Can Corporate Officers be Held Personally Liability for Environmental Violations in Texas?
The Texas Supreme Court recently overturned an Austin Court of Appeals decision which held that a corporate officer could not be held personally liable for environmental violations unless certain conditions were present. Below is an overview of this decision and its implications on corporate officers in Texas.
The case involved an action by the State of Texas against a corporation and one of its officers for failing to comply with provisions of the Texas Water Code. The state alleged that the corporate officer personally engaged in activities that constituted violations of the Texas Water Code. Before making its way to the Texas Supreme Court, the Austin Court of Appeals, in relieving the corporate officer of liability for the alleged environmental violations, held that that a corporate officer could only be liable for such actions if his or her individual conduct was fraudulent or tortious.
However, at the Texas Supreme Court, the state argued that the laws in question, Texas Water Code sections 7.101 and .102, should be interpreted based on their plain meaning. The laws, which prohibit a “person” from committing certain environmental violations, also state:
A person who causes, suffers, allows, or permits a violation shall be assessed for each violation a civil penalty of not less than $50 nor greater than $25,000 for each day of violation….
The state, in focusing on the laws’ use of the word “person,” argued that this language clearly intends liability to apply to both individual actors and corporate entities—not just corporations.
Agreeing with the state that the term “person” refers to an individual, the court held that a corporate officer who violates the aforementioned sections of the Texas Water Code may be held personally liable for his or her unlawful acts. In reaching its decision, the court joined several other state and federal courts that have reached similar decisions regarding the personal liability of corporate officers.
If you or your company have been cited for non-compliance or are facing legal action based on non-compliance, then you need an experienced Texas attorney like C. William Smalling on your side. Smalling, with a background in engineering, understands both the technical and legal aspects of situations affecting corporations in the oil, gas, and energy industries. Whether negotiating with the government or litigating government enforcement actions and private tort suits, the experience of C. William Smalling provides corporate clients with a significant edge in all oil, gas, and energy matters. We take pride in providing our business clients with the legal tools to remain confident while navigating the complicated world of environmental regulations. If your company is facing legal action or simply needs guidance in the area of environmental law, please contact the Law Office of C. William Smalling for a consultation.