Source: http://corporate.findlaw.com/law-library/arranger-and-transporter-liability-under-cercla.html
Timestamp: 2018-02-18 18:09:39
Document Index: 605292930

Matched Legal Cases: ['§9601', '§107', '§9607', '§107', '§107', '§9607', '§107', '§107', '§107', '§107', '§107']

Arranger and Transporter Liability under CERCLA - FindLaw
The Comprehensive Environmental Response, Compensation and Liability Act, 42U.S.C. §§9601-9675 ("CERCLA"), was enacted in the wake of Love Canal as a means of facilitating the cleanup of potentially dangerous hazardous waste sites. The primary goals of the statute are to provide the federal government with the tools necessary to implement a prompt and effective response to problems created by the disposal of hazardous materials, and to ensure that those responsible for the problems caused by such disposal assume financial responsibility for remedying the harmful conditions they created.
To effectuate these purposes, CERCLA established a liability regime which renders certain classes of parties, deemed responsible for the presence of hazardous materials in the environment, strictly liable, jointly and severally, for costs incurred by the government, or other private parties, to investigate and remediate contaminated sites. The four classes of "persons" which Congress deemed to be "responsible" for the contamination of a particular site are defined broadly as:
Present owners and operators of contaminated sites;
Former owners who owned or operated the site during a period of hazardous substance disposal;
Those who generated hazardous substances that came to be located at the site or who "otherwise arranged" for their disposal or treatment; an
Transporters who select the site to which the hazardous substances are transported.
CERCLA, however, left many of its key terms without meaningful definition. Moreover, because it is the product of an eleventh-hour compromise of a lame-duck Congress, CERCLA's legislative history sheds little light on congressional intent with respect to various issues impacting the imposition of liability.
For example, Congress provided no guidance whatsoever on such critical issues as what type of conduct is necessary to render a party liable for having "otherwise arranged" for the disposal or treatment of hazardous substances, or how involved in the disposal site selection decision a transporter must become before it will be deemed to be liable. Is a person who "sells" a product, byproduct or co-product which is itself a hazardous substance or contains hazardous substances liable for its subsequent release? Can a corporate officer or shareholder be held personally liable for the corporation's disposal practices? Since the answers to such questions cannot be gleaned from the language of the statute or its legislative history, they must be supplied by the courts through the development of federal common law.
The focus of this paper is the response of the federal courts to these and other questions regarding the contours of the arranger and transporter categories of CERCLA liability.
Arranger Liability Under CERCLA §107(A)(3)
CERCLA's Section107(a)(3) imposes liability on:
Any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for the transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility... owned or operated by another party or entity and containing such hazardous substances. 42 U.S.C. §9607(a)(3).
Thus, by the clear terms of the statute, any person who affirmatively provides for the disposal or treatment of hazardous substances will be liable for a subsequent release of such hazardous substances. What is less clear, however, are the circumstances under which a person who arranges to send hazardous substances to a facility, ostensibly for a purpose other than their disposal or treatment, may be deemed to have implicitly arranged for "disposal" or "treatment" at the facility, and thus be held liable for the resultant cleanup costs. When confronted with such scenarios, courts have reached somewhat divergent conclusions regarding the type of "arrangement" that will subject a person to CERCLA liability.
Sale Versus Disposal
The mere sale of a product which is, or contains, a hazardous substance cannot support a finding of arranger liability under CERCLA "without additional evidence that the transaction includes an 'arrangement' for the ultimate disposal" or treatment of the hazardous substance. Florida Power & Light Co. v. Allis Chalmers Corp., 893 F.2d 1313, 1317 (11th Cir. 1990).
Courts have found such additional evidence of an arrangement for treatment or disposal in the nature and condition of the article sold and the nature of the purchaser's business. If, upon consideration of the facts and circumstances surrounding the purported sale transaction, it can be concluded that the transaction constituted the conveyance of a useful product for a useful purpose, rather than an affirmative act to "get rid of" hazardous substances, the seller cannot be deemed an arranger and cannot be subject to liability pursuant to Section107(a)(3).
Thus, while it is clear that the seller of a new product which is or contains a hazardous substance is not liable for its ultimate disposal by the purchaser, this is not the only situation in which the transaction may legitimately be characterized as a sale rather than an arrangement for treatment or disposal. A number of courts also have declined to impose liability on the seller of used products, provided that such products, at the time of sale, remain useful, in their current state, for the purpose for which they were originally manufactured. However, when the article involved in the sale transaction can no longer be used for its intended purpose, and its residual value is solely a function of the fact that it can be processed to recover a valuable commodity, an arrangement for disposal or treatment is likely to be found. Chatham Steel Corp. v. Brown, 858 F. Supp. 1130, 1140-41 (N.D. Fla. 1994).
Applying these broad principles, courts have uniformly held that sellers of spent lead acid batteries, used industrial or electrical equipment or metal-containing byproducts of manufacturing processes to a reclamation or recycling facility are liable under Section107(a)(3) for response costs incurred in responding to a release or threatened release of hazardous substances at that facility. In United States v. Pesses, 794 F.Supp.151 (W.D. Pa. 1992), for example, the site in question was a metal alloy manufacturing facility.
The defendants in Pesses had sold scrap materials to the site operator, and these materials were then either processed for use as raw material in the alloy manufacturing process or resold to other reclamation facilities. Despite defendants' contention that they sold valuable, useful commodities to the facility operator in order to make a profit, the court held that because the materials sold by defendants necessarily required processing in order to be put to productive use, defendants had implicitly arranged for the treatment and disposal of those materials at the processing site. Id. at 156-67; see also Catellus Dev. Corp. v. United States, 34 F.3d 748 (9th Cir. 1994).
In addition to transactions involving the sale of recyclable or reclaimable materials to a processor, situations have arisen in which parties have attempted to claim the "sale" defense in conjunction with transactions in which manufacturing byproducts have been sold for direct use. In such situations, courts typically have refused to view the sale as anything other than an arrangement for the disposal of the byproduct. The two leading cases in this regard are Louisiana-Pacific Corp. v. ASARCO, Inc., 24 F.3d 1565 (9th Cir. 1994), and United States v. A&F Materials Co., 582 F. Supp. 842 (S.D. Ill. 1984). In the latter case, at issue was a spent caustic solution which was generated by McDonnell Douglas Corporation ("MDC") as a byproduct of the jet aircraft manufacturing process. MDC sold this spent caustic at auction to A&F for use as a neutralizing agent. The government then sought to hold MDC liable as an arranger for response costs incurred at the A&F facility.
Similarly, in Louisiana-Pacific, ASARCO sold slag produced in conjunction with its smelting operations to a broker for resale. The broker marketed the slag for use as ballast to provide firmer ground in logyards. Louisiana-Pacific purchased the slag and used it in its yard until it became contaminated with wood waste and other debris, at which point the slag was hauled to a landfill for disposal and replaced with a fresh load. Louisiana-Pacific subsequently sued ASARCO for response costs incurred in connection with the cleanup of its yard and for contribution for the costs incurred in cleaning up the landfill where the slag was ultimately disposed.
In both of these cases, the courts' analysis focused primarily on the waste-like nature of the hazardous substances at issue, with the result that both ASARCO and MDC were found to have arranged for the disposal of their hazardous byproducts. As explained by the Louisiana-Pacific court:
Slag, like the caustic solution in A&F Materials, is at best a by-product. ASARCO's principal business is the smelting of copper. McDonnell Douglas's principal business is the manufacture of aircraft. Both slag and the caustic solution are by-products with a nominal commercial value. The logging companies paid $3.50 per ton for slag, and preferred it to gravel as a "ballast." Similarly, A&F paid 7.2" per gallon for the caustic solution and used it to neutralize acidic oils. Both by-products were materials their producers wanted to get rid of whether they could sell them or not. ASARCO had dumped slag in Commencement Bay for the years before that means of disposal became infeasible. McDonnell Douglas paid to have the caustic solution hauled away after A&F stopped buying it. 24 F.3d at 1575.
Where, however, the hazardous substance in question is produced not as a byproduct, but as a product or co-product of a manufacturer's principal business, courts are loath to hold the manufacturer liable for its eventual disposal by the purchaser. See id. at n.6. See also 3550 Stevens Creek Assocs. v. Barclays Bank, 915 F.2d 1355 (9th Cir. 1990), cert. denied, 500 U.S. 917 (1991) (asbestos vendor not liable to purchaser of commercial building for asbestos removal costs); Dayton Indep. Sch. Dist. v. United States Mineral Prods. Co., 906 F.2d 1059 (5th Cir. 1990) (same); Florida Power & Light Co. v. Allis Chalmers Corp., 893 F.2d 1313 (11th Cir. 1990) (manufacturers of PCB transformers not liable for disposal of transformers after use by purchasers); Edward Hines Lumber Co. v. Vulcan Materials Co., 685 F. Supp. 651, 654 (N.D. Ill.), aff'd, 861 F.2d 155 (7th Cir. 1988) (manufacturer of wood treatment chemicals not liable for response costs incurred at wood treatment facility); Kelley v. ARCO Indus. Corp., 739 F.Supp. 354 (W.D. Mich. 1990) (neoprene supplier not liable for contamination at facility of rubber goods manufacturer).
A number of courts have been asked to determine whether a manufacturer which sends hazardous substances to an outside concern for further preparation prior to the distribution of the manufacturer's final product in commerce can be held liable for resulting contamination at the facility to which the substances are sent for preparation. Manufacturers in such situations have argued that, by entering into such arrangements, they are contracting merely for the performance of a service, and not for the disposal of their hazardous substances. In many instances, however, the courts have disagreed.
The seminal case addressing the scope of arranger liability under these so-called "tolling agreements" is United States v. Aceto Agric. Chems. Corp., 872 F.2d 1373 (8th Cir. 1989). In that case, defendants were pesticide manufacturers who hired Aidex Corporation to formulate their technical-grade pesticides into commercial-grade products. Pursuant to the tolling agreements with the manufacturers, Aidex would mix the manufacturers' active ingredients -- which were hazardous -- with inert materials according to the specifications provided by the manufacturers. Aidex would then package the resulting commercial-grade pesticide and ship it either back to the manufacturers or directly to the manufacturers' customers. Throughout the manufacturers' relationship with Aidex, ownership of the technical-grade pesticide, the work in process and the commercial-grade product remained with the individual manufacturers.
Relying on Florida Power & Light and other cases discussed above, the manufacturers sought to avoid liability by claiming that where a party conveys a useful substance to another party, who then incorporates it into a product which is subsequently disposed, imposition of arranger liability is inappropriate. The court, however, easily distinguished the "useful product" cases.
Initially, the court noted that, unlike Florida Power & Light and other cases exonerating sellers of useful products from liability, in the case before it, there was no transfer of ownership of the hazardous substances from the manufacturers to Aidex. Moreover, the court asserted that, unlike the purchasers in the cited cases, Aidex performed "a process on products owned by the [manufacturers] for [the manufacturers'] benefit and at their direction; waste is generated and disposed contemporaneously with the process." 872 F.2d at 1381.
The court, therefore, concluded that, because the manufacturers owned the technical-grade pesticides provided to Aidex, the commercial-grade pesticide produced by Aidex and the work in process, and because the generation of pesticide-contaminated waste was inherent in the formulation process, the manufacturers could be deemed to have implicitly arranged for the disposal of hazardous substances at the Aidex facility. Under virtually identical situations, other courts have agreed. See United States v. Vertac Chem. Corp., 966 F.Supp. 1491 (E.D. Ark. 1997); Jones-Hamilton Co. v. Beazer Materials & Servs., Inc., 973 F.2d 688 (9th Cir. 1992); Mathews v. Dow Chem. Co., 947 F. Supp. 1517 (D. Colo. 1996); Levin Metals Corp. v. Parr-Richmond Terminal Co., 781 F. Supp. 1448, 1451 (N.D. Cal. 1991).
Despite the seemingly broad reach of Aceto and its progeny, there is no per se rule of liability whenever a party contracts for services involving hazardous substance disposal. The Eleventh Circuit recently exonerated from liability landowners who contracted for the aerial spraying of pesticides owned by them on their properties. In Montalvo, the defendants were farming and ranching companies which had contracted with a company called Chemairspray for the aerial spraying of pesticides. As a result of loading the pesticides into the tanks on the applicator plane, and the rinsing of the tanks following application of pesticides to defendants' lands, the Chemairspray site became contaminated.
In its attempt to recover its response costs from defendants, Chemairspray, in apparent reliance on Aceto, alleged that defendants owned the pesticides throughout the application process, that the generation of hazardous pesticide wastes was a necessary incident of the application process and that defendants, therefore, arranged for the disposal of such wastes. 85 F.3d at 405.
The Eleventh Circuit, however, found that the defendants' involvement with Chemairspray and the pesticide application process was a far cry from the extent of the manufacturers' involvement with the formulation process alleged in Aceto, and declined to hold that defendants had arranged for the disposal of pesticide wastes at the Chemairspray facility. According to the court, because the Aceto manufacturers not only owned the technical- and commercial-grade pesticides, but also provided the formulation specifications, and knew or should have known that the formulation process would give rise to pesticide wastes, "it was possible to infer [that] the manufacturers exercised some control over the formulator's mixing process." Since, however, there was no basis for inferring that the farmers and ranchers knew that pesticide wastes were an incidental byproduct of the spraying services for which they contracted, the court declined to find that they acquiesced in or implicitly agreed to the disposal of the pesticide wastes at the Chemairspray facility. 84 F.3d at 408-09.
The Eleventh Circuit also was careful to note that its holding should not be construed as an endorsement of the proposition that a party who contracts for services involving the use and disposal of hazardous substances can never be held liable as an arranger for such disposal. According to the court, the determination of whether a party "otherwise arranged" for disposal within the meaning of CERCLA's Section107(a)(3) requires a fact-specific inquiry. Under this approach, "[w]hile factors such as a party's knowledge (or lack thereof) of the disposal, ownership of the hazardous substances, and intent are relevant to determining whether there has been an 'arrangement' for disposal, they are not necessarily determinative of liability in every case." 84 F.3d at 407.
In the view of the Eleventh Circuit, since there were no allegations that defendants knew about the spills at the site, or that they had any duty or authority to control Chemairspray's activities, Chemairspray failed to demonstrate that defendants took any "affirmative act to dispose of the wastes" in question. There was, therefore, no basis for concluding that defendants had implicitly agreed to the disposal. See also Briggs & Stratton Corp. v. Concrete Sales & Servs., Inc., 971 F. Supp. 566 (M.D. Ga. 1997) (nail manufacturer who contracted for electroplating/galvanizing services not liable for contamination of contractor's site where manufacturer did not know of, or have authority to control, contractor's improper disposal practices).
Transporter Liability Under CERCLA §107(A)(4)
CERCLA §107(A)(4) provides, a person who transports hazardous substances to a facility for treatment or disposal may be held liable in the event of a release or threatened release of hazardous substances at that facility only if that person "selected" the facility in question. 42U.S.C. §9607(a)(4). Thus, by the express terms of this provision, a transporter which makes the ultimate decision of where to take its customer's hazardous substances is a CERCLA responsible party. Not surprisingly, however, it has been left to the courts to determine how involved a transporter must become in choosing the disposal or treatment location, short of exercising absolute discretion, before liability will attach. While the case law on this issue of site selection is sparse, the courts construing the language of Section107(a)(4) have been unanimous in their establishment of a "substantial input" or "active participation" standard for transporter liability.
This controlling standard was elucidated by the Third Circuit in Tippins Inc. v. USX Corp., 37 F.3d 87 (3d Cir. 1994). In Tippins , the plaintiff had contracted with Petroclean to remove and dispose of electric arc furnace dust present in and around a baghouse plaintiff had purchased from a third party. The agreement between Tippins and Petroclean required Petroclean to supply all labor, equipment and material for the job, and to obtain an EPA identification number for the generation of the hazardous waste. Petroclean gathered information on a potential disposal site and submitted a cost proposal to Tippins. When subsequent developments rendered disposal at the original site prohibitively expensive, Petroclean surveyed substitute disposal sites and ultimately identified two landfills willing to accept the dust for disposal. Both of the landfills were presented to Tippins as possible disposal locations, and based on cost information gathered by Petroclean, Tippins directed Petroclean to dispose of the dust at the Four County Landfill. The question before the court was whether Petroclean's involvement with locating and gathering information on available landfill options was sufficient to support a finding that it selected the Four County Landfill for disposal of the dust.
Recognizing that one of CERCLA's primary objectives is to hold those who are "actively involved" in hazardous substance disposal financially accountable for the resulting harm, the Third Circuit asserted that the imposition of transporter liability must reflect the fact that, by virtue of their expertise, "transporters often play an influential role in the decision to dispose waste at a given facility." Id. at 95. According to the court, a person is subject to transporter liability "not only if it ultimately selects the disposal facility, but also when it actively participates in the disposal decision to the extent of having had substantial input into which facility was ultimately chosen." Id. at 94. Such substantial input occurs:
[w]hen a transporter with a knowledge and understanding of the industry superior to its customer's investigates a number of potential disposal sites and suggests several to the customer from which it may pick, and the customer relies upon the transporter's knowledge and experience by choosing one of the winnowed sites. Id. at 95.
The court went on to explain that, in such a situation, while "the transporter has not made the ultimate decision, it has made the penultimate one; for all intents and purposes, the transporter has selected the facility by presenting it as one of a few disposal alternatives." Id.; accord B.F Goodrich v. Betoski, 99 F.3d 505, 520-21 (2nd Cir. 1996); ACC Chem. Co. v. Halliburton Co., 932 F. Supp. 233, 239 (S.D. Iowa 1995). See also United States v. Aluminum Co. of Amer ., 1996 WL 27074, at *4 (E.D. Pa. Jan. 16, 1996) (simply acquiescing in customer's suggestion as to disposal location is insufficient to support finding that transporter selected the site; transporter must have taken "an affirmative step to exercise its formal discretion").
Individual Arranger / Transporter Liability of Corporate Officers / Shareholders
While some environmental statutes expressly provide for the imposition of liability on shareholders or officers of an offending corporation, CERCLA does not. In many instances, however, courts have borrowed from common law tort principles, and have imposed liability on such officers or shareholders who participate in the liability-creating activity. Thus, in the context of CERCLA operator liability, the prevailing weight of authority allows for the imposition of liability only on a shareholder or officer who exercises actual control over the offending corporation by actively participating in its day-to-day management or operations. However, as discussed below, those courts that have addressed the issue of individual responsibility for corporate activities in the CERCLA arranger/transporter arena have determined that, while the exercise of actual and substantial control over the general management of operations of the offending corporation is sufficient to hold the individual liable for on-site releases or threatened releases of hazardous substances, such control does not, by itself, render an individual liable as an arranger or transporter.
The rationale for imposing disparate standards for the imposition of operator and arranger/transporter liability on individual corporate officers and shareholders can be found in the words of the governing CERCLA provisions. As the two circuit courts that have addressed the issue of personal liability under Sections107(a)(3) and(4) recognized, the operator liability provisions of CERCLA require only that a person "operate" the facility at which the disposal occurred; there is no express requirement that the operator take any action whatsoever in connection with the disposal activities themselves. To impose operator liability on a corporate officer or shareholder, it is sufficient, therefore, that the person in question exercised actual and substantial control over the day-to-day operations of the facility. While the exercise of authority over disposal activities would, in most instances, satisfy the "actual control" requirement for the imposition of operator liability, it is not required. The arranger/transporter provisions, on the other hand, both impose liability for specific conduct -- the "arrangement for disposal or treatment" and the "selection" of and transportation to the disposal or treatment location -- rather than for one's status. See United States v. TIC Investment Corp., 68 F.3d 1082, 1089 nn.5-7 (8th Cir. 1995); United States v. USX Corp ., 68 F.3d 811, 822-24 (3d Cir. 1995).
In TIC Investment, the Eighth Circuit was faced with a situation involving several parent corporations, their wholly owned subsidiaries and the individual, Georgoulis, who was their sole shareholder, president and chairman of the board. Georgoulis was also chairman of the board and/or an officer of several of the subsidiary corporations. One of the issues before the court was whether Georgoulis could be held liable under Section107(a)(3) for having arranged for the disposal of one of the subsidiary's wastes at the facility that was the subject of the lawsuit.
The court found that arranger liability could properly be imposed on a corporate officer or director only if that person actually "participate[d] in, or exercised control over, activities that are causally connected to, or have some nexus with, the arrangement for disposal of hazardous substances, or the off-site disposal itself." 68 F.3d at 1087-88. By way of further explanation, the Eighth Circuit opined:
Our holding today recognizes that, for purposes of determining arranger liability under [CERCLA §107(a)(3)], whether an individual exercises his or her authority over a corporation which generates and arranges for the disposal, treatment, or transportation of hazardous substances, is relevant under the statutory scheme. For arranger liability to attach to a corporate officer or director, there must be some actual exercise of control, and it must include the exercise of some control, directly or indirectly, over the arrangement for disposal, or the off-site disposal, of hazardous substances. Id . at 1089-90.
Thus, despite the fact that there was no evidence to suggest that Georgoulis was personally involved in, or was even aware of, the details of the disposal arrangement, the court nonetheless found him liable based on his exercise of "substantial indirect control over the disposal arrangement." Id. The facts presented to the court revealed that, in his capacity as chairman of the board and chief executive officer of the company which arranged for the disposal of hazardous substances, Georgoulis "so usurped the power of those who were only nominally running [the company] that he undertook responsibility for all of [the company's] decisionmaking." Moreover, he so tightly controlled the finances of the company that he left its employees "with no other choice but to continue with the relatively inexpensive arrangement that had historically existed" between the company and the contaminated disposal site. The court, therefore, concluded that "Georgoulis's actions inexorably led to the continuation of the disposal of [the company's] wastes at the dumpsite." Id . at 1090.
The TIC court also established an identical standard for holding a parent corporation liable as an arranger for the disposal activities of its subsidiary. However, it declined to impose liability in this instance, based on the absence of evidence that Georgoulis's control over the disposing subsidiary company was exercised in his capacity as an officer or director of the parent corporations, rather than in his capacity as an officer and director of the subsidiary. According to the court, the overlap of officers and directors between the parent and subsidiary does not, without more, establish the arranger liability of the parent. Id. at 1092.
In a similar vein, the Third Circuit established that corporate officers or shareholders may be subjected to transporter liability under Section107(a)(4) only if they "actively participate in the process of accepting hazardous substances for transport and have a substantial role in the selection of the disposal facility." USX Corp ., 68 F.3d at 824. However, for liability to be imposed,
[i]t is not necessary that the officer personally accept the waste for transport. Nor is it necessary that the officer participate in the selection of the disposal facility. Liability may be imposed where the officer is aware of the acceptance of materials for transport and of his company's substantial participation in the selection of the disposal facility. An officer who has authority to control the disposal decisions should not escape liability under §107(a)(4) when he or she has actual knowledge that a subordinate has selected a disposal site and, effectively, acquiesces in the subordinate's actions. Id . at 825 (citations omitted).
Under this standard, the court determined that, if the waste disposal company's principals were not aware of the disposal at the site in question, they could not be held personally liable, despite the fact that they had been actively involved in the day-to-day affairs of the company at the time of disposal. Id . at 825-26.
CERCLA's liability provisions are written in very broad, ill-defined terms, leaving ample room for judicial construction. As a result, a body of common law has been developed to give shape and provide substance to the statute's general dictates regarding who is to bear financial responsibility for remedying the harm caused by the release of hazardous substances into the environment.
Recognizing that arrangements for disposal may assume myriad guises, courts have looked beyond the characterizations of the parties to the transactions in question to determine whether, at bottom, they are anything more than a pretext for getting rid of otherwise unwanted wastes or a method for shifting the onus of disposal from one entity to another. Where such a purpose or effect is found, courts do not hesitate to impose liability, pursuant to Section107(a)(3) of CERCLA, even if the transaction in question has a legitimate business purpose.
The issue of whether a particular transporter selected the disposal site for its customer's hazardous substances also requires a fact-intensive inquiry by the courts. When the issue is the imposition of corporate liability under Section107(a)(4), judicial analysis focuses on the extent of the transporter's involvement with the process of identifying facilities suitable for its customer's disposal needs and the extent to which its expertise in the waste disposal arena impacted the ultimate choice of disposal facilities.
Courts also have not hesitated to hold individual officers, directors and shareholders, including corporate parents, liable, along with the corporation, for the operation of a contaminated site (CERCLA §§107(a)(1), (2)), arranging for the disposal or treatment of a hazardous substance at some other facility (CERCLA §107(a)(3)) or the selection of the disposal location by a transporter (CERCLA §107(a)(4)) when to do so would be in keeping with the express statutory language. Borrowing from common law principles developed in the tort arena, such liability has been imposed, however, only where it can be established that the individual or parent actually participated in the liability-creating conduct.
Since the imposition of operator liability under CERCLA requires no conduct apart from the operation of the site in question at the time of hazardous substance disposal, officer/director/shareholder liability merely requires the exercise of substantial control over the day-to-day management or operations of the facility. While actual and substantial control over environmental policy or waste disposal decisions also may be sufficient to subject an officer or controlling shareholder to operator liability pursuant to Section107(a)(1) or(2), it is not necessary. However, by the express language of the arranger and transporter liability provisions, something more than mere operation of the offending corporation is required before arranger liability may be imposed on an individual or parent corporation. The imposition of such liability on a corporate officer, director or shareholder requires control -- whether direct or indirect -- over the very conduct that renders the corporation itself liable, i.e., the arrangement for disposal or the selection of the disposal site.
There are no bright-line tests that may be applied to determine when a party may be held liable as an arranger or transporter under Section107(a)(3) or(4). Whether dealing with direct corporate liability or the indirect liability of officers, directors or shareholders, resolution of such claims requires a fact-specific analysis.