Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 102

524US1

Unit: $U74

[09-06-00 17:54:15] PAGES PGT: OPIN

Cite as: 524 U. S. 51 (1998)

57

Opinion of the Court

managers of Ott I, including its founder, president, and prin-
cipal shareholder, Arnold Ott, on board as ofﬁcers of Ott II.
Arnold Ott and several other Ott II ofﬁcers and directors
were also given positions at CPC, and they performed duties
for both corporations.

In 1972, CPC sold Ott II to Story Chemical Company,
which operated the Muskegon plant until its bankruptcy in
1977. Shortly thereafter, when respondent Michigan De-
partment of Natural Resources (MDNR) 4 examined the site
for environmental damage, it found the land littered with
thousands of leaking and even exploding drums of waste,
and the soil and water saturated with noxious chemicals.
MDNR sought a buyer for the property who would be will-
ing to contribute toward its cleanup, and after extensive ne-
gotiations, respondent Aerojet-General Corp. arranged for
transfer of the site from the Story bankruptcy trustee in
1977. Aerojet created a wholly owned California subsidiary,
Cordova Chemical Company (Cordova/California), to pur-
chase the property, and Cordova/California in turn created
a wholly owned Michigan subsidiary, Cordova Chemical
Company of Michigan (Cordova/Michigan), which manufac-
tured chemicals at the site until 1986.5

By 1981, the federal Environmental Protection Agency
had undertaken to see the site cleaned up, and its long-term
remedial plan called for expenditures well into the tens of
millions of dollars. To recover some of that money, the

4 The powers and responsibilities of MDNR have since been transferred

to the Michigan Department of Environmental Quality.

5 Cordova/California and MDNR entered into a contract under which
Cordova/California agreed to undertake certain cleanup actions, and
MDNR agreed to share in the funding of those actions and to indemnify
Cordova/California for various expenses. The Michigan Court of Appeals
has held that this agreement requires MDNR to indemnify Aerojet and
its Cordova subsidiaries for any CERCLA liability that they may incur in
connection with their activities at the Muskegon facility. See Cordova
Chemical Co. v. MDNR, 212 Mich. App. 144, 536 N. W. 2d 860 (1995), leave
to appeal denied, 453 Mich. 901, 554 N. W. 2d 319 (1996).