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In re In re Acushnet River & New Bedford Harbor: Proceedings re Alleged PCB Pollution

ELR Citation: 18 ELR 20543
Nos. No. 83-3882-Y, 675 F. Supp. 22/(D. Mass., 11/06/1987) Personal jurisdiction issues

The court holds that piercing the corporate veil to assert personal jurisdiction in Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) actions is a federal question determined by traditional tests for piercing the corporate veil, CERCLA §106 does not authorize nationwide service of process, and the 1986 nationwide service of process amendments to CERCLA §113 are not retroactive. The court first holds that 60-day notice is not required before bringing a CERCLA cost recovery action, and 1984 amendments to the Resource Conservation and Recovery Act (RCRA) retroactively remove the 60-day notice requirement for RCRA citizen suits, following the First Circuit's decision in Dedham Water Co. v. Cumberland Farms Dairy, Inc., 17 ELR 20223 (1986). The court next rules that CERCLA §106 does not authorize nationwide service of process. The court observes that Congress does have the power to provide for nationwide service of process if it chooses, but that has not explicitly authorized it in CERCLA. A court may find nationwide service of process implicitly authorized where the statute puts venue in only one district, and CERCLA §106 authorizes injunctive relief in the district in which the environmental threat occurs. However, the court holds, CERCLA §106 only supplements the general venue provisions of CERCLA §113, which permit venue where the release or damage occurs or where the defendant is located. Where the threat occurs, under §106, need not necessarily be where the release or damage occurs, under §113. Section 106 authorizes relief for an actual or threatened release, but §113 covers actual releases only. Finally, to the extent the statute is unclear as to venue, it should be interpreted to give full effect to §113, where Congress clearly addressed itself to venue and which suggests no exceptions to its provisions.

Turning to whether to pierce the corporate veil, the court first holds that where the underlying claim is a federal statute, the question of whether the in-state subsidiary should be considered an agent of the out-of-state defendant is governed by federal law, which requires a uniform rule rather than deference to state law. Congress did not address the liability of parent corporations in CERCLA, and federal common law has developed seven factors for a court to consider when deciding whether to pierce the corporate veil. The policies underlying the federal statute may direct the emphasis the court will place on the seven factors. However, CERCLA does not pierce the corporate veil simply because the parent completely owned the subsidiary; appropriate use of corporate insulation is not fraudulent or against public policy. The court holds that in this case, the parent's control of the subsidiary was not so inordinate as to justify the equitable remedy of piercing the corporate veil.

The 1986 amendments to CERCLA §113, making nationwide service of process available, do not change the court's ruling on nationwide service of process. Although the legislative history of the amendments say they "clarify" congressional intent in the original enactment, and the amendments certainly operate prospectively with full force, subsequent legislative history is of much less weight than a statement to the same effect in the statute itself, and the court is not persuaded to change its ruling for personal jurisdiction attaching before the 1986 amendments.

Finally, the court holds that one of the defendants, which had previously been terminated as a corporate entity and then revived, has the capacity to be sued under Massachusetts law. [Briefs related to this case are summarized at ELR PEND. LIT. 65809, 65827, 65951, 65957, and 65973.]

Counsel for Plaintiff
Colene Gaston, Ass't U.S. Attorney
1107 John W. McCormack Federal Bldg., U.S. Post Office & Courthouse, Boston MA 02109
(617) 223-9400

Counsel for Defendant
Paul Galvani
Ropes & Gray
225 Franklin St., Boston MA 02110
(617) 423-6100