Texas Supreme Court Holds Manager Personally Liable for Environmental Penalties

This is a guest post from my good friend Jim Smith at Crain Caton. In State of Texas v. Morello, the Texas Supreme Court reversed a mid-level appellate court and reinstated a trial court’s judgment making Bernard Morello personally liable for approximately $400,000 in civil penalties for environmental violations. The Company’s History of Permit Violations Morello had been the sole member and manager of White Lion Holdings, a limited liability company.  The State alleged that White Lion consistently violated its hazardous waste permit.  Based on these violations, the State received a judgement of a similar penalty amount against White Lion, which was affirmed in a separate appeal. Morello’s Personal Involvement The State also sued Morello, individually.  The State alleged, and the courts agreed, that Morello was the sole decision-maker for the limited liability company. Moreover, Mr. Morello personally removed water treatment equipment from the…

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