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United States v. Bestfoods

Supreme Court of the United States

March 24, 1998, Argued ; June 8, 1998, Decided

No. 97-454

Opinion

 [*55]  [***52]  [**1881]    JUSTICE SOUTER delivered the opinion of the Court.

 The United States brought this action for the costs of cleaning up industrial waste generated by a chemical plant. The issue before us, under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 94 Stat. 2767, as amended, 42 U.S.C. § 9601 et seq., is whether a parent corporation that actively participated in, and exercised control over, the operations of a subsidiary may, without more, be held liable as an operator of a polluting facility owned or operated by the subsidiary. We answer no, unless the corporate veil may be pierced. But a corporate parent that actively participated in, and exercised control over, the operations of the facility itself may be held [****9]  directly liable in its own right as an operator of the facility.

 In 1980, CERCLA was enacted in response to the serious environmental and health risks posed by industrial pollution. See Exxon Corp. v. Hunt, 475 U.S. 355, 358-359, 89 L. Ed. 2d 364, 106 S. Ct. 1103 (1986). "As its name implies, CERCLA is a comprehensive statute that grants the President broad power to command government agencies and private parties to clean up hazardous waste sites." Key Tronic Corp. v. United States, 511 U.S. 809, 814, 128 L. Ed. 2d 797, 114 S. Ct. 1960 (1994).] If it satisfies certain statutory conditions, the United States may, for instance, use the "Hazardous Substance Superfund" to finance cleanup efforts, see 42 U.S.C. §§ 9601(11), 9604; 26 U.S.C. § 9507, which it may then replenish by suits brought under § 107 of the Act against, among others, "any person who at the time of disposal of any hazardous  [**1882]  substance owned or operated any facility." 42 U.S.C. § 9607(a)(2). So, those actually "responsible for any damage, environmental harm, or injury from chemical poisons  [*56]  [may be tagged with] the cost of their actions," S. Rep. No. 96-848, p. 13 (1980). 1 ] The term "person" is defined in CERCLA to include corporations and other business organizations,  [****10]  see 42 U.S.C. § 9601(21), and the term "facility" enjoys a broad and detailed [***53]  definition as well, see § 9601(9). 2 The phrase "owner or operator" is defined only by tautology, however, as "any person owning or operating" a facility, § 9601(20)(A)(ii), and it is this bit of circularity that prompts our review. Cf. Exxon Corp. v. Hunt, supra, at 363 (CERCLA, "unfortunately, is not a model of legislative draftsmanship").

 

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524 U.S. 51 *; 118 S. Ct. 1876 **; 141 L. Ed. 2d 43 ***; 1998 U.S. LEXIS 3733 ****; 66 U.S.L.W. 4439; 98 Cal. Daily Op. Service 4317; 98 Daily Journal DAR 5957; 28 ELR 21225; 46 ERC (BNA) 1673; 157 A.L.R. Fed. 735; 1998 Colo. J. C.A.R. 2937; 11 Fla. L. Weekly Fed. S 610

UNITED STATES v. BESTFOODS, ET AL.

Prior History:  [****1]  ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT.

Disposition: 113 F.3d 572, vacated and remanded.

CORE TERMS

subsidiary, piercing, parent corporation, corporate veil, environmental, Chemical, direct liability, polluting, state law, ownership, court of appeals, participated, site, officers and directors, corporate law, dual, derivative liability, hazardous substance, federal common law, plant, veil-piercing, decisions, disposal, indirect, cleanup, parties, norms, veil, subsidiary corporation, exercise control

Administrative Law, Separation of Powers, Executive Controls, Environmental Law, Enforcement, Cost Recovery Actions, Strict Liability, Business & Corporate Compliance, Hazardous Wastes & Toxic Substances, CERCLA & Superfund, Hazardous Substance Superfund, General Overview, Potentially Responsible Parties, Operators & Owners, Cleanup, Cleanup Costs, Torts, Vicarious Liability, Corporations, Subsidiary Corporations, Business & Corporate Law, Management Duties & Liabilities, Causes of Action, Directors & Officers, Terms in Office, Shareholders, Shareholder Duties & Liabilities, Piercing the Corporate Veil, Governments, Courts, Common Law, Alter Ego, Corporate Formalities, Shareholder Actions, Actions Against Corporations, Joint Ventures