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Tort/Negligence – Nuisance – Landfill Odors – Corporate – LLC – Related Entities – Punitive Damages

By: South Carolina Lawyers Weekly staff//February 24, 2012//

Tort/Negligence – Nuisance – Landfill Odors – Corporate – LLC – Related Entities – Punitive Damages

By: South Carolina Lawyers Weekly staff//February 24, 2012//

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Babb v. Lee County Landfill SC, LLC (Lawyers Weekly No. 002-026-12, 9 pp.) (Joseph F. Anderson Jr., J.) 3:10-cv-01724; D.S.C.

Holding: Even though plaintiffs assert that defendants Republic Services of South Carolina, LLC and Republic Services, Inc. directly control the landfill, which is owned by defendant Lee County Landfill SC, LLC, plaintiffs have failed to show that direct liability exists in South Carolina for non-owning entities who nevertheless directly control a property.

Defendants Republic Services of South Carolina, LLC and Republic Services, Inc. (the Republic entities) are dismissed from this lawsuit. Defendant’s motion for partial summary judgment as to plaintiffs’ punitive damages claim is denied.

Defendant Republic Services, Inc. is a distant parent company of defendant Lee County Landfill SC, LLC (Lee County LLC). Republic Services, Inc. is the only member of defendant Republic Services of South Carolina, LLC (South Carolina, LLC). Although Lee County LLC owns the landfill at issue, plaintiffs contend that the Republic entities directly control the landfill.

Plaintiffs have failed to show that direct control over the landfill (which the Republic entities do not own) subjects the Republic entities to liability under S.C. law. Thus, the court cannot find South Carolina, LLC and Republic Services, Inc. liable under a direct control theory.

Lee County LLC is a limited liability company organized under Delaware law.

Plaintiffs have offered little argument that veil piercing is appropriate and admitted during the hearing that veil piercing is not their primary theory of liability. This court is persuaded by defendants’ contention that Delaware law is controlling and that Delaware law does not allow for veil piercing in this context. As such, this court finds that neither South Carolina LLC nor Republic Services can be found liable for the actions of Lee County LLC through veil piercing.

Moreover, the distinctions among Lee County LLC, South Carolina LLC, and Republic Services are not blurred such that they are in effect one and the same as required under S.C. law to find liability under the theory of amalgamation of interests. Therefore, the court finds that neither South Carolina LLC nor Republic Services can be found liable for the actions of Lee County LLC under an amalgamation of interests theory.

Plaintiffs cite United States v. Bestfoods, 524 U.S. 51 (1998), for the proposition that the theory of direct liability should be applied in this case. Although the Supreme Court finds direction from corporate law norms in

Bestfoods, their holding appears to be limited to operator liability under the Comprehensive Environmental Response, Compensation, and Liability Act. Plaintiffs have not convinced this court to extend the Bestfoods holding to the facts of this non-CERCLA case.

Finally, as to plaintiffs’ claim for punitive damages, the evidence is conflicting as to whether such damages are appropriate in this case. Hence, summary judgment is inappropriate.

Motion granted as to the Republic entities, denied as to punitive damages.

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