Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 113

524US1

Unit: $U74

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UNITED STATES v. BESTFOODS

Opinion of the Court

the subsidiary,

necessarily be different under the two tests.
“The question
is not whether the parent operates the subsidiary, but rather
whether it operates the facility, and that operation is evi-
denced by participation in the activities of the facility, not
the subsidiary. Control of
if extensive
enough, gives rise to indirect liability under piercing doc-
trine, not direct liability under the statutory language.” Os-
wald 269; see also Schiavone v. Pearce, 79 F. 3d 248, 254
(CA2 1996) (“Any liabilities [the parent] may have as an oper-
ator, then, stem directly from its control over the plant”).
The District Court was therefore mistaken to rest its analy-
sis on CPC’s relationship with Ott II, premising liability on
little more than “CPC’s 100-percent ownership of Ott II” and
“CPC’s active participation in, and at times majority control
over, Ott II’s board of directors.”
777 F. Supp., at 575. The
analysis should instead have rested on the relationship be-
tween CPC and the Muskegon facility itself.

In addition to (and perhaps as a reﬂection of) the errone-
ous focus on the relationship between CPC and Ott II, even
those ﬁndings of the District Court that might be taken to
speak to the extent of CPC’s activity at the facility itself
are ﬂawed, for the District Court wrongly assumed that the
actions of the joint ofﬁcers and directors are necessarily at-
tributable to CPC. The District Court emphasized the facts
that CPC placed its own high-level ofﬁcials on Ott II’s board
of directors and in key management positions at Ott II, and
that those individuals made major policy decisions and con-
ducted day-to-day operations at the facility: “Although Ott
II corporate ofﬁcers set the day-to-day operating policies for
the company without any need to obtain formal approval
from CPC, CPC actively participated in this decision-making
because high-ranking CPC ofﬁcers served in Ott II manage-
ment positions.”
Id., at 559; see also id., at 575 (relying on
“CPC’s involvement in major decision-making and day-to-
day operations through CPC ofﬁcials who served within Ott
II management, including the positions of president and chief