Deck 47: Personal Property and Bailment

Question 1

The Interstate Commerce Commission has the power to approve or set the tariff rates that railroads charge shippers. As a result of past ICC approvals, the railroad tariffs call for higher shipping charges to carry scrap metals and paper than to carry virgin materials. This disparity operates as an economic discrimination against recycled goods. A group of law students have formed an organization known as SCRAP (Students Challenging Regulatory Agency Procedures). SCRAP is concerned that the ICC-approved rate structure discourages the environmentally desirable user of recycled goods. The ICC approved a 2.5 percent across-the-board surcharge in railroad shipping rates and indicated that no environmental impact statement was necessary because there was "no environmental impact." SCRAP is concerned that the increase will further the discrimination against used materials and files suit against the ICC to require that an environmental impact statement be prepared. Should the court decide that an environmental impact statement is required?

Answer 1

Case summary:
Mr. S contracted with RL Motors to buy certain specific brand of car with unique interiors and design for which S made a payment of $3500 as a deposit. Later, RL returned this amount back to S mentioning that the car is not available. When S discovered that the car is still at dealer's place, and that he is planning to sell that car to another buyer, S filed a case against RL to perform as per the contract. Over this, RL argued that S could only get damages under the contract, and could not enforce specific performance. It was discovered that around 100 similar cars are sold in the country of the type that S ordered for, but none of them carry the interior and design that S wanted to buy in this car.
Specific performance stands for the performance that is expected to deliver and perform by the required party under the contract so as to avoid litigation against it.
Solution:
In this case, Mr. S could avail the remedy of specific performance because he has ordered for a car that was unique and carry interior that was different in features as compared to other cars available of the same brand and type. This shows that he wanted specific performance under the contract that has to be performed by RL Motors by selling him the car that he ordered for and paid $3500 for the same. And, if the seller refuses to sell that car to S with an intention to sell it to another buyer, then it concludes that Mr. S could avail the remedy of specific performance and make RL Motors to sell that car to S.

Question 2

In August 1986, Tzavah Urban Renewal Corporation purchased from the city of Newark a building formerly known as the Old Military Park Hotel. While the buyer was given an opportunity to inspect the building, it was not informed by the city that the building was permeated with asbestos-containing material. At the time of the purchase, the building was in great disrepair and had been uninhabited for many years. Its proposed renovation was to be a major urban renewal project. In June 1987, Tzavah contracted with Greer Industrial Corporation to "gut" the building. While the work was going on, an EPA inspector visited the site and concluded that the hotel was contaminated with asbestos. He observed Greer employees throwing asbestos-laced objects out of the windows of the building and noted an uncovered refuse pile next to the hotel that contained asbestos. The workers were not wetting the debris before heaving it out thewindows, and the refuse pile was also dry. As a result, asbestos dust was being released into the air. Although the hotel was located in a commercial district, there were private homes nearby. Renovation of buildings contaminated with asbestos is regulated under the Clean Air Act. The EPA regulations require building owners or operators to notify EPA before commencing renovation or demolition and prescribe various procedures for storage and removal of the asbestos. Tzavah failed to provide the required notice or to comply with procedures required. After being notified by EPA of the violation of the law, Tzavah stopped the demolition work, left the building unsecured, and left the waste piles dry and uncovered. EPA tried informally to get Tzavah to complete the work in accordance with the asbestos regulations; when Tzavah did not take action, EPA brought a lawsuit against Tzavah to do so. Should the court issue an injunction requiring Tzavah to abate the hazard posed by the dry asbestos remaining in the hotel?

Answer 2

Case summary:
TU Corp. bought an old hotel building from N City. The building was abandoned for many years, and at the time of the purchase the buyer was not informed from the seller's side that the building carried asbestos waste. For renovating the building, TU hired GI Corp. and when the employees of GI were working for building's renovation, an EPA officer saw workers throwing asbestos waste out of the window which had not been wetted by the workers and was throwing the waste in dry condition. As per rule, whenever asbestos waste is discarded, EPA has to be informed, but when TU failed to inform EPA about the same, EPA issued a notification against it. As a result of this, TU left the building renovation task abandoned and also the asbestos was left open making them to pollute the air. EPA asked TU to complete the work under EPA's guideline, but when TU refused to do so, EPA filed a case against TU.
Environmental Protection Agency (EPA) stands for the federal agency that looks after the regulation of various environmental acts like Clean Water Act, Clean Air Act, etc.
Solution:
In this case, the court should issue an injunction against TU Corp. requiring it to abate the hazard caused by it by dry asbestos remaining in the hotel. This is because under law, a person cannot dump or discard asbestos without making EPA aware about the same. But as in this case, TU did not work as per the regulation failing to inform EPA about dumping of dry asbestos in the environment. It could be said that the court should issue an injunction against TU Corp. requiring it to abate the hazard caused by it by dry asbestos remaining in the hotel so that TU perform as per EPA's regulation and safely discard and dump asbestos.

Question 3

In July 1984 Vanguard Corporation began operating a metal furniture manufacturing plant in Brooklyn, New York. The plant is located in an area that has not attained the national ambient air quality standards for ozone. The plant is a major stationary source (i.e., has the potential to emit more than 100 tons a year) of volatile organic compounds that contribute to the formation of ozone in the atmosphere. The New York State implementation plan (SIP) requires that metal-coating facilities use paint that contains less than 3 pounds of organic solvent (minus water) per gallon at the time of coating. On August 24, 1984, EPA notified Vanguard that it was not in compliance with the SIP provision concerning coatings and issued it a notice of violation. Vanguard sought to defend against the notice of violation on the grounds that it had used its best faith efforts to comply but that it was technologically and economically infeasible. It indicated that it wanted 18 more months to come into compliance. Should Vanguard be held to be in violation of the Clean Air Act?

Answer 3

Case summary:
VN Corp. is in the manufacturing of metal furniture, and releases paint residue in the environment that is beyond the allowed level by the government. When EPA discovered this, it issued a notification against VN asking it to reduce its release of air pollution forming affecting ozone layer in the environment. Over this, VN argued that it worked in its best faith till date and will require another 18 more months to come into compliance.
Clean Air Act stands for the federal law that aims at controlling air pollution in the country.
Solution:
In this case, VN Corp. should be held in the violation of Clean Air Act because with the initiation of its manufacturing plant, VN is releasing hazardous residue in the air which is against the Clean Air Act, and no matter how much in good faith VN performed and operated a plant, it should be held in the violation of Clean Air Act because it has failed to follow the regulation and restrict the air pollution that it releases in the air. This concludes that VN Corp. should be held in the violation of Clean Air Act till the time it changes its manufacturing procedures and releases pollutants under limits set by the government.

Question 4

Charles Hanson owned land abutting Keith Lake, a freshwater lake that was subject to some tidal flooding as a result of its connection with tidal waters. In order to minimize the detrimental effects from the tidal activities and consequent flooding, Hanson deposited a large quantity of dirt, rock, bricks, sheet metal, and other debris along the shoreline of his property. He did so without obtaining a permit from the U.S. Army Corps of Engineers under section 404 of the Clean Water Act, which controls dumping and filling activities in navigable waters of the United States. Under the law, discharges of pollutants into navigable waters without a permit are forbidden. The term pollutant is defined to include "dredged spoil, solid waste, incinerator residue, sewage, garbage, sewage sludge, munitions, chemical wastes, biological materials, radioactive materials, heat, wrecked or discarded equipment, rock, sand, cellar dirt, and industrial, municipal and agricultural waste discharged into water." EPA brought an enforcement action against Hanson claiming he had violated the Clean Water Act. Should the court find that Hanson violated the act?

Question 5

Mall Properties, Inc., was an organization that for many years had sought to develop a shopping mall in the town of North Haven, Connecticut, a suburb of New Haven. Because the proposed development would require the filling of some wetlands, Mall Properties was required to obtain a permit from the Corps of Engineers pursuant to Section 404 of the Clean Water Act. The city of New Haven opposed development of the mall-and the granting of the permit-on the grounds it would jeopardize the fragile economy of New Haven. The Corps of Engineers found the net loss of wetlands would be substantially compensated for by a proposed on-site wetland creation. Relying primarily on the socioeconomic concerns of the city of New Haven, the District Engineer rejected the proposed permit. Mall Properties then brought suit against the Corps of Engineers, claiming that the decision was arbitrary and capricious. Should the District Engineer have relied on socioeconomic factors unrelated to the project's environmental impacts in making a decision on the permit?

Question 6

Johnson Towers, Inc., is in the business of overhauling large motor vehicles. It uses degreasers and other industrial chemicals that contain chemicals classified as "hazardous wastes" under the Resource Conservation and Recovery Act (RCRA), such as methylene chloride and trichloroethylene. For some period of time, waste chemicals from cleaning operations were drained into a holding tank and, when the tank was full, pumped into a trench. The trench flowed from the plant property into Parker's Creek, a tributary of the Delaware River. Under RCRA, generators of such wastes must obtain a permit for disposal from the Environmental Protection Agency (EPA). EPA had neither issued nor received an application for a permit for the Johnson Towers operations. Over a three-day period, federal agents saw workers pump waste from the tank into the trench, and on the third day toxic chemicals flowed into the creek. The company and two of its employees, Jack Hopkins, a foreman, and Peter Angel, the service manager, were indicted for unlawfully disposing of hazardous wastes. The company pled guilty. The federal district court dismissed the criminal charges against the two individuals, holding that RCRA's criminal penalty provisions imposing fines and imprisonment did not apply to employees. The government appealed. Can employees of a corporation be held criminally liable if their actions on behalf of the corporation violate the federal hazardous waste law?

Question 7

In 1979, Anne Arundel County, Maryland, enacted two related ordinances. One absolutely prohibited the disposal in and the transportation through Anne Arundel County of various hazardous wastes not originating in that county. Another ordinance required a license to dispose of hazardous waste in the county; it also required a license to transport hazardous wastes through the county. Browning-Ferris, Inc. (BFI), is the owner and operator of a landfill located in Anne Arundel County that is licensed by the state of Maryland to receive hazardous wastes; BFI is also a hauler of hazardous wastes within the county. The county notified BFI that it expected BFI to comply with the new regulations, and BFI filed a lawsuit challenging the ordinances and seeking to have them enjoined. How should the court rule?

Question 8

The Royal McBee Corporation manufactured typewriters at a factory in Springfield, Missouri. As a part of the manufacturing process, Royal McBee generated cyanidebased electroplating wastes, sludge from the bottom of electroplating tanks, and spent plating bath solution. As a part of their duties, Royal McBee employees dumped the wastes onto the surface of the soil on a vacant lot adjoining the factory. This took place between 1959 and 1962. Over time, the waste materials migrated outward and downward from the original dumping site, contaminating a large area. In 1970, the manufacturing facility and lot were sold to General Electric, which operated the plant but did not engage in any dumping of wastes on the vacant lot. In the mid-1980s, General Electric was required by EPA and the state of Missouri, under the authority of the federal Superfund law, to clean up the contamination at the site. General Electric then brought a lawsuit against the successor corporation of Royal McBee's typewriter business, Litton Business Systems, to recover for the costs it incurred in cleaning up the site. Under the Superfund law, "any person who at the time of disposal of any hazardous substance owned or operated any facilities at which such hazardous substances were disposed of, shall be liable for any other necessary costs of response incurred by any other person" consistent with the Superfund law and regulations. Is General Electric entitled to recover its cleanup costs from Litton?