USA – ALABAMA Law and Practice Contributed by: John M. Johnson, Lana A. Olson, W. Larkin Radney IV and Brian P. Kappel, Lightfoot, Franklin & White, LLC
but compliance-based duties and cost recovery from “responsible” or “liable” parties are often imposed. Liability can be proportional to contribution, such as through the Hazardous Substance Cleanup Fund statute. Transporters and owners/operators face programme-specific duties and financial responsibil- ity rules, such as specific insurance and permitting requirements. Common law claims, like nuisance, negligence, trespass and personal injury, are gener- ally preserved, and regulatory compliance does not, by itself, bar tort recovery. 5.2 Liability for Historical Environmental Incidents or Damage Liability for historic environmental incidents or damag- es is governed by a combination of state and federal laws. Liability can be imposed on current owners and operators for historical releases by virtue of their sta- tus. Prior owners and operators may also be liable for releases that occurred during their tenure. Applicable laws seek to hold responsible parties accountable for their environmental impact and ensuring remediation and compensation. Alabama provides for risk-based remediation, allowing remedies tailored to site-spe- cific conditions and exposure scenarios. Other state statutes may apply depending on the nature of the release (eg, oil and gas operations, coastal resources). 5.3 Key Defences Alabama provides for response and cleanup obliga- tions, administrative and civil penalties and potential third-party claims. Civil liability is available for injured parties. Defences are fact specific and may include compliance with permits and regulatory standards, lack of causation or proof of substantial damage, force majeure and divisibility/allocation arguments. ADEM has authority to assess civil penalties for violations of environmental laws, permits and regulations. Criminal liability is also a potential outcome in certain circum- stances, primarily related to false reporting. 6. Corporate Liability 6.1 Liability for Environmental Damage or Breaches of Environmental Law Liability for environmental damage or breaches of environmental law is not impacted by corporate form
in the state of Alabama. Like individuals, corpora- tions may be held liable for violations of Alabama and federal statutory law as well as common law torts. Punitive damages are available under Alabama law for conduct that is found to be wanton and may be awarded against corporations in an amount to punish for past conduct and deter misconduct in the future. With respect to regulatory penalties, Alabama follows the US EPA’s requirement that it perform an assess- ment of the economic benefit realised from a viola- tion, which can impact corporations disproportion- ately to individuals. In addition, repeat or significant non‑compliance can result in increased penalties and more stringent permit conditions. 6.2 Environmental Taxes Alabama does not impose standalone environmental taxes. Instead, the state assesses fees and requires the purchase of permits for specific purposes/activi- ties, including solid and hazardous waste permitting, air emissions fees, wastewater and stormwater per- mitting, and other facility and pollution programmes. 6.3 Incentives, Exemptions and Penalties Alabama offers tax incentives and exemptions for pollution control and environmental protection invest- ments. Equipment, systems and other technology investments that are used to reduce or control pol- lution may qualify for property tax relief. Sales and use tax exemptions are an option for certain materi- als, equipment and items acquired or held primarily for environmental protection purposes. Alabama also has statutory tax abatement programmes available for certain industries that apply to construction-related sales. These programmes are all overseen by the Ala- bama Department of Revenue. 6.4 Shareholder or Parent Company Liability Traditional veil‑piercing standards apply. Parent com- panies and related entities may not be held liable for the conduct of a subsidiary or other affiliated corpo- ration unless they exercise sufficient control over the function in question such that the two entities are fairly treated as one or there are other grounds to disre- gard the corporate form under common law princi- ples. Shareholder liability is inapplicable unless the shareholder is personally and directly involved in the conduct at issue.
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