Opinion ID: 853313
Heading Depth: 2
Heading Rank: 2

Heading: Roseman's Liability

Text: The Court of Appeals determined that it was unnecessary either to adopt or reject the responsible corporate officer doctrine because the court found the evidence inadequate to establish Roseman as a responsible party under Park, as formulated in Dougherty. RLG, 735 N.E.2d at 299. We disagree. Roseman was the sole shareholder of RLG, Inc., which operated the Spring Valley Landfill. As Indiana corporate law allows in a company with only one shareholder, Roseman was the single director. From RLG's inception in 1988, Roseman served as its only corporate officer, holding the offices of president, secretary, and treasurer. As is typical of a single shareholder corporation, only Roseman appears in the corporate minutes in any capacity. These factors, individually or collectively, are not enough to establish individual liability under the responsible corporate officer doctrine. It is not Roseman's status as officer, director, or sole shareholder of RLG that is determinative under this theory. Each of these in itself may be sufficiently removed from the relevant corporate activities that the individual is not a responsible corporate officer despite high corporate office. Rather it is Roseman's direction of and involvement in operating the landfill, his representation to IDEM that he was the responsible party, and his actual role in the corporation's activities that are critical. Matter of Dougherty, 482 N.W.2d 485, 490 (Minn.Ct.App.1992), formulated the standard of a responsible corporate officer as: (1) the individual must be in a position of responsibility which allows the person to influence corporate policies or activities; (2) there must be a nexus between the individual's position and the violation in question such that the individual could have influenced the corporate actions which constituted the violations; and (3) the individual's actions or inactions facilitated the violations. This is a fair restatement of the responsible corporate officer doctrine as articulated in United States v. Park, 421 U.S. 658, 673-74, 95 S.Ct. 1903, 44 L.Ed.2d 489 (1975). Roseman meets all these criteria. He plainly had a position that allowed him to influence RLG's policies and functions. Indeed, he dominated the corporation. He also designated himself as the responsible party in the solid waste permit application, establishing the necessary nexus between his position and environmental compliance. Finally, his acts facilitated the violation. The facts of this case are analogous to Dougherty, where the Minnesota Court of Appeals based responsible corporate officer liability on findings that the defendant was in a position of responsibility as president and primary emergency coordinator, that the violations were within his sphere of influence, that he was the primary contact with all regulatory bodies concerning hazardous waste, and that he failed to prevent the violations and take proper corrective action once the violations occurred. Dougherty, 482 N.W.2d at 490. Here there is no subordinate or intermediate officer principally responsible for compliance, and Roseman was directly involved in at least some corporate activities. Either may be sufficient, and in concert they demonstrate that Roseman had both the responsibility and authority to prevent the IEMA violations in the first instance and to correct the violations once they were brought to his attention. Cf. Park, 421 U.S. at 673-74, 95 S.Ct. 1903. In any event, Roseman's voluntary assumption of the role of responsible party is also sufficient. When Roseman signed IDEM's character disclosure statement, he did not cite the corporation's activities to demonstrate its capacity to operate a proposed landfill. Rather he pointed to his own individual experience as Director of a landfill for three years as fulfilling the requirement of experience of the applicant. Thus, by his own admission, he was the party responsible for the landfill's operations, and held himself out as the responsible party in obtaining the permit.
Corporate status was not Roseman's only involvement in the IEMA violations. According to Jim Ritchie, who operated a bulldozer and backhoe at the landfill from April 1990 until April 1991, Roseman was at the landfill site approximately five days per month, and Roseman ordered the landfill's manager and Ritchie to landfill garbage outside of the permitted landfill contours. This was evidence of Roseman's direct participation in the environmental violation. Equally important, the environmental laws require that there be a Responsible Party incident to the permitting of a landfill. [3] When RLG filled out IDEM's Waste Facility Character Disclosure Statement in 1991, Roseman listed RLG in Section D as the Responsible Party, but signed his own name as the Applicant/Responsible Party. Section D2 of that form also requires the applicant or responsible party to list his, her, or its experience in managing the type of waste for which the permit was sought. Significantly, Roseman listed his individual three years of experience as director of Spring Valley Landfill as supplying the Responsible Party's experience in waste management at the contemplated site. Finally, once the violations became the subject of court order, Roseman, who had sole, ultimate control over RLG, did not act to correct them. The trial court's findings did not address Ritchie's affidavit describing Roseman's direct involvement in placing the garbage outside the permitted area, or the fact that Roseman represented himself, not RLG, to be the Responsible Party with three years experience as director of the landfill. All of these are documented and essentially indisputable. The Court of Appeals observed that [t]he evidence discloses [only] that Roseman conducted himself as a corporate officer. RLG, 735 N.E.2d at 299. But that circumstance addresses only the piercing of the corporate veil and does not in itself eliminate liability under Indiana statute or the responsible corporate officer doctrine. Finally, Ritchie's uncontradicted affidavit established that Roseman directly supervised at least some of the landfill's daily unlawful waste disposal activities. This undisputed evidence of Roseman's active involvement in the violations is also sufficient to impose personal liability.