United States v. Cordova Chemical Co. of Michigan

No. 1:89-CV-961, -503 (W.D. Mich. March 26, 1991)

The court holds that issues of material fact remain concerning the liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERLCA) of a corporate officer. Ruling on the corporate officer's motion for reconsideration of the court's denial of his motion for summary judgment, the court notes that the test for CERCLA liability for a corporate officer is heavily fact-specific. The court must weigh a number of factors, including the officer's position in the company, degree of authority, percentage of ownership, role in board decisionmaking and daily management, knowledge of and responsibility for waste disposal policy, and personal involvement with and ability to control hazardous waste matters. The court holds that unresolved factual issues preclude summary judgment in this case. These issues include the corporate officer's corporate positions, share of stock, and degree of control over hazardous waste disposal matters.

[A previous decision in this litigation is published at 21 ELR 20802.]

Counsel are listed at 21 ELR 20802.

[21 ELR 20805]

Hillman, J.

Opinion

This is a consolidated cleanup case brought under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et seq. (1988). On February 4, 1991, at the conclusion of a hearing on eight summary judgment motions pending in this consolidated matter, the court delivered a bench opinion denying summary judgment on a number of the motions, including Arnold C. Ott's motion for summary judgment. Ott now has filed a "motion for reconsideration and clarification or alternatively for certification for immediate appeal."

Ott's motion for reconsideration does not point to new facts or controlling law. Rather, Ott asserts that the court denied summary judgment by apparently focusing solely upon the "control" element of a "prevention" test set forth in Kelley v. Arco Indus., Inc., 723 F. Supp. 1214 (W.D. Mich. 1989). Ott urges the court to apply a narrow standard of liability set forth in Joslyn Mfg. Co. v. T. L. James & Co., 893 F.2d 80 [20 ELR 20382] (5th Cir. 1990).

In denying Ott's motion, the court has not relied exclusively on Arco or the element of "control." Nor does the court elect to attempt to apply Joslyn, a case in which the liability of parent corporations, not corporate officers, was at issue.

The court denied Ott's motion for summary judgment in light of a number of prior cases addressing the question of CERCLA liability for corporate officers or shareholders, including Arco, 723 F. Supp. at 1219-20; United States v. Northeastern Pharmaceutical & Chemical Co., 579 F. Supp. 823, 847-48 [14 ELR 20212] (W.D. Mo. 1984), aff'd in part and rev'd in part, 810 F.2d 726 [17 ELR 20603] (8th Cir. 1986), cert. denied, 484 U.S. 1008 (1987); New York v. Shore Realty Corp., 759 F.2d 1032, 1052 [15 ELR 20358] (2d Cir. 1985); and Idaho v. Bunker Hill Co., 635 F. Supp. 665, 671-72 [16 ELR 20879] (D. Idaho 1986). See also 2 Law of Hazardous Waste § 14.01[5][b][iii].

It is clear to this court that the test for CERCLA liability for a corporate officer is a heavily fact-specific inquiry. A court must weigh a number of factors to determine an official's role in a corporation and its polluting activities. These factors include a corporate individual's position in the company; degree of authority; percentage of ownership; role in board decision-making and daily management; knowledge of and responsibility for waste disposal policy; and personal involvement with, neglect of and ability to control hazardous waste matters.

The absence or existence of one or more of these factors in a particular case does not necessarily determine liability. Rather, a combined assessment of all of these factors determines whether a corporate individual should be held personally liable under CERCLA due to involvement in hazardous waste practices or due to neglect thereof when placed in the context of the individual's pervasive control and active involvement over other aspects of the company.

To prevail at summary judgment, movants must show that the evidence is so one-sided in their favor that they must prevail as a matter of law and that no jury could reasonably find otherwise. Anderson v. Liberty Lobby, 477 U.S. 242, 251-52 (1986).

After careful consideration of all the evidence before the court in light of these factors, the court continues to believe that genuine issues of material fact exist regarding Arnold Ott's liability due, in part, to his corporate positions, share of company stock, and conflicting evidence regarding his involvement and control over all aspects of company decision-making including waste disposal matters.

In light of the foregoing, Ott's motion for reconsideration is denied. In addition, Ott's alternative request for certification for immediate appeal is denied. I am satisfied that an immediate appeal would not materially advance the ultimate termination of the litigation. In addition, this is not the kind of controlling issue of law contemplated by 28 U.S.C. § 1292(b). This section "is to be strictly construed and contemplates only the extraordinary type of case." Wagner v. Burlington Indus. Inc., 423 F.2d 1319, 1322 n.5 (6th Cir. 1970).