Carter-Jones Lumber Co. v. Dixie Distrib. Co.
Citation: 29 ELR 20506
No. Nos. 97-3422, -3709, 166 F.3d 840/48 ERC 1001/(6th Cir., 02/02/1999)
The court holds a company and its president liable under the Comprehensive EnvironmentalResponse, Compensation, and Liability Act (CERCLA) for arranging for the disposal of hazardous waste. Through several transactions, the company and its president sold transformers containing polychlorinated biphenyls that were eventually disposed of on plaintiff's land. The court first holds that the company and its president are liable as arrangers for response costs. The result of the many transactions was that the transformers were indeed being scrapped rather than reused. Moreover, arguably shady practices were used by the company and its president and those with whom they dealt. The court next holds that the third-party defense is inappropriate. The third party alleged to have been the sole cause of the release was the company's employee. It may be true that the acts of the employee were intentional and criminal, but the acts and the consequences were not unforeseeable. The court also holds that the system of cost apportionment among the liable parties is not unconstitutionally vague.
The court then holds that the president of the company was properly held to be individually liable. Under Ohio law, a corporate officer can be held personally liable for a tort committed while acting within the scope of his employment. In addition, the evidence supports the conclusion that the president was actively involved in the arrangements for disposal. The court, however, reverses the district court's decision that the company's and the president's liability must be several as a matter of law. In Ohio, both a corporation and an officer are liable for wrongful acts committed by an officer in performance of his corporate duties. Joint and several liability between the company and the president for the president's share of the response costs is, therefore, appropriate. In addition, if the corporate veil may be pierced under Ohio law to reach the president as the sole shareholder, then he will be jointly and severally liable for the company's share of the response costs. Because the district court did not address the issue of veil piercing, the court remands the issue.
Counsel for Plaintiff
John A. Daily
Daily & Schnars
3570 Executive Dr., Ste. 202, Uniontown OH 44685
Counsel for Defendants
Michael T. Gmoser
Law Offices of Michael T. Gmoser Co.
Key Bank Bldg.
Second & High Sts., Ste. 720, Hamilton OH 45011
Before Boggs and Suhrheinrich, JJ.