State of Iowa, ex rel. Iowa Department of Natural Resources, Appellee, vs. Donald Lilly and Ronald Albrecht, Appellants.
No. 25–0443
In the Iowa Supreme Court
Submitted March 24, 2026—Filed June 30, 2026
Corporate officers appeal a district court ruling denying their motion to dismiss for lack of personal jurisdiction. Affirmed in Part, Reversed in Part, and Case Remanded.
Oxley, J., delivered the opinion of the court, in which Christensen, C.J., and Waterman, Mansfield, and McDermott, JJ., joined. May, J., filed an opinion concurring in the judgment, in which McDonald, J., joined.
Bradley R. Kruse (argued) and Joseph M. Borg of Dickinson, Bradshaw, Fowler & Hagen, P.C., Des Moines, for appellants.
Brenna Bird, Attorney General; Eric Wessan, Solicitor General; Breanne A. Stoltze (argued), Assistant Solicitor General; and Jacob J. Larson and David S. Steward, Assistant Attorneys General, for appellee.
The State alleges that two fiberglass waste recycling companies failed to properly dispose of roughly 1,300 decommissioned wind turbine blades, instead stockpiling the blades at sites across Iowa for years without recycling them.1 The State now seeks civil penalties and a permanent injunction under Iowa’s solid waste and recycling statutes. See
The businesses answered the State’s petition, disputing its merits. The officers filed a joint motion to dismiss for lack of personal jurisdiction. The officers’ motion argued that they had never been to Iowa and were not personally involved in the underlying action. The district court denied their motion, concluding that the officers had sufficient minimum contacts to be subject to personal jurisdiction in Iowa as responsible corporate officers of the two entities that were directly involved in the underlying conduct. It also ruled that each of the corporate officers may be subject to civil penalties as “[a]ny person who violates” Iowa Code section 455B.307.
This interlocutory appeal asks us to review those determinations. For the reasons below, we agree with the district court that the State has adequately pleaded that both officers are “person[s]” who could be subject to liability under
Chapter 455B governs the jurisdiction of the Iowa Department of Natural Resources (DNR). Part of the chapter creates a detailed system for solid waste disposal. The general assembly enacted a policy declaration that protecting the environment and Iowans’ health, safety, and welfare “require[s] the safe and sanitary disposal of solid wastes.”
Solid waste is “garbage, refuse, rubbish, and other similar discarded solid or semisolid materials.”
A private agency or public agency shall not dump or deposit or permit the dumping or depositing of any solid waste at any place other than a sanitary disposal project approved by the director unless the agency has been granted a permit by the department which allows the dumping or depositing of solid waste on land owned or leased by the agency.
Chapter 455D governs waste volume reduction and recycling. The general assembly made statutory findings that “Iowa’s environment is precious and no person has the right to pollute Iowa’s air, water, or soil.”
So, solid waste in chapter 455B does not include “[m]aterial that is legitimately recycled pursuant to section 455D.4A.”
When a recycling facility allows material to accumulate with only a speculation of being recycled (i.e., when the material is stored for recycling but not processed), the material is not “legitimately recycled.”
II. Factual Background and Proceedings.
This appeal reaches us following a motion to dismiss, so we construe the facts pleaded in the petition as true. E.g., Benskin, Inc. v. W. Bank, 952 N.W.2d 292, 298 (Iowa 2020). Donald Lilly is the chief executive officer of Global Fiberglass Solutions, Inc. (GFS, Inc.) and Global Fiberglass Solutions of Texas, LLC (GFS Texas). Ronald Albrecht is a director of GFS, Inc. and the chief operating officer of GFS Texas. Those two GFS entities (collectively GFS) are in the business of recycling decommissioned wind turbine blades. The State’s petition alleges that, in November 2017, GFS contracted with General Electric and MidAmerican Energy Company to recycle about 1,300 decommissioned blades. GFS stored roughly 868 blades at a site in Newton, 400 blades in Ellsworth (once they were removed from a site in Fort Dodge), and 22 blades in Atlantic.
In August 2018, the DNR received a complaint that those decommissioned blades were being improperly recycled. So, it visited the site in Newton and began to raise concerns about speculative accumulation. The DNR visited the site in Fort Dodge a year later and took photos of GFS’s still-unprocessed blades. The DNR also sent a letter of inquiry to GFS and the owner of the Fort Dodge site,
During an inspection of the Fort Dodge site in February 2020, the DNR learned from the site owner that GFS failed to remove the blades by the deadline in the parties’ contract. GFS had also stopped making rent payments. The DNR issued GFS a notice of violation the following month. Its notice stated that the decommissioned blades were not being legitimately recycled under section 455D.4A, so they were deemed discarded material and subject to Iowa’s solid waste laws. The notice further stated that the stockpile of blades did not comply with chapter 455B because none of the sites are sanitary disposal projects and GFS did not have permits to dump the blades there. See
The DNR’s legal services bureau began to develop a compliance plan with GFS in March 2020, resulting in a fully executed consent order by December. See
The DNR consequently issued an administrative order based on GFS’s failure to comply with the consent order. After GFS did not remedy the speculative accumulation of its blades within sixty days of the administrative order, the DNR referred GFS to the Iowa Attorney General’s Office for enforcement. See
The State, in addition to seeking civil penalties and a permanent injunction against GFS, also seeks to hold Lilly and Albrecht personally responsible for GFS’s alleged violations of Iowa’s solid waste and recycling laws. See
Lilly and Albrecht, both of whom live in the State of Washington, moved to dismiss the claims against them individually, asserting that the district court lacked personal jurisdiction over them. They supported their motion with cursory affidavits, each claiming they had never been to Iowa—at least not “for business purposes”—and were not “personally involved in the transactions and conduct complained of in the Petition.” The State’s resistance relied largely on the allegations in its petition; it did not seek jurisdictional discovery. See, e.g.,
The district court denied Lilly and Albrecht’s motion to dismiss for lack of personal jurisdiction, citing caselaw from other jurisdictions concluding that the responsible corporate officer doctrine can “hold corporate officers in responsible positions of authority personally liable for violating strict liability statutes protecting the public welfare.” People v. Roscoe, 87 Cal. Rptr. 3d 187, 189 (Ct. App. 2008); accord United States v. Park, 421 U.S. 658, 673–74 (1975). It thus denied the motion to dismiss Lilly and Albrecht “based on their directorial relationships to the corporations directly involved in the complained-about conduct.” Lilly and Albrecht sought an interlocutory appeal of that ruling, and we granted their application.
III. Analysis.
Lilly and Albrecht challenge the district court’s refusal to dismiss them from the State’s action on two grounds. First, they argue that the district court erred in concluding that they could be personally responsible under the responsible corporate officer doctrine for the alleged violations of state law. Second, they argue that the district court lacks personal jurisdiction over them even if they could be subject to personal liability under Iowa’s solid waste and recycling statutes. The State counters that Lilly and Albrecht are proper defendants and that the district court properly exercised personal jurisdiction over both individuals. We address the issues in turn.
A. Whether the Officers Could Be Subject to Liability Under Iowa Code Section 455B.307.
We review a motion to dismiss and rulings on statutory
1. Iowa Code section 455B.307(3)’s imposition of sanctions on “[a]ny person” includes responsible corporate officers.
The State asks us to rely on the responsible corporate officer doctrine in interpreting Iowa’s solid waste and recycling statutes—specifically,
“[A] recycling facility owner or operator” is required to “ensure that stockpiled material is not speculatively accumulated.”
Section 455B.307 is the type of strict liability public welfare law to which the responsible corporate officer doctrine has been applied in other jurisdictions. E.g., Morissette v. United States, 342 U.S. 246, 254–55 (1952) (discussing laws that “have been aptly called ‘public welfare offenses’ ” because they “heighten the duties of those in control of particular industries, trades, properties or activities that affect public health, safety or welfare”). For instance, in addressing federal statutes closely analogous to the statute at issue here, the United States Court of Appeals for the Eighth Circuit interpreted federal solid waste statutes that “impose[] strict liability upon ‘any person’ ” to include personal liability for corporate officers. United States v. Ne. Pharm. & Chem. Co., 810 F.2d 726, 743 (8th Cir. 1986) (quoting
The Court took up the doctrine again thirty-two years later in United States v. Park, 421 U.S. at 671, reinforcing its rationale. The Court held that responsible corporate officers have “not only a positive duty to seek out and remedy violations when they occur but also, and primarily, a duty to implement measures that will insure that violations will not occur.” Id. at 672. The decision clarified what it is that makes a corporate officer responsible for the company’s illegal conduct:
The concept of a “responsible relationship” to, or a “responsible share” in, a violation of the Act indeed imports some measure of blameworthiness; but it is equally clear that the Government establishes a prima facie case when it introduces evidence sufficient to warrant a finding by the trier of the facts that the defendant had, by reason of his position in the corporation, responsibility and authority either to prevent in the first instance, or promptly to correct, the violation complained of, and that he failed to do so. The failure thus to fulfill the duty imposed by the interaction of the
corporate agent’s authority and the statute furnishes a sufficient causal link. The considerations which prompted the imposition of this duty, and the scope of the duty, provide the measure of culpability.
Id. at 673–74. In Park, the Court affirmed the conviction of a corporation’s president and chief executive officer for shipping adulterated food that was contaminated by rodents in the firm’s warehouse. Id. at 660, 676–78.
We cited Dotterweich and Park favorably in Randall’s International Inc. v. Hearing Board of the Iowa Beer & Liquor Control Department, 429 N.W.2d 163, 164 (Iowa 1988), and Iowa City v. Nolan, 239 N.W.2d 102, 104–05 (Iowa 1976) (en banc). Both cases quoted the same excerpt from Dotterweich: “In the interest of the larger good [the responsible corporate officer doctrine] puts the burden of acting at hazard upon a person otherwise innocent but standing in responsible relation to a public danger.” Randall’s Int’l Inc., 429 N.W.2d at 164 (quoting Dotterweich, 320 U.S. at 281); Nolan, 239 N.W.2d at 104 (quoting Dotterweich, 320 U.S. at 281). The State argues that we applied the doctrine in State ex rel. Miller v. Santa Rosa Sales & Marketing, Inc., where we affirmed the conviction of a corporation’s president based in part on his “complete control of” a company that violated Iowa’s consumer fraud laws. 475 N.W.2d 210, 219–20 (Iowa 1991), superseded by statute on other grounds, 1992 Iowa Acts ch. 1242, § 37 (codified at
We view the responsible corporate officer doctrine as a rule of interpretation for environmental statutes and other public welfare laws that impose strict liability on persons responsible for the statutory violation. The interpretation makes sense because environmental laws often involve sins of omission. For example, here, the alleged offense was not moving the discarded turbine blades to a temporary storage location before recycling them, but leaving them there and never doing anything to recycle them.
The fact that a corporation is a distinct legal entity from its owners and officers does not prevent a statute from imposing liability on individuals for conduct they undertake on behalf of the entity. E.g., BEC Corp. v. Dep’t of Env’t Prot., 775 A.2d 928, 937 (Conn. 2001) (“[U]nder § 22a–432, the mere fact that a ‘person’ who is polluting is a corporate officer does not automatically shield that officer from liability for his own actions or omissions.”); cf. Est. of Countryman, 679 N.W.2d at 604 (“The [Iowa Limited Liability Company Act] does not insulate a manager from liability for participation in tortious conduct merely because the conduct occurs within the scope and role as a manager.”). The general assembly imposed such liability here. It enacted a strict liability environmental statute regulating the conduct of any “private agency or public agency” engaged in solid waste disposal,
Numerous states have interpreted similar environmental statutes to impose personal liability on corporate officers responsible for the violations. See, e.g., Roscoe, 87 Cal. Rptr. 3d at 190 (holding that “the responsible corporate officer doctrine applies to section 25299, subdivision (a)(6),” which imposes strict civil liability on “[a]ny operator of an underground tank system” for violating regulations adopted by the State Water Resources Control Board (alteration in original) (quoting
Delaware—often viewed as a persuasive reference point for questions of corporate law—recognizes that responsible corporate officers can be held personally liable for violations of Delaware’s solid waste disposal statutes. See T.V. Spano Bldg. Corp. v. Dep’t of Nat. Res. & Env’t Control, 628 A.2d 53, 60 (Del. 1993) (en banc) (concluding that Delaware’s solid waste disposal statute imposing sanctions on a “responsible party” to mean a “person,” and holding that “[a]lthough the definition [of responsible party] does not specifically mention officers of a corporation, the definition is broad enough to include a corporate
We read Iowa law similarly. The responsibility for ensuring compliance with the recycling and solid waste regulatory requirements includes not only the “private agency,”
2. The petition states a claim against Lilly and Albrecht as “person[s]” subject to Iowa Code section 455B.307(3).
Corporate officers are generally found
A closer review of how courts have applied the responsible corporate officer doctrine reveals that the nexus and facilitation elements impose concrete limitations. See id.; see also T.V. Spano Bldg. Corp., 628 A.2d at 61 (recognizing that officers can be personally liable for some solid waste violations, but only under particular conditions). For example, the corporate officer from In re Dougherty did not satisfy the nexus element simply because he was a high-ranking corporate leader. 482 N.W.2d at 490 (“[A] corporate officer will not be
In addition to the nexus requirement, the officer must have also facilitated the violation. Id. In this regard, the Supreme Court of Delaware required “[t]he State [to] show that the officer directed, ordered, ratified, approved, or consented to the improper disposal.” T.V. Spano Bldg. Corp., 628 A.2d at 61. This could encompass not only violations that the officer authorized and directed, but also violations that were “in the regular course of that business, with [the officer’s] knowledge and with their consent or approval, or such acquiescence on [the officer’s] part as warrants inferring such consent or approval.” Id. (quoting 3A William Meade Fletcher et al., Fletcher Cyclopedia of the Law of Corporations § 1135 (1990)). But “[i]t is not enough that the officer knew of an improper disposal.” Id. “Simple knowledge is not sufficient for the imposition of personal liability.” Id.
We conclude that these limitations provide an appropriate benchmark for interpreting Iowa Code section 455B.307 as it applies to responsible corporate officers.
Under our notice pleading standard, a “petition need not allege ultimate facts that support each element of the cause of action” or “identify a specific legal theory.” Mormann v. City of Manchester, 27 N.W.3d 820, 834 (Iowa 2025) (quoting Terrace Hill Soc’y Found. v. Terrace Hill Comm’n, 6 N.W.3d 290, 296 (Iowa 2024)). A petition only needs to “contain factual allegations that give the defendant ‘fair notice’ of the claim asserted so the defendant can adequately
Here, the State satisfied our notice pleading standard. See Rees v. City of Shenandoah, 682 N.W.2d 77, 79 (Iowa 2004) (stating that “nearly every case will survive a motion to dismiss” because a petition merely needs to “inform[] the defendant of the incident giving rise to the claim and of the claim’s general nature”). The State pleaded that Lilly was “the Chief Executive Officer of GFS and GFS Texas”; was a manager of three GFS-related entities alleged to have entered purchase agreements with end users of the recycled blades; and “was at all times relevant to this action a responsible corporate officer of GFS, GFS Texas, [and the related entities].” The State pleaded that Albrecht was the “Chief Operating Officer of GFS and GFS Texas”; was a manager of three GFS-related entities alleged to have entered purchase agreements with end users of the recycled blades; and “was at all times relevant to this action a responsible corporate officer of GFS, GFS Texas, [and the related entities].” And the State pleaded that all the defendants, including Lilly and Albrecht, improperly and illegally permitted the waste turbine blades to speculatively accumulate at sites across Iowa in violation of various statutes, regulations, and orders—including a strict liability public welfare statute. The pleadings adequately put each of the officers on notice of the incident giving rise to the claim and the theory of their liability. See Mormann, 27 N.W.3d at 834; Rees, 682 N.W.2d at 79.
Therefore, the district court properly denied Lilly and Albrecht’s motion to dismiss to the extent that they argued they could not be subject to personal liability. See Haupt v. Miller, 514 N.W.2d 905, 910–11 (Iowa 1994) (en banc)
B. Whether the Officers Are Subject to Personal Jurisdiction.
Lilly and Albrecht also contend that, even if the petition sufficiently alleges that they are liable under
Iowa‘s courts exercise personal jurisdiction “in every case not contrary to the provisions of the Constitution of the United States.”
1. Personal jurisdiction over Lilly. The State met its burden to establish personal jurisdiction over Lilly. See Harding, 2 N.W.3d at 265 (“The contact necessary to support the exercise of specific jurisdiction is not great.“). Lilly signed his name to a consent order on behalf of GFS, agreeing that GFS would recycle its decommissioned blades and provide the DNR with a surety bond. Failure to comply with this consent order forms the basis for the DNR‘s action against GFS. Lilly‘s involvement in the DNR‘s inquiry supports the DNR‘s claim that he sufficiently directed GFS‘s operations in Iowa to support the exercise of specific personal jurisdiction over him individually. See, e.g., LeDuc v. Ky. Cent. Life Ins., 814 F. Supp. 820, 825 (N.D. Cal. 1992) (holding that plaintiffs pleaded sufficient facts to establish jurisdiction over “Defendant Burnett, the President and Chairman of the Board of Kentucky Central,” where the plaintiffs alleged
2. Personal jurisdiction over Albrecht. Turning to Albrecht, we conclude that the State did not meet its jurisdictional burden. Cf. LeDuc, 814 F. Supp. at 825–26 (analyzing personal jurisdiction for each defendant individually and concluding that all but one lacked sufficient contacts with the forum state). “Liability and jurisdiction are independent. Liability depends on the relationship between the plaintiff and the defendants and between the individual defendants; jurisdiction depends only upon each defendant‘s relationship with the forum.” MFS Series Tr. III ex rel. MFS Mun. High Income Fund v. Grainger, 96 P.3d 927, 933 (Utah 2004) (quoting Sher v. Johnson, 911 F.2d 1357, 1365 (9th Cir. 1990)). Although the State sufficiently pleaded claims against Albrecht using the
Unlike Lilly, the record does not show that Albrecht signed any contracts or otherwise acted on GFS‘s behalf related to the failure to properly recycle or dispose of the turbine blades—the conduct that forms the basis for the State‘s claimed regulatory violations. The State argues that jurisdiction is proper over Albrecht because a contract that GFS provided to the DNR listed him as a “manager” of companies that sell GFS‘s recycled product once it has been processed. But those separate entities were dismissed from this case because the record does not reveal that those entities’ subsequent attempts to sell the decommissioned blades are related to GFS‘s violations of the solid waste regulations on the front end. Merely being connected to GFS in a way that is unrelated to the claims cannot establish jurisdiction. See LeDuc, 814 F. Supp. at 825–26; cf. Reddam, 180 A.3d at 690–91 (“[E]vidence that Reddam had knowledge of, controlled, and directed the respondent companies’ actions that violated RSA chapter 399–A can support a finding that the Department has specific personal jurisdiction over him.“).
The district court found that because “Albrecht avers none of the three . . . companies [of which he is listed as a manager] have ever done business in the State of Iowa,” the companies lacked sufficient minimum contacts here for an Iowa court to exercise personal jurisdiction over them. Albrecht‘s
IV. Conclusion.
For these reasons, we affirm the district court‘s ruling as to Lilly but not as to Albrecht. We reverse the denial of Albrecht‘s motion to dismiss for lack of personal jurisdiction and remand for dismissal of the State‘s claims against him without prejudice.
Affirmed in Part, Reversed in Part, and Case Remanded.
Christensen, C.J., and Waterman, Mansfield, and McDermott, JJ., join this opinion. May, J., files an opinion concurring in the judgment, in which McDonald, J., joins.
#25–0443
DNR v. Lilly
May, Justice (concurring in the judgment).
There is good news, and there is troubling news. The good news is that the majority seems to accept Delaware‘s reasonable limits on corporate officers’ personal liability for environmental violations. See T.V. Spano Bldg. Corp. v. Dep‘t of Nat. Res. & Env‘t Control, 628 A.2d 53, 61 (Del. 1993) (en banc). At least, the majority concedes that those limits “provide an appropriate benchmark for interpreting
Now for the troubling news. The majority does not seem wholly satisfied with Delaware‘s limited approach. So the majority has also adopted the so-called “responsible corporate officer doctrine,” or the RCOD. And potential liability under the RCOD is far broader than under Delaware‘s narrow approach. By design, the RCOD threatens high-ranking corporate officers with personal liability for the corporation‘s environmental violations, no matter whether the officer knew of—much less participated in—the violation. And, according to the majority, the RCOD is now “a rule of interpretation for environmental statutes and other public welfare laws that impose strict liability on persons responsible for the statutory violation.” (Emphasis added.) The majority says this even though no prior Iowa case has adopted the RCOD. Certainly, no prior Iowa case has said that the RCOD is a “rule of interpretation” for any Iowa statute.
Although I appreciate my colleagues’ efforts, I cannot agree with their two-step approach. Delaware‘s limited approach is enough, on its own. There is
I. A Little More Background.
As mentioned, this case involves alleged violations of environmental statutes. The State of Iowa alleges that certain foreign corporate entities—plus two corporate officers (Donald Lilly and Ronald Albrecht) who reside in the State of Washington—committed “violations of Iowa‘s solid waste laws” by “illegally dispos[ing] of solid waste by speculatively accumulating decommissioned wind turbine blades at several locations in Iowa beginning as early as November 2017, and ma[king] no effort to recycle or otherwise legally dispose of the blades.” Lilly, Albrecht, and some of the corporate defendants moved to dismiss for lack of personal jurisdiction. The district court granted the motion as to the corporate movants but denied it as to Lilly and Albrecht. Lilly and Albrecht were granted interlocutory review of that ruling.
Although the motion under review only sought dismissal on personal jurisdiction grounds, our court has addressed three distinct issues, two of which are not jurisdictional.
- First, the court has considered whether the State‘s petition adequately pleaded a claim for which relief can be granted against Lilly and Albrecht.
Second, the court has considered what standard should be applied when deciding whether corporate officers can be held personally liable for a corporation‘s environmental violations. - Finally, the court has considered the jurisdictional question raised by Lilly and Albrecht‘s motion.
I agree with the majority‘s resolution of the pleading issue and the jurisdictional issue. As to the pleading issue, I agree that the State‘s detail-laden, thirteen-page petition easily meets our notice pleading standards as to the State‘s claims that all defendants—including Lilly and Albrecht—committed “violations of Iowa‘s solid waste laws” by “illegally dispos[ing] of solid waste” in the manner described and at the times and places specified in said petition. As to the jurisdictional issue, I also agree that under our well-established minimum-contacts analysis, the district court can exercise personal jurisdiction over Lilly but not over Albrecht.
As mentioned, though, I have concerns about the majority‘s approach to the larger question: What must be proven to impose personal liability on corporate officers under our solid waste statutes? I turn to that question now.
II. Proper Boundaries on Personal Liability.
To find the boundaries of statutory liability, personal or otherwise, we must look to the statute itself. Here, the liability-creating statute is
And so the crucial question is this: When, exactly, does a corporate officer “violate” this sort of prohibition?
I think the commonsense answer is that an officer usually doesn‘t violate the prohibition unless the officer was “directly and personally engaged in conduct leading to” the violation. 14 William Meade Fletcher et al., Fletcher Cyclopedia of the Law of Corporations § 6770.50, Westlaw (database updated Sep. 2025). This lines up with Iowa‘s approach to our employment discrimination statutes. In Rumsey v. Woodgrain Millwork, Inc., 962 N.W.2d 9, 36 (Iowa 2021), we held that individuals can‘t be personally liable for employment discrimination or retaliation unless the individual “is personally involved in, and has the ability to effectuate, an adverse employment action.” 962 N.W.2d 9, 36 (Iowa 2021). Likewise, a corporate officer shouldn‘t be personally liable for an environmental violation unless, at the very least, the officer “is personally involved in” the violation. Id.
Delaware has taken a similar approach. As mentioned, the Supreme Court of Delaware recognized that officers can be personally liable for some waste-disposal violations—but only under particular conditions. T.V. Spano Bldg. Corp., 628 A.2d at 61. They can be liable, the court held, for “actually making corporate decisions resulting in the improper disposition of hazardous waste.” Id. Thus, the officer must have been “actively involved in the alleged violative activity.” Id. (quoting United States v. Conservation Chem. Co. of Ill., 733 F. Supp. 1215, 1221 (N.D. Ind. 1989)). “The State must show that the officer
III. Kudos to the Majority.
To their credit, the majority appears to adopt Delaware‘s limits on personal liability for officers. Toward the end of section III.A.2, the majority opinion states:
[T]he Supreme Court of Delaware required “[t]he State [to] show that the officer directed, ordered, ratified, approved, or consented to the improper disposal.” T.V. Spano Bldg. Corp., 628 A.2d at 61. This could encompass not only violations that the officer authorized and directed, but also violations that were “in the regular course of that business, with [the officer‘s] knowledge and with their consent or approval, or such acquiescence on [the officer‘s] part as warrants inferring such consent or approval.” Id. (quoting 3A William Meade Fletcher et al., Fletcher Cyclopedia of the Law of Corporations § 1135 (1990)). But “[i]t is not enough that the officer knew of an improper disposal.” Id. “Simple knowledge is not sufficient for the imposition of personal liability.” Id.
(Second and subsequent alterations in original.)
The opinion goes on to say that “these limitations provide an appropriate benchmark for interpreting
I think the statements just quoted are enough. They offer an adequate explanation of the standard governing personal liability for corporate officers. No more is needed.
Although no more is needed, the majority opinion says much more. Indeed, the majority performs a sort of “two-step” maneuver. First, the majority adopts the RCOD, which it calls a “rule of interpretation” for a potentially wide range of statutes. Then, the majority seems to impose certain limits on the RCOD by adopting the Delaware approach as a “benchmark” for interpreting
Likewise, I am confused by the majority‘s adoption of two conflicting regimes here. Why not simply say, “We‘re adopting the Delaware approach, not the RCOD,” and then delete the other pages that discuss the RCOD?
The majority, though, goes beyond merely adopting the RCOD for purposes of this case. Instead, the majority says that the RCOD is now ”a rule of interpretation for [Iowa‘s] environmental statutes and other public welfare laws that impose strict liability on persons responsible for the statutory violation.” (Emphasis added.) Yet I see no prior Iowa case that has adopted the RCOD, much less adopted it as a “rule of interpretation” for any type of Iowa statute. I also notice that only about ten other jurisdictions have adopted the RCOD. And at least some courts in those jurisdictions have described the RCOD as a mere “common law theory of liability.” People v. Roscoe, 87 Cal. Rptr. 3d 187, 189 (Ct. App. 2008); accord Celentano v. Rocque, 923 A.2d 709, 722 (Conn. 2007) (“The responsible corporate officer doctrine is a common-law theory of liability. See, e.g., United States v. Park, 421 U.S. 658, 670–73, 95 S. Ct. 1903, 44 L. Ed. 2d 489 (1975).“). United States District Court Judge Mark W. Bennett (ret.), long noted for his scholarship, described the RCOD as “a creation of the common law.” United States v. Quality Egg, LLC, 99 F. Supp. 3d 920, 924 n.3 (N.D. Iowa 2015), aff‘d sub nom., United States v. DeCoster, 828 F.3d 626 (8th Cir. 2016).
In any event, consider the implications of this court‘s adoption of the RCOD as a “rule of interpretation” that governs both “environmental statutes and other public welfare laws that impose strict liability on persons responsible for the statutory violation.” We cannot expect regulators to overlook this. Rather, regulators will expect us to approve RCOD personal liability for corporate officers under any statute that can be characterized as a strict-liability “public welfare law.” And as for the more-limited Delaware approach, regulators may argue that it is not really a part of the RCOD. Indeed, if you read the Delaware case that the majority and I both rely on, you will find no reference to a “responsible corporate officer doctrine.” Regulators may also note that in today‘s opinion, the majority does not actually say that the Delaware limits are part of the majority‘s RCOD “rule of interpretation.” Rather, the majority merely says that those limits are an “appropriate benchmark for interpreting
But why, the reader might ask, am I so concerned about the RCOD? My concern is about the vast potential breadth of RCOD liability (and I think that concern is shared by the majority, at least to some degree; otherwise, the majority wouldn‘t have added in the Delaware approach as a limiter on RCOD liability under
As the State accurately explains: under the traditional view of the RCOD, a corporate officer‘s personal liability “is not based on an officer‘s personal participation, or even knowledge of the alleged violations” of a statute. (Citing Park, 421 U.S. at 670.) Rather, under the RCOD, an officer‘s liability flows from their position in the corporation and, of course, the power that comes with that position. That is what the Supreme Court said in United States v. Park, a foundational RCOD case. Id. at 670–71. What matters, Park said, is that “by virtue of the relationship” an officer “b[ears] to the corporation,” the officer ”had the power to prevent the act complained of.” Id. (emphasis added). And so, because high-ranking corporate officers are theoretically capable of preventing nearly any corporate activity, those officers might be personally liable for any company violation solely because of their position in the company and the power that comes with it. As the State‘s brief explains: “The responsible corporate officer doctrine is meant to apply to high-ranking corporate officers . . . who operate companies that violate public welfare laws. . . . State cases applying the doctrine routinely have imposed liability on company officers . . . who had the ability to prevent or correct environmental violations through their corporate roles, but did not do so.” (Emphasis added.)
I respectfully submit that this court should not inject that sort of scheme into Iowa law. See State v. Markowitz, 273 A.D.2d 637, 640–42 (N.Y. App. Div. 2000) (declining to impose strict statutory liability on “stockholders or officers of corporations which own or operate the system from which a[n] [oil] spill has occurred based solely on those statuses“). If the RCOD‘s style of “buck stops here” liability is to threaten high-ranking officers of Iowa corporations—as well as foreign companies, like those before us—the judiciary should not be its creator. Rather, if that sort of change is to come, it should come through a clear mandate from the people‘s democratically elected policymakers in Iowa‘s legislature. As the Supreme Court advised in Meyer v. Holley, even when a statute advances crucial public interests—such as combatting racial discrimination in housing—courts should not adopt schemes like the RCOD unless the legislature has clearly authorized them. 537 U.S. 280, 287 (2003) (distinguishing Park, 421 U.S. at 673, and United States v. Dotterweich, 320 U.S. 277, 280–81 (1943), because, in those situations, Congress had specified its intent that officers or agents would be liable for corporate violations); see Martin Petrin, Circumscribing the “Prosecutor‘s Ticket to Tag the Elite“--A Critique of the Responsible Corporate Officer Doctrine, 84 Temp. L. Rev. 283, 321 (2012) [hereinafter Petrin] (“In light of the doctrine‘s singular position within the traditional legal framework and its uneasy fit with corporate law principles, courts should heed the Supreme Court‘s call in Meyer and refrain from extending the duties of a corporate entity to its ‘responsible officers’ in absence of a clear legislative mandate.“).
But I find no clear legislative mandate for the RCOD in the provisions before us. As explained, although the statute allows personal liability for “[a]ny person who violates” the prohibition, it does not specify how a personal violation is to occur.
Of course, as the majority notes, there are courts that have adopted the RCOD without explicit statutory support. See, e.g., Roscoe, 87 Cal. Rptr. 3d at 190, 194–95. Yet we would not be the first court to reject schemes like the RCOD because of the absence of clear legislative authorization. Cf. Markowitz, 273 A.D.2d at 640–42. I‘ve already mentioned Meyer, where the Supreme Court opined that “courts ordinarily should determine [corporate agent liability] in accordance with traditional principles of vicarious liability-unless, of course, Congress, better able than courts to weigh the relevant policy considerations, has instructed the courts differently.” 537 U.S. at 290–91.
Likewise, in Illinois v. Commonwealth Edison Co., the federal district court reasoned that because Congress had expressly authorized actions by a federal agency against “responsible corporate officers” but had not expressly authorized such actions by private citizens, it discerned a “clear intent of Congress to exempt individual corporate officers from liability under citizen‘s suits.” 490 F. Supp. 1145, 1147–48 (N.D. Ill. 1980); accord Illinois v. Celotex Corp., 516 F. Supp. 716, 719 (C.D. Ill. 1981).
Also, in Commissioner of Environmental Protection v. Underpass Auto Parts Co., the Connecticut Supreme Court found that because its legislature had expressly authorized the RCOD in certain criminal Aquifer Protection Act cases but had not expressly authorized the doctrine as to civil liability, the RCOD did not apply to civil Aquifer Protection Act cases. 123 A.3d 1192, 1208 (Conn. 2015).
The same sort of logic should apply here. In some parts of the Iowa Code, our legislature has expressly imposed personal liability on corporate officers for particular corporate wrongs, such as certain sales tax violations.
VI. Conclusion.
Although I appreciate my colleagues’ efforts in this case, I cannot join them in adopting the RCOD. Instead, we should just apply Delaware‘s much more limited approach and be done. I respectfully concur in the judgment.
McDonald, J., joins this concurrence in the judgment.