Opinion ID: 482542
Heading Depth: 2
Heading Rank: 2

Heading: Individual Liability under CERCLA Sec. 107(a)(3), 42 U.S.C. Sec. 9607(a)(3)

Text: 77 CERCLA Sec. 107(a)(3), 42 U.S.C. Sec. 9607(a)(3), imposes strict liability upon any person who arranged for the disposal or transportation for disposal of hazardous substances. As defined by statute, the term person includes both individuals and corporations and does not exclude corporate officers or employees. See CERCLA Sec. 101(21), 42 U.S.C. Sec. 9601(21); United States v. Ward, 618 F.Supp. at 894 (CERCLA); cf. United States v. Pollution Abatement Services of Oswego, Inc., 763 F.2d 133, 134-35 (2d Cir.) (individual liability for violation of Rivers and Harbors Appropriation Act of 1899), cert. denied, --- U.S. ----, 106 S.Ct. 605, 88 L.Ed.2d 583 (1985). Congress could have limited the statutory definition of person but chose not to do so. Compare CERCLA Sec. 101(20)(A), 42 U.S.C. Sec. 9601(20)(A) (limiting definition of owner or operator). Moreover, construction of CERCLA to impose liability upon only the corporation and not the individual corporate officers and employees who are responsible for making corporate decisions about the handling and disposal of hazardous substances would open an enormous, and clearly unintended, loophole in the statutory scheme. 78 First, Lee argues he cannot be held individually liable for having arranged for the transportation and disposal of hazardous substances under CERCLA Sec. 107(a)(3), 42 U.S.C. Sec. 9607(a)(3), because he did not personally own or possess the hazardous substances. Lee argues NEPACCO owned or possessed the hazardous substances. 79 The government argues Lee possessed the hazardous substances within the meaning of CERCLA Sec. 107(a)(3), 42 U.S.C. Sec. 9607(a)(3), because, as NEPACCO's plant supervisor, Lee had actual control over the NEPACCO plant's hazardous substances. We agree. It is the authority to control the handling and disposal of hazardous substances that is critical under the statutory scheme. The district court found that Lee, as plant supervisor, actually knew about, had immediate supervision over, and was directly responsible for arranging for the transportation and disposal of the NEPACCO plant's hazardous substances at the Denney farm site. We believe requiring proof of personal ownership or actual physical possession of hazardous substances as a precondition for liability under CERCLA Sec. 107(a)(3), 42 U.S.C. Sec. 9607(a)(3), would be inconsistent with the broad remedial purposes of CERCLA. Cf. United States v. Mottolo, 629 F.Supp. 56, 14 Envtl.L.Rep. (Envtl.L.Inst.) 20497, 20499 (D.N.H.1984) (person who arranges for disposal or transportation for disposal need not own or possess the hazardous waste). 80 Next, Lee argues that because he arranged for the transportation and disposal of the hazardous substances as a corporate officer or employee acting on behalf of NEPACCO, he cannot be held individually liable for NEPACCO's violations. Lee also argues the district court erred in disregarding the corporate entity by piercing the corporate veil because there was no evidence that NEPACCO was inadequately capitalized, the corporate formalities were not observed, individual and corporate interests were not separate, personal and corporate funds were commingled or corporate property was diverted, or the corporate form was used unjustly or fraudulently. 81 The government argues Lee can be held individually liable, without piercing the corporate veil, because Lee personally arranged for the disposal of hazardous substances in violation of CERCLA Sec. 107(a)(3), 42 U.S.C. Sec. 9607(a)(3). We agree. As discussed below, Lee can be held individually liable because he personally participated in conduct that violated CERCLA; this personal liability is distinct from the derivative liability that results from piercing the corporate veil. The effect of piercing a corporate veil is to hold the owner [of the corporation] liable. The rationale for piercing the corporate veil is that the corporation is something less than a bona fide independent entity. Donsco, Inc. v. Casper Corp., 587 F.2d 602, 606 (3d Cir.1978). Here, Lee is liable because he personally participated in the wrongful conduct and not because he is one of the owners of what may have been a less than bona fide corporation. For this reason, we need not decide whether the district court erred in piercing the corporate veil under these circumstances. 82 We now turn to Lee's basic argument. Lee argues that he cannot be held individually liable for NEPACCO's wrongful conduct because he acted solely as a corporate officer or employee on behalf of NEPACCO. The liability imposed upon Lee, however, was not derivative but personal. Liability was not premised solely upon Lee's status as a corporate officer or employee. Rather, Lee is individually liable under CERCLA Sec. 107(a)(3), 42 U.S.C. Sec. 9607(a)(3), because he personally arranged for the transportation and disposal of hazardous substances on behalf of NEPACCO and thus actually participated in NEPACCO's CERCLA violations. 83 A corporate officer is individually liable for the torts he [or she] personally commits [on behalf of the corporation] and cannot shield himself [or herself] behind a corporation when he [or she] is an actual participant in the tort. The fact that an officer is acting for a corporation also may make the corporation vicariously or secondarily liable under the doctrine of respondeat superior; it does not however relieve the individual of his [or her] responsibility. 84 Donsco, Inc. v. Casper Corp., 587 F.2d at 606 (citations omitted); see New York v. Shore Realty Corp., 759 F.2d at 1052-53 (CERCLA; New York law); United States v. Conservation Chemical Co., 619 F.Supp. at 187-90 (CERCLA); United States v. Carolawn Co., 14 Envtl.L.Rep. (Envtl.L.Inst.) 20699, 20700 (D.S.C.1984) (CERCLA); United States v. Mottolo, 629 F.Supp. 56, 14 Envtl.L.Rep. (Envtl.L.Inst.) at 20499; cf. United States v. Pollution Abatement Services of Oswego, Inc., 763 F.2d at 135 (corporate officers liable for violating Rivers and Harbors Appropriations Act of 1899); see also Escude Cruz v. Ortho Pharmaceutical Corp., 619 F.2d 902, 907 (1st Cir.1980) (general discussion of liability of corporate officers for participation in corporate torts), citing Lobato v. Pay Less Drug Stores, Inc., 261 F.2d 406, 408-09 (10th Cir.1958); see generally 3A W. Fletcher, Cyclopedia of the Law of Private Corporations Sec. 1135 (rev. perm. ed. 1986). Thus, Lee's personal involvement in NEPACCO's CERCLA violations made him individually liable. 85