ELR Citation: ELR 20264
No(s). K87-372-CA4 (W.D. Mich. Sep 27, 1989)

The court rules that corporate officers and directors may be held personally liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) if they could have prevented or significantly abated a hazardous waste discharge. The court initially observes that under the weight of authority, a court may find an individual personally liable under CERCLA. The court notes that CERCLA's statutory scheme varies traditional corporate principles that preclude individual liability unless the corporate veil is pierced or the court finds that an individual had a close and active involvement or direct supervision in the events leading to the alleged harm. The court next establishes a "prevention" test for individual liability—an individual in a close corporation may be held personally liable under CERCLA if he or she could have prevented or significantly abated the hazardous waste discharge. Factors the court will consider in applying this test include the individual's authority to control waste handling and the responsibility undertaken for waste disposal. The court will examine evidence of responsibility undertaken and neglected concerning waste disposal practices, as well as affirmative attempts to prevent unlawful disposal. The court notes that this standard will encourage increased responsibility with increased authority within a corporation.

[A previous decision in this litigation is published at 20 ELR 20179.]

Counsel for Plaintiffs
Stanley F. Pruss, Ass't Attorney General
Environmental Protection Division
Law Bldg., Lansing MI 48913
(517) 373-1110

Counsel for Defendants
Charles M. Denton
Varnum, Riddering, Schmidt & Howlett
121 Monroe Ave. NW, Ste. 171, Grand Rapids MI 49503
(616) 459-4186

Jay E. Brant
Honigman, Miller, Schwartz & Cohn
2290 First National Bldg., Detroit MI 48226
(313) 256-7800