Homework Help

Business Law Chapter 45 Homework The Penalties For Violations Include Civil Fines

Page Count
12 pages
Word Count
8197 words
Book Title
Business Law: Text and Cases 14th Edition
Authors
Frank B. Cross, Kenneth W. Clarkson, Roger LeRoy Miller
1
Chapter 45
Environmental Protection
INTRODUCTION
Fifty years ago, there were only a handful of statutes and regulations, plus old common law concepts,
governing the environment. Regulation was initially aimed at cleaning up damage to the environment. At the end of
the 1970s, there was a shift toward preventive regulation, on the theory that preventing injury to the environment is
less expensive than cleaning up damage after it has occurred. Controlling waste is not without a price, however. For
many businesses, the costs are high, and for some they are too high. There is a constant tension between the
desirability of increasing profits and productivity and the need to attain quality in the environment. This chapter
considers some of the major federal environmental laws.
CHAPTER OUTLINE
I. Common Law Actions
Common law doctrines that were applied against polluters centuries ago may still be applied today.
A. NUISANCE
Persons may be liable if they use their property in a way that unreasonably interferes with others’ rights
to use or enjoy their property. Courts balance the equities between the harm caused and the cost of
stopping it.
2 UNIT NINE: GOVERNMENT REGULATION
Private nuisanceDistinct harm separate from that affecting the general public is a private
nuisance. Some states require this to support standing for an individual plaintiff.
Public nuisanceA public authority can maintain an action to stop a public nuisance.
B. NEGLIGENCE AND STRICT LIABILITY
Businesses may be sued under these theories.
ADDITIONAL BACKGROUND
Proof
The environment receives pollution from many sources. No one source by itself would produce the
damage caused by all the sources together. Because of the widespread effects of pollution, it may be
impossible to provide proof that any particular polluter is solely responsible for a specific injury or damage.
Also, the common law limited relief from pollution in situations where the harm was caused by two or more in-
dependent sources. For example, if a number of firms were polluting the air, a harmed individual could sue
any individual firm; however, until early in the twentieth century, the plaintiff was not able to sue all of the firms
simultaneously. Consequently, specific proof of damages in individual actions was often impossible.
Another difficulty concerning proof has been to relate specific diseases to particular pollution. There is
not always medical or scientific certainty that a particular source of pollution caused a specific disease.
These difficulties in seeking relief in pollution cases, along with the forces creating additional pollution and the
failure of the common law to provide a systematic mechanism for supervising pollution, have been largely
responsible for the development of statutory regulation of environmental quality.
II. Federal, State, and Local Regulations
A. STATE AND LOCAL REGULATIONS
Many states regulate pollution (for example, by requiring changes in proposed developments). State
laws restrict discharge of chemicals into the water or air (including emissions from motor vehicles),
and regulate disposal of toxic wastes and disposal or recycling of other wastes (metal, plastic,
paper).
Local governments regulate waste and garbage removal and disposal, the appearance of buildings
and other structures, and noise.
ENHANCING YOUR LECTURE
  CAN A LOCAL REGULATION CONSTITUTE A “TAKING”?
 
CHAPTER 45: ENVIRONMENTAL PROTECTION 3
Environmental regulations and other legislation to control land use are prevalent throughout the United
States. Generally, these laws reflect the public’s interest in preserving natural resources and habitats for
wildlife. At times, their goal is to enable the public to have access to and enjoy limited natural resources, such
as coastal areas. Although few would disagree with the rationale underlying these laws, the owners of the
private property directly affected by the laws often feel that they should be compensated for the limitation
imposed on their right to do as they wish with their land.
The Fifth Amendment to the U.S. Constitution gives the government the power to “take” private property
for public use. The Fifth Amendment attaches an important condition to this power, however: when private
land is taken for public use, the landowner must be given “just compensation.” An ongoing legal debate has
to do with whether environmental regulations that limit private property owners’ uses of their property
constitute a “taking” of private property in the public interest. If so, the property owners should receive the just
compensation guaranteed under the Fifth Amendment.
In some cases, the courts have held for the property owners on this issue. In others, however, the courts
have sided with government regulators. We consider here two significant cases concerning this issue, both of
which ultimately came before the United States Supreme Court.
THE DEL MONTE DUNES CASE
One case involved an owner of oceanfront property in Monterey, California. The owner had applied to the
city of Monterey on several occasions for a permit to build a residential development. Each time, the city
denied the use of more of the property until none of it remained available for any use. In effect, the entire
property had to be left in its natural state. The city claimed that it was seeking to protect various forms of
wildlife that inhabit the coastal sand dunes, particularly the endangered Smith’s blue butterfly. Eventually, the
property owner sold the property to the city and then sued the city, claiming that the restrictions on use
amounted to an unconstitutional taking without just compensation. The jury agreed and awarded the owner
nearly $1.45 million in damages. The award was affirmed on appeal.a
The city then appealed to the United States Supreme Court, arguing that the question of whether a taking
had occurred should have been decided by a judge, not a jury. The Supreme Court, however, held that
whether a taking has occurred is a predominantly factual question and, thus, was a question for a jury to
decide.b
The Del Monte Dunes case was regarded as a victory for property rights advocates. For state and local
governments, however, the decision meant that they would find it more costly to preserve natural resources in
their communities.
THE TAHOE CASE
In 2002, the United States Supreme Court reviewed another case involving a takings claim. This time,
however, the Court supported the local regulators. The case revolved around an attempt to curb pollution and
the growth of algae in Lake Tahoe, on the California-Nevada border. In 1981, the Tahoe Regional Planning
Agency issued a temporary moratorium (suspension) on the construction of residential housing in areas
around the lake that were the most susceptible to further environmental damage. The moratorium was
extended over the next several years until 1987 when it was replaced by a “revised plan,” which is still in
effect.
4 UNIT NINE: GOVERNMENT REGULATION
Most of the affected property owners were older couples who had purchased their lots decades earlier
and had planned to build their retirement homes along the lake. The moratorium, however, allowed no
exceptions and forbade any land use whatsoever. The regulations were so stringent that some owners were
even forbidden to enter their own land without the agency’s permission. Ultimately, the owners sued the
agency, claiming that a regulatory taking had occurred. Even if the taking was only temporary, the regulations
had forced the owners to give up all reasonable use of their land, economically and personally, for a period of
time, and they deserved to be compensated for this deprivation.
The United States Supreme Court sided with the regulators. The Court held that the agency’s actions
had not deprived the owners of their property for too long a time, and thus no taking had occurred. How long
is too long? The Court said no categorical rule could be stated; the answer always depends on “the facts
presented.”c
FOR CRITICAL ANALYSIS
Even though the Supreme Court sided with the regulators in the Tahoe case, the debate over en-
vironmental takings continues. On the one hand, states, cities, and other local governments want to preserve
their natural resources and need some authority to regulate land use to achieve this goal. On the other hand,
private property owners complain that they alone should not have to bear the costs of environmental
preservation, given that all members of the public reap the benefits. Should private landowners be
compensated when their land is essentially “taken” for public use by environmental regulations?
Should landowners be compensated even when a taking is temporary?
B. FEDERAL REGULATIONS
Federal laws intended to improve environmental quality include the National Environmental Policy Act
(NEPA) of 1969, which requires federal agencies to prepare environmental impact statements (EIS)
when major federal actions significantly affect the quality of the environment.
1. Environmental Regulatory Agencies
There is also a list of federal agencies, including the Environmental Protection Agency (EPA), that
deal with environmental matters.
CASE SYNOPSIS
Case 45.1: Friends of Animals v. Clay
Migratory birds that congregate near airports threaten human safety. To reduce the risks at New York
City’s John F. Kennedy International Airport (JFK), the Port Authority of New York and New Jersey, which
operates JFK, obtained a permit from the U.S. Fish and Wildlife Service (FWS) to take(kill or capture) birds
CHAPTER 45: ENVIRONMENTAL PROTECTION 5
of certain species. Friends of Animals (FOA) filed a suit in a federal district court to challenge the permit,
arguing that its issuance was arbitrary and capricious. FOA criticized the permit’s emergency-take provision,
under which the Port Authority could take any migratory bird (with exceptions for endangered species and
others), including one not listed, if it posed a “threat of serious bodily injury or a risk to human life.” The court
issued a summary judgment in favor of the defendants. FOA appealed.
The U.S. Court of Appeals for the Second Circuit affirmed. Under 50 C.F.R. Section 21.41, the FWS can
issue a permit that authorizes the taking of migratory birds causing injury to certain human interests. Section
21.41 does not place Port Authority officials in the untenable position of having to choose between violating
federal law and deliberately ignoring serious threats to human safety. Rather, the regulation plainly authorizes
FWS to issue * * * permits that contain non-species-specific emergency-take provisions.”
..................................................................................................................................................
Notes and Questions
What was the primary interest at stake in this case? How does that interest relate to the purpose
of environmental law? The chief interest at the center of the issue in the Friends case was human safety.
The Migratory Bird Treaty Act (MBTA) prohibits the taking of any bird protected by treaty or federal law. But
unchecked, migratory birds can interfere with human activity. For example, migratory birds that congregate
near airports pose a threat to human safety. Thus, there is an exception in the MBTA allowing the taking of
migratory birds as permitted by such regulations as 50 C.F.R. Section 21.41. Competing interpretations of this
regulation were at the heart of the dispute in the Friends case. The purpose of environmental law is to
promote human health and safety through the regulation of our use of the environment. The primary interest
at stake here related directly to this purpose.
2. Environmental Impact Statements
An environmental impact statement (EIS) must be prepared for every major federal action that
significantly affects the quality of the environment. An action qualifies as major if it involves a
substantial commitment of resources (monetary or other). An action is federal if a federal agency
has the power to control it. An EIS must analyze
The impact on the environment that the action will have .
Any adverse effects to the environment and alternative actions that might be taken.
Irreversible effects the action might generate.
If an agency decides that an EIS is unnecessary, it must issue a statement supporting this
conclusion.
III. Air Pollution
Federal law provides a basis for regulations of pollution emitted from mobile and stationary sources.
A. MOBILE SOURCES
Federal regulations specify standards and timetables for mobile sources (cars, trucks, and other motor
vehicles). The EPA updates these and other standards to reduce emissions further when new scientific
evidence is available.
1. Reducing Emissions over the Long Term
By 2050, emissions of nitrogen oxide and other pollutants from mobile sources are to be reduced
by 80 percent. National standards for fuel economy and emissions for medium- and heavy-duty
trucks are to be applied to 2014 models.
2. Authority to Regulate Greenhouse Gases
According to the EPA, greenhouse gases, including carbon dioxide, are a public danger.
3. Controlling Climate Change
At least one court has allowed a suit challenging the federal government for doing too little to
control climate change.
ADDITIONAL BACKGROUND
Mobile Sources
Some of the most recent mobile source regulations are discussed in the text. Other provisions
amending the Clean Air Act cover the introduction of alternative-fuel vehicles in California.
To ensure compliance with emission regulations, the EPA certifies a prototype of a new car whose
emission controls are effective up to 50,000 miles. The EPA may inspect production models. If a car does
not meet the standards in actual driving, the EPA can order a recall and the repair or replacement of pollution-
control equipment at the manufacturers’ expense. To ensure compliance, the EPA certifies a prototype of a
new car whose emission controls are effective up to 50,000 miles. The EPA may also inspect production
models. If a vehicle does not meet the standards in actual driving, the EPA can order a recall and the repair
or replacement of pollution-control equipment at the manufacturers’ expense.
Service stations must sell gasoline with higher oxygen content in forty-one cities with winter carbon
monoxide pollution and must sell even cleaner-burning gasoline in Los Angeles and eight other urban areas.
B. STATIONARY SOURCES
Under the Clean Air Act, the primary responsibility for controlling and preventing pollution from stationary
sources (manufacturing plants and so on) rests with the states. Different standards apply to sources in
clean areas and sources in polluted areas, and to existing sources and major new sources.
1. Hazardous Air Pollutants
The focus is on hazardous air pollutants (HAPs), which are likely to cause death or serious illness
such as cancer. The EPA lists about 200 HAPs.
2. Maximum Achievable Control Technology
Performance standards for major sources require the use of maximum achievable control
technology (MACT), which is subject to EPA guidelines.
CASE SYNOPSIS
Case 45.2: United States v. O’Malley
CHAPTER 45: ENVIRONMENTAL PROTECTION 7
Duane O’Malley owned and operated Origin Fire Protection. Michael Pinski hired Origin to remove and
dispose of insulation wrapped around pipes in a building Pinski owned in Kankakee, Illinois. The insulation
contained asbestos, which Pinski, O’Malley, and O’Malley’s employees recognized. But O'Malley did not have
a license to remove asbestos, none of his employees were trained in complying with federal asbestos
regulations, and the Environmental Protection Agency (EPA) was not notified of the removal. The debris was
disposed of in an abandoned farmhouse, a dumpster, and a vacant lot, where it leaked into the soil. O’Malley
was convicted of removing, transporting, and dumping asbestos in violation of the criminal provisions of the
Clean Air Act. He appealed.
The U.S. Court of Appeals for the Seventh Circuit affirmed. O’Malley argued that the government was
required to prove he knew the asbestos was one of six types of asbestos regulated by the EPA. But “the very
fact that O'Malley was knowingly working with asbestos-containing material met the mens rea requirement.”
..................................................................................................................................................
Notes and Questions
Before O’Malley was hired, he convinced Pinski, the owner of the building with the asbestos-lined pipes,
that he would remove the insulation properly and dispose of it in a proper landfill, and even save Pinski
money in the process. But O’Malley insisted on a payment in cash of $12,000 and did not provide a written
contract for the job. Should Pinski have been charged with “knowingly violating” the Clean Air Act? If
O’Malley misled Pinski to believe that he was licensed to remove asbestos, his other assurances might have
seemed legitimate and reasonable. The cash payment and lack of a written contract might have raised a red
flag in some persons’ minds, but these might have been factors that others would have overlooked due to a
course of prior dealing or usage in the trade, O’Malley’s “salesmanship,” or some other factor. At worst, Pinski
was naïve. At best, he was deceived by O’Malley. In either circumstance, most likely Pinski did not “knowingly
violate” the Clean Air Act.
Does it seem appropriate to impose significant fines on citizens, or even imprison individuals,
when they violate environmental laws? Increasingly, businesspersons and others who violate
environmental, consumer, health and safety laws and regulations find themselves subject to not only hefty
fines but to prison terms. Whether large fines and prison terms are appropriate responses to such violations is
clearly debatable. To be sure, the more such sanctions are publicized, the more deterrent effect we will
observe on behavior. Some observers do argue, nonetheless, that such sanctions are inappropriate for
violations of environmental laws unless they result in serious and immediate physical harm to others.
How does an individual’s violation of environmental laws also violate the standards of ethics?
Ethics focuses on morality and the way in which moral principles are derived and applied to one’s conduct
that is, what constitutes right or wrong behavior. Crimes and their consequences can be avoided if the
perpetrators engage in ethical decision making beforehand and then act ethically. In a business context,
ethical behavior can result in the long-run viability of a company, and the wellbeing of its owners, operators,
and employees. Unethical behavior can negatively affect the business’s participants, as well as its suppliers,
customers, and community, and society as a whole. The minimum acceptable standard for ethical business
behavior is considered to be compliance with the law. And the converse is also truenoncompliance with the
law is prima facie a failure to engage in ethical business behavior. An individual’s violation of the law,
including those that protect the environment, is concurrently a violation of ethical standards.
8 UNIT NINE: GOVERNMENT REGULATION
C. VIOLATIONS OF THE CLEAN AIR ACT
Civil penalties include assessments of up to $25,000 per day, or an amount equal to a violator’s
economic benefits from noncompliance, plus up to $5,000 per day for other violations.
Criminal penalties include fines of up to $1 million and imprisonment of up to two years.
Private citizens can sue.
IV. Water Pollution
Laws and regulations govern the pollution of navigable waters, drinking water, and ocean water. Federal
regulations governing water pollution date from the turn of the last century.
A. THE CLEAN WATER ACT
The Clean Water Act (CWA) of 1972 amended the Federal Water Pollution Control Act (FWPCA) of
1948 and laid out specific time schedules and limits. The goals are to
Make waters safe for swimming.
Protect fish and wildlife.
Eliminate the discharge of pollutants into the water.
1. Permit System for Point-Source Emissions
Under the CWA and a National Pollutant Discharge Elimination System (NPDES), any point source
of pollution emitted into water must have a permit. Permits can be obtained from the EPA and
authorized state agencies and Indian tribes, and must be reissued every five years. The NPDES
includes
National effluent standards set by the EPA for each industry.
Water-quality standards set by the states under EPA supervision.
A discharge-permit program that sets water-quality standards to limit pollution.
Provisions for toxic chemicals and oil spills.
Construction grants and loans for publicly owned treatment works (chiefly sewage treatment
plants).
2. Standards for Equipment
Regulations specify the use of the best available control technology (BACT) for new sources.
Existing sources must first install the best practical control technology (BPCT).
CASE SYNOPSIS
Case 45.3: Entergy Corp. v. Riverkeeper, Inc.
The EPA adopted “Phase I” and “Phase II” rules for power plants. Phase I requires new plants to restrict
their inflow of water “to a level commensurate with that which can be attained by a closed-cycle recirculating
cooling water system.” Phase II applies “national performance standards” to more than 500 existing plants,
but do not require closed-cycle cooling systems. The EPA found that to convert these facilities to closed-cycle
operations would cost $3.5 billion per year. The facilities would then produce less power while burning the
same amount of coal. And other technologies can attain nearly the same results as closed-cycle systems.
CHAPTER 45: ENVIRONMENTAL PROTECTION 9
Phase II also allows a variance from the standards if a facility’s cost of compliance “would be significantly
greater than the benefits.” Environmental organizations, including Riverkeeper, Inc., challenged Phase II,
arguing that existing plants should be required to convert to closed-cycle systems. The U.S Court of Appeals
for the Second Circuit issued a ruling in the plaintiffs’ favor. Power-generating companies, including Entergy
Corp., appealed.
The United States Supreme Court affirmed. The EPA could use a cost-benefit analysis to set standards
and allow for variances from those standards. “Best technology” can mean the technology that achieves the
greatest reduction in adverse environmental impacts, but it can also describe the technology that “most
efficiently” achieves a reduction, even if the result is less than other technologies might achieve. The use of
the word “minimizing” in the controlling statute indicates that the intended objective was not the greatest
possible reduction. Also, other provisions order the EPA to consider costs and benefits in some situations.
This shows that “cost-benefit analysis is not categorically forbidden.” Also, in imposing standards on power
plants, the EPA has been weighing costs against benefits for more than thirty years. This suggests that the
practice is “reasonable and hence legitimate.”
..................................................................................................................................................
Notes and Questions
Why would Congress intend to forbid comparisons of costs and benefits when determining the
“best available technology”? Preparing and reviewing formal cost-benefit analyses takes time, which can
delay making and implementing rules. Such analyses might emphasize quantity over qualityfor example, in
What are some of the costs and benefits that could be considered in setting the standards and
mandating the technology for existing power plants? The most obvious costs and benefits would be the
impacts of different technologies on the aquatic organisms most directly affected. As for the power plants, the
existing facilities would need to be retrofitted with whatever technology is ordered. They would lack the
3. Wetlands
Filling or dredging wetlands is prohibited without a permit from the U.S. Army Corps of Engineers.
The EPA defines wetlands to include “those areas that are inundated or saturated by surface or
ground water at a frequency and duration sufficient to support vegetation typically adapted for life in
saturated soil conditions.”
4. Violations of the Clean Water Act
10 UNIT NINE: GOVERNMENT REGULATION
Lying about a discharge is more serious than admitting to an improper discharge. The penalties for
violations include civil fines of up to $25,000, criminal fines of substantial amounts, and
imprisonment, plus injunctions and damages. Citizens can sue. Polluters can be ordered to clean
up the pollution or pay for the cost of doing so.
CHAPTER 45: ENVIRONMENTAL PROTECTION 11
B. DRINKING WATER
Under the Safe Drinking Water Act of 1974, the EPA sets maximum levels for pollutants in public water
systems. System operators must use the best available technology that is economically and
technologically feasible. Suppliers must inform the public of the source of the water, the level of
contaminants, and possible health concerns.
ADDITIONAL BACKGROUND
Drinking Water
More than 200 pollutants, many of which are associated with cancer and other serious ailments, are
known to exist in groundwater used for drinking in at least thirty-four states.
C. OCEAN DUMPING
The Marine Protection, Research, and Sanctuaries Act of 1972 (Ocean Dumping Act) regulates
transporting and dumping into the ocean. Dumping of radiological, chemical, and biological warfare
agents and high-level radioactive waste is prohibited.
Civil penalties include assessments of not more than $50,000 or revocation or suspension of a
permit. Criminal penalties include fines of up to $50,000, imprisonment for not more than a year, or
both. Injunctions can be imposed
D. OIL POLLUTION
Under the Oil Pollution Act of 1990, any onshore or offshore oil facility, oil shipper, vessel owner, or
vessel operator that discharges oil into navigable waters or onto an adjoining shore may be liable for
cleanup costs, as well as damages for harm to natural resources, private property, and local economies.
Penalties include fines of $2 million to $350 million.
V. Toxic Chemicals and Hazardous Waste
A. PESTICIDES AND HERBICIDES
Under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) of 1947, pesticides and
herbicides must be
Registered before they can be sold.
Certified and used only for approved applications.
Used in limited quantities when applied to food crops.
1. EPA Actions
The EPA can inspect factories where the chemicals are made and cancel or suspend registration of
substances that are identified as harmfulwhich means that there can be no greater than a one-
in-a-million chance of people developing cancer from exposure.
2. Violations and Penalties
Violations include selling substances that are not registered or that are labeled falsely. Penalties
include fines off up to $50,000 and imprisonment of up to on year for commercial dealers, with
lesser penalties for private users.
12 UNIT NINE: GOVERNMENT REGULATION
B. TOXIC SUBSTANCES
The Toxic Substances Control Act of 1976 regulates chemicals and chemical compounds that are known
to be toxic and provides for investigation of any possible harmful effects from new compounds. The EPA
regulations require special labeling, production and use quotas, and the prohibiting of use altogether.
C. THE RESOURCE CONSERVATION AND RECOVERY ACT
The Resource Conservation and Recovery Act (RCRA) of 1976 requires the EPA to determine
which forms of solid waste should be considered hazardous and regulate hazardous waste storage,
disposal, and treatment.
Penalties for violations include up to $25,000 (civil) per violation, $50,000 (criminal) per day, and
imprisonment up to two years (may be doubled for repeaters).
D. SUPERFUND
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or
Superfund) of 1980, regulates the cleanup of leaking hazardous waste disposal sites.
1. Primary Elements
Information gathering and analysis system that enables the government to identify chemical
dump sites and determine the appropriate action.
EPA authority to respond to hazardous substance emergencies and to arrange for the cleanup
of a leaking site directly if the persons responsible fail to do so.
Hazardous Substance Response Trust Fund (Superfund) to pay for the clean up of hazardous
sites using funds obtained through taxes on certain businesses.
Government recovery of the cost of cleanup from the persons who were (even remotely)
responsible for hazardous substance releases.
2. Potentially Responsible Parties
When a release or a threatened release occurs, the EPA can clean up a site and recover the cost
from
A party who generated the waste disposed of at the site.
A party who transported the waste to the site.
A party who owned or operated the site at the time of the disposal.
The current owner or operator.
a. Strict Liability of PRPs
Superfund imposes strict liability on PRPs.
b. Joint and Several Liability of PRPs
One party can be charged with the entire cost (which that party may recover in a contribution
action against others).
3. Minimizing Liability
Businesses that conduct self-audits and promptly detect, disclose, and correct wrongdoing are
subject to lighter penalties. There may be no fines for small companies that correct violations within
180 days (360 days if pollution-prevention techniques are involved).
4. Defenses
An innocent property owner may avoid liability by showing the lack of a contractual or employment
relation to the party who released the hazardous substance. In effect, this requires a buyer to
investigate possible hazards at the time property is bought.
ENHANCING YOUR LECTURE
  HOW CAN YOU KEEP ABREAST OF
ENVIRONMENTAL LAWS?
 
Businesspersons today increasingly face the threat of severe civil or criminal penalties if they violate
environmental laws and regulations. Thus, it is crucial to be aware of what those laws and regulations are,
how to monitor changes in them, and when to consult with an attorney during the normal course of business.
Consider some areas of concern that affect businesses.
FACTORS TO CONSIDER WHEN PURCHASING BUSINESS PROPERTY
When purchasing business property, keep in mind the environmental problems that may arise. Realize
that it is up to you as a purchaser of the property to raise environmental issuessellers, title insurance
companies, and real estate brokers will rarely pursue such matters. (A bank financing the property may worry
about the potential environmental hazards of the property, however.)
As a purchaser of business property, you should find out whether there are any restrictions regarding the
use of the land, such as whether it can be cleared of trees for construction purposes. The most important
environmental concern, though, is whether the property has been contaminated by hazardous wastes created
by the previous owners.
INVESTIGATE LAND-USE HISTORY
Purchasers of property can be held liable under Superfund for the cleanup of hazardous wastes dumped
by previous property owners. Although current property owners who pay cleanup costs can sue the previous
owners for contribution, such litigation is expensive and the outcome uncertain. Clearly, a more prudent
course is to investigate the history of the use of the land prior to purchasing the property. You might even
want to hire a private environmental site inspector to determine, at a minimum, whether the land has any
obvious signs of former contamination.
INVESTIGATE AND CORRECT ENVIRONMENTAL VIOLATIONS
Today’s companies have an incentive to discover their own environmental wrongdoings. The federal
14 UNIT NINE: GOVERNMENT REGULATION
sentencing guidelines encourage companies to promptly detect, disclose, and correct wrongdoing, including
environmental crimes. Companies that do so are subject to lighter penalties for violations of environmental
laws. Thus, a company would be well advised to conduct environmental compliance audits regularly.
Small businesses (those with up to one hundred employees) will find it particularly advantageous to
investigate and correct environmental violations. Under current EPA guidelines, the EPA will waive all fines if
a small company corrects environmental violations within 180 days after being notified of the violations (or
360 days if pollution-prevention techniques are involved). The policy does not apply to criminal violations of
environmental laws or to actions that pose a significant threat to public health, safety, or the environment.
CHECKLIST FOR THE BUSINESSPERSON
1. If you are going to purchase real estate, use land, or engage in activities that might cause environmental
damage, check with your attorney immediately.
2. If you want to avoid liability for violating environmental regulations or statutes, conduct environmental
compliance audits on a regular basis.
3. If you are ever charged with violating an environmental regulation or law, contact your attorney.
4. In general, environmental law is sufficiently complex that you should never attempt to deal with it without
the help of an attorney.
TEACHING SUGGESTIONS
1. To illustrate that the costs of many kinds of pollution are borne not by the polluter but by somebody else,
use an example of what has been called the tragedy of the commons. Ask students to imagine, for example,
a pasture open to the livestock of all farmers. As the number of livestock begins to exceed the capacity of the
pasture to provide adequate grazing, each farmer nevertheless continues to increase the size of his or her
own herd. The additional benefit of increasing a herd always seems positive, because each individual farmer
receives all of the benefits from the added stock while most of the costs are borne by the other farmers.
Eventually, the pasture is ruined for all.
2. Explain that one of the problems with common law causes of action in environmental litigation concerned
questions of proof. Because of the widespread effects of pollution, it may be impossible to prove any
particular polluter solely responsible for a specific injury or damage. Also, the common law limited relief from
pollution in situations where the harm was caused by two or more independent sources. For example, if a
number of firms were polluting the air, a harmed individual could sue any individual firm; however, until early
in the twentieth century, the plaintiff was not able to sue all of the firms simultaneously. Consequently,
specific proof of damages in individual actions was often impossible.
3. When CERCLA was enacted, most legislators believed that cleaning up a site was relatively inexpensive
and involved removing containers and scraping a few inches of soil off the ground. Today, there is a
multibillion dollar Superfund industry. Should either of these facts make any difference in the
enforcement or the amendment of CERCLA?
4. Environmental law is inseparable from administrative law. It may be helpful when reviewing the law in this
chapter to remind students of the material in the chapter on administrative law.
Cyberlaw Link
What are the legal issues surrounding the disposal of computers and related products, many of
which contain hazardous substances? Who should be liable if disposal results in harm to the envi-
ronment or to individuals?
DISCUSSION QUESTIONS
1. How may a polluter be held liable on a common law nuisance theory? A polluter may be held liable for
the use of property in a way that unreasonably interferes with others’ rights to use or enjoy their property. A nuisance
may be public or private. A public nuisance is a cause of action based on harm to the public. A public authority (such
2. Do state and local governments regulate environmental quality? Yes. Many states regulate the degree
to which the environment may be polluted (by requiring changes in proposed developments, for instance). State laws
3. Under the National Environmental Policy Act, when are federal agencies required to prepare envi-
ronmental impact statements? The National Environmental Policy Act requires federal agencies to prepare
4. How might an environmental impact statement be used? Private citizens, businesses, or others might use
5. The Clean Air Act provides a basis for regulating air pollution from what two kinds of sources? The
Clean Air Act provides a basis for regulating air pollution from mobile sources (motor vehicles) and stationary sources
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 schedulesextended in 1977 and by the Water Quality Act in 1987the Environmental
7. What are specific regulations covering pesticides and herbicides? Under the Federal Insecticide,
Fungicide, and Rodenticide Act, pesticides and herbicides must be (1) registered before they are sold, (2) certified
8. What does the Comprehensive Environmental Response, Compensation, and Liability Act regulate?
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or Superfund) regulates
the cleanup of leaking hazardous waste disposal sites. When a release or a threatened release occurs, the
9. Does it seem appropriate to put businessmen and women in jail when they violate the Clean Water
Act? Increasingly, businesspersons who violate environmental, consumer, health and safety laws and regulations find
10. What should local government bodies do to reduce the level of pollutants in storm-water runoff? To
reduce the level of pollutants in storm-water runoff, local government bodies can become more aggressive in enacting
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.
EXPLANATIONS OF SELECTED FOOTNOTES IN THE TEXT
Footnote 3: A well-documented rise in global temperatures has coincided with a significant increase in the
concentration of carbon dioxide in the atmosphere. Some scientists believe that the two trends are related because,
CHAPTER 45: ENVIRONMENTAL PROTECTION 17
when carbon dioxide is released into the atmosphere, it produces a greenhouse effect, trapping solar heat. Under the
Clean Air Act (CAA) of 1963, the Environmental Protection Agency (EPA) is authorized to regulate “any” air pollutants
“emitted into . . . the ambient air” that in its “judgment cause, or contribute to, air pollution.” Calling global warming
“the most pressing environmental challenge of our time,” a group of private organizations asked the EPA to regulate
carbon dioxide and other “greenhouse gas” emissions from new motor vehicles. The EPA refused, stating in part that
Congress last amended the CAA in 1990 without authorizing new, binding auto emissions limits. The petitioners,
nineteen statesincluding Massachusettsand others asked the U.S. Court of Appeals for the District of Columbia
Circuit to review the EPA’s denial.
In Massachusetts v. Environmental Protection Agency, the United States Supreme Court held that
greenhouse gases fit within the Clean Air Act's (CAA’s) definition of “air pollutant.”
Did the EPA have the authority to regulate greenhouse gas emissions from new motor vehicles? If so,
was its stated reason for refusing to do so consistent with that authority? The Supreme Court held that the
Environmental Protection Agency (EPA) has the authority under that statute to regulate the emission of such gases
from new motor vehicles. According to the Court, the definition, which includes “any” air pollutant, embraces all
airborne compounds “of whatever stripe.” The EPA's focus on Congress’s 1990 amendments (or their lack) indicates
Footnote 18: The Environmental Protection Agency (EPA) conditionally registered Strongarm, a new
weed killer, in March 2000. Dow Agrosciences, LLC, immediately sold Strongarm to Texas peanut farmers, who
normally plant their crops around May 1. The label stated, “Use of Strongarm is recommended in all areas where
peanuts are grown.” Strongarm damaged the crops and failed to control the growth of weeds. The farmers announced
their intent to sue Strongarm’s maker for violations of Texas state law. Dow filed a suit in a federal district court
against the farmers, asserting that FIFRA preempted their claims. The court ruled in Dow’s favor. The farmers
appealed to the U.S. Court of Appeals for the Fifth Circuit, which affirmed. The farmers appealed.
In Bates v. Dow Agrosciences, LLC, the United States Supreme Court vacated the judgment. A state can
regulate the sale and use of federally registered pesticides to the extent that it does not permit anything that FIFRA
prohibits, but a state cannot impose any requirements for labeling or packaging in addition to or different from those
Prior to 1910, as the Court explained in the Bates case, the states provided the primary, and possibly the
exclusive, source of regulatory control over the distribution of poisonous substances. Both the federal government’s
18 UNIT NINE: GOVERNMENT REGULATION
first effort at regulation in this area, the Insecticide Act of 1910, and FIFRA as originally enacted in 1947 primarily
dealt with licensing and labeling. It was not until 1972 that FIFRA began to take on its present contours. As stated in
the text, tort suits against pesticide manufacturers were common long before 1947 and continued to be a part of the
legal landscape after 1972 If it was generally held that state law claims were not preempted by FIFRA when the
statute was enacted and later amended, when and why did the question arise? As the Court noted in the Bates
case, “[F]or at least a decade after [FIFRA’s 1972] amendments, arguments that such tort suits were pre-empted by
Suppose that FIFRA required Strongarm’s label to include the word CAUTION, and the Texas peanut
farmers filed their claims under a state regulation that required the label to use the word DANGER. Would the
result have been different? Yes, because the state would have been imposing a requirement for “labeling or
packaging in addition to or different from” those that FIFRA would require. In that circumstance, FIFRA would likely be
held to preempt the state-based claim.
According to the Court’s interpretation, what is required for a state regulation or rule to be preempted
under FIFRA? Why is this significant? The Court reasoned that for a state rule to be preempted under FIFRA, it
must be a requirement “for labeling or packaging” that is “in addition to or different from those required under” FIFRA.
Rules that require manufacturers to design reasonably safe products, to use due care in conducting appropriate

Trusted by Thousands of
Students

Here are what students say about us.

Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.