Upload
germaine-puckett
View
32
Download
1
Tags:
Embed Size (px)
DESCRIPTION
Module V – Corporate Externalities. Chapter 13 Corporate Environmental Liability. Bar exam. Corporate practice. Law profession. Corporation as polluter Respondeat superior liability But pollution pays! CERCLA liability (beyond corporate polluter) Parent corporation liability - PowerPoint PPT Presentation
Citation preview
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 1of 10
Chapter 13Corporate Environmental Liability
• Corporation as polluter– Respondeat superior liability– But pollution pays!
• CERCLA liability (beyond corporate polluter)– Parent corporation liability
(1) owner: only under PCV (derivative liability)(2) operator: manage polluting facilities (direct liability)
– Factors in direct liability: parent personnel ~ polluting facility (1) dual officers/directors not enough(2) beyond “norms” of parental oversight
• Corporate officers’ liability• Criminal (environmental statutes): no convictions! • Civil: beyond normal PCV
Module V – Corporate Externalities
Citizen of world
Citizen of world
Law profession
Law profession
Corporate practice
Corporate practice
Bar examBar exam
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 2of 10
When is corporationliable as polluter?
Civil liabilityCriminal liability
Does pollution pay?
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 3of 10
United States v. Bestfoods (US 1998)
• Superfund?• How funded?• Who liable? Why BF?
• Rules on parent liability?• Overlapping managers? • Supervision of
environ compliance?• CERCLA policy?
• “owner” liability?• “operator” liability?
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 4of 10
CERCLA § 107(a)(1)
Any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of shall be liable for all costs of removal or remedial action incurred by the United States Government or a State.
Justice David Souter
Nothing in CERCLA purports to reject this bedrock principle of corporate law: parent is not liable for acts of subsidiary. … Only when the corporate veil may be pierced may parent face derivative liability.
Under CERCLA “operator” [direct liability] must manage, direct or conduct operations specifically related pollution…. Analysis of relationship between CPC and Muskegon facility. Common D/Os acting in their capacities as CPC D/Os – beyond “normal relationship.”
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 6of 10
Subsidiary
Gov’t regulator
Parent
Derivative liability
Direct liability
PCV
“owner/operator”
“operator”
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 7of 10
Unanswered questions:
• Derivative liability: Why does Supreme Court adopt “state” PCV standards – isn’t CERCLA federal law?
– Which state: If federal “derivative liability” standards depend on state law, which state?
• Direct liability: Compare to PCV - different? “Corporate form misused” vs. “beyond norms of parental influence”?
– Reward laxity: Which parent corporation is better off – one that oversees its sub’s polluting activities or not?
• Corporate awe: Why is the Supreme Court so in awe of state-based corporate limited liability – “bedrock principle”?
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 8of 10
Data on PCV in environmental cases …
Thompson
(until 1985)
Wake I
(1986-1995)
Wake II
(1996-2005)
PCV
(K / tort cases)
1005 cases
PCV = 39.5%
118 cases
PCV = 32.2%
154 cases
PCV = 26.6%
PCV
(environ cases)
6 cases
PCV = 83.3%
5 cases
PCV = 60.0%
6 cases
PCV = 67.7%
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 9of 10
Data on PCV in environmental cases …
Thompson
(until 1985)
Wake I
(1986-1995)
Wake II
(1996-2005)
PCV
(K / tort cases)
1005 cases
PCV = 39.5%
118 cases
PCV = 32.2%
154 cases
PCV = 26.6%
PCV
(environ cases)
6 cases
PCV = 83.3%
5 cases
PCV = 60.0%
6 cases
PCV = 67.7%
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 10of 10
More questions:
• Special PCV: Should there be different piercing standards in environmental cases?
• Officer civil liability: why should “could have prevented” be the standard? Too lax?
• Officer criminal liability: if statutes specifically contemplate this, why no convictions?
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 11of 10
Subsidiary
Gov’t regulator
Parent
Derivative liability
Direct liability
PCV
“owner/operator”
“operator”
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 12of 10
Unanswered questions:
• Derivative liability: Why does Supreme Court adopt “state” PCV standards – isn’t CERCLA federal law?
– Which state: If federal “derivative liability” standards depend on state law, which state?
• Direct liability: Compare to PCV - different? “Corporate form misused” vs. “beyond norms of parental influence”?
– Reward laxity: Which parent corporation is better off – one that oversees its sub’s polluting activities or not?
• Corporate awe: Why is the Supreme Court so in awe of state-based corporate limited liability – “bedrock principle”?
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 13of 10
: A te
rrible hyp
othetical
BP Oil Spill Victim Compensation Fund
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 14of 10
BP plc
BP Corp North Am
BP Co. North Am
BP Am Production
BP Exploration, Inc
BP America Inc
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 15of 12
You are the general counsel of GlobalPetroleum.
There’s been a terrible accident. An oil rig leased to GP North America -- a company in the GP group -- has gone down in flames with loss of life, and the uncapped underwater well is spewing oil into the Gulf of Mexico. It may become the biggest man-made oil spill in history.
It turns out the rig was actually operated not by GP, but its wholly-owned US sub, GP Exploration – which held the lease to the offshore oil field. And liability of GP Exploration (as “holder” of the offshore mineral rights) is capped under the Oil Pollution Act of 1990 at removal costs plus $75 million in environmental damages, unless there was “gross negligence.” [See Act]
The GP board has met in emergency session. You have been asked to address GP’s liability. What do you advise the board?
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 16of 12
OIL POLLUTION ACT OF 1990
SEC. 1001. DEFINITIONS.
(27) ‘‘person’’ means an individual, corporation, …
(32) ‘‘responsible party’’ means the following: …
(C) OFFSHORE FACILITIES.—In the case of an offshore facility … the lessee or permittee of the area in which the facility is located or the holder of a right of use and easement granted under applicable State law or the Outer Continental Shelf Lands Act….
SEC. 1002. ELEMENTS OF LIABILITY.
(a)IN GENERAL.—Notwithstanding any other provision or rule of law, … each responsible party for … a facility from which oil is discharged .. into or upon the navigable waters … is liable for the removal costs and damages specified in subsection (b) that result from such incident. …
SEC. 1004. LIMITS ON LIABILITY.• GENERAL RULE.—Except as otherwise provided in this section, the total of the liability of a
responsible party under section 1002 … with respect to each incident shall not exceed—• … (3) for an offshore facility …, the total of all removal costs plus $75,000,000 …
(c) EXCEPTIONS.—
(1) … Subsection (a) does not apply if the incident was proximately caused by—
(A) gross negligence or willful misconduct of, or
(B) the violation of an applicable Federal safety, construction, or operating regulation by, the responsible party, an agent or employee of the responsible party ….
Corporations:A Contemporary Approach
Chapter 13Corporate Environmental Liability
Slide 17of 10
The end