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Tort and Regulatory Risk Plan

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There are many risks for a company in the legal realm and it is important for them to minimize their tort and regulatory risks. A company should have a risk plan in place that can help them succeed. This plan can be a continuously changing plan depending on needed improvements on the plan. A risk plan can be developed easily when you look at the Alumina Inc. case as an example. A company such as Alumina can manage their risks through three basic measures which are preventative, detective, and corrective. Preventative measures are the easiest for a company to control and change. These can include anything from the company’s internal laws to the education of these laws. Freedom of speech is a civil right given to people and in cases such as Alumina vs. Kelly Bates; preventative measures could have helped controlled the case. Even though a citizen’s speech may be considered as disparagement, damage to the company can still occur. A major risk for a company in a situation like this is if they were to harm their own customers and alienate their business. This can really damage their reputation and that is why the CEO Roger Lloyd of Alumina was so concerned. They have a Duty of Care that they must ensure that they are protecting these individuals and are not guilty of negligence. A company can have a legal department that is proactively researching potential problems and ensuring their corrective measures are in place. This can help solve a problem quickly with minimal damage if something was to occur. A company such as Alumina must always make sure that their products meet all minimum standards and they are documented correctly. For example, Alumina met the Toxic Substance Control Act that showed that they were able to properly remove all existing toxins from the incident 5 years prior (Cheeseman 2010). When an issues arises there is always panic in the company due to the uncertainty of the issue and the repercussions that may follow. If your preventative measures do not work you should follow you company’s goals and ADR processes to solve the issue. When the issue arose I recommended that Alumina should conduct a private study of the issue before they reacted. It is imperative to always remain calm in a situation like this and do not jump to actions that can be detrimental. A company does not want to compound any issues with additional problems and try to cover up any issues. That is why Alumina should have conducted their own site study and not get involved with Kelley Bates so to not circum to issues such as unreasonable search and seizure or an invasion of someone’s privacy. They also need to allow certain substantive laws created by the relevant agencies (i.e. EPA, FDA, USDA) to do what that are created for. These laws are in place to help govern and protect issues before they arise so if they do arise and you meet the requirements then it will definitely help strengthen your case. For example, if Alumina is following all of the other acts then they should have a stronger case such as the Environmental Protection Laws, Clean Water Act, Safe Drinking Water Act (Cheeseman 2010).. Even though you have followed all the correct procedures as a company and met the requirements this does not prevent issues or continuing issues to stop. In the Alumina case the Erehwon Reporter and Kelley Bates continued to pursue the issue. They requested public records through the Federal Register Act and used defamatory language to continue to get a response from Alumina. I chose after the second article to allow the disclosure of partial information to show they are not hiding any information. This also protects them without giving up too much. The public is entitled to some information in some cases and they want to make sure they are following the Freedom of Information Act. If they continue to meet all the requests and needs of these legal requirements then Kelly can be considered as pursuing malicious prosecution and the defamation of the character of the company. Also if Alumina is doing the correct steps then they can not be sued for Res Ipsa Loquitur if they are unaware of the actions and their connections to leukemia. It is also hard for Kelly to prove that if in deed the water from Lake Dira caused the leukemia and that Alumina was the sole contributor. The “Scientific Society Report” showed an increase in automotive activity around Lake Dira (Cheeseman 2010). Corrective measures are extremely important in a case such as this and can help solve the case in a reasonable fashion. This can save a lot of resources, money, and heart ache for both the company and someone like Kelly Bates. The best way to solve this is by Alumina having an ADR clause created as part of their preventative measures. They can use some sort of arbitration or mediator to help solve the problem as well. A company also needs to solve issues and address them when they come up. It is not good for a company to ignore issues like these when they arise. When addressing these issues proper documentation is vital for future litigation. By doing this it can prevent any further problems that can arise from the same case in the future and prevent the company from being charged with Liability Without Fault-Strict Liability(Cheeseman 2010).. Litigation can be a very costly process for a company and could even serve as a main component in them closing their doors. If a company takes all issues as serious and as honest as possible they can survive most issues that arise. They also need to learn from examples such as this one of Alumina. They can do this by having excellent preventative, detective, and corrective measures.

References

Cheeseman, H.R. (2010). Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues (7th Ed). Upper Saddle River, NJ: Pearson Prentice Hall.

Learning Team B’s Table for Alumina Inc.

|Issue |Principle |
|Kelly Bates sold a story to the Erehwon Reporter |Kelly Bates is speaking out through Freedom of Speech (Chpt. 4, p. 61). But |
|stating that Alumina was the cause of her |can also be considered disparagement against Alumina (Chpt. 5, p. 79). |
|daughter’s sickness. | |
|Kelly Bates’ daughter has leukemia and blames it |This is considered negligence on the company’s part due to duty of care 5 |
|on Alumina’s violation of contaminating Lake Dira|years prior. (Chpt. 5, p. 80-81). |
|5 years ago. | |
|In compliance with the Clean Water Act and |The Clean Water Act and the effluent water standards are met, this is trade |
|cleared of damages 5 years ago. Accusations are |libel (Chpt. 5, p. 79). The Toxic Substances Control Act was also most likely|
|baseless. |reviewed and showed no remaining toxins (Chpt. 43, p. 709). |
|Conduct an independent site study to check for |This way an Alumina does not have to deal with an unreasonable search and |
|new violations and disclose results to the EPA. |seizure (Chpt. 43, p. 685). |
|Conduct a private investigation of Bates. |Could be considered invasion of the right to privacy (Chpt. 5, p. 77). |
|PAH levels are lower than the prescribed 5 |The Environmental Protection Agency (EPA) enforces laws to protect the |
|milligrams per liter for all hydrocarbons. |environment, which are substantive laws (Chpt. 43, p. 681). |
|Increased traffic in the heavily industrialized |The EPA needs to regulate this with environmental protection laws (Chpt. 45, |
|state of Erehwon is poisoning the waters of Lake |p. 704). Water pollution is regulated by the Clean Water Act (p. 707), and |
|Dira with polycyclic aromatic hydrocarbons |the Safe Drinking Water Act (p. 707). |
|(PHAs). | |
|The Erehwon Reporter and Kelly Bates request a |Freedom of Information Act (FOIA) for the public to request copies of |
|copy of the violation from 5 years ago. |violations through the Federal Register (Chpt. 43, p. 688). |
|The Erehwon Reporter continues to investigate |Continued defamatory language (unprotected speech) about Alumina (Chpt. 4, p. |
|Alumina after 1 month. |64). |
|To release or not release information contained |Exemptions of releasing the information are protected against disclosure (of |
|in the environmental audit. |administrative agency actions) if it would harm national defense or foreign |
| |policy, privacy of individuals, proprietary interests of business, functioning|
| |of the government, etc. (Chpt. 43, p. 687). |
|Release of partial information from the FOIA |Good business practice based on the Freedom of Information Act- the public |
|report. |needed to know (Chpt. 43, p. 688). |
|Kelly Bates continues to threaten to file a |If Bates did sue, it would be considered malicious prosecution by Alumina if |
|million-dollar personal injury lawsuit against |dismissed (Chpt. 5, p. 80). |
|Alumina to recover compensatory and punitive |File a lawsuit on behalf of daughter for injury to the plaintiff for being the|
|damages. |actual or proximate cause of her leukemia (Chpt. 5, p. 84). |
| |Continued defamation of character (Chpt. 5, p. 78). |
|The link between Alumina’s violation and leukemia|If Alumina did know that the damage done 5 years ago would cause leukemia, |
|is not established. |they could be sued for res ipsa loquitur (Chpt. 5, p. 86). |
|Seek AAA’s (American Arbitration Association) |Arbitration is the most popular form of ADR (alternative dispute resolution) |
|intervention in resolving the dispute. |(Chpt. 3, p. 45). |
|Alumina’s ability to resolve the dispute |Reduction of civil penalties for following environmental regulations. |
|themselves. |Voluntary discovery, disclosure, and correcting of violations (Chpt. 3, p.38).|
| |This is because the company could have been charged with liability without |
| |fault-strict liability (Chpt. 5, p. 89). |
|Findings of the “Scientific Society Report” on |This could be unclear or unjust accusations that Alumina is the only one |
|the increase of automobile traffic around Lake |contributing pollutants. Making this not a strict liability case with having |
|Dira |other factors involved (Chpt. 5, p. 89). |…...

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