Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 97

524US1

Unit: $U74

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52

UNITED STATES v. BESTFOODS

Syllabus

subsidiary’s actions in operating a polluting facility.
It is a general
principle of corporate law that a parent corporation (so-called because
of control through ownership of another corporation’s stock) is not liable
for the acts of its subsidiaries. CERCLA does not purport to reject
this bedrock principle, and the Government has indeed made no claim
that a corporate parent is liable as an owner or an operator under
§ 107(a)(2) simply because its subsidiary owns or operates a polluting
facility. But there is an equally fundamental principle of corporate law,
applicable to the parent-subsidiary relationship as well as generally, that
the corporate veil may be pierced and the shareholder held liable for
the corporation’s conduct when, inter alia, the corporate form would
otherwise be misused to accomplish certain wrongful purposes, most
notably fraud, on the shareholder’s behalf. CERCLA does not purport
to rewrite this well-settled rule, either, and against this venerable
common-law backdrop, the congressional silence is audible. Cf. Ed-
monds v. Compagnie Generale Transatlantique, 443 U. S. 256, 266–267.
CERCLA’s failure to speak to a matter as fundamental as the liability
implications of corporate ownership demands application of the rule
that, to abrogate a common-law principle, a statute must speak directly
to the question addressed by the common law. United States v. Texas,
507 U. S. 529, 534. Pp. 61–64.

2. A corporate parent that actively participated in, and exercised con-
trol over, the operations of its subsidiary’s facility may be held directly
liable in its own right under § 107(a)(2) as an operator of the facility.
Pp. 64–73.

(a) Derivative liability aside, CERCLA does not bar a parent cor-
poration from direct liability for its own actions. Under the plain lan-
guage of § 107(a)(2), any person who operates a polluting facility is di-
rectly liable for the costs of cleaning up the pollution, and this is so even
if that person is the parent corporation of the facility’s owner. Because
the statute does not deﬁne the term “operate,” however, it is difﬁcult to
deﬁne actions sufﬁcient to constitute direct parental “operation.”
In
the organizational sense obviously intended by CERCLA, to “operate”
a facility ordinarily means to direct the workings of, manage, or conduct
the affairs of the facility. To sharpen the deﬁnition for purposes of
CERCLA’s concern with environmental contamination, an operator
must manage, direct, or conduct operations speciﬁcally related to the
leakage or disposal of hazardous waste, or decisions about compliance
with environmental regulations. Pp. 64–67.

(b) The Sixth Circuit correctly rejected the direct liability analysis
of the District Court, which mistakenly focused on the relationship be-
tween parent and subsidiary, and premised liability on little more than
CPC’s ownership of Ott II and its majority control over Ott II’s board