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PA Commonwealth Court Holds that Corporate Officer May Be Liable for Deliberate Inaction Under Participation Theory
Earlier this month, in B&R Resources, LLC v. DEP, No. 1234 C.D. 2017 (March 15, 2018), Pennsylvania’s Commonwealth Court held that the sole managing member of a limited liability company may be personally liable for his company’s failure to plug certain abandoned wells. In doing so, the Commonwealth Court clarified that the participation theory of liability, which essentially extends liability from a corporation to its officers who “participated” in corporate wrongdoing, may encompass not only intentional misconduct by an officer but also deliberate inaction.
The case concerned an enforcement action against Richard F. Campola ("Campola"), the sole and managing member of B&R Resources, LLC ("B&R"), a limited liability company engaged in oil and gas exploration activities. In December 2011, the Pennsylvania Department of Environmental Protection (the “Department” or “DEP”) first notified Campola that a number of B&R's wells appeared to be abandoned.
