The regulations “define solid waste as any discarded material which is …inherently wastelike.” .

General argued that the batteries could not be considered waste because they were recycled and put to further use.  The problem with this argument; however, was that the battery casings were disposed of without further use.  The court wrestled with the distinction between what was a by-product and what was a principal business product.  The choice was made under the current regulations of CERCLA requiring strict liability.

The regulations “define solid waste as any discarded material which is ‘[a]bandoned…[r]ecycled…or…inherently wastelike.” .  A material is not considered waste if it is somehow recycled or “reclaimed” to make a usable product.  The battery casings remaining after the batteries were recycled were inescapably considered to be waste because they remained after the process of recycling was complete.

The court found that General could not escape this conclusion simply by selling the battery to another party that disposed of the casings.  Further, the court rejected the idea of “continued ownership or control” because it would simply allow one to close their eyes to the disposition of a hazardous substance.  The court stated, “It is sufficient that the substance had the characteristic of waste, as we have defined it above, at the point at which it was delivered to another party.”

The Court affirmed the lower court’s ruling that General could not be liable on the grounds that the batteries were not treated at Catellus’s property.  However, the court did reverse and remand to allow Catellus the opportunity to seek liability on the grounds that General arranged for disposal “that eventually led to the contamination of Catellus’s property.”

6.  There are limits to recourse because of expropriation.  This is an act of state doctrine wherein the U.S. courts recognize acts of foreign governments as valid.  This would include acts such as a foreign country seizing private property.  The constitutional standards applied in the U.S. would not apply in this type of situation because of Underhill v. Hernandez, (168 U.S. 250 (1987)) wherein the court found, “the courts of one country will not sit in judgment on…the acts of another done within its own territory.”

There may be some remedy under repatriation.  Repatriation is a process wherein the United States can bring back profits earned on investments in another country.  There may be limits on how much of the profits can be removed.

7.  Ethical considerations are tough, especially when it comes to business.  “[E]thical standards are the generally accepted rules of conduct that govern society.”  (Jennings, 2005, p. 35).  The problem becomes what one considers

Ethics consist of several things:  values, notions of fairness and how a business interacts with a community, the environment or its neighbors. (Jennings, p. 39).  The powers at Sony may have an ethical obligation based on the values that you and I have; however, the values may not be the same in Japan, or in Afghanistan.  The saying, “When in Rome, do as the Romans do” can and often is applied in business.  (Jennings)  Sony doesn’t have an ethical obligation not to sell to the Taliban based on one person’s beliefs any more than the pawn shop dealer has no ethical obligation not to sell a gun to someone they find questionable.

Once “values” and “morals” come into play, business is put under a microscope.  There are probably issues to be found with most transactions.  Should Sony sell to the person that has not paid their child support payment?  Should Sony sell to the person stealing cable?  The possibilities are endless.  The fact that one, or even many, disagree with the actions of the Taliban, does not make it unethical for Sony as a business to sell to a customer.  To correct problems such as illegal smuggling, the matters should be addressed within the law.  This sets clear boundaries and takes the guesswork out of the equation.

There does not appear to be a consequence to a company making profits from a government making money on its own ban.  Daniel Pearl address the issue of Afghanistan and Sony in an article entitled, Afghanistan Provides Valuable Route for Smugglers Shipping Goods to Pakistan (Wall Street Journal, January 9, 2002).  In this article, Pearl discusses many of the ethical implications of the transactions and the lack of remedy.  He also discusses the fact that Sony profits the same, whether they sell to legitimate customers, or to smugglers.  Sony claimed to have no way of distinguishing whether items were being smuggled.


Jennings, Marianne M.  (2005) Business:  Its Legal, Ethical and Global Environment.  South-Western Publisher.

Pearl, Daniel.  (2002, January 9).  Afghanistan Provides Valuable Route for Smugglers Shipping Goods to Pakistan.  Wall Street Journal.