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Law 531 Learning Team Reflection Week 5

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Learning Team Reflection - Exide Technologies
Business Law - Law 531
March 23, 2015
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Learning Team Reflection - Exide Technologies Exide Technologies in Vernon, California is an example of a company which failed to comply with government regulations requiring them to properly handle and dispose of toxic battery waste. This case also highlights the negligence in part by state officials regarding violations discovered over a period of almost two decades. These violations included battery acid draining into a manholes and lead waste stored in open containers causing the toxic waste to be exposed. There are consquences when a company such as Exide Technologies fail to comply with state and federal regulations which could ultimately hinder their sustainability and financial prosperity. Principles of regulatory compliance requirements.
According to Exide Technologies website, they are committed to comply with applicable legal requirements and other requirements related to environmental aspect. Due to the numerous violations discovered in the Vernon plant, Exide agreed to shut down the plant as a plea agreement to avoid any future criminal charges and additional fines. In addition to the plant shutting down, they were order to decontaminate the site in which they worked due to high levels of lead and arsenic emissions. Exide Technologies was not only mishandling their toxic waste, but they were not complying with all applicable governmental laws and regulations with the Environmental Protection Agency (EPA), South Coast Air Quality Management District and the Department of Toxic Substance Control.
Lastly, Exide Technologies, exposed Vernon residents to fatal levels of arsenic and other dangerous pollutants. Even now, officials can't say with certainty what the long term effects will be to all the Vernon residence who were directly exposed to these materials.

IRAC Brief
Issue- Exide Technologies was forced to shut down their doors due to numerous violations and illegal practices involving toxic waste.
Rule- Section 1 13(a)(1) of the Act authorizes EPA to issue an order requiring compliance with the requirements of the Act, issue an administrative penalty order, or commence a civil action seeking an injunction and/or a civil penalty. Furthermore, section 113(c) of the Act provides for criminal penalties in certain cases.
Analysis- By Exide Technologies failing to change their practices after being warned and cited several times, their actions were deemed negligent.
Conclusion- Several state and government agencies decided Exide Technologies were in violation of several EPA codes and state law. As a result of these violations, Exide Technologies was forced to shut down its facility and agreed to pay its largest penalty yet, more than $526,000 in fines, and to set aside $38.6 million for closure, along with $9 million in a trust fund to clean lead-tainted soil from surrounding homes. In addition, Exide Technologies filed for chapter 11 bankruptcy protection.
Managing Legal Risk
Methods for managing legal risk that may arise from regulatory compliance issues require a company to formulate procedures and implement practices to avoid the committing the same violations. According to Lee O’Connell, a Senior Management Consultant within Eversheds Consulting, organizations need to have a wide understanding of the regulations governing its practices, be proactive in identifying discrepancies and taking action to rectify and mitigate future occurrences (O'Connell, 2012). Company legal advisors are now becoming more actively involved in the risk assessment of a company by preventing issues leading to compliance violation. In the case of Exide Technologies, state regulating officials such as the California Department of Toxic Substances Control (DTSC) identified and reported several violations throughout the years. Despite these violations, Exide Technologies paid the minimal fines and did not make changes to the way they stored their toxic waste.
Conclusion
Exide Technologies could have avoided the build up of violations by having in place a proactive team to assess and advise on the legal repercussions Exide faced if it continued to violate the environmental regulations. When analyzing the amounts and type of violations accumulated over the years, it is clear that Exide Technologies did not consider legal counsel as a method to mitigate future violations of the laws governing Exide, the DTSC and the Enviromental Protection Agency (EPA). Lastly, this is a great example of why it's important to adapt to change and respect your neighbors. The residents of the City of Vernon were tired of being ignored because they raised issues of neglegence by Exide. This in my opinion was the nail in the coffin for Exide because these residence ultimately spearheaded the campaing to shut down the plant. If Exide management were not asleep at the wheel, they could have made the nessasary changes to be compliant and reduce the media attention it received.

References
Barbosa, T. (2015, March 14). Exide’s troubled history: years of pollution violations but few penalties. Retrieved March 19, 2015, from latimes.com: http://graphics.latimes.com/exide-battery-plant/ O'Connell, L. (2012, April 30). 6 risk and compliance challenges for global organizations. Retrieved March 20, 2015, from insidecounsel.com: http://www.insidecounsel.com/2012/04/30/6-risk-and-compliance-challenges-for-global-organi?page=2 WeissLaw LLP announces a class action lawsuit has been filed against exide technologies -- XIDE. (2013, Apr 24). NASDAQ OMX's News Release Distribution Channel Retrieved from http://search.proquest.com/docview/1343646935?accountid=458

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