Business Associations Keyed to Hamilton
United States v. Bestfoods
Facts
Bestfoods (D) purchased a chemical plant via a subsidiary incorporated for that purchase. The previous operator dumped hazardous substances on the site and polluted the surrounding area, the new company continued the practice. The plant was then sold to another company who filed for bankruptcy. The Michigan Department of Natural Resources eventually found a buyer willing to clean up the site. The Environmental Protection Agency (P) initiated the first phase of cleaning up the site and sued to recover some of its costs. The district court found that operator liability could directly attach to a parent company and indirectly when state law was used to “pierce the corporate veil”. The court of appeals found Bestfoods (D) not liable since it did not use the subsidiary for inappropriate conduct. The Supreme Court granted certiorari to review to what extent parent corporations can be held liable under CERCLA for operating facilities via the control of their subsidiaries.
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