Case Study

In 1962 the Atlantic Cement Company began operating a cement plant outside of Albany, New York. The Company employed over 300 local residents and by 1970 had invested $45 million in the plant. The plant was insured but plant insurance will not cover any damage which is related with environmental and health problem. The insurance company made an agreement with the Cement Company that, if anything goes wrong, insurance company will pay the losses. The plant emitted large amounts of pollution, however, as well as causing constant vibrations and loud noise. Local residents filed suit against the Company, claiming that the loud noise and the vibrations were harming their health and property. The suit asked that the court issue an injunction that would close down the plant until the pollution and vibrations could be eliminated. The Company was already using the best available technology, which meant that the suit was asking that the plant be closed down indefinitely. The court refused to issue the injunction, reasoning that the costs of closing the plant outweighed the benefits to be gained by the residents. Instead of closing the plant, the court ruled that the cement company should pay residents a onetime fee to compensate them for ongoing harms. This fee was calculated to be a fair market price for what the residents would receive if they were inclined and able to rent their property.

Question (6 MARKS)

1 Was the compensation is justified?

2 Was the decision of the court in this case fair? Explain

3 If you are agree with the judgment of the court so, explain why? If you are not agree with the judgment of the court so, explain why?

4 In your opinion, will you compromise your health and property with the amount of compensation?

5 Who will pay the loss? Cement company or insurance company?

6 Environmental pollution is very harmful, is it acceptable to compromise your surroundings and environment in term of money? Explain