All seventeen of the cited violations took place in 1976, At the time, appellant Kailua Auto Wreckers, Inc. (hereinafter KAW) was in the business of processing used cars for scrap metal; the cars were burned to rid them of non-metallic material, compressed into cubes called bales and sold to lоcal scrap dealers. In 1976, appellant H. Roy Weber, was vice-president-general manager-secretary-director of KAW and was principally involved in managing the company. His wife, appellant Helen Weber, held the position of president-treasurer-director of KAW but did not actively participate in business operations. The couple were at the time the only directors, officers and employees of the closely held corporation.
For the period beginning March 12, 1974 through July 31, 1975, KAW had a variance from the air pollution regulation; an extension was applied for and denied on October 9, 1975. Thereafter, KAW engaged in open burning in violation of PHR Ch. 43, Sec. 7. Despite repeated oral and written warnings, the violations continued.
The uncontradicted evidence at trial, based on photographs as well as testimony by environmental health specialist Bruce Tillman and Katherine Hendricks and citizens Jerry Goodman andDr. David Rodwell overwhelmingly established that the cited incidents did take place and that the violations were flagrant and continuous. Moreover, appellant Roy Weber confirmed the occurrence of these violations by admitting at trial that he openly burned automobiles in 1976 and that, during the period from 1969 through 1976, KAW openly burned a total of approximately 10,000 to 15,000 cars. He further admitted that in 1977 KAW still had not completed its air pollution emission control device.
The appellants’ defense at trial was that the Department of Health had discriminatorily enforced the open burning ban against KAW, singling it out from among the large number of automobile open burners contemporaneously violating the regulation and thereby denying appellants equal protection of the law.
Initially, appellants KAW, H. Roy Weber and Helen Weber were charged for each of the seventeen violations under PHR Ch. 43, Sec. 7 and HRS § 342-23, a general prohibition against air pollution without a written permit from the director of health. At the close of trial, the lower court concluded that the violations had been established beyond any doubt and that the defense of discriminatory enforcement was not well-founded. Given that each incident originally entailed two counts, the trial judge struck the counts under the statute and found the appellants guilty severally and individually of violating PHR Ch. 43, Sec. 7. With respect to the first eight incidents referred to in the complaint; the lower court imposed a fine of $2,000 for each violation comprising a total fine of $16,000. 2 With respect to the remaining nine incidents, the trial judge suspended imposition of sentence on the condition that there be no further violations for six months.
Two issues raised on this appeal warrant our consideration:
1. Whether the Department of Health in 1976 enforced the open burning ban in a discriminatory manner against KAW violating the equal protection guarantee of the Fourteenth Amendment of the United States Constitution and Article I, Section 5 of the Hawaii Constitution.
2. Whether the corporate officers of KAW may be held personally liable for the corporation’s repeated violations of PHR Ch. 43, Sec. 7.
We have considered the other issues raised by the appellants and find them tо be without merit.
I. THE DEFENSE OF DISCRIMINATORY ENFORCEMENT OF PHR CH. 43, SEC. 7.
Appellants contend that the Department of Health’s selective enforcement of PHR Ch. 43, Sec. 7 unconstitutionally discriminated against KAW mandating reversal of the convictions below. Although this Court has never explicitly recognized discriminatory penal law enforcement as a defense in a criminal proceeding,
3
the United States Supreme
Court has established that the discriminatory enforcement of a criminal law is unconstitutional and may be raised as a defense by a person so subjected. In
Two Guys from Harrison-Allentown, Inc. v. McGinley,
[T]he conscious exercise of some selectivity in enforcement is not in itself a federal constitutional violation. Even though the statistics in this case might imply a policy of selective enforcement, it was not stated that the selection was deliberately based uponan unjustifiable standard such as race, religion or other arbitrary classification. Therefore, grounds supporting a finding of a denial of equal protection were not alleged. Oregon v. Hicks, 213 Ore. 619 ,325 P.2d 794 (1958); cf. Snowden v. Hughes,321 U.S. 1 (1944); Yick Wo v. Hopkins,118 U.S. 356 (1886) (by implication).
The burden of proving discriminatory enforcement of the law rests upon the party raising the defense.
United States v. Torquato,
We recognize that important societal interests are served by providing defendants with such a defense. Because there are few effective limits on the power of the poliсe or prosecutor to ignore a violation of the criminal law, these officials have the power to enforce the law selectively — to prosecute some and not to prosecute others, when all have engaged in conduct similarly prohibited by a given criminal law and when all have an equal chance of being convicted. Abuse of this prosecutorial power to harass unpopular political groups or otherwise to intimidate persons unjustly presents a serious danger to society. The defense of discriminatory enforcement is the only means provided defendants to ensurе that enforcement of the criminal law is not premised upon bias, prejudice or other improper influences. Our courts, as an agency of government, should not lend itself to a prosecution which would violate a defendant’s constitutional rights. We therefore hold that if a defendant sustains the burden of establishing intentional or purposeful discrimination based upon an unjustifiable standard, that defendant is entitled to dismissal of prosecution as a matter of law under the equal protection clause of both the Federal arid State Constitutions.
Turning to the facts of the case at hand, however, we find that appellants have woefully failed to carry their burden of proof. The evidence simply does not support a finding that the Department of Health purposefully discriminated against the appellants based upon an unjustifiable standard. Although appellants claim that PHR Ch. 43, Sec. 7 was enforced only against KAW from 1973 through 1976, the record indicates that formal administrative enforcement proceedings were commenced against four other automobile open burners in 1976, the year in which KAW was charged. 6 In addition, during the relevant period, the Department of Health filed suit against Leeward Auto Wreckers and Grace Enterprises, mаjor competitors of KAW. As a result of the Department’s enforcement actions, Leeward Auto Wreckers developed an incinerator to control air pollution emissions that complied with the Department’s requirements and Grace Enterprises was forced out of business. Of the three large-scale auto wrecking operations, KAW alone continued to burn openly without any attempt to conform with the air pollution regulation. Thus, at the threshold, appellants fail to present a distinct pattern of selective enforcement.
Lastly, the appellants have faded to shоw that the Department of Health based its decision to prosecute KAW on an arbitrary or unjustifiable standard. There is no evidence in the record of racial, sexual, political or other improper discrimination. The appellants imply persecution but we find such charges unfounded in light of the leniency extended to KAW by the Department of Health. The first open burning violation in 1976 was reprimanded with just a warning letter; prosecution followed only after the warning was ignored. Moreover, we find the Department’s prosecution of KAW completely consistent with its enforcement policy of respond ing to citizens’ complaints. In 1976. the Department of Health received approximately forty complaints of open burning: one-half of these complaints had been provoked by KAW's unlawful activities, the largest number attributed that year to any single source. In this sense, KAW was in a class by itself. We therefore find no error by the trial court in refusing to dismiss the charges against appellants on the ground of discriminatory enforcement.
II. THE PERSONAL LIABILITY OF KAW’S CORPORATE OFFICERS.
The evidence at trial overwhelmingly established that KAW violated PHR Ch. 43, Sec. 7 on seventeen different occasions in 1976. The corporation KAW is, however, merely an artificial entity and can only act through the individuals whо act on its behalf. In 1976, the only agents of the closely held corporation were appellants H. Roy Weber and his wife, Helen Weber; both were held individually liable by the court below for KAW’s violations. Appellants contend that the trial court’s imposition of individual liability was in error because the evidence failed to establish Mr. and Mrs. Weber’s participation in the corporation’s unlawful acts.
It is undisputed that a corporate officer may be held individually liable for a corporate penal law violation where he performs or causes the performance of the illegal act. Hawaii Penal Code § 702-228, “Liability of persons acting, or under a duty to act, in behalf of corporations or unincorporated associations,” subsection (1), states in pertinent part:
A person is legally accountable for any conduct he performs or causes to be performed in the name of a corporation or an unincorporated association or in its behalf to the same extent as if it were performed in his own name or behalf.
The trial court also held Mrs. Weber personally liable for KAW’s violations of the open burning regulation but on different grounds. Her liability was premised on the fact that in 1976 she was both president and treasurer of KAW and therefore held a “significant pоsition” in the corporation at the time the violations occurred. The record reveals that in spite of her high corporate position, however, Mrs. Weber did not take an active part in the business, never issued orders on business operations and never set company policy. Her only participation in the business was to run a few errands now and then and occasionally to attend the corporation’s annual directors’ meeting. Mrs. Weber testified at trial that she was and always has been just a housewife.
10
The appellants argue
that without evidence proving that Mrs. Weber either performed or authorized the performance of KAW’s illegal open burning, she may not be held personally liable. We concur with appellants’ contention only to the extent of agreeing that HPC § 702-228(1) is inapplicable to justify the imposition of individual liability with respect to Mrs. Weber.
11
Whether Mrs. Weber, as president and treasurer of KAW, may nevertheless be held personally liable for the corporation’s violations of PHR Ch.
Critical in our determination is the fact that the instant case involves corporate violations of a policе regulation intended to protect the public from the harmful effects of air pollution. Where corporate violations of public health regulations are involved, the United States Supreme Court and courts in other jurisdictions have held corporate officers personally liable irrespective of whether such officers performed or authorized the performance of the unlawful acts.
See
United States v. Park,
In each of the above cases,.the officers’ liability was based upon the recognized principle that a corporate agent, through whose act, default or omission the corporation committed a crime, was ■ himself guilty individually of that crime. Thе principle was held to apply not only to those corporate agents who themselves committed the criminal act but also to those who by virtue of their managerial positions or other similar relation to the actor could be deemed responsible for its commission.
A detailed discussion of the most recent of these cases,
United States v. Park, supra,
is helpful in resolving the question before us. As stated earlier, in that case a large national food store chain violated § 301(k) of the Federal Food, Drug and Cosmetic Act. The president of the corporation had not authorized the violations and the pertinent statutory provision
placed no explicit duties upon him. In determining the personal liability of the corporate president, the United States Supreme Court first looked to the Act’s purpose — protecting the public from adulterated or misbranded food — and found that it warranted the imposition upon corporate officers of “not only a positive duty to seek oiit 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 citing
United States v. Dotterweich,
The Court considered two primary factors in setting forth the standard for determining the personal liability of responsible corporate
In the instant case, PHR Ch. 43, Sec. 7 similarly imposes strict liability upon persons and institutions who engage in unlawful open burning. Infractions of PHR Ch. 43, Sеc. 7 constitute penal code violations,
13
HRS § 342-11(b), and, as such, require no proof of scienter.
14
HPC § 702-212(1). Moreover, like the statute in
Park,
the pertinent regulation here protects a significant public interest — the public interest in clean air free from harmful pollutants. The open burning prohibition is part of a comprehensive regulatory scheme designed to control all sources of air pollution and thereby to protect the public health.
See
Department of Health, Public Health Regulations, Chapter 43, Air Pollution Control. We find that the regulation’s purpose of safeguarding the public from the hazards of air pollution similarly warrants the impo
sition of a high standard of care upon officers of a corporation to insure corporate compliance with the law. Therefore, in accordance with the principles set forth in
Park,
we hold that high corporate officers who possess managerial authority bear a personal responsibility to the public to exercise reasonable care to discover any violation of the open burning regulation, to remedy any such violation of which the officer knows or should have known, and to prevent future violations.
15
To find otherwise, we believe, would be to permit corporate officers to
In view of the standard of care imposed upon corporate officers by PHR Ch. 43, Sec. 7, we find Mrs. Weber, as president and treasurer of KAW, negligent in failing to exercise reasonable care to discover, remedy and prevent corporate violations of the open burning prohibition. 17 In its findings of fact and conclusions of law, the trial court found that KAW’s violations of PHR Ch. 43, Sec. 7 were in disregard of repeated warnings and were “open, continuous and flagrant.” By H. Rоy Weber’s own admission, KAW openly burned thousands of automobiles over the course of seven years. In 1976, KAW’s air polluting activities spurred one-half of the citizens’ complaints received by the Department of Health. Given the constant and egregious nature of KAW’s violations, the slightest effort by Mrs. Weber to carry out her duties as president and to become generally informed about the corporation’s affairs would have made her aware of the corporation’s illegal activity. Although she failed to do even this much, one can reasonably infer that as the only directors, officers and employees in the сlosely held corporation, Mrs. Weber, as well as Mr. Weber, personally benefitted from KAW’s unlawful operations. In light of these circumstances, we find no error by the trial court in holding Mrs. Helen Weber personally liable for KAW’s repeated violations of PHR Ch. 43, Sec. 7.
Affirmed.
Notes
PHR Ch-. 43, Sec. 7(a) states, in relevant part, “no person shall ignite, cause to be ignited, permit to be ignited or maintain any open fire.” PHR Ch. 43, Sec. l(r) defines “person” as “any individual', corporation ... or any legal successor, representative, agent or agency of the foregoing. ”
Violations of PHR Ch. 43, Sec. 7 are punishable by a maximum fine of $10,000 per offense under HRS § 342-ll(b).
Two Hаwaii Supreme Court cases discuss discriminatory administration of the law in other contexts.
See
Baldeviso v. Thompson,
In Snowden v. Hughes,
The unlawful administration by state officers of a state statute fair on its face, resulting in its unequal application to those who are entitled to be treated alike, is not a denial of equal protection, unless there is shown to be present in it an element of intentional or purposeful discrimination.
Id.
at 8 (emphasis added).
See also
Mackay Telegraph & Cable Co. v. City of Little Rock,
In State v. Wakinekona,
See Department of Health v. Nick Gega, dbа Pearl City Towing and Auto Wrecking, Docket No. EO-A-IO (State Exhibit R); Department of Health v. Gulston Crawford, Docket No. EO-A-16 (State Exhibit S); Department of Health v. Charles Hook, Docket No. EO-A-18 (State Exhibit T); Department of Health v. John Tandal, dba L & T Auto Wreckers, Docket No. EÓ-A-20 (State Exhibit U). These actions were all instituted in 1976.
Appellants criticize the Department’s failure to enlist the aid of fire departments in enforcing the open burning prohibition. Mr. Kazuo Shishido, an environmental health specialist employed by the Department of Health, testified, however, that the Department did meet with representatives from both the fire department and the police department to explain Hawaii’s air pollution regulations and to instruct them specifically on how they could be of assistance in enforcing the open burning ban.
Appellants maintain that by contacting Flynn-Learner Inc., the major local purchaser of scrap metal, the Department of Health could have discovered exactly who was engaged in the open burning of cars and in what quantity. The State points out that appellants’ claim ignores the gap between identifying a deliverer of burnt cars and identifying who was actually involved in the illegal act of open burning. The usefulness of the information available from Flynn-Learner is further reduced by the fact that the receiving weightmaster for Flynn-Learner testified that, where scrap metal is delivered in bales, he could not tell whether the scrap had been burned or even whether it came from cars. KAW delivered scrap metal in precisely those types of bales.
We note that PHR Ch. 43, See. 7 did not go into effect until 1972. KAW’s open burning activity prior to the effective date of the regulation is described herein only to portray the extensiveness of this corporate practice.
The appellants contend that “a mere housewife cannot be convicted of the charges” disputed here. Contrary to appellants’ assertion, however, corporate officers are not free from personal liability where they serve in those capacities only
as an “accommodation” and do not participate actively in the corporation’s affairs. A person cannot divorce the responsibilities of a corporate position from the statutory and common law duties it carries with it by accepting the position merely as an accommodation. Minton v. Cavaney,
Appellee argues that HPC § 702-228(2) permits the imposition of personal liability upon Mrs. Weber. We disagree. HPC § 702-228(2) states in relevant part as follows:
Whenever a duty to act is imposed by law upon a corporation. . ., any agent of the corporation . . . having primary responsibility for the discharge of the duty is legally accountable for a reckless omission to perform the required act to the same extent as if the duty were imposed by law directly upon himself.
Thus, under HPC § 702-228(2), if an affirihative duty to act is imposed by statute upon a corporation, the responsible corporate officers may be held personally liable for their reckless failure to perform such act. In the instant case, however, PHR Ch. 43, Sec. 7 does not explicitly impose an affirmative duty to act upon corporations. The regulation is phrased in terms of a ban against open burning, i.e., in terms of a prohibition against acting in a specific manner. Given this distinction, we do not find HPC § 702-228(2) dispositive of the question before us.
The responsible corporate officer doctrine applied in
Park
was first enunciated by the United States Supreme Court in United States v. Dotterweich,
Penal code violations do not technically constitute crimes and therefore do not give rise to any civil disability based upon conviction of a criminal offense. HPC § 701-107(5). Open burning infractions are punishable only by fine. HRS § 342-ll(b).
The public health regulation conforms to the, modern trend of not requiring proof of scienter in air pollution prosecutions. Annot.,
Necessity of Showing Scienter, Knowledge, or Intent, in Prosecution forViolation of Air Pollution or Smoke Control Statute or Ordinance,
The application oftheParA decision in areas other than corporate violations of the Federal Food, Drug and Cosmetic Act has been noted by courts in other jurisdictions.
See, e.g.,
United States v. Frezzo Brothers, Inc.,
Our holding is not unduly harsh. Personal liability is not to be imposed for all corporate violations of PHR Ch. 43, Sec. 7; it is to be imposed only with respect to those violations that the responsible officer could have remedied or prevented in the exercise of reasonable care. Courts may consider numerous factors in determining whether a corporate officer has been negligent and, therefore, should be held liable for a corporate violation. Relevant factors include, but are not limited to, the degree of harm to the public, the egregiousness of the violations, the supervisory authority and control vested in a particular corporate position, and the size of the corporation. In this manner, mechanical applications of the rule may be avoided while instances of negligent supervision resulting in corporate violations may bejustly punished and repetitions of such behavior deterred.
By basing Mrs. Weber’s personal liability for KAW’s violations of PHR Ch. 43. Sec. 7 on her role as an officer of the corporation, we need not reach the question of whether solely in her position as director she could also have been held liable.