Criminal Liability of Corporation President from Corporate Facilities: Stock v. Alaska

The superior court case of Stock v. Alaska¹ has established for the first time in that state standards for determining when an officer of a corporation can be held criminally liable for the acts of his corporation. At issue in this appeal was the criminal conviction of a corporation president for allowing raw sewage from his corporately-owned Juneau trailer court to flow into state waters in violation of the state water pollution statute.

Although the defendant did not personally cause the discharge of sewage, the court found that he knew of the illegal situation, and that, having the necessary authority, he exposed himself to criminal liability by not ordering the discharge stopped. The judge also made clear that the prosecution of a pollution-related offense can be initiated in the same manner as any other criminal violation, i.e., by the issuance of a summons or warrant at any time upon probable cause. The enforcement agency does not need to issue prior notices and compliance orders before proceeding.

The decision by Judge Victor Carlson upheld the criminal provisions of the statute against the charge that they were unconstitutionally vague. He also found that the two penalty provisions "could have been more artfully drafted" but that they were sufficiently distinct and rational to conform to the due process and equal protection guarantees of the state and federal constitutions.

The trial court had confused the two penalty provisions. The defendant was sentenced under the wrong section, receiving a thirty-day suspended jail term out of a possible maximum of one year, and a fine of $1000, the maximum allowed under that section. The case was remanded for resentencing under the correct penalty provision, which provides for the same maximum jail term of one year, but allows a fine of up to $25,000.

Attorney General John E. Havelock has stated this case should add significant impetus to Alaska's efforts to protect its environment, because under the decision individuals can no longer avoid criminal penalties by hiding behind the corporate shield when they have the authority in fact to halt illegal pollution.

1. 3 ELR 20569 (Sup. Ct. Alas. May 31, 1973.).