United States v. Bestfoods

United States v. Bestfoods, 524 U.S. 51 (1998), is a United States corporate law case in which the Supreme Court of the United States held that the indirect liability of a parent corporation under CERCLA is to be determined by its control over a subsidiary's facility, rather than the relationship between the corporation and subsidiary.

United States v. Bestfoods
Argued March 24, 1998
Decided June 8, 1998
Full case nameUnited States v. Bestfoods, et al.
Citations524 U.S. 51 (more)
118 S. Ct. 1876; 141 L. Ed. 2d 43; 1998 U.S. LEXIS 3733
Case history
PriorReversed in part, 113 F.3d 572 (6th Cir. 1997). Certiorari granted.
Holding
The liability of a parent corporation under CERCLA is to be determined by its control over a subsidiary's facility.
Court membership
Chief Justice
William Rehnquist
Associate Justices
John P. Stevens · Sandra Day O'Connor
Antonin Scalia · Anthony Kennedy
David Souter · Clarence Thomas
Ruth Bader Ginsburg · Stephen Breyer
Case opinion
MajoritySouter, joined by unanimous
Laws applied
CERCLA

Facts

A chemical manufacturing plant developed a significant pollution problem after many years of operation. The companies in charge of operations at the plant were wholly owned subsidiaries of, first, CPC International Inc. (CPC). Following ownership by CPC, the chemical manufacturing plant was owned by Aerojet- General Corp (Aerojet). In 1981, the Environmental Protection Agency ordered to have the site cleaned up. To reimburse the cleanup, the federal government filed suit under Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. Section 9607(a)(2). Section 107 grants the federal government permission to seek reimbursement for cleanup costs from "any person who at the time of disposal of any hazardous substance owned or operated any facility."

The question before the court, was whether a parent corporation that exercised control over the operations of a subsidiary be held liable under CERCLA Section 107(a)(2)?

Decision of the Court

In a unanimous decision in favor of the United States, Justice Souter wrote the opinion of the Court. The Court noted that, "But a corporate parent that actively participated in, and exercised control over, the operations of the facility itself may be held directly liable in its own right as an operator of the facility."[1][2]

Notes
  1. "United States v. Bestfoods - 524 U.S. 51 (1998)". The Oyez Project: Chicago-Kent College of Law. Retrieved 10 October 2013.
  2. "United States v. Bestfoods - 524 U.S. 51 (1998)". Justia. Retrieved 10 October 2013.
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See also
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