Shareholder liability under CERCLA after Bestfoods

In its June 8, 1998 decision in U.S. v. Bestfoods, a unanimous United States Supreme Court provided much‐needed clarification of the nature and extent of involvement a shareholder, including a corporate parent, must have with the corporation's (or a facility's) operation before liability can be imposed under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Since CERCLA's enactment in 1980, courts had struggled with the circuitous statutory definition of operator, and had developed inconsistent standards to determine the circumstances under which a shareholder could be held liable as such. This article analyzes the Supreme Court's resolution of this issue, identifies the areas of uncertainty remaining after the decision, and discusses steps shareholders can take to minimize the risk of the imposition of CERCLA liability after Bestfoods.