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32 ELR 20701 | Environmental Law Reporter | copyright © 2002 | All rights reserved LeClercq v. Lockformer Co.No. 00 C 7164 (UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS May 6, 2002)The court holds that a corporation is not entitled to summary judgment on Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and Resource Conservation and Recovery Act (RCRA) claims brought against it by property owners that neighbored the corporation and its subsidiary corporation. The owners alleged that trichloroethylene (TCE) leakage from the subsidiary corporation contaminated the soil, groundwater, and domestic well water for their houses. The court first holds that the corporation may be held liable under CERCLA and RCRA for the actions of its subsidiary. Under United States v. Bestfoods, 524 U.S. 51, 28 ELR 21225 (1998), a parent can be held liable for a corporate subsidiary's liability if the parent manages, directs, or conducts operations specifically related to pollution, operations having to do with the leakage or disposal or hazardous waste, or decisions about compliance with environmental matters. Here, the corporation received all TCE invoices from the subsidiary's TCE purchases, it fired the subsidiary's environmental consultant, advised the subsidiary on the TCE issues, managed the subsidiary's TCE insurance policies, had representatives present when the subsidiary informed EPA of the TCE contamination, and approved the subsidiary's settlement with a neighbor. Moreover, the president of the subsidiary had no knowledge of who hired the subsidiary's environmental manager. This information meets the owners' burden of creating a genuine issue of material fact as to the corporation's liability as an operator under CERCLA and RCRA. In addition, to prove the corporation is liable as a CERCLA and RCRA owner of the subsidiary, the corporate veil must be pierced. The owners present numerous facts sufficient to create a genuine issue of material fact on this issue, including, among other facts, the subsidiary president's lack of knowledge as to who hired corporate officers, the subsidiary's lack of a checking account, the payment of the subsidiary's payroll by the corporation, lack of board of directors meetings by the subsidiary, and the subsidiary's failure to prepare its own financial assessments. The full text of this decision is available from ELR (6 pp., ELR Order No. L-524). Counsel for Plaintiffs Counsel for Defendants [OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE] 32 ELR 20701 | Environmental Law Reporter | copyright © 2002 | All rights reserved |