Regulatory Risks and Tort Liability
Lori Rodgers
Law 531/Business Law
Shanrika Hall, Esq.
September 12, 2010

Regulatory Risks and Tort Liability
Five years ago, Alumina Inc. a $4 billion aluminum maker was in violation of environmental discharge norms due to high levels of Polycyclic Aromatic Hydrocarbon. Since this time Alumina has maintained strong compliance with all Clean Air Act policy and regulations. Now five years later Alumina has found itself in the middle of potential legal troubles again when Mrs. Bates accuses Alumina of polluting the waters of Lake Dira. Mrs. Bates is claiming that Alumina is responsible for the illness leukemia that has stricken her 10 year old daughter. The Erehwon Reporter the local newspaper is helping Mrs. Bates by publishing her accusations and by keeping the story alive in the public??™s eye because the five year anniversary is coming up. The decision for Alumina Inc. is now to decide how to handle the newspaper, the public, and Mrs. Bates accusations.
In the simulation EPA contacts Alumina to inform them that disclosure of information under Freedom of Information Act (FOIA) is being considered. Team D questioned whether or not this would be an invasion of privacy but the legal advisors and upper management of Alumina will allow a partial release of the environmental audit report. This is the best route for Alumina to take. In the simulation it clearly states that exemption 4 can help Alumina keep some information protected so all business information will not be known globally. Under the EPA restrictions it may not allow Alumina to release pertinent information relating to any violation. This will be in the best interest for Alumina; it will help the public relations department handle damage control.
Mrs. Bates is threatening a million dollar personal injury lawsuit against Alumina stating the negligent conduct evident in the violations of environmental laws of five years ago. The problem now is that Mrs. Bates has to prove current violations are Alumina. Alumina and Mrs. Bates both agreed to mediation from a neutral third party. Mediation is the best method for all parties concerned in this matter. Mrs. Bates has agreed to sign a confidentiality agreement that states she will release all current and future claims against Alumina. Mrs. Bates receives a confidential financial settlement that will pay for current, past, and present medical expenses for her daughter plus a lump sum settlement and an education fund for her daughter. This is a win-win for both parties and the end of a potential costly settlement for both parties.
Team D discussed the different methods that could come in to play for Alumina and have all agreed to the mediation. The one question that Team D has is the statute of limitation and whether or not it comes into play with the lawsuit. Team D also realized that the bad publicity would cost Alumina several thousand dollars and be detrimental to the business. Many organizations use mediation for this reason and the simulation clearly shows the need for mediation and the benefits of mediation.

Business regulation simulation. (2010). Retrieved from