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CERCLA 9/3/2009 9:31:38 AM EST Parent of subsidiary is not liable under Bestfoods as CERCLA operator for merely fencing a site, providing access to a PRP to remediate the site, and addressing access agreements, rules Michigan District Court Partner, Ropers Majeski Kohn & Bentley Other aspects of the ITT v. BorgWarner case have been noted in a prior post.
In another ruling, ITT v. BorgWarner, Inc., 2009 U.S. Dist. LEXIS 62792 (W.D.Mich. 2009), the District Court addressed ITT's attempt to have BorgWarner made liable as an operator of the site. Historically, in 1929, Bronson Reel Co. (BRC) began manufacturing at the site. Higbie Manufacturing Co. (HMC) owned BRC and the property until 1963 when it sold BRC and property to Bronson Specialties Inc. (old BSI); plaintiff ITT is the successor to HMC. New BSI had a manufacturing operation at site from 1979 to 1984; it stopped all manufacturing operations in 1990, but still owns the site. New BSI was a subsidiary of a subsidiary (Kuhlmann) of BorgWarner.
After incurring costs related to site contamination, ITT filed a CERCLA contribution claim against Kuhlmann and BorgWarner. BorgWarner filed a MSJ, arguing it was not an operator. The Court agreed, noting the Bestfoods standard. To be liable as an operator a parent must manage, direct, or conduct operations specifically related to pollution. The Court noted that since acquiring Kuhlmann in 1999, BorgWarner did nothing with the site. After 2002, BorgWarner put up a fence, allowed Bronson Precision Products to remove its chattel, and has provided ITT with access to the site. It provided a point person for contact by EPA and ITT, and its legal department dealt with access agreements. The District Court found that BorgWarner merely was involved in the general affairs of the subsidiary, which was not sufficient to meet the Bestfoods standard.
ITT also raised veil-piercing arguments under Michigan law, which will not be reviewed herein. Create an account or login to post comments.
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