Connecticut corporate officers have long been protected by a cloak of immunity when making corporate decisions in an honest, diligent and fiscally responsible manner. That cloak, however, is coming off especially when it involves protecting the state's air, water and other natural resources. Such longstanding principles are eroding, falling victim to the words used by the legislature when writing these environmental laws. Protective concepts historically relied upon, such as determining when the "corporate veil" should be pierced, " are now yielding to a more contemporary analysis based upon principles grounded in the precise language of the laws. Corporate officers in every industry need to be wary, for the decisions they make today in deciding how to comply with the state's environmental laws can lead to their own personal liability tomorrow.

In BEC Corporation v. Department of Environmental Protection, the Connecticut Supreme Court recently found corporate officers, who fail to ensure that their companies' actions comport with the Connecticut Water Pollution Control Act ("WPCA") may face civil liability. The WPCA regulates facilities or conditions that can reasonably be expected to create a source of pollution to the waters of the state. Its reach is extremely broad and forms the basis for a vast number of DEP enforcement actions ranging from point source discharges to storm water runoff to claims of historical pollution that occurred 50, 60 or even 100 years ago. Specifically, in BEC, the DEP issued an administrative order to both the company and two of its officers to take steps necessary to investigate contamination on the property that resulted from decades of oil spills, some predating environmental regulation. Interestingly, the company and its officers had taken certain steps after each spill to contain it and, at times, DEP was called in. However, the Commissioner of DEP did not believe that enough work had been performed to investigate and remediate the extent of the contamination. There was also no hydrogeologic investigation; nor was there a plan to monitor the effectiveness of the cleanup activities. Additionally, the DEP wanted certain measures installed to preclude potential releases in the future. The company (BEC) and its officers contested the order and requested an administrative hearing before a DEP hearing officer. After the hearing, the hearing officer found that the company and the officers shall be jointly and severally liable for cleaning up the property.

The BEC officers appealed the decision to court. The issue on appeal to the Connecticut Supreme Court was whether corporate officers could be held civilly liable for their company's violations of the WPCA. Under the WPCA, the Court found that individuals may be personally liable because sections of the Act adopt a responsible corporate officer doctrine. The Court dismissed the officers' assertion that their status as corporate officers shielded them from liability and found them personally liable for their failure to prevent environmental pollution and conduct proper environmental remediation activities after the oil spills. Assessing the case's factual background, the Court found that the corporate officers were in positions of authority allowing them to influence environmental compliance, investigation, and remediation activities and that their action or inactions in those positions resulted in pollution and violation of the WPCA.

Reviewing the regulatory framework of the WPCA, the BEC Court's findings turned on the definition of "person" under the statute. The Court reasoned that the inclusion of the all-encompassing term "any person" within the WPCAs liability framework, coupled with the statute's broad remedial purpose and the officers' failure to prevent and remediate pollution, supported its application of personal liability.

The Connecticut Supreme Court's decision to hold corporate officers personally liable for their companies' environmental transgressions might seem shocking, but it is a logical extension of two decades of evolving legal precedent specifically in the context of environmental laws. In the mid-1980s and early 1990s, certain federal courts have determined that a corporate officer could be personally, civilly liable for environmental violations. Following those courts, the Connecticut Supreme Court found that a corporate officer or director is not held responsible simply because of his position but, rather, the officer's conduct must also have a responsible relationship to the violation.

In spite of the BEC Court's suggestion that its holding applies "solely to violations of the Act [WPCA],"its succinct rationale for applying civil liability to corporate officers renders it a credible threat to Connecticut corporate officers for a few reasons. First, to hold a corporate officer civilly liable, a claimant need only prove that: (1) the corporate officer was in a position of responsibility allowing him to influence corporate policies and activities; (2) there existed a nexus between the corporate officer's actions (or inactions) in that position and the subsequent environmental violation; and (3) the officer's actions (or inactions) resulted in the environmental violation. Second, the Court's conclusion that the term "any person" includes corporate officers could subject corporate officers to civil liability under a number of other environmental laws. Third, the Court's holding that a corporate officer is civilly liable merely because he is in a position to influence environmental policy potentially covers not only the officer's actions and omissions, but also the actions and omissions of subordinates.

Because BEC authorizes the imposition of civil liability on a corporate officer by virtue of his position to influence corporate environmental policy, prudence suggests that corporate officers occupying positions of authority should: (1) establish environmental compliance, investigation, and, remediation programs; (2) require that subordinates supervising the company's environmental compliance, investigation, and remediation program keep diligent records of pollution prevention, investigation, and remediation on activities; (3) hold regular meetings and trainings concerning environmental compliance to ensure that all employees within his sphere of authority are familiar with and understand the company's environmental compliance program; (4) post signage instructing the employees on the company's environmental compliance programs; and (5) respond with all due diligence to spills and releases that may occur. 

All corporate officers should endeavor to be as responsive and diligent as possible in the environmental context. Although BEC specifically involved an oil storage and distribution company, its reach extends far beyond that industry. The officers of every company that is regulated by the WPCA must be cognizant of the potential consequences of the individual decisions they make today. Given BEC, and recent enforcement activity, the DEP is not reluctant to exercise its newfound authority and impose liability for violations on responsible corporate officers. Indeed, the next chapter may be holding such officers personally liable for civil fines and violations assessed against a corporate violator. The cloak is now in shreds and corporate officers need to heed the lessons of BEC in order to protect against unwanted personal exposure tomorrow.