Corporate Officers Personally Liable for $2.5 Million Penalty for Company’s Tardy Tank Cleanup


The California Court of Appeal upheld a $2.5 million civil penalty for a tardy cleanup of an underground storage tank leak against two men who were officers, directors, and shareholders of a family company. People v. Roscoe, et al., C055801 (2008 WL 35378254, Dec. 26, 2008). The Court’s rationale could be used to impose personal liability for a company’s violation of any environmental statute.

The Court applied the “responsible corporate officer doctrine” to find John and Ned Roscoe personally liable, even though the corporation owned and operated the tanks. The doctrine, which originated in a 1943 Supreme Court criminal liability case, is a common law theory of liability separate from “piercing the corporate veil” or imposing liability for direct participation in wrongful conduct. Under the doctrine, the officer, director, or shareholder can be held personally liable even if he or she had no awareness of wrongdoing.

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