Campbell Soup is being sued by the Department of Justice and two environmental groups. The suit alleges that the company’s manufacturing plant in Napoleon, Ohio has been discharging contaminated wastewater into the Maumee River, with the water eventually making its way to Lake Erie. The lawsuit alleges that Campbell’s dumps approximately 5 million gallons of wastewater per day into the river. The water has been found to contain bacteria and E, coli, which can cause illnesses in humans and animals, as well as phosphorous, which can create algae blooms that negatively impact the wildlife in the river and lake.
If found in violation of the Clean Water Act, which regulates the type and quantity of wastewater discharges, Campbell’s may be forced to halt operations at the plant and pay hefty civil penalties. For their part, the company has stated that they are making capital investments which would mitigate the problem and resolve the issue.
Discussion Questions:
- What is the Coase Theorem? Why might it be difficult for private negotiation to resolve the pollution issue with Campbell Soup?
- Describe some of the methods that could be used to get Campbell Soup to internalize the external costs they are imposing on their neighbors.
Source| CBS News: https://www.cbsnews.com/news/campbell-soup-lake-erie-doj-environmental-groups-lawsuit-pollution/; Unsplash: Photo by Sigmund on Unsplash