The decision in which case established the liability standard for corporate entities and their subsidiaries?

The decision in which case established the liability standard for corporate entities and their subsidiaries?

• A. Brown v. Board of Education
• B. Roe v. Wade
• C. United States v. Bestfoods
• D. Marbury v. Madison

Answer: (C)

The main idea is determining when a parent company can be held liable for what a subsidiary does. United States v. Bestfoods explains that a parent can be liable under the statute for cleanup costs at a subsidiary’s site if the parent actively participated in or controlled the subsidiary’s operations there, effectively acting as the site’s operator. Ownership alone isn’t enough to impose liability; you look for actual control or participation in how the site was run. This sets the standard for when responsibility can be pushed up from the subsidiary to the parent. The other cases address entirely different topics—desegregation in schools, abortion rights, and judicial review—so they don’t establish the corporate-entity liability standard.

The main idea is determining when a parent company can be held liable for what a subsidiary does. United States v. Bestfoods explains that a parent can be liable under the statute for cleanup costs at a subsidiary’s site if the parent actively participated in or controlled the subsidiary’s operations there, effectively acting as the site’s operator. Ownership alone isn’t enough to impose liability; you look for actual control or participation in how the site was run. This sets the standard for when responsibility can be pushed up from the subsidiary to the parent.

The other cases address entirely different topics—desegregation in schools, abortion rights, and judicial review—so they don’t establish the corporate-entity liability standard.