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United States v. High Point Chem. Corp.

Citation: 28 ELR 21579
No. 97-147-C, 7 F. Supp. 2d 770/(W.D. Va., 05/26/1998)

The court holds that the federal government alleged sufficient facts in its pleadings to show that a nonpolluting corporation and an officer could be held liable as operators under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) §§ 107 and 113(b). The officer was the president and treasurer of the polluting corporation, and the nonpolluting corporation had common ownership ties with the polluting corporation. The court first holds that the relevant inquiry into liability is whether the officer and nonpolluting corporation possessed the "authority to control" environmental policy and activity at the polluting corporation. The court then holds that the pleadings do not rule out operator liability for the officer. He participated in day-to-day production decisions at the polluting corporation. Moreover, the officer's alleged power over the administrative and financial divisions of the polluting corporation is a sufficient indicia of an authority to control the hazardous waste storage and disposal processes of the company. The court next holds that the well-pleaded factual allegations do not preclude a conclusion that the nonpolluting corporation possessed the authority to control the polluting corporation. Certain employees of the nonpolluting corporation developed chemical and other formulas for products made by the polluting corporation; certain employees of the polluting corporation, remunerated by the nonpolluting corporation, signed checks on behalf of the polluting corporation; certain employees of the nonpolluting corporation dealt with product suppliers on behalf of the polluting corporation; and the nonpolluting company rendered free maintenance work, donated equipment, ordered and paid for products delivered, and performed chemical analyses of products for the polluting corporation. Therefore, the court denies the officer's and nonpolluting corporation's motions to dismiss.

Counsel for Plaintiff
John F. Corcoran, Ass't U.S. Attorney
U.S. Attorney's Office
Thomas B. Mason Bldg.
105 Franklin Rd. SW, Ste. 1, Roanoke VA 24011
(540) 857-2250

Counsel for Defendants
Stuart F. Carwile
Wiley, Rein & Fielding
1776 K St. NW, Washington DC 20006,
(202) 429-7000