Cases & Deals

CenterPoint defends against CERCLA contribution claims related to Florida manufactured gas plant

Clients CenterPoint Energy Resources Corp.

Jones Day defended CenterPoint Energy Resources Corporation ("CenterPoint") against a CERCLA claim for contribution to the costs of cleaning up a former manufactured gas plant in St. Augustine, Florida. Plaintiff Atlanta Gas Light Company had sought contribution under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA" or "Superfund") from CenterPoint, among others, alleging that it was the operator of the St. Augustine facility at a time when its predecessor, American Gas & Power, was the sole shareholder and parent corporation of the St. Augustine Gas and Electric Company which owned the facility.

Affirming a decision issued in March 2005 by the U.S. District Court in Florida (Middle District), the U.S. Court of Appeals for the Eleventh Circuit in September 2006 issued a unanimous opinion, determining that CenterPoint, as a successor to American Gas & Power Company, was not liable as the operator of the former manufactured gas plant under the provisions of Section 107(a) of CERCLA. The 11th Circuit decided that a variety of arrangements between a parent corporation and a former subsidiary with overlapping officers and directors were not enough to hold the parent directly responsible for the subsidiary's environmental cleanup liabilities under the reasoning set forth in United States v. Bestfoods, 524 U.S. 51 (1998), the seminal decision controlling a parent corporation's potential environmental liability under Superfund for contamination at a facility owned by a subsidiary.

Atlanta Gas Light Co. v. UGI Utilities Inc., et al., 463 F.3d 1201 (11th Cir. 2006)

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