BEC Corp. v. Dept. Envtl. Protection, SC
| Decision Date | 10 July 2001 |
| Docket Number | No. SC,SC |
| Citation | 256 Conn. 602,775 A.2d 928 |
| Court | Connecticut Supreme Court |
| Parties | (Conn. 2001) BEC CORPORATION ET AL. v. DEPARTMENT OF ENVIRONMENTAL PROTECTION 16174 |
William F. Gallagher, with whom, on the brief, was Barbara L. Cox, for the appellants (plaintiffs).
David H. Wrinn, assistant attorney general, with whom were Mary K. Lenahan, assistant attorney general, and, on the brief, Richard Blumenthal, attorney general, for the appellee (defendant).
Eric Lukingbeal and Richard M. Fil filed a brief for the Connecticut Business and Industry Association, Inc., as amicus curiae.
McDonald, C. J., and Borden, Norcott, Sullivan and Vertefeuille, Js.1
Opinion
The issue raised in this appeal is whether the trial court properly held that the officers of BEC Corporation (BEC), Irvin A. Shiner and Michael Shiner, are personally liable under the Connecticut Water Pollution Control Act, General Statutes §§ 22a-416 et seq. (act). The plaintiffs, BEC, Irvin A. Shiner,2 the president of BEC, and Michael Shiner, the vice president and secretary of BEC, appeal from the judgment of the trial court dismissing their administrative appeal from the decision of the defendant, the department of environmental protection (department). On June 6, 1996, the commissioner of the department, pursuant to §§ 22a416, issued an abatement order regarding BEC's real property located in West Haven. The commissioner found that the plaintiffs, BEC, and Irvin A. Shiner and Michael Shiner individually, created or were maintaining a facility or condition that reasonably could be expected to pollute the waters of the state, and ordered that BEC, Irvin A. Shiner and Michael Shiner "shall be jointly and severally liable for compliance with this order." The commissioner, pursuant to General Statutes §§ 22a-432,3 ordered the plaintiffs to prevent further pollution at the site, to investigate existing and potential pollution at the site, to undertake remedial actions to abate that pollution, and to monitor the effectiveness of those remedial actions.
The plaintiffs appealed to an administrative hearing officer from the commissioner's decision to issue the abatement order. Before the hearing officer, Irvin A. Shiner and Michael Shiner argued that, even if BEC were liable under §§ 22a-432 as set forth in the order, they could not be held personally liable. The hearing officer rejected this argument and affirmed the commissioner's order. The plaintiffs appealed from this administrative decision to the trial court pursuant to General Statutes §§ 4-183.4 The trial court upheld the hearing officer's decision and dismissed the appeal, and the plaintiffs appealed to the Appellate Court. Thereafter, we transferred the appeal to this court pursuant to General Statutes §§ 51-199 (c) and Practice Book §§ 651. We affirm the judgment of the trial court.
The administrative hearing officer who considered the plaintiffs' appeal from the abatement order found the following relevant facts: BEC, a Connecticut corporation, owns real property located at 101-105 Water Street in West Haven (site). The site is bordered on the west by Water Street, on the east by the confluence of the West River and New Haven Harbor, and on the north and south by private property. BEC or its corporate predecessors operated an oil storage and distribution business from the site from as early as 1944 to approximately May 15, 1995. The site includes a barge docking facility for the unloading of oil barges, above ground oil storage tanks, and piping to carry oil from the barge docking facility to the oil storage tanks and for loading oil from the tanks into oil tanker trucks. In addition, the site includes an office building, warehouse, garage and other structures.
The oil storage tanks are located on pilings in a row in the northwest corner of the site near Water Street.
Four of the tanks hold 15,000 barrels of oil each, and one tank holds 5000 barrels. A barrel is equivalent to forty-two gallons. The tanks are surrounded by a concrete dike and the concrete foundation of a structure on the neighboring property. The five tanks, the dike and the foundation wall surrounding the tanks and the unpaved floor beneath the tanks in the diked area are referred to as the "tank farm." An intermittent spring runs through the tank farm, and the floor of the tank farm is wet and frequently covered in water from both that spring and precipitation. Water in the tank farm is drained by a manually operated pump that empties oil into an oil/water separator.
The site, until approximately 1988, also had a tank farm and loading rack on the southeast corner of the property (former tank farm). The former tank farm included five above ground oil storage tanks, two having the capacity of 20,000 barrels each and three having a 15,000 barrel capacity. The floor of the former tank farm was unpaved, and the tank closest to the West River was surrounded by several inches of water during high tide. After the former tank farm was removed, its location was paved over and converted to a drydocking facility.
The site has a high water table as evidenced by the spring in the tank farm, the wet floor of the tank farm and the former tank farm, and the site's proximity to the West River. The site's proximity to New Haven Harbor subjects the groundwater underlying the site to tidal influences.
The site was purchased by the Connecticut Refining Company (Connecticut Refining) on or about December 29, 1944. Connecticut Refining merged with the Benzoline Energy Company (Benzoline) on December 3, 1986. The surviving corporation retained the name Benzoline Energy Company. On May 9, 1995, Benzoline changed its name to BEC Corporation. Subsequently, BEC discharged all of its employees and sold all of its assets with the exception of the real property at 101105 Water Street, including its tank farm and on-site buildings. The assets were sold to Alliance Energy Corporation (Alliance), which leased the office building on the site from BEC but did not operate an oil terminal at the site.
Connecticut Refining was formed by Irvin A. Shiner's father, Edward Shiner. Irvin A. Shiner assumed control as president of Connecticut Refining from his father in approximately 1968, and he retained that position until Connecticut Refining's merger with Benzoline. He was president of Benzoline prior to its merger with Connecticut Refining and remained so until Benzoline's name changed to BEC in 1995. He was BEC's president from 1995 until his death on September 16, 1999. He owned or co-owned 100 percent of its voting stock. Irvin A. Shiner supervised the day-to-day operations of Connecticut Refining and Benzoline and made most of the major decisions regarding their operations. He performed in the same capacity with BEC. In performing those duties, Irvin A. Shiner typically had been at the site no fewer than five days a week, except for vacations, from 1968 until 1995.
Michael Shiner served as vice president and secretary of Connecticut Refining and then Benzoline from approximately 1975 to May 9, 1995. He has been vice president and secretary of BEC since 1995. Michael Shiner reported directly to his father, Irvin A. Shiner, and in his absence Michael Shiner was in charge of the company's operations and typically was on the site five days a week.
In the late 1980s, Michael Shiner assumed greater responsibility for supervising the day-to-day operations at the site, although Irvin A. Shiner remained involved in major corporate and operational decisions. Since approximately 1973, Michael Shiner oversaw the company's environmental compliance. In that capacity, he coordinated the preparation of spill prevention control and countermeasure plans, and communicated with environmental enforcement agencies such as the department and the United States Coast Guard (Coast Guard). During environmental inspections of the site, Michael Shiner generally would accompany the government inspectors.
Since the early 1970s, it was the policy of Connecticut Refining and its successor companies that employees notify either Irvin A. Shiner or Michael Shiner of oil releases at the site. Michael Shiner coordinated the response to the spills. Irvin A. Shiner was at the site within twenty-four hours of every oil release since 1970, except for one release in 1992, which occurred while he was away on vacation.
There has been a history of oil spills on the site, including several spills that occurred around the former tank farm that was located in the southeast corner of the site. On or about October 5, 1971, approximately 900 gallons of oil spilled onto the floor of the former tank farm when one of its tanks overflowed during the unloading of an oil barge. The oil on the floor of the former tank farm was collected by means of absorbent material and a vacuum truck, but no soils were removed from the site of the former tank farm or remediated following that incident.
In August, 1977, oil was observed leaching into the West River from the vicinity of the bulkhead in the northeast corner of the site. Michael Shiner engaged a private contractor to locate the source of the discharge and clean it up. The contractor installed a boom, which is a floating containment barrier used to contain floating oil, to contain and remove the oil that had leached into the river. The contractor also installed an oil collection system to collect the oil in the soils and prevent additional oil from leaching into the West River. The contractor determined that the oil was coming from a leaking underground pipe, which subsequently was replaced with an above ground pipe. Some oil-soaked soils also were removed from the vicinity of the leak. Despite those remedial efforts, oil continued to leach into the West River. The oil collection system was expanded and enlarged, but the leaching continued.
In October, 1978, the Coast Guard determined that the efforts of...
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