In Precedent Setting Enforcement Action, U.S. Coast Guard Has Fined Maersk Line, Limited $10,000 For Violating 46 USC § 10104 During Shocking Shipboard Sexual Assault Coverup Involving USMMA Cadets

New York, NY

In a policy move that represents a radical sea change in the way the entire U.S. maritime industry will soon be forced to handle the issue of shipboard sexual misconduct, the U.S. Coast Guard has issued the first ever penalty against anyone, ever, for failing to notify the U.S. Coast Guard of an allegation of shipboard sexual assault in accordance with the “Federal Shipboard Sexual Assault Allegation Reporting Law,” aka 46 USC § 10104.

In a Preliminary Assessment Letter (PAL) dated November 3, 2020, S.M. Griffin—Commander, U.S. Coast Guard Hearing Office—notified William Woodhour, President and CEO of Maersk Line, Limited, that Maersk was being fined $10,000 for a violation of 46 USC § 10104 that occurred on February 3, 2015.

For Maersk, a company that generated nearly $40 billion in revenue during 2020, the $10,000 fine was not even a rounding error.  But in response to the PAL, Maersk decided to throw all of the lawyers and money it could muster behind an effort to fight the $10,000 fine before the U.S. Coast Guard Hearing Office. Maersk attempted to turn the fairly informal administrative process of the USCG Hearing Office into full-blown litigation, and responded to the PAL with an aggressive request for an enormous volume of documents, many of which likely never existed.

Then, on December 22, 2020, Maersk CEO William Woodhour sought to throw his own weight behind the effort to derail the $10,000 fine by writing a letter to Admiral Karl Schultz—Commandant of the U.S. Coast Guard—in protest of the fine. On March 2, 2021, Maersk CEO William Woodhour received a response to his desperate plea for help, or perhaps, he received a response to what could be more accurately characterized as Woodhour’s “Do You Know Who I Am?” (DYKWIA?) letter.

On March 2, 2021, Commandant Karl Schultz responded to Maersk CEO William Woodhour in a letter sent by Rear Admiral R.V. Timme. In the Coast Guard’s response to Woodhour, RADM Timme wrote:

“[Mr. Woodhour] As you referenced in your letter, Maersk Line, Limited (MLL) was informed of the allegations against Mr. Stinziano by the Master of the Maersk Idaho in February 2015.  Although MLL proceeded to conduct an internal investigation at that time, neither the master of the Maersk Idaho [IOMMP member Paul Willers] nor MLL notified the Department of Homeland Security or the U.S. Coast Guard about the complaint of a sexual offense as required by 46 USC § 10104.

“In early 2019, U.S. Merchant Marine Academy Alumnus J. Ryan Melogy notified the Coast Guard of the allegations against Mr. Stinziano via email.  The Coast Guard subsequently conducted a criminal investigation that uncovered evidence corroborating Mr. Melogy’s 2015 allegations that Mr. Stinziano initiated unwanted sexual contact with two individuals and engaged in other unprofessional conduct that violated company policy while serving as the Chief Mate of the Maersk Idaho.  The U.S. Attorney’s Office for the Eastern District of New York declined a Coast Guard Investigative Service referral to pursue criminal charges in November 2019 and the Coast Guard then initiated an administrative Suspension and Revocation (S&R) investigation against Mr. Stinziano’s Merchant Mariner Credential (MMC).  The Coast Guard subsequently commenced administrative action against Mr. Stinziano; however his hearing has been postponed until June 2021 to ensure the safety of all participants during the COVID-19 pandemic.  In the interim, Mr. Stinziano continues to hold a valid MMC to serve as Master.”

It’s not difficult to understand why Maersk was so determined to fight a $10,000 fine.  The simple $10,000 fine could potentially open the door for Maersk, and some of its many employees (including Captains who are required to follow 46 USC § 10104), facing incredibly serious civil and criminal liability, especially if a decades-long pattern of intentional lawbreaking around the non-reporting of shipboard sexual assaults were to be established.   

And as MLAA has proven through documents obtained from the U.S. Coast Guard via the Freedom of Information Act, this is far from the first time that Maersk has intentionally violated 46 USC § 10104 in a case involving USMMA cadets aboard their vessels.  It is not even the first time that the U.S. Coast Guard has caught Maersk red-handed in a sexual assault coverup that involved a clear violation of 46 USC § 10104.  It’s only the first time that the U.S. Coast Guard has taken action.  

There is no way to know how many times Maersk and other U.S. companies subject to U.S. Coast Guard oversight have violated 46 USC § 10104 since 1990, but given there are more than 215,000 USCG-credentialed mariners working in the industry, there are likely hundreds of incidents of reported shipboard sexual assaults that have not been reported to the US Coast Guard in clear violation of federal law over the past 31 years.  

Criminality on this scale, involving such a serious issue, could and should eventually result in the United States Department of Justice becoming involved. It seems likely that this massively important $10,000 fine is scratching at the surface of corporate criminality on a vast scale, and the best thing that could happen to the U.S. maritime industry would be a small army of lawyers from the U.S. Department of Justice tearing apart Maersk’s internal personnel and other relevant files.

We’ll have more details soon.

—MLAA