Application of the Remedial Purpose Canon to CERCLA Successor Liability Issues After United States v. Bestfoods: Why State Corporate Law Should Be Applied in Circuits Encompassing Substantial Continuity Exception States
Heffernan, Lea J.
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Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in 1980 to address the growing problem of improper hazardous waste disposal. Due to the rushed enactment of CERCLA, however, Congress failed to fully and explicitly identify the standards that courts should invoke to determine issues of liability. Despite this ambiguity, the United States' federal courts have unanimously determined that successor corporations should be held liable under CERCLA; however, the level of liability that courts should impose on those successor corporations is still under debate. Several United States federal courts remain split with regard to whether state corporate law or a federal common law should be applied when determining issues of successor liability under CERCLA. To resolve the circuit split over whether federal common law or state corporate law should be used in determining issues of successor liability, the author applies the remedial purpose canon, a doctrine which dates back to sixteenth-century England. The remedial purpose canon, which dictates that remedial statutes should be interpreted as broadly as possible to best effectuate Congress's remedial intent, has been consistently applied to CERCLA since its enactment in 1980. Proper application of this canon to the issues of successor liability under CERCLA commands the application of legal standards that would be the most expansive in providing for liability of successor corporations. Because federal common law and state corporate law impose essentially the same level of liability since the United States v. Bestfoods Supreme Court decision, the answer to the question of which law to apply is moot in most circuits. However, Illinois' state corporate law is among the most expansive in the country when it comes to successor liability. As such, the answer to the question of which law to apply does indeed make a substantive difference in the outcome of potential future litigation in the Seventh Circuit. Therefore, proper application of the remedial purpose canon to the issue of successor liability under CERCLA requires that the Seventh Circuit adopt a standard of applying state corporate law to resolve such issues.