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Jacksonville Elec. Auth. v. Bernuth Corp.

ELR Citation: 23 ELR 21442
Nos. No. 92-2169, 996 F.2d 1107/37 ERC 1186/(11th Cir., 07/30/1993)

The court holds that a university, which was the major stockholder of a corporation, is not an "operator" of the corporation's facility for purposes of imposing liability under §107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The court holds that shareholders are not operators unless they themselves participate in CERCLA prohibited conduct through actual supervision of activities at the facility and active management of the enterprise. Merely holding stock is not sufficient to find a shareholder liable under CERCLA as an operator. The court holds that a parent corporation may be held liable under CERCLA as an operator of its subsidiary's business only when it exercises actual and pervasive control of the subsidiary's daily operations. The court holds that there is not sufficient evidence to establish that the university is liable as an owner or operator of the facility under CERCLA. The university was engaged in an entirely different business than the corporation and there is no evidence of actual involvement in the corporation's business affairs or actual participation in the contamination, notwithstanding evidence that the university approved a profit-sharing plan and employment contracts and received reports at trustee meetings on the status of the corporation, and that several trustees served as directors of the corporation.

Counsel for Plaintiff
Richard Maguire
Rogers, Towers, Bailey, Jones & Gay
1301 Gulf Life Dr., Ste. 1500, Jacksonville FL 32202
(904) 346-5539

Counsel for Defendants
Malcolm McKay
Carlton & Fields
P.O. Box 3239, Tampa FL 33601
(813) 223-7000

Before COX, Circuit Judge, MORGAN and HENDERSON, Senior Circuit Judges.