Quote of the Day - All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome.
John and Ned Roscoe owned The Customer Company in Galt, California. The company operated an underground storage tank that leaked some 3,000 gallons of gas. A TCC employee, John Johnson, properly notified the Sacramento County Environmental Management Department of the leak. The SCEMD turned around and sent letters, notifing TCC that it had to clean up the fuel that leaked.
Unfortunately, John Roscoe treated these notifications as "form letters" and simply routed them on to Johnson, but neither Roscoe nor Johnson did anything to follow up on the County's orders to clean up the fuel.
Had TCC timely cleaned up the fuel, it would have cost the company about $400,000.
Because the "clean up" dragged on unattended for so long and without any progress, the SCEMD decided to remediate the problem itself. Largely due to the delay, the fuel spread out over a wider area and cost more to clean up.
A total of $1,500,000.
To recover these costs, SCEMD filed a civil case against TCC and the Roscoes individually.
After a 12-day court trial, the judge issued a 44-page opinion, which assessed TCC and the Roscoes with $2,493,250 in penalties.
The Roscoes filed an appeal, seeking to avoid personal liability under the "responsible corporate officer doctrine." They argued, essentially, that they were shielded from liability by the corporation.
The Court observed that the SCEMD had to prove three things to find the Roscoes individually liable: (1) the individual is in a position of responsibility that allows the person to influence corporate policies or activities; (2) there must be a connection between the individual's position and the violation in question allowing the individual to influence the corporate actions which constituted the violations; and (3) the individual's actions or inactions facilitated the violations.
Here, the Court found the Roscoes neatly fit all three elements, and imposed the penalties. Plus, they observed that the Court fined the Roscoes only $1,000 a day when the statute allowed a maximum penalty of $5,000 a day for the violations.
Such a deal for a series of form letters.