Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 103

524US1

Unit: $U74

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UNITED STATES v. BESTFOODS

Opinion of the Court

United States ﬁled this action under § 107 in 1989, nam-
ing ﬁve defendants as responsible parties: CPC, Aerojet,
Cordova/California, Cordova/Michigan, and Arnold Ott.6
(By that time, Ott I and Ott II were defunct.) After the
parties (and MDNR) had launched a ﬂurry of contribution
claims, counterclaims, and cross-claims, the District Court
consolidated the cases for trial in three phases: liability, rem-
edy, and insurance coverage. So far, only the ﬁrst phase has
been completed; in 1991, the District Court held a 15-day
bench trial on the issue of liability. Because the parties stip-
ulated that the Muskegon plant was a “facility” within the
meaning of 42 U. S. C. § 9601(9), that hazardous substances
had been released at the facility, and that the United States
had incurred reimbursable response costs to clean up the
site, the trial focused on the issues of whether CPC and
Aerojet, as the parent corporations of Ott II and the Cordova
companies, had “owned or operated” the facility within the
meaning of § 107(a)(2).

The District Court said that operator liability may attach
to a parent corporation both directly, when the parent itself
operates the facility, and indirectly, when the corporate veil
can be pierced under state law. See CPC Int’l, Inc. v.
Aerojet-General Corp., 777 F. Supp. 549, 572 (WD Mich.
1991). The court explained that, while CERCLA imposes
direct liability in situations in which the corporate veil can-
not be pierced under traditional concepts of corporate law,
“the statute and its legislative history do not suggest that
CERCLA rejects entirely the crucial limits to liability that
Id., at 573. As the District
are inherent to corporate law.”
Court put it:

“a parent corporation is directly liable under section
107(a)(2) as an operator only when it has exerted power
or inﬂuence over its subsidiary by actively participating
in and exercising control over the subsidiary’s business

6 Arnold Ott settled out of court with the Government on the eve of trial.