Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 104

524US1

Unit: $U74

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

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

59

Opinion of the Court

during a period of disposal of hazardous waste. A par-
ent’s actual participation in and control over a subsid-
iary’s functions and decision-making creates ‘operator’
liability under CERCLA; a parent’s mere oversight of a
subsidiary’s business in a manner appropriate and con-
sistent with the investment relationship between a par-
Ibid.
ent and its wholly owned subsidiary does not.”

Applying that test to the facts of this case, the District Court
held both CPC and Aerojet liable under § 107(a)(2) as opera-
tors. As to CPC, the court found it particularly telling that
CPC selected Ott II’s board of directors and populated its
executive ranks with CPC ofﬁcials, and that a CPC ofﬁcial,
G. R. D. Williams, played a signiﬁcant role in shaping Ott II’s
environmental compliance policy.

After a divided panel of the Court of Appeals for the Sixth
Circuit reversed in part, United States v. Cordova/Michigan,
59 F. 3d 584, that court granted rehearing en banc and
vacated the panel decision, 67 F. 3d 586 (1995). This time,
7 judges to 6, the court again reversed the District Court
113 F. 3d 572 (1997). The majority remarked on
in part.
the possibility that a parent company might be held directly
liable as an operator of a facility owned by its subsidiary:
“At least conceivably, a parent might independently oper-
ate the facility in the stead of its subsidiary; or, as a sort
of joint venturer, actually operate the facility alongside its
subsidiary.”
Id., at 579. But the court refused to go any
further and rejected the District Court’s analysis with the
explanation:

“[W]here a parent corporation is sought to be held lia-
ble as an operator pursuant to 42 U. S. C. § 9607(a)(2)
based upon the extent of its control of its subsidiary
which owns the facility, the parent will be liable only
when the requirements necessary to pierce the corpo-
rate veil [under state law] are met.
In other words, . . .
whether the parent will be liable as an operator depends