United States v. Bestfoods case brief

United States v. Bestfoods case brief summary

524 U.S. 51 (1998)

CASE SYNOPSIS: Petitioner, federal EPA, sought a writ of certiorari to review a decision of the U.S. Court of Appeals for the Sixth Circuit that partly reversed a decision of the district court that held that respondents, succeeding parent corporations, were liable to pay for the clean up of a hazardous waste site.

FACTS: A chemical plant generated industrial waste for many years. The chemical plant significantly polluted the soil and ground water. Respondents, succeeding parent corporations, purchased the chemical plant's assets. Petitioner, federal EPA, filed suit to recover funds for the clean up of the hazardous waste site. 

PROCEDURAL HISTORY
The district court found respondents directly liable to pay clean up costs as operators. The lower appellate court reversed ruling that respondents maintained separate personalities and did not improperly utilize the subsidiary corporate form. 

DISCUSSION

• The court vacated and remanded holding that a participation-and-control test looking to the parent corporation's supervision over a subsidiary could not be used to identify operation of a facility resulting in direct parental liability. 
• Any parent corporation liability as an operator, stemmed directly from its control over a polluting plant.

CONCLUSION: The court vacated and remanded for a redetermination of respondents' liability. The court held that any parent corporation liability as an operator, stemmed directly from its control over a polluting plant. The participation-and-control test was inapplicable.

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