In United States vs. Best Foods, 118 S. Ct. 1876 (1998) the United States Supreme Court ruled that a parent corporation may not be liable as an operator for the environmental liabilities of its subsidiary based on its relationship with the subsidiary if such relationship would not warrant piercing the corporate veil. Instead, the court said that the key the question is not whether a parent operates the subsidiary but whether the parent operates the facility. If the parent corporation exercises actual control over the facility, then it may be liable as an operator. However, as in this case,  the mere fact that the parent had placed its own key officials on the subsidiary’s board of directors, that parent officers’ occupied the president and chief executive positions and that these officials exercised day-to-day management of the facility would not expose the parent to operator liability. The court noted that there was a well-established principle of corporate law that directors and officers holding dual positions with a parent and subsidiary can and do “change hats” and that courts presume that directors are wearing their “subsidiary hats” and not their “parent hats” when acting on behalf of the subsidiary. It is up to the government, the court went on, to rebut this presumption and establish that a particular officer may have been acting as an agent of the parent and not the subsidiary. 
However, because there was some evidence that the parent’s environmental and regulatory affairs director may have exerted control over the environmental operations of the subsidiary’s plant, the court remanded the case to the district court with instructions to evaluate the role of the parent’s environmental officer and any of the parent’s other employees who might be said to have played a role in operating the subsidiary’s facility.