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524US1

Unit: $U74

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UNITED STATES v. BESTFOODS

Opinion of the Court

be charged with derivative CERCLA liability for its subsid-
iary’s actions.10

IV
A
If the Act rested liability entirely on ownership of a pollut-
ing facility, this opinion might end here; but CERCLA liabil-
ity may turn on operation as well as ownership, and nothing
in the statute’s terms bars a parent corporation from direct
liability for its own actions in operating a facility owned by
its subsidiary. As Justice (then-Professor) Douglas noted al-
most 70 years ago, derivative liability cases are to be distin-
guished from those in which “the alleged wrong can seem-
ingly be traced to the parent through the conduit of its own
personnel and management” and “the parent is directly a
participant in the wrong complained of.” Douglas 207, 208.11

(Mass. 1987) (noting that, since “federal common law draws upon state law
for guidance, . . . the choice between state and federal [veil-piercing law]
may in many cases present questions of academic interest, but little practi-
cal signiﬁcance”). But cf. Note, Piercing the Corporate Law Veil: The
Alter Ego Doctrine Under Federal Common Law, 95 Harv. L. Rev. 853
(1982) (arguing that federal common law need not mirror state law, be-
cause “federal common law should look to federal statutory policy rather
than to state corporate law when deciding whether to pierce the corporate
veil”). Since none of the parties challenges the Sixth Circuit’s holding
that CPC and Aerojet incurred no derivative liability, the question is not
presented in this case, and we do not address it further.

10 Some courts and commentators have suggested that this indirect,
veil-piercing approach can subject a parent corporation to liability only as
an owner, and not as an operator. See, e. g., Lansford-Coaldale Joint
Water Auth. v. Tonolli Corp., supra, at 1220; Oswald, Bifurcation of the
Owner and Operator Analysis under CERCLA, 72 Wash. U. L. Q. 223, 281–
282 (1994) (hereinafter Oswald). We think it is otherwise, however.
If
a subsidiary that operates, but does not own, a facility is so pervasively
controlled by its parent for a sufﬁciently improper purpose to warrant veil
piercing, the parent may be held derivatively liable for the subsidiary’s
acts as an operator.

11 While this article was written together with Professor Shanks, the
passages quoted in this opinion were written solely by Justice Douglas.
See Douglas 193, n. *.