Business Law Chapter 46 Homework The Clean Air Act Provides Basis For

CHAPTER 46: ENVIRONMENTAL LAW 1125

ANSWERS TO QUESTIONS AT THE END OF CASE 46.3

1. Assume that during most of the year, there was a solid strip of land around the property in question that

remained completely dry. Would the outcome of this case have been the same? Why or why not? Much would

2. According to the judge in this case, what three characteristics of jury instructions does a federal appellate

court examine to determine whether a district court has abused its discretion in omitting a requested jury

instruction? Which of these three characteristics was at issue in this case? The judge noted that “a district

5. Violations of the Clean Water Act

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.

B. DRINKING WATER

Under the Safe Drinking Water Act of 1974, the EPA sets maximum levels for pollutants in public water systems.

ADDITIONAL BACKGROUND—

Drinking Water Pollutants

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

1126 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION

• 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

V. Toxic Chemicals

A. PESTICIDES AND HERBICIDES

• Under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) of 1947, pesticides and herbicides

must be (1) registered before they can be sold, (2) certified and used only for approved applications, and (3)

used in limited quantities when applied to food crops. There can be no greater than a one-in-a-million

chance of people developing cancer from exposure, which includes eating food with pesticide residue.

• 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.

B. TOXIC SUBSTANCES

VI. Hazardous Wastes

A. RESOURCE CONSERVATION AND RECOVERY ACT

The Resource Conservation and Recovery Act (RCRA) of 1976 requires, among other things, that the EPA de–

B. SUPERFUND

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or Superfund) of 1980,

regulates the clean-up of leaking hazardous waste disposal sites.

1. Primary Elements

CHAPTER 46: ENVIRONMENTAL LAW 1127

• Information gathering and analysis system that enables the government to identify chemical dump

2. Potentially Responsible Parties

When a release or a threatened release occurs, the EPA can clean up a site and recover the cost from (1) the

3. Joint and Several Liability

4. Minimizing Liability

5. Defenses to Liability

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?

 

1128 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION

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 issues—sellers, 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.)

INVESTIGATE LAND-USE HISTORY

Purchasers of property can be held liable under Superfund for the clean-up of hazardous wastes dumped by

previous property owners. Although current property owners who pay clean-up 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

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.

3. If you are ever charged with violating an environmental regulation or law, contact your attorney.

help of an attorney.

CHAPTER 46: ENVIRONMENTAL LAW 1129

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

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

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?

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 environment 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

2. Do state and local governments regulate environmental quality? Yes. Many states regulate the degree to which

3. Under the National Environmental Policy Act, when are federal agencies required to prepare environmental

impact statements? The National Environmental Policy Act requires federal agencies to prepare environmental impact

4. How might an environmental impact statement be used? Private citizens, businesses, or others might use an

5. The Clean Air Act provides a basis for regulating air pollution from what two kinds of sources? The Clean Air

6. How are the objectives of the Clean Water Act to be accomplished? The Clean Water Act established a new

7. What are specific regulations covering pesticides and herbicides? Under the Federal Insecticide, Fungicide, and

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 clean-up of

leaking hazardous waste disposal sites. When a release or a threatened release occurs, the Environmental Protection Agency

can clean up a site and recover the cost from (1) a party who generated the waste disposed of at the site, (2) a party who

CHAPTER 46: ENVIRONMENTAL LAW 1131

transported the waste to the site, (3) a party who owned or operated the site at the time of the disposal, or (4) the current

owner or operator. Liability is usually joint and several.

ACTIVITY AND RESEARCH ASSIGNMENT

Direct students to contact local manufacturers and other businesses to ask about the impact of local, state, and federal

EXPLANATION OF A SELECTED FOOTNOTE IN THE TEXT

Footnote 16: 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

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 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,

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

1132 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION

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 testing of their products, to

ANSWERS TO ESSAY QUESTIONS IN

STUDY GUIDE TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION

BY HOLLOWELL & MILLER

1. What does the National Environmental Policy Act require? The National Environmental Policy Act imposes the

2. What federal laws regulate toxic chemicals? Pesticides and Herbicides. Under the Federal Insecticide,

Fungicide, and Rodenticide Act (1947), pesticides and herbicides must be (1) registered before they are sold, (2) certified and

used only for approved applications, and (3) used in limited quantities when applied to food crops. If a pesticide or herbicide is

identified as harmful, the Environmental Protection Agency can cancel its registration after a hearing. If the harm is imminent,

the Environmental Protection Agency can suspend registration pending the hearing. The Environmental Protection Agency can

also inspect factories in which pesticides and herbicides are manufactured. Toxic Substances. The Toxic Substances Control

Act (1976) regulates chemicals and chemical compounds that are known to be toxic and provides for investigation of possible

CHAPTER 46: ENVIRONMENTAL LAW 1133

REVIEWING—

 ENVIRONMENTAL LAW 

In the late 1980s, various 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

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

2. Are air-quality regulations typically overseen by federal, state, or local governments? Typically, the federal

3. The equipment to control air pollution has to meet what standard for limiting emissions from Cotton

Design? Major stationary sources of air pollution are required to use the maximum achievable control technology to

4. What information must the city send to every household that it supplies with water? Under the Safe Drinking

1134 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION

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 wetlands 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 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.

