Appellants Arthur David Sugar, Honey Creek Contracting Company, Inc., Dave Sugar Excavating, LLC, ADS Leasing Corp., and Excavating Technologies appealed findings of personal liability, joint and several liability, and a March 27, 2013 environmental enforcement civil penalty awarded to the State of Ohio by the Jefferson County Common Pleas Court.
Appellant Sugar individually argued that the trial court improperly found him personally liable “for environmental violations that occurred during the asbestos removal in a mill owned by his company.” Prior to his 2004 purchase of the mill in question, Sugar was advised that the mill contained friable asbestos that would need to be removed by the purchaser. More specifically, he was advised that the mill had 30,000 linear feet of friable asbestos, including 5,992 linear feet in a building located within the mill. Sugar subsequently acquired ownership of the mill and put a consultant of his in charge of the demolition process. During the preparation and remediation processes (for which he hired the named entities), as many as 50 environmental violations, both state and federal, were reported including a complaint that certain demolition activities were “disturbing the asbestos” and that a “white, greyish powder was floating in the air above the mill.” In 2011, the U.S. Attorney General filed an information against the prior owner of the mill (Honey Creek) and Sugar pertaining to some of the asbestos violations. Honey Creek and Sugar ultimately pled guilty to five counts. Honey Creek was fined $40,000. Sugar, as an individual, was fined $10,000 and sentenced to 90 days in jail, 9 months of house arrest, and two years of probation. The State of Ohio subsequently brought a complaint against the Sugar, Honey Creek, Dave Sugar Excavating, LLC, ADS Leasing Corp., and Excavating Technologies in 2012 alleging violations in connection with Sugar’s remediation project. After a granting of partial summary judgment as to several of the violations alleged in the state matter, a bench trial was conducted in May 2012, during which the aforementioned parties were found jointly and severally liable for an $850,000 civil penalty.
On appeal, Sugar contended that the trial court erred in finding him personally liable on the basis of his personal conduct. However, after exploring the record, the Court of Appeals found:
“[T]he record before us is replete with evidence to establish Sugar’s personal liability. While Sugar rarely physically visited the site, there is evidence that he oversaw the operations. He organized the project, sent workers form his companies…to remove the machinery and leased equipment through another of his companies…to enable workers to complete the project. He also served as the administrative contact person, as he received and responded to all notices of violations. He also gave al of the orders regarding the project. Every time a problem arose at the site, he ordered…his agent, to visit the site. He also ordered his workers to prevent inspectors from entering the site…Most importantly, Sugar made all decisions as to the project…”
The Court of Appeals also found that the record clearly demonstrated that Sugar failed to correct known violations from the start of the project in 2015 until its end in 2010. Accordingly, the Court of Appeals affirmed the finding of personal liability as to Sugar.
Sugar Excavating, Excavating Tech, and ADS next argued on appeal that they did not own or operate the property, and thus should not have been held liable. In reviewing the record, the Court of Appeals found that there was “no question that the three companies participated in demolition activities at the site” and that trial testimony established that the workers “had been performing demolition activities which caused friable asbestos to become disturbed.” The trial court’s decision was accordingly affirmed.
Finally, the Court of Appeals found that the challenged finding of joint and several liability as to all appellants was appropriate and that the $850,000 civil penalty assessed against the appellants was not excessive. In support of its position, the Court of Appeals noted that it found that the trial court properly found the individual and entity appellants properly liable under applicable Ohio laws and that the record demonstrated that the civil penalty was not excessive.