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Browning-Ferris Indus. of Ill., Inc. v. Ter Maat

Citation: 30 ELR 20135
No. Nos. 98-3204, 99-1360, 195 F.3d 953/49 ERC 1449/(7th Cir., 11/01/1999) aff'd in part, rev'd in part

The court affirms in part and reverses in part a district court decision that determined and allocated Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) liability at a landfill. The landfill's owner brought a CERCLA contribution suit against the corporation that leased the landfill, the leasing corporation's parent corporation, and the corporations' president and principal shareholder. The court first holds that an individual cannot shield himself from liability for operating a hazardous waste facility merely by being an officer or shareholder of a corporation that operates the facility. If an individual operates a landfill personally, rather than merely directing the business of the corporations that operate the landfill and of which he was the president, then he is personally liable. The district court failed to consider this possibility, therefore, remand is necessary. The court next holds that CERCLA does not preclude the imposition of joint as distinct from several liability in a suit for contribution. The district court mistakenly believed that liability must be allocated equally among joint polluters and, therefore, the issue is remanded to determine whether the parent corporation should pay more than 50 percent of the two corporations' liability. However, the court finds that the district court did not make any clear errors in allocating responsibility to the landfill owner. Although the imposed liability exceeded the proportional share of waste contributed, there are a variety of factors that the district court properly considered and there is no requirement that liability be proportioned based solely on the volume of waste disposed. Finally, the court holds that if, on remand, the president is not found liable and the parent corporation is not found jointly liable, the corporate veil of the two corporations cannot be pierced to hold the president personally liable. There is no evidence to suggest that either corporation failed to comply with legal requirements for operating in the corporate form. Additionally, the fact that the leasing corporation was undercapitalized for tax reasons is not a reason for piercing the corporate veil.

Counsel for Plaintiffs
William G. Beck
Lathrop & Gage
2345 Grand Blvd., Ste. 2800, Kansas City MO 64108
(816) 292-2000

Counsel for Defendants
Michael W. Rathsack
Law Offices of Michael W. Rathsack
111 W. Washington St., Chicago IL 60602
(312) 726-5433

Before Bauer and Ripple, JJ.