Cite as: 524 U. S. 51 (1998)
Opinion of the Court
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," 777 F. Supp., at 574, the District Court applied the "actual control" test of whether the parent "actu-ally operated the business of its subsidiary," id., at 573, as several Circuits have employed it, see, e. g., United States v. Kayser-Roth Corp., supra, at 27 (operator liability "requires active involvement in the affairs of the subsidiary"); Jacksonville Elec. Auth. v. Bernuth Corp., 996 F. 2d 1107, 1110 (CA11 1993) (parent is liable if it "actually exercised control over, or was otherwise intimately involved in the operations of, the [subsidiary] corporation immediately responsible for the operation of the facility" (internal quotation marks omitted)).
The well-taken objection to the actual control test, however, is its fusion of direct and indirect liability; the test is administered by asking a question about the relationship between the two corporations (an issue going to indirect liability) instead of a question about the parent's interaction with the subsidiary's facility (the source of any direct liability). If, however, direct liability for the parent's operation of the facility is to be kept distinct from derivative liability for the subsidiary's own operation, the focus of the enquiry must
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