Federal court finds that officers may be individually liable for Clean Water Act violations even without piercing the corporate veil
Courts have the authority to hear environmental citizen suit claims that are properly noticed in a notice letter prior to the filing of a complaint. If proper notice is not given, then a defendant may move to dismiss a case for lack of jurisdiction and/or failure to state a claim.
Under the Clean Water Act regulations, the purpose of the citizen suit notice is to provide sufficient information to permit the recipient to identify the allegations and bring itself into compliance. Notice is sufficient if it is specific enough to give the accused company the opportunity to correct the problem.
In Northern California River Watch et al. v. Oakland Maritime Support Services, Inc. et al. (2011 U.S. Dist. LEXIS 14551) (N.Dist. California, February 14, 2011), the Defendants moved to dismiss Clean Water Act citizen suit claims against an individual defendant for failure to provide adequate notice of individual liability.
The citizen suit plaintiffs filed two citizen suit notices. Defendants contended that there was not proper notice of individual liability because the notice letters referred to the individual defendant as president and registered agent for the named co-defendant business. Further, they argued that the allegations in the notice letters were insufficient to pierce the corporate veil or to establish individual liability based on an alter ego theory.
The court noted the following salient facts: (1) the notice letters individually identified the defendant’s [personal] name three times; (2) one notice letter gave notice that the individual was an owner, officer or operator responsible for violations at the facility; and (3) the notice letters identified the individual defendant as a “person responsible for the alleged violations.”
Based on the above facts, the court rejected the defendants’ arguments and denied the motion to dismiss the individual liability claims. It recognized that “under the Clean Water Act, penalties may be imposed against individuals who are in positions of authority at polluting companies.” Further, the court found that “ [u]nder the CWA, a person is a ‘responsible corporate officer’ if the person has authority to exercise control over the corporation’s activity that is causing the discharges. There is no requirement that the officer in fact exercise such authority or that the corporation expressly vest a duty in the officer to oversee the activity.”
The court concluded that because individual liability could attach to the individual based on the ‘responsible corporate officer’ allegations, it was unnecessary for plaintiffs to demonstrate a unity of interest between the defendant business and individual [personal] defendant to state a claim against an individual.
Although this case is outside of Ohio, the court’s decision is consistent with past Ohio environmental individual liability cases. The court’s holding makes it clear that corporate officers that are in the position to address or prevent environmental violations should do if they wish to attempt to avoid or minimize penalties for environmental violations. The case also serves as a reminder that notice letters that fail to allege corporate officer liability could ultimately result in the dismissal of individual liability claims.