Environmental Law Bulletin

On June 8, the Supreme Court issued a unanimous opinion limiting the liability of a corporation under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) arising out of the operations of that corporation's subsidiaries. United States v. Bestfoods, No. 97-454. The Court held that a company cannot be derivatively liable for the acts of its subsidiaries under CERCLA unless the corporate veil can be pierced. It also held that a parent may be held directly liable under CERCLA only if it operates its subsidiary's facility, not simply because it operates the subsidiary.

Mayer, Brown & Platt briefed and argued the case for Bestfoods.

Derivative liability: homage to long-standing common-law principles