ill. Oct.
13, 2011) at *11 (“the Government did not prove, by a pre‐
ponderance of the evidence, that Alex Oliva was using a
propane torch on the cargo pump of the EMC 423 at the time
Nos. 15‐2477 & 15‐2485 3
of the incident”). The United States did not appeal from that
adverse decision but instead pressed forward with this crim‐
inal prosecution.
Egan and Egan Marine sought the benefit of issue preclu‐
sion (collateral estoppel), arguing that the United States
should not be allowed to contend that they are guilty be‐
yond a reasonable doubt after Judge Leinenweber found that
the proof did not show culpability even by a preponderance
of the evidence. But Judge Zagel rejected this contention.
The Supreme Court has said that the outcome of a civil
case has preclusive force in a criminal prosecution. See Yates
v. United States, 354 U.S. 298, 335–36 (1957). (Burks v. United
States, 437 U.S. 1 (1978), overruled a different portion of Yates
relating to double jeopardy; Burks did not question the por‐
tion of Yates dealing with preclusion.) If the United States
cannot prove a factual claim on the preponderance standard,
it cannot logically show the same thing beyond a reasonable
doubt. The prosecutor maintains that this statement in Yates
was dictum, but we do not think that characterization ap‐
propriate. It was integral to the Court’s rationale—for alt‐
hough the Justices proceeded to conclude that the civil suit
did not block the Yates prosecution under ordinary princi‐
ples of preclusion, it would not have undertaken that exer‐
cise had the Court believed issue preclusion categorically
inapplicable to the civil–criminal sequence.
United States v. Weems, 49 F.3d 528 (9th Cir. 1995), and
United States v. Rogers, 960 F.2d 1501 (10th Cir. 1992), both
took Yates at face value and held that a criminal prosecution
can be blocked by the preclusive effect of a decision in a civil
case. No court of appeals has held otherwise. But the United
States maintains, and Judge Zagel concluded, that our deci‐
4 Nos. 15‐2477 & 15‐2485
sion in United States v. Alexander, 743 F.2d 472 (7th Cir. 1984),
means that preclusion is unavailable notwithstanding Yates.
Alexander held that the outcome of an administrative pro‐
ceeding cannot be invoked to block the resolution of a crimi‐
nal indictment. The opinion observed that many administra‐
tive systems are designed to be informal and expeditious,
and that when the agency loses an administrative adjudica‐
tion it may not be entitled to judicial review. 743 F.2d at 477.
Making the administrative process reliable enough to justify
preclusive effect in a criminal prosecution might require a
substantial investment of prosecutorial resources—if that
were even possible under the statute in question. The United
States’ alternative might be to forego the administrative pro‐
ceeding, which could have bad consequences of its own.
When using these considerations of public policy to de‐
cide whether to give preclusive effect to administrative ad‐
judications, Alexander drew on Standefer v. United States, 447
U.S. 10 (1980), which had concluded that it would be unwise
to apply nonmutual preclusion from one criminal prosecu‐
tion to another. Standefer and Niederberger had been
charged with joint criminal activity. Niederberger was tried
first and acquitted; Standefer maintained that he was enti‐
tled to the benefit of that adjudication, because it takes two
to tango. The Court held not, observing (447 U.S. at 21–23)
that nonmutual preclusion (that is, using the result in A’s
case to determine the result in B’s) is designed largely to re‐
duce litigation costs in civil suits, while the criminal process
has different and more important goals. The Justices added
that acquittals in criminal prosecutions are unreasoned and
cannot be reviewed (given the Double Jeopardy Clause);
they may reflect compromise or misunderstanding rather
Nos. 15‐2477 & 15‐2485 5
than a determination of contested facts. That’s why incon‐
sistent verdicts within a single criminal prosecution do not
work in a defendant’s favor. See, e.g., Bravo‐Fernandez v.
United States, No. 15–537 (U.S. Nov. 29, 2016).
Standefer did not cast doubt on Yates. The considerations
that led the Court to abjure nonmutual preclusion in the
criminal–criminal sequence do not pertain to mutual preclu‐
sion in the civil–criminal sequence. Many a civil decision is
fully explained (as Judge Leinenweber’s was), and all are re‐
viewable on appeal. The Supreme Court understands mutu‐
al preclusion not just as a judicial work‐saving device but as
a matter of right for the litigants involved. See, e.g., Federated
Department Stores, Inc. v. Moitie, 452 U.S. 394 (1981).
This is so even when one of the litigants is the United
States. See, e.g., Montana v. United States, 440 U.S. 147 (1979);
United States v. Stauffer Chemical Co., 464 U.S. 165 (1984). The
prosecutor’s brief in our case tells us that allowing Judge
Leinenweber’s decision to foreclose the criminal charges
would cause the United States either to pour extra resources
into civil suits, disrupting its litigation strategy, or to forego
or postpone such suits pending the outcome of criminal cas‐
es. Similar arguments were made by the Solicitor General in
Montana and Stauffer Chemical, where the United States
maintained that the outcome of a poorly litigated civil case
(perhaps pursued by a single Assistant United States Attor‐
ney in some remote outpost) should not be allowed to block
a new suit that has the Department of Justice’s full attention
and may be designed to serve a vital public goal. But the Jus‐
tices had none of this. They concluded that ordinary rules of
preclusion apply to the United States and that the Depart‐
ment of Justice must navigate around established legal rules,
6 Nos. 15‐2477 & 15‐2485
rather than the rules giving way to bureaucratic conven‐
ience. (The Court made an exception for offensive nonmutu‐
al issue preclusion in United States v. Mendoza, 464 U.S. 154
(1984), again reflecting Standefer’s conclusion that nonmutual
preclusion is a matter of wise policy rather than of litigants’
entitlements.)
There is of course a potential for nonmutuality in the civ‐
il–criminal sequence—but it is the United States that prefers
a situation in which it can win but not lose. The United
States filed the civil suit seeking damages and hoped to en‐
joy the fruits of victory. But it tells us that a loss meant little,
because after losing it could pursue the criminal prosecution
and ask a different judge or jury to reach a different out‐
come. The principal stakes in both the civil and criminal cas‐
es are money. Six months in prison are not to be sneezed at,
but the main contest has been about recompense for Oliva’s
death and the oil released from the barge. What would have
been labeled “damages” in the civil case is called “restitu‐
tion” in the criminal case, but the money covers the same
losses either way. And had the criminal case gone to trial
first and defendants been acquitted, the United States doubt‐
less would be arguing that it could still pursue civil remedies
because of the different burdens of persuasion. See, e.g., One
Lot Emerald Cut Stones v. United States, 409 U.S. 232, 234–35
(1972); Helvering v. Mitchell, 303 U.S. 391, 397–98 (1938).
Every litigant would like multiple chances to win; that’s
what the United States is claiming, while it contends that for
Egan and Egan Marine any one loss would be dispositive (at
least for financial issues). And, by bringing the civil case
first, the United States received the benefit of civil discovery,
which is more extensive than that allowed in criminal prose‐
Nos. 15‐2477 & 15‐2485 7
cutions by Fed. R. Crim. P. 16—discovery that it could put to
use in the criminal case as well as the civil one. We under‐
stand why the United States seeks these advantages but do
not think it entitled to them, without the detriment of being
bound by the civil judgment if it loses. If it fails to show
some fact in the civil suit by a preponderance of the evi‐
dence, it is precluded from trying to show the same thing
beyond a reasonable doubt.
Judge Zagel stated that, even if issue preclusion applies
in the civil–criminal sequence (as we have concluded it
does), he would exercise discretion not to use that doctrine
in this prosecution. He did not say where that discretion
comes from or address the significance of decisions such as
Federated Department Stores that reject judicial efforts to treat
rules of preclusion as dispensable whenever judges prefer
another outcome. See 452 U.S. at 399–402.
Normal rules of preclusion have some flex. For example,
“[a] new determination of the issue [may be] warranted by
differences in the quality or extensiveness of the procedures
followed in the two courts”. Restatement (Second) of Judgments
§28(3). In other words, if the first forum’s procedures do not
conduce to sufficiently reliable decisions, the second forum
may decide that it is best to determine the issue anew. This is
what Alexander said about the difference between adminis‐
trative adjudication and criminal litigation. But Judge Zagel
did not conclude that Judge Leinenweber had conducted the
civil trial unreliably or that any of the other exceptions in Re‐
statement §28 had been established; he simply announced
that he would disregard the civil judgment because that
course seemed best to him. That’s not an appropriate way to
treat the outcome of a properly conducted federal civil trial.
8 Nos. 15‐2477 & 15‐2485
Egan Marine was the only defendant in the civil suit. The
United States maintains that Egan therefore cannot receive
the benefit of the judgment, which it sees as the sort of non‐
mutual issue preclusion forbidden by Standefer. (The United
States also contends that Egan forfeited his entitlement to the
benefit of issue preclusion, but he preserved his position by
telling the district court that he was adopting Egan Marine’s
arguments on issue preclusion.)
Standefer used the word “nonmutual” to refer to the use
of preclusion across different persons, so that A’s victory
over C in one case would imply B’s victory over C in another.
But the law of preclusion has long recognized that if A and B
are in a contractual relation (“in privity” as judges often say)
then they are entitled to the same treatment under normal
principles of mutual preclusion. Egan and Egan Marine were
in such a relation. Indeed, in the civil suit the United States
contended that Egan Marine was vicariously liable for Egan’s
acts precisely because of their employment relation. The civil
suit was about Egan’s conduct, which was attributed to his
employer, and Judge Leinenweber’s core finding (which we
quoted earlier) was that the United States had not shown
that Oliva was using a propane torch at all, let alone that in
using a torch he was following Egan’s directive. When a
court rejects a claim of vicarious liability based on a worker’s
conduct, the worker is as much entitled to the benefit of that
judgment as is the employer. Muhammad v. Oliver, 547 F.3d
874 (7th Cir. 2008); Restatement §51. Cf. Taylor v. Sturgell, 553
U.S. 880, 893–95 (2008) (canvassing situations in which a
nonparty gets the benefit of a judgment). Having argued in
the civil suit that Egan Marine was liable for Egan’s conduct,
the United States cannot now treat Egan and the corporation
as strangers to each other.
Nos. 15‐2477 & 15‐2485 9
Another way to see this is to recall that Standefer dealt
with considerations unique to nonmutual preclusion in
criminal litigation: acquittals are unexplained and unreview‐
able on appeal. Judge Leinenweber’s decision, by contrast,
was accompanied by an opinion and reviewable in this
court—though the United States chose not to appeal. It is
much easier to see why a reviewable civil finding that X has
not been shown by a preponderance of the evidence should
foreclose a contention that X is true beyond a reasonable
doubt than it is to carry one criminal acquittal over to a dif‐
ferent case.
Because both Egan and Egan Marine are entitled to the
benefit of the civil judgment, we need not discuss any of the
remaining issues. The convictions are reversed, and the case
is remanded for the entry of judgments of acquittal.