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Joslyn Corp. v. T.L. James & Co.

Citation: 19 ELR 20518
No. No. 87-2054, 696 F. Supp. 222/(W.D. La., 09/19/1988)

The court holds that a parent corporation is not liable for cleanup costs for which its subsidiary is liable under § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Louisiana Environmental Quality Act. The court first rules that CERCLA does not provide for direct liability for corporate officers and parent corporations, and that to hold a parent corporation liable it is first necessary to pierce the corporate veil. The court next finds it unnecessary to rule whether state or federal law governs the piercing of the corporate veil, since federal and state alter ego tests are virtually the same. The court then holds that there are insufficient grounds for piercing the corporate veil in this case. While the parent and subsidiary corporations had common stock owners and common directors, the parent corporation made substantial loans to its subsidiary, the parent company hired and fired the subsidiary's executive officers, and the two companies shared corporate offices, there was no proof that the parent company had complete dominion over its subsidiary. The two entities adhered closely to basic corporate formalities by keeping their books, records, meetings, and daily operations strictly separate.

Counsel for Plaintiffs
Robert E. Holden
Liskow & Lewis
50th Fl., One Shell Square, New Orleans LA 70139
(504) 581-7979

Counsel for Defendants
Stephen J. Weiss, Donald B. Mitchell
Arent, Fox, Kitner, Plotkin & Kahn
Washington Square, 1050 Connecticut Ave. NW, Washington DC 20036-5339
(202) 857-6000