The United States brought this action for the costs of cleaning up industrial waste generated by a chemical plant. The issue before us, under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), [citation], is whether a parent corporation that actively participated in, and exercised control over, the operations of a subsidiary may, without more, be held liable as an operator of a polluting facility owned or operated by the subsidiary. We answer no, unless the corporate veil may be pierced. But a corporate parent that actively participated in, and exercised control over, the operations of the facility itself may be held directly liable in its own right as an operator of the facility.

I

In 1980, CERCLA was enacted in response to the serious environmental and health risks posed by industrial pollution. [Citation.] ‘‘As its name implies, CERCLA is a comprehensive statute that grants the President broad power to command government agencies and private parties to clean up hazardous waste sites.’’ [Citation.] If it satisfies certain statutory conditions, the United States may, for instance, use the ‘‘Hazardous Substance Superfund’’ to finance cleanup efforts, [citation], which it may then replenish by suits brought under §107 of the Act against, among others, ‘‘any person who at the time of disposal of any hazardous substance owned or operated any facility.’’ [Citation.] So, those actually ‘‘responsible for any damage, environmental harm, or injury from chemical poisons [may be tagged with] the cost of their actions,’’ * * *.

II

In 1957, Ott Chemical Co. (Ott I) began manufacturing chemicals at a plant near Muskegon, Michigan, and its intentional and unintentional dumping of hazardous substances significantly polluted the soil and ground water at the site. In 1965, respondent CPC International Inc. incorporated a wholly owned subsidiary to buy Ott I’s assets in exchange for CPC stock. The new company, also dubbed Ott Chemical Co. (Ott II), continued chemical manufacturing at the site, and continued to pollute its surroundings. CPC kept the managers of Ott I, including its founder, president, and principal shareholder, Arnold Ott, on board as officers of Ott II. Arnold Ott and several other Ott II officers and directors were also given positions at CPC, and they performed duties for both corporations.

In 1972, CPC sold Ott II to Story Chemical Company, which operated the Muskegon plant until its bankruptcy in 1977. Shortly thereafter, when respondent Michigan Department of Natural Resources (MDNR) examined the site for environmental damage, it found the land littered with thousands of leaking and even exploding drums of waste, and the soil and water saturated with noxious chemicals. MDNR sought a buyer for the property who would be willing to contribute toward its cleanup, and after extensive negotiations, respondent Aerojet-General Corp. arranged for transfer of the site from the Story bankruptcy trustee in 1977. Aerojet created a wholly owned California subsidiary, Cordova Chemical Company (Cordova/California), to purchase the property, and Cordova/California in turn created a wholly owned Michigan subsidiary, Cordova Chemical Company of Michigan (Cordova/Michigan), which manufactured chemicals at the site until 1986.

By 1981, the federal Environmental Protection Agency had undertaken to see the site cleaned up, and its long-term remedial plan called for expenditures well into the tens of millions of dollars. To recover some of that money, the United States filed this action under §107 in 1989, naming five defendants as responsible parties: CPC, Aerojet, Cordova/California, Cordova/Michigan, and Arnold Ott. (By that time, Ott I and Ott II were defunct.) After the parties (and MDNR) had launched a flurry of contribution claims, counterclaims, and cross-claims, the District Court consolidated the cases for trial in three phases: liability, remedy, and insurance coverage. So far, only the first phase has been completed; in 1991, the District Court held a 15-day bench trial on the issue of liability. [T]he trial focused on the issues of whether CPC and Aerojet, as the parent corporations of Ott II and the Cordova companies, had ‘‘owned or operated’’ the facility within the meaning of §107(a)(2)

The District Court said that operator liability may attach to a parent corporation both directly, when the parent itself operates the facility, and indirectly, when the corporate veil can be pierced under state law * * *. [T]he District Court held both CPC and Aerojet liable under §107(a)(2) as operators. As to CPC, the court found it particularly telling that CPC selected Ott II’s board of directors and populated its executive ranks with CPC officials, and that a CPC official, G.R.D. Williams, played a significant role in shaping Ott II’s environmental compliance policy.

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Applying Michigan veil-piercing law, the Court of Appeals decided that neither CPC nor Aerojet was liable for controlling the actions of its subsidiaries, since the parent and subsidiary corporations maintained separate personalities and the parents did not utilize the subsidiary corporate form to perpetrate fraud or subvert justice.

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 III

It is a general principle of corporate law deeply ‘‘ingrained in our economic and legal systems’’ that a parent corporation (so-called because of control through ownership of another corporation’s stock) is not liable for the acts of its subsidiaries. [Citations.] * * * The Government has indeed made no claim that a corporate parent is liable as an owner or an operator under §107 simply because its subsidiary is subject to liability for owning or operating a polluting facility.

But there is an equally fundamental principle of corporate law, applicable to the parent-subsidiary relationship as well as generally, that the corporate veil may be pierced and the shareholder held liable for the corporation’s conduct when the corporate form would otherwise be misused to accomplish certain wrongful purposes, most notably fraud, on the shareholder’s behalf. [Citations.] Nothing in CERCLA purports to rewrite this well-settled rule, either * * *. The Court of Appeals was accordingly correct in holding that when (but only when) the corporate veil may be pierced, may a parent corporation be charged with derivative CERCLA liability for its subsidiary’s actions.

IV
A

If the act rested liability entirely on ownership of a polluting facility, this opinion might end here; but CERCLA liability may turn on operation as well as ownership, and nothing in the statute’s terms bars a parent corporation from direct liability for its own actions in operating a facility owned by its subsidiary. As Justice (then-Professor) Douglas noted almost 70 years ago, derivative liability cases are to be distinguished from those in which ‘‘the alleged wrong can seemingly be traced to the parent through the conduit of its own personnel and management’’ and ‘‘the parent is directly a participant in the wrong complained of.’’ [Citation.] In such instances, the parent is directly liable for its own actions. [Citation.] The fact that a corporate subsidiary happens to own a polluting facility operated by its parent does nothing, then, to displace the rule that the parent ‘‘corporation is [itself] responsible for the wrongs committed by its agents in the course of its business,’’ [Citations.] It is this direct liability that is properly seen as being at issue here.

Under the plain language of the statute, any person who operates a polluting facility is directly liable for the costs of cleaning up the pollution. [Citation.] This is so regardless of whether that person is the facility’s owner, the owner’s parent corporation or business partner, or even a saboteur who sneaks into the facility at night to discharge its poisons out of malice. If any such act of operating a corporate subsidiary’s facility is done on behalf of a parent corporation, the existence of the parent-subsidiary relationship under state corporate law is simply irrelevant to the issue of direct liability. [Citations.]

This much is easy to say; the difficulty comes in defining actions sufficient to constitute direct parental ‘‘operation.’’ * * * So, under CERCLA, an operator is simply someone who directs the workings of, manages, or conducts the affairs of a facility. To sharpen the definition for purposes of CERCLA’s concern with environmental contamination, an operator must manage, direct, or conduct operations specifically related to pollution, that is, operations having to do with the leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations.

B

With this understanding, we are satisfied that the Court of Appeals correctly rejected the District Court’s analysis of direct liability. But we also think that the appeals court erred in limiting direct liability under the statute to a parent’s sole or joint venture operation, so as to eliminate any possible finding that CPC is liable as an operator on the facts of this case.

1 By emphasizing that ‘‘CPC is directly liable under section 107(a)(2) as an operator because CPC actively participated in and exerted significant control over Ott II’s business and decision-making,’’ [citation], the District Court applied the ‘‘actual control’’ test of whether the parent ‘‘actually operated the business of its subsidiary,’’ [citation]. * * *

In imposing direct liability on these grounds, the District Court failed to recognize that ‘‘it is entirely appropriate for directors of a parent corporation to serve as directors of its subsidiary, and that fact alone may not serve to expose the parent corporation to liability for its subsidiary’s acts.’’ [Citations] (‘‘Control through the ownership of shares does not fuse the corporations, even when the directors are common to each’’); [citation] (noting that it is ‘‘normal’’ for a parent and subsidiary to ‘‘have identical directors and officers’’).

This recognition that the corporate personalities remain distinct has its corollary in the ‘‘well established principle [of corporate law] that directors and officers holding positions with a parent and its subsidiary can and do ‘change hats’ to represent the two corporations separately, despite their common ownership.’’ * * * The Government would have to show that, despite the general presumption to the contrary, the officers and directors were acting in their capacities as CPC officers and directors, and not as Ott II officers and directors, when they committed those acts. The District Court made no such enquiry here, however, disregarding entirely this time-honored common law rule.

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2 We accordingly agree with the Court of Appeals that a participation-and-control test looking to the parent’s supervision over the subsidiary, especially one that assumes that dual officers always act on behalf of the parent, cannot be used to identify operation of a facility resulting in direct parental liability. Nonetheless, a return to the ordinary meaning of the word ‘‘operate’’ in the organizational sense will indicate why we think that the Sixth Circuit stopped short when it confined its examples of direct parental operation to exclusive or joint ventures, and declined to find at least the possibility of direct operation by CPC in this case.

In our enquiry into the meaning Congress presumably had in mind when it used the verb ‘‘to operate,’’ we recognized that the statute obviously meant something more than mere mechanical activation of pumps and valves, and must be read to contemplate ‘‘operation’’ as including the exercise of direction over the facility’s activities. The Court of Appeals recognized this by indicating that a parent can be held directly liable when the parent operates the facility in the stead of its subsidiary or alongside the subsidiary in some sort of a joint venture. We anticipated a further possibility above, however, when we observed that a dual officer or director might depart so far from the norms of parental influence exercised through dual office holding as to serve the parent, even when ostensibly acting on behalf of the subsidiary in operating the facility. Yet another possibility, suggested by the facts of this case, is that an agent of the parent with no hat to wear but the parent’s hat might manage or direct activities at the facility.

Identifying such an occurrence calls for line drawing yet again, since the acts of direct operation that give rise to parental liability must necessarily be distinguished from the interference that stems from the normal relationship between parent and subsidiary. Again norms of corporate behavior (undisturbed by any CERCLA provision) are crucial reference points * * *. The critical question is whether, in degree and detail, actions directed to the facility by an agent of the parent alone are eccentric under accepted norms of parental oversight of a subsidiary’s facility.

There is, in fact, some evidence that CPC engaged in just this type and degree of activity at the Muskegon plant. The District Court’s opinion speaks of an agent of CPC alone who played a conspicuous part in dealing with the toxic risks emanating from the operation of the plant. G.R.D. Williams worked only for CPC; he was not an employee, officer, or director of Ott II, and thus, his actions were of necessity taken only on behalf of CPC. The District Court found that ‘‘CPC became directly involved in environmental and regulatory matters through the work of * * * Williams, CPC’s governmental and environmental affairs director. Williams * * * became heavily involved in environmental issues at Ott II.’’ He ‘‘actively participated in and exerted control over a variety of Ott II environmental matters,’’ and he ‘‘issued directives regarding Ott II’s responses to regulatory inquiries.’’ We think that these findings are enough to raise an issue of CPC’s operation of the facility through Williams’s actions, though we would draw no ultimate conclusion from these findings at this point.

V

The judgment of the Court of Appeals for the Sixth Circuit is vacated, and the case is remanded with instructions to return it to the District Court for further proceedings consistent with this opinion.