I 0we v. I/O
Poetics of veil-piercing on a corporate planet
Ten years into tortuous research surrounding a modest seventy-three-acre plot of toxins sitting quiet some hundred feet from the house where I grew up, diffuse obsessive e-digging struck metal hydroxide sludge. In the wilds of Justia.com, suddenly clear-cut by my more sophisticated search strings or their more precisely targeted algorithms, I came upon a document titled “Town of Oyster Bay v. Occidental Chemical Corp., 987 F. Supp. 182 (E.D.N.Y. 1997).” This seemingly dry discussion of several motions by the US District Court of Eastern New York details one moment in a struggle by the local township to recuperate the costs of capping a noxious dump — a primal dread/seduction complex for us kids, known to neighbors in roughly endearing terms as the “sump.” Unlined, the “landfill,” as the document euphemistically calls the hole, had been stockpiled and occasionally ignited with several decades of unrestricted agricultural, cesspool, commercial, demolition, industrial, and residential waste: approximately three million cubic yards of refuse reaching depths of ninety feet below the surface. It occupied about half of the reticent real estate across from us; abutting the dump was the locus of a decommissioned copper mill, an Inactive Hazardous Waste Site unto itself, and one of the cells’ premier providers of industrial sludge.
Gash in the Upper Glacial Formation and Magothy Aquifer, fount-in-reverse of postwar economic miracles of aerospace engineering, corrugated containment, lighting, electricity and telephony, photography and imaging, shipping, mass suburbanization, and “plastics,” the dump was shut when found to be polluting the groundwater with so-called indicator chemicals — for example, alarming levels of arsenic, cadmium, chromium, and lead. The Environmental Protection Agency added it to their National Priorities List for remediation in 1983, and after a two-part Remedial Investigation and Feasibility Study ordered that a geosynthetic membrane cap be constructed on top. In the mid-1990s, facing the costs of containing the toxic threat, the town went after the major offenders, whose highly identifiable names and aliases, defunct and current, follow Occidental in the case proper (the latter company formerly known as Hooker Chemical Corporation, of Love Canal renown).
Having cobbled together this seemingly straightforward narrative in fits and starts over the course of a decade, I suddenly began to perceive the legal underpinnings of what I’d come to call the Great Chain of Irresponsibility, existing previously only as an atlas gone haywire in the brain, transcribed into lines upon lines upon shredded veins of propertyscape, with the syntactical guidance of Alice. Piecing together the shrouded contents of the site manually, in the literal sense, had become a means of dealing with the leakage of fact that I could periodically stomach — to retether ducts of disinterred data to one another, preserving the anxiety of haphazard disclosure while scoring retribution in the form of plaint.
The court’s discussion opens by stating that the landfill was situated “within 1.25 miles of more than one thousand residences and less than 150 feet from a local elementary school.” The residents and students conjured in absentia by this sentence, communities riddled by cancer clusters and other concerns on the cheap margin of an elsewhere affluent suburb, are otherwise missing from the document, being what business dryly names “externalities” — side effects of commercial or industrial activity that affects third parties, omitted from any evaluation of cost. Instead, the “persons” represented in the case are corporations and the Town of Oyster Bay, while the injuries under consideration are “continuing injuries to real property.” Somewhere amidst the deferred reader’s late-breaking addenda of panic and rage, teeming in the guts of this document was a debate about the limits of personhood whose terms took some time to understand: it turned out that the case, charging companies with environmental and human health offenses stretching back decades, tested the bounds of a contested juridical act known as “corporate veil piercing.”
Slowly I came to apprehend that financial responsibility for the containment of contaminants eked via underground plume or gas migration could be assigned only through dogged determination of the extent of legal liability on the part of corporations or successors to corporations that dumped. Some of the corporations in the Town of Oyster Bay’s action were operating under new and improved aliases; others were officially “dead and buried.” They therefore exceeded the limits of culpability according to the fiction of corporate personhood. This situation led me and my verses to a research digression on pipelines of so-called personal liability.
A longstanding legal fairy tale — one that has been receiving fresh attention in the wake of the Occupy movements and opposition to the 2010 Supreme Court ruling in Citizens United v. Federal Election Commission — posits that the corporation is a person with remarkably impermeable limits, so that in many cases only the corporation itself, and not its shareholders, directors, owners, or subsidiaries, is responsible for its deeds. Enforcement of this notion dates back to an 1886 case before the Supreme Court, Santa Clara County v. Southern Pacific Railroad, which due to either offhand commentary, clerical mistranscription, or outright forgery, expanded the application of the Fourteenth Amendment — adopted after the Civil War to grant emancipated slaves full citizenship, which states that “[n]o state shall … deprive any person of life, liberty, or property without due process of law, nor deny to any person … the equal protection of the laws” — to commercial or private groups of people acting collectively. Despite the nation’s enduring qualms in extending these constitutional rights to all citizens, somehow corporations, as “artificial persons,” or APs, have been granted the theoretical rights of natural persons ever since, while being cordoned off from their successors to evade responsibility for civil wrongs we’d have little trouble ascribing otherwise. It is as though the corporation as person were sealed with a geosynthetic membrane cap around its fictional skin and sphere of action.
This virtual geosynthetic membrane cap is picturesquely referred to as a “veil” in legal terms. The Eastern District court, determining who should pay for sealing off the neighborhood dump, had to determine first of all whether to “pierce the veils” of new and improved corporations — that is, whether they should hold the alter egos of enterprises like Hooker and Columbia Corrugated Container Co. responsible for the waste disposal of their “predecessors-in-interest.” Piercing the veil is the most litigated issue in corporate law. In 1926, Justice Benjamin Cardozo wrote of this ambiguous legal terrain,
The whole problem of the relation between parent and subsidiary corporations is one that is still enveloped in the mists of metaphor. Metaphors in law are to be narrowly watched, for starting as devices to liberate thought, they end often by enslaving it. We say at times that the corporate entity will be ignored when the parent corporation operates a business through a subsidiary which is characterized as an “alias” or a “dummy.” All this is well enough if the picturesqueness of the epithets does not lead us to forget that the essential term to be defined is the act of operation. Dominion may be so complete, interference so obtrusive, that by general rules of agency the parent will be a principal and the subsidiary an agent. Where control is less than this, we are remitted to the tests of honesty and justice.
Certain tests of honesty and justice lead courts to acknowledge the collusion of parent and child companies as polluting agents even if the subsidiaries don’t look like dummies, since, as Cardozo writes, only by acknowledging the overarching continuity of enterprise “can we overcome a perversion of the privilege to do business in a corporate form.”
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 — otherwise known as CERCLA, and more colloquially as Superfund — was a historic bit of legislation by Congress that made it possible for courts to recognize the perversion of treating artificial persons as if they were natural: as if, that is, the strategic transformation of a corporate brand over time could limit its accountability for a record of environmental harm. Following the first Earth Day and Nixon’s establishment of the Environmental Protection Agency in 1970, and in response to highly publicized disasters such as Love Canal and the Cuyahoga River fire, Superfund made trailing and capping our local slough of poisons possible: it established protocols for dealing with closed or abandoned hazardous waste sites (Response), taxing the chemical and petroleum industries (Compensation), and setting aside the money as a trust fund for the treatment of environmental hazards. CERCLA also launched a strict and retroactive definition of liability to ensure that businesses responsible for the release of hazardous substances would bear the burden of cleaning up toxic pollutant spills, sparing taxpayers the (monetary) cost of their poisoning — for the dissolution of a business into the ground signals only the beginning of its debt to those who live near the grave.
In the 1997 Oyster Bay case, CERCLA served as justification for piercing the veil of the allegorically named Great American Industries. But Supreme Court interpretation of the Liability Act has since the ’90s been eroding reliance on federal common law in favor of state laws that favor corporations and their guises. The push toward deregulation of business environments on the part of states to attract economic investment has been identified both as a “race to efficiency” and, using the words of a famous 1933 dissenting opinion by Justice Louis Brandeis, as a “race to the bottom” — a metaphor confounding in the context of excavating a dump, but which refers to underbidding states competing for business investments to lower taxes. Interpreters of the law who resist piercing the corporate veil in line with CERCLA’s aims have insisted that imposing a strict notion of liability will interfere with commercial relationships, and that citizens are not to worry, since it is in the best interests of states not to befoul their natural resources. Moreover, the number of Superfund sites added to the National Priorities List has steadily declined, so that the question of going after polluters in sheep’s clothing will no longer arise so frequently. The Superfund tax expired in 1995 and, facing Republican opposition in both houses of Congress, has not been reauthorized; it has been expected for some years now that the trust fund’s agenda will be restricted to more visible and immediate emergencies in the near future, and that states will be expected to take up the slack by cleaning up environmental hazards on a voluntary basis. EPA personnel themselves are more and more baldly tied to institutions like the Federal Enterprise Institute, supported by the interests of companies such as Koch Petroleum, ExxonMobil and Dow Chemical. We have been obliged, this month, to conjecture about whether the EPA will exist at all under the imminent regime, and at the time of revision have learned that it will be headed by a man who has spent the bulk of his energy as attorney general acting as “a leading advocate against the EPA’s activist agenda,” actually suing the agency for seeking to curtail emissions of greenhouse gases and methane (and simultaneously challenging the constitutionality of the Dodd-Frank Wall Street Reform and Consumer Protection Act).
Meanwhile, there are myriad additional routes through which a corporate person may dodge the gaze of justice. The copper plant next door to the dump, for example, passed lucratively through the invisible hands of an exalted empire of benefactors whose names festoon galleries, performance halls, hospitals, and centers for environmental engineering in my current city, a third of a continent away; the toxic property transferred hands through another finance-boosting paradox of owning and not owning via a sale-and-leaseback deal. Having changed ownership multiple times, the fenced-off property is now being touted in watercolors as the future plot for a smart-growth New Urbanist hamlet of world-class “live, work, relax and play” spaces.
Incoherent subjecthood papered over with green new names and suits; splintered trails of agency nourished by continuous flows of capital, and spiked by volatile organic compounds: umbilical ties gone awry under corporate, if not corporal, protection by the law. Real-estate mogul president-elect passing management unblindly onto kids who form part of his political transition team and show up in meetings with prime ministers, though it’s “visually important” to keep domestic and foreign policy decisions separate from business dealings, to keep the parent corporation apart from the child. (Chairman of the House Committee on Oversight and Government Reform Jason Chaffetz to Hillary Clinton, pressing for emergency hearings: “If you’re going to run and try to become the president of the United States, you’re going to have to open up your kimono and show everything.” On Donald Trump’s conflicts of interest: “We’ll let him get sworn in and see how it’s structured.”)
How does one stand up for justice in a republic dominated by immunity in the name of the person on the one hand, brand kinship and disavowed nepotism on the other? We ought to take a cue from Thoreau’s “strict business habits” in confronting the fresh cloaking of agency as it roves through time and space:
Our moulting season, like that of the fowls, must be a crisis in our lives. The loon retires to solitary ponds to spend it. Thus also the snake casts its slough, and the caterpillar its wormy coat, by an internal industry and expansion; for clothes are but our outmost cuticle and mortal coil. Otherwise we shall be found sailing under false colors, and be inevitably cashiered at last by our own opinion, as well as that of mankind.
As long ago as 1854, Thoreau perceived that the manufacture of new cortices served mostly to immiserate operatives: “the principal object is, not that mankind may be well and honestly clad, but, unquestionably, that the corporations may be enriched.”
When the law fails to recognize the continuity of exploitation on a corporate planet, we need to forge the chronicle ourselves; we must produce the crisis. Laboring in our solitary sloughs, and then out loud. We can work against the oath of amnesty and resulting stasis of depoliticized citizenship in relation to past crimes that presses against any resistance in moments such as those following a contentious election or civil strife — an oath that led Roberto Rossellini, for example, to participate in the easing of internecine national tensions by replacing the final firing squad of Italian Fascists that kill Don Pietro in Rome: Open City with a squad of Nazis, others.
The crisis we need to induce in ourselves, to become ready to shed our mortal coil (archaic for confusion or tumult), and to call out the false colors of adulterating corporate interests, calls for poetry understood in the broad sense to breach the walls of the polis — now more than ever. All that which Socrates mistrusts in the poet — lamentation, hilarity, pleasure, words spoken against rules, fear of the dead, generating conflict in the lower parts of the psyche — militates against the fiction of personhood with corporate immunity from yesterday’s misdeeds. The corrosive discourse of poetry can pierce geosynthetic membrane caps, and it can articulate the indigestible contents of those outside the text of the arguable case: the contents of innumerable natural persons who deserve reparations, yet reside beyond the purview of a system of justice driven only to recuperate its own face-saving expenditures. The tragic worldview that poetry can fuel just might induce systemic crisis by exposing the material foundations of the fact that “many happy men are unjust, and many wretched ones just, and that doing injustice is profitable if one gets away with it, but justice is someone else’s good and one’s own loss.”
Meanwhile, the poetic fallacy of a coherent lyric person must also continue to be pierced in favor of industrious focus on the forces, the substances, the spills that breach and bind us. The dump across the street was no exception, only a fleetingly technicolored example of the rule: the common landscape all of us inhabit now is a repository of the tainted entrails of corporate persons, open field of exits and entrances ajar. And unless we conspire to dig the now-brittle inflatables of the ’70s out for public reoccupation from their museum depots, we the people are a chorus of input-output devices, witting or non.
The I/O of The Republic of Exit 43 proposes that landscapes understood systemically are impossible to pin down as wholly “site-specific” phenomena, and that corporate and lyric persons are impossible to contain. Every isolated site, every I is a sprawling accident of disaster capitalism, with its state-sponsored “resiliency” taking the place of amends, and peddled fantasy that externalities are infinitely renewable through fresh coats of paint, through attitude and breathing exercises. I/O as lips of the common hole in progress that speak from the bottom, and lowd.
I/O: denizen of the recycled public lot next door to the slough absorbing noxious acronyms and schooling by turns, seeking late to force the residue of chemical and literary histories to accrue to one another in a cogent plaint. As if somehow all of pastoral and urbane civilization so named were liable for this quiet emergency — all being convoked to replay their part, to combat.
To give this abject exit the name of Republic, in the absence of public works and even of infrastructure. An aspirational gesture, and one that remains open to sentence and question.
1. For more background, see Howard Jay Graham, Everyman’s Constitution: Historical Essays on the Fourteenth Amendment, the “Conspiracy Theory,” and American Constitutionalism (Madison: State Historical Society of Wisconsin, 1968).
2. Berkey v. Third Ave. Ry., 244 N.Y. 84, 155 N.E. 58 (1926) (opinion by Cardozo, J.), reh’g denied, 244 N.Y. 602, 155 N.E. 914 (1927).
3. See Bradford C. Mank,“Should State Corporate Law Define Successor Liability?: The Demise Of CERCLA’s Federal Common Law,” University of Cincinnati Law Review 68 (2000): 1157–98.
4. See Judith Jacobs, “Superfund: Former EPA Official Clay Sees Program Winding Down, with Greater Role for States,” Environment Reporter (Nov. 19, 1999).
5. See E. Scott Pruitt’s LinkedIn page.
6. Henry David Thoreau, Walden,ed. Raymond MacDonald Alden (New York, London, Bombay, and Calcutta: Longmans, Green, and Co., 1910), 17, 21.
8. See Giorgio Agamben, Stasis: Civil War as a Political Paradigm, trans. Nicholas Heron (Stanford University Press, 2015), 15–16.
9. The Republic of Plato, translated with notes and an interpretive essay by Allan Bloom (New York: Basic Books, 1968), book III, 392a13–b6.