8. DISTANCE A BUYER FROM THE REAL ESTATE
Sophisticated purchasers now explore participation in a deal as limited partners, or through a subsidiary, or owning a limited economic interest in a project. The idea is to exclude interest in the real estate. Be aware that these approaches probably will not isolate the buyer who has actual knowledge and control over activities that contaminate the land. Under court decisions, the key appears to be who made hazardous waste operation, production, or disposal decisions, or who oversaw that area within a business. Be sure to avoid the degree of managerial involvement which constitutes "ownership" or "operation" of a site or facility covered by the federal or state Superfund.
Thus, a limited partnership might limit liability if the limited partners stay out of day-to-day management activities. Partners could acquire property through a joint venture and allocate liability among themselves. Owning a piece of the project, not the real estate, likewise may limit liability for an investor who is not directly involved in waste generation or disposal.
A parent company may not be liable for a subsidiary where the parent company did not form itself specifically as a shelter against Superfund and where the parent is not involved directly in day-to-day operations. Generally, parent corporations will not be held liable for the actions of subsidiary corporations that are financially independent and make unconstrained business decisions. However, parent corporations can be held liable as site operators for parcels that subsidiaries owned and managed, where the parents exert “practical total influence and control” over the subsidiary. Courts will engage in an intensive fact inquiry surrounding the totality of the circumstances, when assessing substantial control for corporate operator liability.
Business organizations cannot protect individuals acting in their corporate capacity, who under the guise of corporate decisions, knowingly present an imminent and substantial endangerment to human health and the environment. Corporate officers and employees who have engaged in highly illegal toxic waste disposal, may be personally liable, even though they have acted on behalf of the corporation.