Commonwealth v. Springfield Terminal Railway Co.
80 Mass. App. Ct. 22
Mass. App. Ct.2011Background
- Four Pan Am entities operate an integrated freight rail system (Pan Am, B&M, Springfield, Maine Central).
- MEC 506, a diesel locomotive, leaked diesel fuel at the Ayer railyard on Aug. 8–9, 2006; initial odor reports emerged around 7 p.m., with more significant leakage observed later.
- Pan Am employees reported the spill to superiors and began cleanup; DEP was not notified until about 2:45 p.m. on Aug. 9, after substantial cleanup work.
- FRA calculated about 947 gallons unaccounted for; ERM was engaged to assist in remediation, but DEP ultimately found no groundwater contamination.
- Pan Am was convicted on counts under G. L. c. 21E, § 11 for failure to notify DEP within two hours after knowledge of a release; penalties included fines and probation with corporate officer participation.
- The trial included various evidentiary rulings and issues related to collective knowledge, piercing the corporate veil, and the definition of “day.”
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether knowledge plus failure to notify satisfies §11 without wilfulness | Pan Am: need wilful failure to notify | Pan Am: no wilful element required; only knowledge and failure to notify | No error; knowledge plus failure suffices under §11 |
| Whether Commonwealth may prove Pan Am’s knowledge via collective corporate knowledge | Commonwealth may rely on agents’ knowledge (collective) | Pan Am: only agent-level liability (respondeat superior) or specific knowledge | Allowed: collective knowledge valid for statutorily created crime with knowledge mens rea |
| Whether corporate probation is statutorily permissible | Pan Am: probation cannot apply to corporations | Pan Am: corporations included under ‘person’ definition | Probation allowed for corporations under G. L. 276, §87; officer signings proper |
| Whether the piercing the corporate veil instructions were correct | Pan Am: need fraud or pervasive control per MCk; M.C.K. factors required | Pan Am: discretion to use Beneficial Fin. Co. factors depends on facts | No error; court allowed Beneficial Fin. Co. framework given trial facts |
| Whether ‘day’ in §11 means calendar day or any 24-hour period | Pan Am: ‘day’ could mean 24-hour period | ‘Day’ means calendar day; instruction proper |
Key Cases Cited
- Bank of New England, N.A. v. United States, 821 F.2d 844 (1st Cir. 1987) (collective knowledge appropriate where knowledge is the mens rea)
- Life Care Centers of America, Inc. v. Commonwealth, 456 Mass. 826 (Mass. 2010) (collective knowledge for statutorily created crimes with knowledge mens rea)
- Beneficial Fin. Co., 360 Mass. 188 (Mass. 1971) (civil and criminal corporate liability; factors for piercing the veil)
- Commonwealth v. M.C.K., Inc., 432 Mass. 546 (Mass. 2000) (twelve division factors for piercing the corporate veil; applies to derivative liability)
- Sunrise Properties, Inc. v. Bacon, Wilson, Ratner, Cohen, Salvage, Fialky & Fitzgerald, P.C., 425 Mass. 63 (Mass. 1997) (civil corporate knowledge; supports collective knowledge theory)
- Booker v. Chief Engr. of Fire Dept. of Woburn, 324 Mass. 264 (Mass. 1949) (definition of ‘day’ reference in historical context)
- Wentworth, 15 Mass. 188 (Mass. 1818) (historical discussion of day definition (persuasive, non-controlling))
- The Pocket Veto Case, 279 U.S. 655 (U.S. 1929) (illustrative cases on statutory interpretation, calendar day concepts)