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New York State Electric & Gas Co. v. FirstEnergy Corp.

ELR Citation: 44 ELR 20210
Nos. 11-4143 et al., (2d Cir., 09/11/2014)

The Second Circuit affirmed in part and remanded in part a lower court decision holding the corporate successor to a utility's former parent company liable for a portion of costs incurred cleaning up coal tar contamination at manufactured gas plant sites in upstate New York. The lower court held the corporate successor liable for a portion of the costs on a veil-piercing theory. While the lower court correctly found that veil piercing was warranted, the corporate successor is only liable to the utility on a veil piercing theory based on the former parent company's control over the utility from 1922 to January 10, 1940, not from 1922 to all of 1940. Nor is the corporate successor liable to the utility on a veil piercing theory for contamination created by other parent company subsidiaries before those subsidiaries merged into the utility. But in all other respects, the lower court decision was affirmed.