of the property to rescind the contract for noncompliance with the Closure Act. The vendor claimed that the Closure Act did not apply to sole source landfills. The Superior Court rejected the vendors argument and interpreted the term "sanitary landfill facility" broadly in light of the legislative purpose of the Closure Act, cited above to hold that term includes a sole source landfill which operates only as the depository of the waste its own commercial operation has generated. Id. at 290.
Similarly, this court's interpretation of the term "owner or operator" to include those shareholders who have a high degree of personal involvement in the operation and decision-making of the corporation furthers the legislative purpose of the Closure Act to ensure proper closure of sanitary landfills, compensate those adversely affected by improper operation or closure and protect the public health and safety. See id.; see also United States v. Northeastern pharmaceutical & Chem. Co., 810 F.2d 743-44 (8th Cir. 1986)(court held that individual liability under CERCLA § 107(a)(3), 42 U.S.C. § 9607(a)(3) was broad to be consistent with the broad remedial purposes of CERCLA).
The Legislature's intent would be circumvented if this court were to interpret the Closure Act so as to shield from liability a shareholder of a corporation who is significantly involved in the management, operation and control of the corporation. See Northeastern Pharmaceutical, 810 F.2d at 743 ("construction of CERCLA to impose liability upon only the corporation and not the individual corporate officers and employees who are responsible for making corporate decisions about the handling and disposal of hazardous substances would open an enormous, and clearly unintended, loophole in the statutory scheme."); see also Shore Realty, 759 F.2d at 1052 (to further clean-up of hazardous wastes and compensate for destruction of natural resources, court refused to allow responsible individuals to hide behind protection of corporate laws). The broad policies underlying the Closure Act mandate that those persons who are in a position to know of and control the improper operation and closure of landfills be held liable as "owners or operators" for the violations of the Closure Act.
E. Application of the standard
The court finds that there are genuine issues of material facts as to whether the individual operator defendants have had a high degree of personal involvement in the operation and decision-making process of the corporations so as to come within the meaning of the term "owner or operator." In a case before the New Jersey Superior court involving the GEMS landfill, Amadei testified as to his ongoing management of the Landfill and his familiarity with the work-force at the Landfill: "some of the fellows used to work with Gohagen[hired because he owned a front-end loader and would move soil to cover refuse], some worked for me. Some of them they just worked for me on a part-time basis . . . they were hangers-on, you know, after we got closed, these guys just came around and hung around the trailer . . . ." (Exh. 1 to plaintiff's brief, Transcript of February 19, 1981 testimony of Anthony Amadei in State of New Jersey v. GEMS, Superior Court, Ch. Div. No. C-661-80 at 25-26). Amadei also sent letters to generators or haulers informing them that they could bring the material to the Landfill and that the material would conform to existing regulations. (Exh. 3 to plaintiff's brief, letter from Amadei to Berk).
Various New Jersey court opinions also contain specific findings of fact that Amadei, Winn and Ehrlich were personally responsible for the operation of the GEMS landfill. See Transamerica Ins. Co. v. Thomas M. Durkin & Sons, Inc. and Durkin Contracting, Inc., 1991 U.S. Dist. LEXIS 14318 (E.D. Pa. Oct. 1, 1991), reconsideration denied, 1991 U.S. Dist. LEXIS 16715; NJDEPE v. Anthony Amadei and Jersey Envtl. Management Serv. Inc. [JEMS], Docket No. A-3508-79T1 (App. Div. June 5, 1981). In Transamerica, the court found that Anthony Amadei and Sidney Liss (now deceased) personally guaranteed AS & G's performance of the lease agreement with the Gloucester for the GEMS landfill site, including that AS & G would adhere to all present and future laws, rules, or regulations of New Jersey, Camden County and Gloucester Township regarding operation and maintenance. Id. at *17.
The Transamerica court also found that "among the principle officers of Amadei Sand & Gravel and the individuals responsible for the operation of the landfill site and the disposal of hazardous substances therein were Anthony Amadei, Jack M. Liss and Sidney Liss (now deceased)." Id. (emphasis added). The court further found that, after the rights of AS & G to operate the landfill were transferred to GEMS, "the principals and officers of GEMS were Anthony Amadei, Dennis Dubin, David Ehrlich and Richard Winn.. . . All were responsible for the operation of the landfill site and for the disposal of hazardous substances therein." Id. (emphasis added).
The court finds that genuine issues of material fact exist as to whether the individual operator defendants had a high degree of involvement in the operation and decision-making process of the corporations so as to come within the meaning of the term "owner or operator." Genuine issues of material fact exist as to many of the factors which may be considered in determining whether the defendants had a sufficient degree of control: whether the defendants controlled the finances of the facility; managed the employees of the facility; managed the daily business operations of the facility; were responsible for the maintenance of environmental control at the facility; and conferred or received any commercial or economic benefit from the facility. Accordingly, defendants' motion for summary judgment must be denied.
F. Piercing the Corporate Veil
Although the NJDEPE implies that defendants may be liable under a theory of piercing the corporate veil, the court need not reach this analysis as to these individual operator defendants since the court finds that there are genuine issues of material fact as to whether the defendants are liable under the "usual meanings" of the term "owner or operator."
Similarly, other courts have held shareholders personally liable without piercing the corporate veil where the shareholder actively participated in the management of the landfill. See Northeastern Pharmaceutical, 810 F.2d at 726. In Northeastern Pharmaceutical, the court held that
[the corporate officer] can be held individually liable because he personally participated in conduct that violated CERCLA; this personal liability is distinct from the derivative liability that results from 'piercing the corporate veil.' 'The effect of piercing a corporate veil is to hold the owner [of the corporation] liable. The rational for piercing the corporate veil is that the corporation is something less than a bona fide independent entity.' Donsco, Inc. v. Casper Corp., 587 F.2d 602, 606 (3d Cir. 1978). Here, [the corporate officer] is liable because he personally participated in the wrongful conduct and not because he is one of the owners of what may have been a less than bona fide corporation.
Id. at 744. Similarly, in New York v. Shore Realty Co., the court rejected the use of the doctrine of piercing of the corporate veil, and instead held the shareholder liable because of his active and extensive role in the daily management of the company. Shore Realty, 759 F.2d at 1052; see also United States v. Mottolo, 605 F. Supp. 898, 913-14 (D.N.H. 1985)(court found that it was not necessary to pierce the corporate veil to hold a shareholder or officer individually liable under CERCLA where there are alternative grounds for individual liability).
The court further notes that in order to pierce the corporate veil, evidence must be presented to show that the corporation is a "sham" which exists to avoid personal liability of the officers.
No evidence has been presented to the court for it to make a fair determination that GEMS either is or is not a "sham" corporation. In addition, a consideration of whether to pierce the corporate veil involves complex issues of law and fact which are not readily amenable to summary judgment. See The Modern Snake in the Grass, 14 Boston in. Env. L.J. at 381-446 & 400 (citing Wehner v. Syntex Corp., 24 Env't Rep. (BNA) 1160, 1161 (N.D.Cal. 1986)).
Because the court finds that the term "owner or operator" in the Closure Act includes a person actively operating a business such that they have a high degree of personal involvement in the operation and decision-making process of the corporation, as well as a person who owns a majority interest in the corporation, the mere fact that each of the defendants owned less than a majority interest in AS & G and GEMS does not necessarily enable them to escape liability under the Closure Act. A genuine issue of material fact exists regarding the degree of the individual operator defendants' personal involvement in the operation and decision-making of both AS & G and GEMS. Accordingly, the individual operator defendants' motion for partial summary judgment must be denied.
STANLEY S. BROTMAN
UNITED STATES DISTRICT COURT
ORDER - August 25, 1992, Filed
This matter having come before the court on the motion of the individual operator defendants Anthony Amadei, Richard Winn and David Ehrlich for partial summary judgment under the Closure Act; and
The court having considered the submissions of the parties; and
For the reasons set forth in the opinion of this date;
It is on this 25th day of August, 1992
ORDERED that Defendants Anthony Amadei, Richard Winn and David Ehrlich's motion for partial summary judgment against plaintiff New Jersey Department of Environmental Protection and Energy, is DENIED.
STANLEY S. BROTMAN
UNITED STATES DISTRICT JUDGE