ELR Citation: ELR 20349
No(s). 88-0325B (D.R.I. Oct 11, 1989)

The court holds that the parent corporation of a defunct textile company is liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for the government's response costs in responding to drinking water contamination caused by the textile company's trichloroethylene (TCE) releases. The court initially holds that a uniform federal rule should be applied in CERCLA cases involving piercing the corporate veil. The court holds that the parent corporation was a de facto operator of the facility under CERCLA §107(a). The parent corporation exercised pervasive control over the subsidiary's operations, including the power to control the release of TCE and authority to prevent and abate environmental damage. The court also pierces the corporate veil and holds that the parent corporation is liable as an owner under CERCLA. CERCLA places no special importance on the corporate structure and should be interpreted broadly to enhance its beneficial purposes. The court holds that the releases from the textile company were the cause of the government's on-site and off-site response costs. Although defendant alleges that other sources were responsible for the contamination, CERCLA's liability is joint and several unless the defendant can show that the harm is divisible and defendant has not introduced any evidence on the divisibility of the TCE contamination.

Counsel for Plaintiff
Michael P. Iannotti, Ass't U.S. Attorney
Westminster Sq. Blvd., 10 Dorrance St., 10th Fl., Providence RI 02903
(401) 528-5477

Cynthia S. Huber, Ass't U.S. Attorney
Land and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 633-5273

Counsel for Defendant
Deming E. Sherman
Edwards & Angell
2700 Hospital Trust Tower, Providence RI 02903
(401) 274-9200