Liability of Parent Corporations, Officers, Directors, and Successors: When Can CERCLA Liability Extend Beyond the Company?

Michelle De Blasi.

The high cost of remediating contaminated sites and the joint and several liability scheme under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) (42 U.S.C. § 9607), as amended, have led the United States Environmental Protection Agency (“EPA”) and CERCLA Potentially Responsible Parties (“PRPs”) to pursue every available resource to cover cleanup costs. Litigation seeking reimbursement for remediation expenses from corporate parents, corporate successors, officers, directors, and shareholders has shown that plaintiffs will attempt to cast CERCLA’s liability over every possible party with resources, and any such party can be caught under the right circumstances.

United States v. Bestfoods established the standard by which the liability of corporate entities and their subsidiaries is determined. In Bestfoods, the Court held that parent corporations can be directly liable under CERCLA § 107(a) if they are directly involved in the company’s management of hazardous substances, or indirectly liable under traditional principles of corporate veil piercing. Courts have found that corporate officers, directors, and shareholders also face similar liability risks.

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