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Corporate Officers Beware California Court Revives and Expands the Responsible Corporate Officer Doctrine and Imposes Millions in Personal Fines

January 12, 2009

By Deborah Schmall, Matthew Sanders, Alexis Ford and John Phillips

For the first time in more than 15 years, a California appellate court applied the responsible corporate officer doctrine (RCOD) in an environmental case, holding officers personally liable for several million dollars in civil penalties under Californias underground storage tank (UST) laws. People v. Roscoe, No. C055801, -- Cal. Rptr. 3d -- 2008 WL 5378254 (Cal. Ct. App. Dec. 26, 2008). Roscoe is perhaps the clearest California appellate decision to use the RCOD to find corporate officers personally liable for their corporations civil, as opposed to criminal, violations. The result raises significant issues for corporate officers and their liability for environmental activities. This alert discusses the law before Roscoe, summarizes this important development, and identifies key implications for corporate officers given Roscoes expansion of California law.

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Image: Deborah J Schmall
Deborah J Schmall
Partner, Real Estate Department