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CHAPTER 25: ENVIRONMENTAL LAW 17
major pollutants. General guidelines set out requirements for protecting vegetation, climate, visibility, and certain
economic conditions.
6. How are the objectives of the Clean Water Act to be accomplished? The Clean Water Act established a
new system of goals, standards, and timetables to (1) make waters safe for swimming, (2) protect fish and wildlife,
and (3) stop the discharge of pollutants into water. Generally, these objectives are being accomplished under a permit
system. Under the time schedules—extended in 1977 and by the Water Quality Act in 1987—the Environmental
Protection Agency sets limits for discharges based on technology available for controlling them (generally, regulations
specify the best available technology). Polluters must apply for permits. Violations may be subject to civil or criminal
penalties. Injunctions and damages can be awarded. A polluter can be required to clean up the pollution or pay for a
the Environmental Protection Agency can suspend registration pending the hearing. Also, the Environmental
Protection Agency can inspect factories in which these chemicals are made.
8. What does the Comprehensive Environmental Response, Compensation, and Liability Act regulate?
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or Superfund) regulates
Increasingly, businesspersons who violate environmental, consumer, health and safety laws and regulations find
themselves subject to not only fines but to prison terms. Whether prison terms are an appropriate response to such
violations is clearly debatable. To be sure, the more such prison terms are publicized, the more deterrent effect we will
observe on other businesspersons’ behavior. Some observers do argue, nonetheless, that prison terms are
inappropriate for violations of environmental laws unless they result in serious and immediate physical harm to others.
ACTIVITY AND RESEARCH ASSIGNMENT
Direct students to contact local manufacturers and other businesses to ask about the impact of local, state,
and federal environmental regulations. Some businesspersons may see the regulations as little more than time-
consuming paperwork. Others may be doing more than the law requires to protect the environment. If so, what more
are they doing? Have students share what they learn with the class.
whole or in part.
20 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
whole or in part.
This ruling significantly narrowed the “preemptive sweep” of FIFRA. The Court held that farmers’ state-based
claims did not qualify as “requirements for labeling or packaging” under FIFRA.
REVIEWING—
ENVIRONMENTAL LAW
Residents of Lake Caliopa, Minnesota, began noticing an unusually high number of lung ailments among
their population. A group of concerned local citizens pooled their resources and commissioned a study of the
frequency of these health conditions per capita as compared to national averages. The study concluded that
Lake Caliopa had four to seven times the usual frequency of asthma, bronchitis, and emphysema when
compared to national data. During the study period, citizens began expressing concerns about the large
volumes of smog emitted by the Cotton Design Apparel manufacturing plant on the outskirts of town. The
plant had opened its production facility two miles east of town beside the Tawakoni River in 1999 and
employed seventy full-time workers. Just downstream on the Tawakoni River, the city of Lake Caliopa
operated a public water works facility, which supplied all city residents with water. The Minnesota Pollution
Control Agency required Cotton Designs to install new equipment to control air and water pollution. Later,
thirty citizens sued Cotton Design for various respiratory ailments allegedly caused or compounded by smog
from Cotton Design’s factory. Ask your students to answer the following questions, using the information
presented in the chapter.
1. Under the common law, what would each plaintiff be required to identify in order to be given relief
by the court? To establish a common law cause of action for nuisance, each plaintiff would have to identify a
distinct harm caused by the pollution that was separate from that affecting the general public. In other words,
they would need to show how each of them was individually harmed by Cotton Design’s emissions.
2. Are air-quality regulations typically overseen by federal, state, or local governments? Typically, the
federal government establishes air-quality regulations, but the primary responsibility for overseeing and
controlling air-pollution rests with both state and local governments.
3. What standard for limiting emissions into the air does Cotton Design’s pollution-control
equipment have to meet? Major stationary sources of air pollution are required to use the maximum
achievable control technology to reduce emissions. The EPA issues guidelines as to what equipment meets
this standard, and the guidelines may vary depending on whether the source is new or existing and whether
the area is clean or polluted.
4. What information must the city send to every household that it supplies with water? Under the Safe
Drinking Water Act, as amended, suppliers of drinking water are required to send an annual statement
describing the source of its water, the level of contaminants contained in the water, and any possible health
concerns associated with the contaminants. Thus, the city must send a statement that includes this
information every year to every household it provides with water.
DEBATE THIS
The courts should reject all cases in which the wetlands in question do not consist of actual
bodies of water that exist during the entire year. The Army Corps of Engineers brings numerous cases to
CHAPTER 25: ENVIRONMENTAL LAW 21
court each year that involve areas that are not “wet” part of the year. Some are only wet during storms.
Congress never created wetlands legislation to protect such areas. The U.S. is a huge country such that the
U.S. Army Corps of Engineers should spend its scarce resources protecting real wetlands—bodies of water
that are wet all year long.
If the government were restricted to protecting just bodies of water that were wet all year long, it would
be forced to allow development in fragile animal habitats. Because the U.S. is so big, developers do not
need to encroach on areas that the U.S. Army Corps of Engineers has deemed wetlands. They have plenty
of other locations for development. All wetlands legislation has as its goal to protect our environment.
EXAMPREP—
ISSUE SPOTTERS
1. Resource Refining Company’s plant emits smoke and fumes. Resource’s operation includes a
short railway system, and trucks enter and exit the grounds continuously. Constant vibrations from
the trains and trucks rattle nearby residential neighborhoods. The residents sue Resource. Are there
any reasons that the court might refuse to enjoin Resource’s operation? Explain. Yes. On the ground
that the hardships that would be imposed on the polluter and on the community are greater than the
hardships suffered by the residents, the court might deny an injunction. If the plant is the core of the local
economy, for instance, the residents may be awarded only damages.
2. ChemCorp generates hazardous wastes from its operations. Disposal Trucking Company
transports those wastes to Eliminators, Inc., which owns a hazardous waste disposal site. Eliminators
sells the property on which the disposal site is located to Fluid Properties, Inc. If the Environmental
Protection Agency cleans up the site, from whom can it recover the cost? The Comprehensive
Environmental Response, Compensation, and Liability Act regulates the cleanup of hazardous waste disposal
sites. Any potentially responsible party can be charged with the entire cost of cleaning up a site. Potentially
responsible parties include the person that generated the waste (ChemCorp) the person that transported the
waste to the site (Disposal), the person that owned or operated the site at the time of the disposal
(Eliminators), and the current owner or operator of the site (Fluid). A party held responsible for the entire cost
may be able to recoup some of it in a lawsuit against other potentially responsible parties.
whole or in part.
20 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
whole or in part.
This ruling significantly narrowed the “preemptive sweep” of FIFRA. The Court held that farmers’ state-based
claims did not qualify as “requirements for labeling or packaging” under FIFRA.
REVIEWING—
ENVIRONMENTAL LAW
Residents of Lake Caliopa, Minnesota, began noticing an unusually high number of lung ailments among
their population. A group of concerned local citizens pooled their resources and commissioned a study of the
frequency of these health conditions per capita as compared to national averages. The study concluded that
Lake Caliopa had four to seven times the usual frequency of asthma, bronchitis, and emphysema when
compared to national data. During the study period, citizens began expressing concerns about the large
volumes of smog emitted by the Cotton Design Apparel manufacturing plant on the outskirts of town. The
plant had opened its production facility two miles east of town beside the Tawakoni River in 1999 and
employed seventy full-time workers. Just downstream on the Tawakoni River, the city of Lake Caliopa
operated a public water works facility, which supplied all city residents with water. The Minnesota Pollution
Control Agency required Cotton Designs to install new equipment to control air and water pollution. Later,
thirty citizens sued Cotton Design for various respiratory ailments allegedly caused or compounded by smog
from Cotton Design’s factory. Ask your students to answer the following questions, using the information
presented in the chapter.
1. Under the common law, what would each plaintiff be required to identify in order to be given relief
by the court? To establish a common law cause of action for nuisance, each plaintiff would have to identify a
distinct harm caused by the pollution that was separate from that affecting the general public. In other words,
they would need to show how each of them was individually harmed by Cotton Design’s emissions.
2. Are air-quality regulations typically overseen by federal, state, or local governments? Typically, the
federal government establishes air-quality regulations, but the primary responsibility for overseeing and
controlling air-pollution rests with both state and local governments.
3. What standard for limiting emissions into the air does Cotton Design’s pollution-control
equipment have to meet? Major stationary sources of air pollution are required to use the maximum
achievable control technology to reduce emissions. The EPA issues guidelines as to what equipment meets
this standard, and the guidelines may vary depending on whether the source is new or existing and whether
the area is clean or polluted.
4. What information must the city send to every household that it supplies with water? Under the Safe
Drinking Water Act, as amended, suppliers of drinking water are required to send an annual statement
describing the source of its water, the level of contaminants contained in the water, and any possible health
concerns associated with the contaminants. Thus, the city must send a statement that includes this
information every year to every household it provides with water.
DEBATE THIS
The courts should reject all cases in which the wetlands in question do not consist of actual
bodies of water that exist during the entire year. The Army Corps of Engineers brings numerous cases to
CHAPTER 25: ENVIRONMENTAL LAW 21
court each year that involve areas that are not “wet” part of the year. Some are only wet during storms.
Congress never created wetlands legislation to protect such areas. The U.S. is a huge country such that the
U.S. Army Corps of Engineers should spend its scarce resources protecting real wetlands—bodies of water
that are wet all year long.
If the government were restricted to protecting just bodies of water that were wet all year long, it would
be forced to allow development in fragile animal habitats. Because the U.S. is so big, developers do not
need to encroach on areas that the U.S. Army Corps of Engineers has deemed wetlands. They have plenty
of other locations for development. All wetlands legislation has as its goal to protect our environment.
EXAMPREP—
ISSUE SPOTTERS
1. Resource Refining Company’s plant emits smoke and fumes. Resource’s operation includes a
short railway system, and trucks enter and exit the grounds continuously. Constant vibrations from
the trains and trucks rattle nearby residential neighborhoods. The residents sue Resource. Are there
any reasons that the court might refuse to enjoin Resource’s operation? Explain. Yes. On the ground
that the hardships that would be imposed on the polluter and on the community are greater than the
hardships suffered by the residents, the court might deny an injunction. If the plant is the core of the local
economy, for instance, the residents may be awarded only damages.
2. ChemCorp generates hazardous wastes from its operations. Disposal Trucking Company
transports those wastes to Eliminators, Inc., which owns a hazardous waste disposal site. Eliminators
sells the property on which the disposal site is located to Fluid Properties, Inc. If the Environmental
Protection Agency cleans up the site, from whom can it recover the cost? The Comprehensive
Environmental Response, Compensation, and Liability Act regulates the cleanup of hazardous waste disposal
sites. Any potentially responsible party can be charged with the entire cost of cleaning up a site. Potentially
responsible parties include the person that generated the waste (ChemCorp) the person that transported the
waste to the site (Disposal), the person that owned or operated the site at the time of the disposal
(Eliminators), and the current owner or operator of the site (Fluid). A party held responsible for the entire cost
may be able to recoup some of it in a lawsuit against other potentially responsible parties.
