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.
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." 