author: Justice Souter

text:
    UNITED STATES v. BESTFOODS et al.
    No. 97-454.
    Argued March 24, 1998
    Decided June 8, 1998

      Souter, J., delivered the opinion for a unanimous Court.

      Assistant Attorney General Schiffer argued the cause for the United States. With her on the briefs were Solicitor General Waxman, Deputy Solicitor General Wallace, Jeffrey P. Minear, Martin W. Matzen, Michael J. McNulty, and Evelyn S. Ying. Frank J. Kelley, Attorney General of Michigan, Thomas L. Casey, Solicitor General, and Kathleen L. Cavanaugh and Robert P. Reichel, Assistant Attorneys General, filed a brief for the Michigan Department of Environmental Quality, respondent under this Court’s Rule 12.6, urging reversal.

      Kenneth S. Getter argued the cause for respondents. With him on the briefs for respondent Bestfoods were Donald M. Falk and J. Michael Smith. John D. Tully, John V. Byl, and Robert J. Jonker filed briefs for respondents Aerojet-General Corp. et al.

      A brief of amici curiae urging reversal was filed for the State of Minnesota et al. by Hubert H. Humphrey III, Attorney General of Minnesota, and Jocelyn F. Olson, Paschal 0. Nwokocha, and Alan C. Williams, Assistant Attorneys General, and by the Attorneys General for their respective States as follows: Bruce M. Botelho of Alaska, Grant Woods of Arizona, Winston Bryant of Arkansas, Richard Blumenthal of Connecticut, Robert A Butterworth of Florida, Thurbert E. Baker of Georgia, Margery S. Bronster of Hawaii, Alan G. Lance of Idaho, James E. Ryan of Illinois, Drew Ketterer of Maine, J. Joseph Curmn, Jr., of Maryland, Scott Harsh-barger of Massachusetts, Joseph P. Mazurek of Montana, Frankie Sue Del Papa of Nevada, Peter Vemiero of New Jersey, Tom Udall of New Mexico, Dennis G. Vacco of New York, Michael F. Easley oí North Carolina, Hardy Myers of Oregon, Jeffrey B. Pine of Rhode Island, John Knox Walkup of Tennessee, Dan Morales of Texas, Jan Graham of Utah, William H. Sor-rell of Vermont, Christine 0. Gregoire of Washington, Darrell V. McGraw of West Virginia, James E. Doyle of Wisconsin, and William U. Hill of Wyoming.
      Briefs of amici curiae urging affirmance were filed for the Atlantic Legal Foundation by Martin S. Kaufman and Douglas Foster; for the American Forest & Paper Association et al. by Donald B. Mitchell, Jr., and John C. Chambers; for Atlantic Richfield Co. et al. by Michael J. Gallagher, Andrew M. Low, and Karl M. Tilleman; for the National Association of Manufacturers et al. by Bruce J. Ennis, Jr., Paul M. Smith, Ann M. Kappler, Jan S. Amundson, Quentin Riegel, Robin S. Conrad, and
        Robert L. Graham; for the United States Business & Industrial Council by David G. Palmer; and for the Washington Legal Foundation et al. by Daniel J. Popeo, Paul D. Eamenar, and Thomas R. Mounteer.

   Justice Souter

delivered the opinion of the Court.

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), 94 Stat. 2767, as amended, 42 U. S. C. §9601 et seq., 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. See Exxon Corp. v. Hunt, 475 U. S. 355, 358-359 (1986). “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.” Key Tronic Corp. v. United States, 511 U. S. 809, 814 (1994). If it satisfies certain statutory conditions, the United States may, for instance, use the “Hazardous Substance Superfimd” to finance cleanup efforts, see 42 U. S. C. §§ 9601(11), 9604; 26 U. S. C. § 9507, 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.” 42 U. S. C. § 9607(a)(2). So, those actually “responsible for any damage, environmental harm, or injury from chemical poisons [may be tagged with] the cost of their actions,” S. Rep. No. 96-848, p. 13 (1980). The term “person” is defined in CERCLA to include corporations and other business organizations, see 42 U. S. C. § 9601(21), and the term “facility” enjoys a broad and detailed definition as well, see §9601(9). The phrase “owner or operator” is defined only by tautology, however, as “any person owning or operating” a facility, § 9601(20)(A)(ii), and it is this bit of circularity that prompts our review. Cf. Exxon Corp. v. Hunt, supra, at 363 (CERCLA, “unfortunately, is not a model of legislative draftsmanship”).

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/Miehigan, 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 eases 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. Because the parties stipulated that the Muskegon plant was a “facility” within the meaning of 42 U. S. C. § 9601(9), that hazardous substances had been released at the facility, and that the United States had incurred reimbursable response costs to clean up the site, the 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. See CPC Int’l, Inc. v. Aerojet-General Corp., 777 F. Supp. 549, 572 (WD Mich. 1991). The court explained that, while CERCLA imposes direct liability in situations in which the corporate veil cannot be pierced under traditional concepts of corporate law, “the statute and its legislative history do not suggest that CERCLA rejects entirely the crucial limits to liability that are inherent to corporate law.” Id., at 573. As the District Court put it:

“a parent corporation is directly liable under section 107(a)(2) as an operator only when it has exerted power or influence over its subsidiary by actively participating in and exercising control over the subsidiary’s business during a period of disposal of hazardous waste. A parent’s actual participation in and control over a subsidiary’s functions and decision-making creates ‘operator’ liability under CERCLA; a parent’s mere oversight of a subsidiary’s business in a manner appropriate and consistent with the investment relationship between a parent and its wholly owned subsidiary does not.” Ibid.

Applying that test to the facts of this ease, the 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 IPs 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.

After a divided panel of the Court of Appeals for the Sixth Circuit reversed in part, United States v. Cordova/Michigan, 59 F. 3d 584, that court granted rehearing en banc and vacated the panel decision, 67 F. 3d 586 (1995). This time, 7 judges to 6, the court again reversed the District Court in part. 113 F. 3d 572 (1997). The majority remarked on the possibility that a parent company might be held directly liable as an operator of a facility owned by its subsidiary: “At least conceivably, a parent might independently operate the facility in the stead of its subsidiary; or, as a sort of joint venturer, actually operate the facility alongside its subsidiary.” Id., at 579. But the court refused to go any further and rejected the District Court’s analysis with the explanation:

“[Wjhere a parent corporation is sought to be held fia-ble as an operator pursuant to 42 U. S. C. § 9607(a)(2) based upon the extent of its control of its subsidiary which owns the facility, the parent will be liable only when the requirements necessary to pierce the corporate veil [under state law] are met. In other words,... whether the parent will be liable as an operator depends upon whether the degree to which it controls its subsidiary and the extent and manner of its involvement with the facility, amount to the abuse of the corporate form that will warrant piercing the corporate veil and disregarding the separate corporate entities of .the parent and subsidiary.” Id., at 580.

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.

We granted certiorari, 522 U. S. 1024 (1997), to resolve a conflict among the Circuits over the extent to which parent corporations may be held liable under CERCLA for operating facilities ostensibly under the control of their subsidiaries. We now vacate and remand.

J — { H-1 H

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. Douglas & Shanks, Insulation from Liability Through Subsidiary Corporations, 39 Yale L. J. 193 (1929) (hereinafter Douglas); see also, e. g., Buechner v. Farbenfabriken Bayer Aktiengesellschaft, 38 Del. Ch. 490, 494, 154 A. 2d 684, 687 (1959); Berkey v. Third Ave. R. Co., 244 N. Y. 84, 85, 155 N. E. 58 (1926) (Cardozo, J.); 1 W. Fletcher, Cyclopedia of Law of Private Corporations §33, p. 568 (rev. ed. 1990) (“Neither does the mere fact that there exists a parent-subsidiary relationship between two corporations make the one liable for the torts of its affiliate”); Horton, Liability of Corporation for Torts of Subsidiary, 7 A. L. R. 3d 1343, 1349 (1966) (“Ordinarily, a corporation which chooses to facilitate the operation of its business by employment of another corporation as a subsidiary will not be penalized by a judicial determination of liability for the legal obligations of the subsidiary”); cf. Anderson v. Abbott, 321 U. S. 349, 362 (1944) (“Limited liability is the rule, not the exception”); Burnet v. Clark, 287 U. S. 410, 415 (1932) (“A corporation and its stockholders are generally to be treated as separate entities”). Thus it is horn-book law that “the exercise of the ‘control’ which stock ownership gives to the stockholders ... will not create liability beyond the assets of the subsidiary. That ‘control’ includes the election of directors, the making of by-laws ... and the doing of all other acts incident to the legal status of stockholders. Nor will a duplication of some or all of the directors or executive officers be fatal.” Douglas 196 (footnotes omitted). Although this respect for corporate distinctions when the subsidiary is a polluter has been severely criticized in the literature, see, e. g., Note, Liability of Parent Corporations for Hazardous Waste Cleanup and Damages, 99 Harv. L. Rev. 986 (1986), nothing in CERCLA purports to reject this bedrock principle, and against this venerable common-law backdrop, the congressional silence is audible. Cf. Edmonds v. Compagnie Generale Transatlantique, 448 U. S. 256, 266-267 (1979) (“[Sjilenee is most eloquent, for sueh reticence while contemplating an important and controversial change in existing law is unlikely”). 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, inter alia, the corporate form would otherwise be misused to accomplish certain wrongful purposes, most notably fraud, on the shareholder’s behalf. See, e. g., Anderson v. Abbott, supra, at 362 (“[Tjhere are occasions when the limited liability sought to be obtained through the corporation will be qualified or denied”); Chicago, M. & St. P. R. Co. v. Minneapolis Civic and Commerce Assn., 247 U. S. 490, 501 (1918) (principles of corporate separateness “have been plainly and repeatedly held not applicable where stock ownership has been resorted to, not for the purpose of participating in the affairs of a corporation in the normal and usual manner, but for the purpose ... of controlling a subsidiary company so that it may be used as a mere agency or instrumentality of the owning company"); P. Blumberg, Law of Corporate Groups: Tort, Contract, and Other Common Law Problems in the Substantive Law of Parent and Subsidiary Corporations §§6.01-6.06 (1987 and 1996 Supp.) (discussing the law of veil piercing in the parent-subsidiary context). Nothing in CERCLA purports to rewrite this well-settled rule, either. CERCLA is thus like many another congressional enactment in giving no indication that “the entire corpus of state corporation law is to be replaced simply because a plaintiff’s cause of action is based upon a federal statute,” Burks v. Lasker, 441 U. S. 471, 478 (1979), and the failure of the statute to speak to a matter as fundamental as the liability implications of corporate ownership demands application of the rule that “[i]n order to abrogate a common-law principle, the statute must speak directly to the question addressed by the common law,” United States v. Texas, 507 U. S. 529, 534 (1993) (internal quotation marks omitted). The Court of Appeals was accordingly correct in holding that when (but only when) the corporate veil may be pierced, may a parent corporation foe 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.” Douglas 207,208. In such instances, the parent is directly liable for its own actions. See H. Henn & J. Alexander, Laws of Corporations 347 (3d ed. 1983) (hereinafter Henn & Alexander) (“Apart from corporation law principles, a shareholder, whether a natural person or a corporation, may be liable on the ground that such shareholder’s activity resulted in the liability”). 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,” Mine Workers v. Coronado Coal Co., 259 U. S. 344, 395 (1922), and whereas the rules of veil piercing limit derivative liability for the actions of another corporation, CERCLA’s “operator” provision is concerned primarily with direct liability for one’s own actions. See, e.g., Sidney S. Arst Co. v. Pipefitters Welfare Ed. Fund, 25 F. 3d 417, 420 (CA7 1994) (“[T]he direct, personal liability provided by CERCLA is distinct from the derivative liability that results from piercing the corporate veil” (internal quotation marks omitted)). 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. See 42 U. S. C. § 9607(a)(2). 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. See Riverside Market Dev. Corp. v. International Bldg. Prods., Inc., 931 F. 2d 327, 330 (CA5) (“CERCLA prevents individuals from hiding behind the corporate shield when, as ‘operators,’ they themselves actually participate in the wrongful conduct prohibited by the Act”), cert. denied, 502 U. S. 1004 (1991); United States v. Kayser-Roth Corp., 910 F. 2d 24, 26 (CA1 1990) (“[A] person who is an operator of a facility is not protected from liability by the legal structure of ownership”).

This much is easy to say: the difficulty comes in defining actions sufficient to constitute direct parental “operation.” Here of course we may again rue the uselessness of CERCLA’s definition of a facility’s “operator” as “any person ... operating” the facility, 42 U. S. C. § 9601(20)(A)(ii), which leaves us to do the best we can to give the term its “ordinary or natural meaning.” Bailey v. United States, 516 U. S. 137, 145 (1995) (internal quotation marks omitted). In a mechanical sense, to “operate” ordinarily means “[t]o control the functioning of; run: operate a sewing machine.” American Heritage Dictionary 1268 (3d ed. 1992); see also Webster’s New International Dictionary 1707 (2d ed. 1958) (“to work; as, to operate a machine”). And in the organizational sense more obviously intended by CERCLA, the word ordinarily means “[t]o conduct the affairs of; manage: operate a business.” American Heritage Dictionary, supra, at 1268; see also Webster’s New International Dictionary, supra, at 1707 (“to manage”). 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 hable as an operator on the facts of this case.

1

By emphasizing that “CPC is directly hable 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 apphed the “actual control” test of whether the parent “actually 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 hable 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 faeihty” (internal quotation marks omitted)).

The well-taken objection to the actual control test, however, is its fusion of direct and indirect habihty; 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 faeihty (the source of any direct habihty). If, however, direct habihty for the parent’s operation of the faeihty is to be kept distinct from derivative habihty for the subsidiary’s own operation, the focus of the enquiry must necessarily be different under the two tests. “The question is not whether the parent operates the subsidiary, but rather whether it operates the facility, and that operation is evidenced by participation in the activities of the facility, not the subsidiary. Control of the subsidiary, if extensive enough, gives rise to indirect liability under piercing doctrine, not direct liability under the statutory language.” Oswald 269; see also Schiavone v. Pearce, 79 F. 3d 248, 254 (CA2 1996) (“Any liabilities [the parent] may have as an operator, then, stem directly from its control over the plant”). The District Court was therefore mistaken to rest its analysis on CPC’s relationship with Ott II, premising liability on little more than “CPC’s 100-percent ownership of Ott II” and “CPC’s active participation in, and at times majority control over, Ott II’s board of directors.” 777 F. Supp., at 575. The analysis should instead have rested on the relationship between CPC and the Muskegon facility itself.

In addition to (and perhaps as a reflection of) the erroneous focus on the relationship between CPC and Ott II, even those findings of the District Court that might be taken to speak to the extent of CPC’s activity at the facility itself are flawed, for the District Court wrongly assumed that the actions of the joint officers and directors are necessarily attributable to CPC. The District Court emphasized the facts that CPC placed its own high-level officials on Ott II’s board of directors and in key management positions at Ott II, and that those individuals made major policy decisions and conducted day-to-day operations at the facility: “Although Ott II corporate officers set the day-to-day operating policies for the company without any need to obtain formal approval from CPC, CPC actively participated in this decision-making because high-ranking CPC officers served in Ott II management positions.” Id., at 559; see also id., at 575 (relying on “CPC’s involvement in major decision-making and day-today operations through CPC officials who served within Ott II management, including the positions of president and chief executive officer,” and on “the conduct of CPC officials with respect to Ott II affairs, particularly Arnold Ott”); id., at 558 (“CPC actively participated in, and at times controlled, the policy-making decisions of its subsidiary through its representation on the Ott II board of directors”); id., at 559 (“CPC also actively participated in and exerted control over day-to-day decision-making at Ott II through representation in the highest levels of the subsidiary’s management”).

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.” American Protein Corp. v. AB Volvo, 844 F. 2d 56, 57 (CA2), cert. denied, 488 U. S. 852 (1988); see also Kingston Dry Dock Co. v. Lake Champlain Transp. Co., 31 F. 2d 265, 267 (CA2 1929) (L. Hand, J.) (“Control through the ownership of shares does not fuse the corporations, even when the directors are common to each”); Henn & Alexander 355 (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.” Lusk v. Foxmeyer Health Corp., 129 F. 3d 773, 779 (CA5 1997); see also Fisser v. International Bank, 282 F. 2d 231, 238 (CA2 1960). Since courts generally presume “that the directors are wearing their ‘subsidiary hats’ and'not their ‘parent hats’ when acting for the subsidiary,” P. Blumberg, Law of Corporate Groups: Procedural Problems in the Law of Parent and Subsidiary Corporations § 1.02.1, p. 12 (1983); see, e. g., United States v. Jon-T Chemicals, Inc., 768 F. 2d 686, 691 (CA5 1985), cert. denied, 475 U. S. 1014 (1986), it cannot be enough to establish liability here that dual officers and directors made policy decisions and supervised activities at the facility. 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.

In sum, the District Court’s focus on the relationship between parent and subsidiary (rather than parent and facility), combined with its automatic attribution of the actions of dual officers and directors to the corporate parent, erroneously, even if unintentionally, treated CERCLA as though it displaced or fundamentally altered common-law standards of limited liability. Indeed, if the evidence of common corporate personnel acting at management and directorial levels were enough to support a finding of a parent corporation’s direct operator liability under CERCLA, then the possibility of resort to veil piercing to establish indirect, derivative liability for the subsidiary’s violations would be academic. There would in essence be a relaxed, CERCLA-speeifie rule of derivative liability that would banish traditional standards and expectations from the law of CERCLA liability. But, as we have said, such a rule does not arise from congressional silence, and CERCLA’s silence is dispositive.

2

We accordingly agree with the Court of Appeals that a partieipation-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. See supra, at 66-67. 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. See 113 F. 3d, at 579. 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 offieeholding as to serve the parent, even when ostensibly acting on behalf of the subsidiary in operating the facility. See n. 13, supra. 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. Just as we may look to such norms in identifying the limits of the presumption that a dual officeholder acts in his ostensible capacity, so here we may refer to them in distinguishing a parental officer’s oversight of a subsidiary from such an officer’s control over the operation of the subsidiary’s facility, “[Ajctivities that involve the facility but which are consistent with the parent’s investor status, such as monitoring of the subsidiary’s performance, supervision of the subsidiary’s finance and capital budget decisions, and articulation of general policies and procedures, should not give rise to direct liability.” Oswald 282. 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, see Tr. of Oral Arg. 7, 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.” 777 F. Supp., at 561. He “actively participated in and exerted control over a variety of Ott II environmental matters,” ibid., and he “issued directives regarding Ott II’s responses to regulatory inquiries,” id., at 575.

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. Not only would we be deciding in the first instance an issue on which the trial and appellate courts did not focus, but the very fact that the District Court did not see the ease as we do suggests that there may be still more to be known about Williams’s activities. Indeed, evén as the factual findings stand, the trial court offered little in the way of concrete detail for its conclusions about Williams’s role in Ott II’s environmental affairs, and the parties vigorously dispute the extent of Williams’s involvement. Prudence thus counsels us to remand, on the theory of direct operation set out here, for reevaluation of Williams’s role, and of the role of any other CPC agent who might be said to have had a part in operating the Muskegon facility.

V

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

It is so ordered.

       “CERCLA . . . imposes the costs of the cleanup on those responsible for the contamination.” Pennsylvania v. Union Gas Co., 491 U. S. 1, 7 (1989). “The remedy that Congress felt it needed in CERCLA is sweeping; everyone who is potentially responsible for hazardous-waste contamination may be forced to contribute to the costs of cleanup.” Id., at 21 (plurality opinion of Brennan, J.).

       “The term ‘facility’ means (A) any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B) any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consumer product in consumer use or any vessel.”

       CPC has recently changed its name to Bestfoods. Consistently with the briefs and the opinions below, we use the name CPC herein.

       The powers and responsibilities of MDNR have since been transferred to the Michigan Department of Environmental Quality.

       Cordova/California and MDNR entered into a contract under which Cordova/California agreed to undertake certain cleanup actions, and MDNR agreed to share in the funding of those actions and to indemnify Cordova/California for various expenses. The Michigan Court of Appeals has held that this agreement requires MDNR to indemnify Aerojet and its Cordova subsidiaries for any GERCLA liability that they may incur in connection with their activities at the Muskegon facility. See Cordova Chemical Co. v. MDNR, 212 Mich. App. 144, 536 N. W. 2d 860 (1995), leave to appeal denied, 453 Mich. 901, 554 N. W. 2d 319 (1996).

       Arnold Ott settled out of court with the Government on the eve of trial.

       Unlike CPC, Aerojet does not base its defense in this Court on a claim that, absent unusual circumstances, a parent company can be held liable as an operator of a facility only by piercing the corporate veil. Rather, Aerojet denies liability by claiming that (I) neither it nor its subsidiaries disposed of hazardous substances during their operation of the facility, see Brief for Respondents Aerojet-General Corp. et al. 27-36, and (2) it is entitled to a third-party defense under § 107(b)(8) of CERCLA, 42 U. S. C. § 9607(b)(3), see Brief for Respondents Aerojet-General Corp. et al. 38-46. The Court of Appeals expressed some measure of agreement with Aerojet on these points and instructed the District Court to consider them on remand. See 113 F. 3d, at 577, 583. These issues are not before this Court.

       Compare United States v. Cordova/Michigan, 113 F. 3d 572, 580 (CA6 1997) (case below) (parent may be held liable for controlling affairs of subsidiary only when the corporate veil can be pierced), and Joslyn Mfg. Co. v. T. L. James & Co., 893 F. 2d 80, 82-83 (CA5 1990) (same), cert. denied, 498 U. S. 1108 (1991) (but cf. Riverside Market Dev. Corp. v. International Bldg. Prods., Inc., 931 F. 2d 327, 330 (CA5) (parent companies that actually participate in the wrongful conduct cannot hide behind the corporate veil, and can be held directly liable without veil piercing), cert. denied, 502 U. S. 1004 (1991)), with United States v. Kayser-Roth Corp., 910 F. 2d 24, 27 (CA1 1990) (parent actively involved in the affairs of its subsidiary may be held directly liable as an operator of the facility, regardless of whether the corporate veil can be pierced), cert. denied, 498 U.S. 1084 (1991), Schiavone v. Pearce, 79 F. 3d 248, 254-255 (CA2 1996) (same), Lansford-Coaldale Joint Water Auth. v. Tonolli Corp., 4 F. 3d 1209, 1220-1225 (CA3 1993) (same), Jacksonville Elec. Auth. v. Bernuth Corp., 996 F. 2d 1107, 1110 (CA11 1993) (same), and Nurad, Inc. v. William E. Hooper & Sons Co., 966 F. 2d 837, 842 (CA4) (parent having authority to control subsidiary is liable as an operator, even if it did not exercise that authority), cert. denied, 506 U. S. 940 (1992).

       There is significant disagreement among courts and commentators over whether, in enforcing CERCLA’s indirect liability, courts should borrow state law, or instead apply a federal common law of veil piercing. Compare, e. g., 118 F. 3d, at 584-685 (Merritt, J., concurring in part and dissenting in part) (arguing that federal common law should apply), Lansford-Coaldale Joint Water Auth. v. Tonolli Gorp., 4 F. 3d, at 1225 (“[Given the federal interest in uniformity in the application of CERCLA, it is federal common law, and not state law, which governs when corporate veil-pierdng is justified under CERCLA”), and Aronovsky & Fuller, Liability of Parent Corporations for Hazardous Substance Releases under CERCLA, 24 U. S. F. L. Rev. 421, 455 (1990) (“CERCLA enforcement should not be hampered by subordination of its goals to varying state law rules of alter ego theory”), with, e. g., 113 F. 3d, at 580 (“Whether the circumstances in this case warrant a piercing of the corporate veil will be determined by state law”), and Dennis, Liability of Officers, Directors and Stockholders under CERCLA: The Case for Adopting State Law, 36 Will. L. Rev. 1367 (1991) (arguing that state law should apply). Cf. In re Acushnet River & New Bedford Harbor Proceedings, 675 F. Supp. 22, 33 (Mass. 1987) (noting that, since “federal common law draws upon state iaw for guidance,... the choice between state and federal [veil-piercing law] may in many cases present questions of academic interest, but little practical significance”). But c£ Note, Piercing the Corporate Law Veil: The Alter Ego Doctrine Under Federal Common Law, 95 Harv. L. Rev. 858 (1982) (arguing that federal common law need not mirror state law, because “federal common law should look to federal statutory policy rather than to state corporate law when deciding whether to pierce the corporate veil”). Since none of the parties challenges the Sixth Circuit’s holding that CPC and Aerojet incurred no derivative liability, the question is not presented in this case, and we do not address it further.

       Some courts and commentators have suggested that this indirect, veil-piercing approach can subject a parent corporation to liability only as an owner, and not as an operator. See, e.g., Lansford-Coaldale Joint Water Auth. v. Tonolli Corp., supra, at 1220; Oswald, Bifurcation of the Owner and Operator Analysis under CERCLA, 72 Wash. U. L. Q. 223,281-282 (1994) (hereinafter Oswald). We think it is otherwise, however. If a subsidiary that operates, but does not own, a facility is so pervasively controlled by its parent for a sufficiently improper purpose to warrant veil piercing, the parent may be held derivatively liable for the subsidiary’s acts as an operator.

       While this article was written together with Professor Shanks, the passages quoted in this opinion were written solely by Justice Douglas. See Douglas 193, n. *.

       See Oswald 257 (“There are . . . instances ... in which the parent has not sufficiently overstepped the bounds of corporate separateness to warrant piercing, yet is involved enough in the facility’s activities that it should be held liable as an operator. Imagine, for example, a parent who strictly observed corporate formalities, avoided intertwining officers and directors, and adequately capitalized its subsidiary, yet provided active, daily supervision and control over hazardous waste disposal activities of the subsidiary. Such a parent should not escape liability just because its activities do not justify a piercing of the subsidiary’s veü”).

       We do not attempt to recite the ways in which the Government could show that dual officers or directors were in fact acting on behalf of the parent. Here, it is prudent to say only that the presumption that an act is taken on behalf of the corporation for whom the officer claims to act is strongest when the act is perfectly consistent with the norms of corporate behavior, but wanes as the distance from those accepted norms approaches the point of action by a dual officer plainly contrary to the interests of the subsidiary yet nonetheless advantageous to the parent.

       There are some passages in the District Court's opinion that might suggest that, without reference to Williams, some of Ott IFs actions in operating the facility were in fact dictated by, and thus taken on behalf of, CPC. See, e. g., 777 F. Supp., at 561 (“CPC officials engaged in . . . missions to Ott II in which Ott II officials received instructions on how to improve and change”); id, at 559 (“CPC executives who were not Ott II board members also occasionally attended Ott II board meetings”). But nothing in the District Court’s findings of fact, as written, even comes dose to overcoming the presumption that Ott II offidals made their ded-sions and performed their acts as agents of Ott II. Indeed, the finding that "Ott II corporate officers set the day-to-day operating polides for the company without any need to obtain formal approval from CPC,” ibid., indicates just the opposite. Still, the Government is, of course, free on remand to point to any additional evidence, not dted by the District Court, that would tend to establish that Ott II’s decisionmakers acted on specific orders from CPC.


source: Caselaw Access Project

license: Public Domain

text:
    GEISSAL, Beneficiary and Representative of the ESTATE OF GEISSAL, DECEASED v. MOORE MEDICAL CORP. et al.
    No. 97-689.
    Argued April 29, 1998
    Decided June 8, 1998

      Souter, J., delivered the opinion for a unanimous Court.

      S. Sheldon Weinkaus argued the cause for petitioner. With him on-the briefs was Marc A. Greidinger.

      James A. Feldman argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Waxman, Assistant Attorney General Argrett, Deputy Solicitor General Kneedler, Gary R. Allen, and Teresa E. McLaughlin.

      Bradley J. Washburn argued the cause and filed a brief for respondents.

        Gill Deford, Mary Ellen Signorille, Melvin Radowitz, Daniel Fein-berg, and Ronald G. Dean filed a brief for the American Association of Retired Persons et al. as amici curiae urging reversal.

        Ray M. Aragon, Barbara J. Bacon, and Jeffrey Gabardi filed a brief for the Health Insurance Association of America as amicus curiae urging affirmance.

   Justice Souter

delivered the opinion of the Court.

The Employee Retirement Income Security Act of 1974 (ERISA), as amended by the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), authorizes a qualified beneficiary of an employer’s group health plan to obtain continued coverage under the plan when he might otherwise lose that benefit for certain reasons, such as the termination of employment. The issue in this case is whether 29 U. S. C. § 1162(2)(D)(i) allows an employer to deny COBRA continuation coverage to a qualified beneficiary who is covered under another group health plan at the time he makes his COBRA election. We hold that it does not.

I

On July 16, 1998, respondent Moore Medical Corporation fired James Geissal, who was suffering from cancer. While employed, Geissal was covered under Moore’s group health plan as well as the health plan provided by his wife’s employer, Trans World Airlines (TWA), through Aetna Life Insurance Company.

According to Geissal, soon after he lost his job, Moore told him that he had a right under COBRA to elect to continue coverage under Moore’s plan. Geissal so elected, and made the necessary premium payments for six months. On January 27, 1994, however, Moore informed Geissal it had been mistaken: he was not actually entitled to COBRA benefits because on the date of his election he was already covered by another group health plan, through his wife’s employer.

Geissal then brought this suit against Moore, the Group Benefit Plan of Moore Medical Group, Herbert Walker (an administrator of the plan), and Sedgwick Lowndes (another administrator) (collectively, Moore). Geissal charged Moore with violating COBRA by renouncing an obligation to provide continuing health benefits coverage (Count I); he further claimed that Moore was estopped to deny him continuation coverage because it had misled him to think that he was entitled to COBRA coverage (Count II), that Moore’s misrepresentation amounted to a waiver of any right to assert a reading of the plan provisions that would deprive him of continuation coverage (Count III), and, finally, that Walker had violated COBRA by failing to provide him with certain plan documents (Count IV).

After limited discovery, Geissal moved for partial summary judgment on Counts I and II of the complaint. He argued that Moore’s reliance upon 29 U. S. C. § 1162(2)(D)(i) as authority to deny him COBRA continuation coverage was misplaced. Although that subsection provides that an employer may cancel COBRA continuation coverage as of “[t]he date on which the qualified beneficiary first becomes, after the date of the election .. . covered under any other group health plan (as an employee or otherwise),” Geissal was first covered under the TWA plan before he elected COBRA continuation coverage, not after. In any event, Geissal maintained, Moore was estopped to deny him health benefits, because he had detrimentally relied upon its assurances that he was entitled to them. While the summary judgment motion was pending, Geissal died of cancer, and petitioner Bonnie Geissal, his wife and personal representative of his estate, replaced him as plaintiff.

The Magistrate Judge hearing the ease first rejected Moore's arguments that Geissal lacked standing and that Aetna was a necessary party under Federal Rule of Civil Procedure 19(a). The Magistrate concluded that even if Moore was correct that Geissal had no claim for compensatory damages because Aetna paid all of the medical bills, Geissal could seek statutory damages under 29 U. S. C. § 1132(a)(1). The Magistrate held that Aetna was not a necessary party to the suit, since complete relief could be granted between Moore and Geissal without joining Aetna, a verdict in Geissal’s favor would not subject Moore to the risk of inconsistent or double obligations, and Aetna's joinder was not necessary to determine primacy as between the two plans.

The Magistrate denied summary judgment for Geissal, however, and instead sua sponte granted partial summary judgment on Counts I and II in favor of Moore, concluding that an employee with coverage under another group health plan as of the date he elects COBRA continuation coverage is ineligible for COBRA coverage under § 1162(2)(D)(i), and that James Geissal presented insufficient evidence of detrimental reliance on Moore’s representation that he was entitled to benefits under COBRA. The Magistrate also found that there was no significant difference between the terms of coverage under Aetna’s plan and Moore’s; they differed only in the amount of their respective deductibles, and there was no evidence that Aetna’s plan excluded or limited coverage for James Geissal’s condition.

The Magistrate then granted Geissal’s unopposed motion under Federal Rule of Civil Procedure 54(b) for the entry of final judgment on Counts I and II, and so enabled Geissal to seek immediate review of the Magistrate’s decision. The Court of Appeals for the Eighth Circuit affirmed, 114 F. 3d 1458 (1997), and we granted certiorari, 522 U. S. 1086 (1998), to resolve a conflict among the Circuits on whether an employer may deny COBRA continuation coverage under its health plan to an otherwise eligible beneficiary covered under another group health plan at the time he elects coverage under COBRA.

II

A

The Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. 99-272,100 Stat. 82,222-287, amended the Employee Retirement Income Security Act, among other statutes. The amendments to ERISA require an employer who sponsors a group health plan to give the plan’s “qualified beneficiaries” the opportunity to elect “continuation coverage” under the plan when the beneficiaries might otherwise lose coverage upon the occurrence of certain “qualifying events,” including the death of the covered employee, the termination of the covered employee’s employment (except in cases of gross misconduct), and divorce or legal separation from the covered employee. 29 U. S. C. § 1163. Thus, a “qualified beneficiary” entitled to make a COBRA election may be a “covered employee” (someone covered by the employer’s plan because of Ms own employment), or a covered employee’s spouse or dependent child who was covered by the plan prior to the occurrence of the “qualifying event.” §1167(3).

COBRA demands that the continuation coverage offered to qualified beneficiaries be identical to what the plan provides to plan beneficiaries who have not suffered a qualifying event. § 1162(1). The statute requires plans to advise beneficiaries of their rights under COBRA both at the com-meneement of coverage and within 14 days of learning of a qualifying event, § 1166(a), after which qualified beneficiaries have 60 days to elect continuation coverage, § 1165(1). If a qualified beneficiary makes a COBRA election, continuation coverage dates from the qualifying event, and when the event is termination or reduced hours, the maximum period of coverage is generally 18 months; in other eases, it is generally 36. § 1162(2)(A). The beneficiary who makes the election must pay for what he gets, however, up to 102 percent of the “applicable premium” for the first 18 months of continuation coverage, and up to 150 percent thereafter. § 1162(3). The “applicable premium” is usually the cost to the plan of providing continuation coverage, regardless of who usually pays for the insurance benefit. § 1164. Benefits may cease if the qualified beneficiary fails to pay the premiums, § 1162(2)(C), and an employer may terminate it for certain other reasons, such as discontinuance of the group health plan entirely, §1162(2)(B). COBRA coverage may also cease on

“[t]he date on which the qualified beneficiary first becomes, after the date of the election—
“(i) covered under any other group health plan (as an employee or otherwise), which does not contain any exclusion or limitation with respect to any preexisting condition of such beneficiary, or
“(ii) entitled to benefits under title XVIII of the Social Security Act.” § 1162(2)(D).

B

Moore, like the Magistrate, believes that James GeissaPs coverage under the TWA plan defeats the claim for COBRA coverage after his election to receive it. As Moore reads § 1162(2)(D)(i), it is not relevant when a qualified beneficiary first obtains other health insurance coverage; instead, Moore submits, all that matters is whether, at any time after the date of election, the beneficiary is covered by another group health plan. In any event, Moore claims, James Geissal first became covered under the TWA plan only after his COBRA election, because it was only at that moment that his TWA coverage became primary.

Moore’s reading, however, will not square with the text. Section 1162(2)(D)(i) does not provide that the employer is excused if the beneficiary “is” covered or “remains” covered on or after the date of the election. Nothing in § 1162(2)(D)(i) says anything about the hierarchy of policy obligations, or otherwise suggests that it might matter whether the coverage of another group health plan is primary. So far as this case is concerned, what is crucial is that § 1162(2)(D)(i) does not speak in terms of “coverage” that might exist or continue; it speaks in terms of an event, the event of “beeom[ing] covered.” This event is significant only if it occurs, and “first” occurs, at a time “after the date of the election.” It is undisputed that both before and after James Geissal elected COBRA continuation coverage he was continuously a beneficiary of TWA’s group health plan. Because he was thus covered before he made his COBRA election, and so did not “first become” covered under the TWA plan after the date of election, Moore could not cut off his COBRA coverage under the plain meaning of § 1162(2)(D)(i).

Moore argues, to the contrary, that there is a reasonable sense in which a beneficiary does “first becom[e]” covered under a pre-existing plan “after the date of the election,” even when prior coverage can be said to persist after the election date: the first moment of coverage on the day following the election is the moment of first being covered after the date of the election. See National Cos. Health Benefit Plan v. St. Joseph’s Hosp., Inc., 929 F. 2d 1558, 1570 (CA11 1991) (“[I]t is immaterial when the employee acquires other group health coverage; the only relevant question is when, after the election date, does that other coverage take effect. In the case of an employee covered by preexisting group health coverage, . . . the first time after the election date that the employee becomes covered by a group health plan other than the employer’s plan is the moment after the election date”). But that reading ignores the condition that the beneficiary must “first beeom[e]” covered after election, robbing the modifier “first” of any consequence, thereby equating “first becomes ... covered” with “remains covered.” It transforms the novelty of becoming covered for the first time into the continuity of remaining covered over time.

Moore argues, further, that even if our reading of the statute is more faithful to its plain language, Congress could not have meant to give a qualified beneficiary something more than the right to preserve the status quo as of the date of the qualifying event. Moore points out that if the phrase “first becomes covered . . . after” the date of election does not apply to any coverage predating election, then the beneficiary is quite free to claim continuation coverage even if he has obtained entirely new group coverage between the qualifying event and the election; in that case, on our reading, COBRA would not be preserving the circumstances as of the date of the qualifying event.

That the plain reading does not confine COBRA strictly to guardianship of the status quo is, of course, perfectly true, though it is much less certain whether this fact should count against the plain reading (even assuming that the obvious reading would be vulnerable to such an objection, see Ardestani v. INS, 502 U. S. 129, 135 (1991)). The statute is neither east expressly in terms of the status quo, nor does it speak to the status quo on the date of the qualifying event except with reference to the coverage subject to election. Nor does a beneficiary’s decision to take advantage of another group policy not previously in effect carry any indicia of the sort of windfall Congress presumably would have disapproved. Since the beneficiary has to pay for whatever COBRA coverage he obtains, there is no reason to assume that he will make an election for coverage he does not need, whether he is covered by another policy in place before the qualifying event or one obtained after it but before his election.

Still, it is true that if during the interim between the qualifying event and election a beneficiary gets a new job, say, with health coverage (having no exclusion or limitation for his condition), he will have the benefit of COBRA, whereas he will not have it if his new job and coverage come after the election date. Do we classify this as an anomaly or merely a necessary consequence of the need to draw a line somewhere? For the sake of argument we might call it an anomaly, but that would only balance it against the anomaly of Moore’s own position, which defies not only normal language usage but the expectations of common sense: since an election to continue coverage is retroactive to the date of the qualifying event, under Moore’s reading of § 1162(2)(D)(i) an election that is ineffective to bring about continuation coverage for the roughly 18 (or 36) month statutory period would nonetheless have the surprising effect of providing continuation coverage for the period of weeks, or even days, between the event and the election. One wonders why Congress would have wanted to create such a strange scheme. Thus, assuming that our reading of § 1162(2)(D)(i) produces an anomaly, so does Moore’s.

But this is not all, for the anomalous consequences of Moore’s position are not exhausted without a look at the interpretative morass to which it has led in practice. To support its thesis that Congress meant individuals situated like James Geissal to be ineligible for COBRA benefits, Moore points to a statement in the House Reports on the original COBRA bill, that “[t]he Committee [on Ways and Means] is concerned with reports of the growing number of Americans without any health insurance coverage and the decreasing willingness of our.Nation’s hospitals to provide care to those who cannot afford to pay.” H. R. Rep. No. 99-241, pt. 1, p. 44 (1985); see 114 F. 3d, at 1463 (quoting House Report). Of course, if this concern (expressed in one House Committee Report) were thought to be a legitimate limit on the meaning of the statute as enacted, there would be no COBRA coverage for any beneficiary who had “any health insurance” on the date of election, or obtained “any” thereafter. But neither Moore nor any court rejecting the plain reading has gone quite so far. Instead, that draconian alternative has been averted by a nontextual compromise.

The compromise apparently alludes to the proviso that § 1162(2)(D)(i) applies so as to authorize termination of COBRA coverage only if the coverage provided by the other group health plan “does not contain any exclusion or limitation with respect to any preexisting condition of such beneficiary.” Moore urges us to hold, as some Courts of Appeals have done, that although Congress generally intended to deny COBRA coverage to individuals with other group insurance on the election date, there will still be COBRA eligibility in such eases if there is a “significant gap” between the coverage offered by the employer’s plan and that offered by the beneficiary’s other group health plan. See 114 F. 3d, at 1464-1465; accord, National Cos. Health Benefit Plan v. St. Joseph's Hosp., Inc., 929 F. 2d, at 1571; Brock v. Primedica, Inc., 904 F. 2d 295, 297 (CA5 1990). When there is such a gap, some courts have explained, it cannot be said that the employee is truly “covered” by his pre-existing insurance coverage. See 114 F. 3d, at 1463; National Cos. Health Benefit Plan v. St. Joseph’s Hosp., Inc., supra, at 1571.

This “significant gap” approach to § 1162(2)(D)(i) is plagued with difficulties, however, beginning with the sheer absence of any statutory support for it. Section 1162(2)(D)(i) makes no mention of what to do when a person’s other coverage is generally inadequate or inferior; instead, it provides merely that coverage under a later acquired group health plan will not terminate COBRA rights when that plan limits or excludes coverage for a pre-existing condition of the beneficiary. The proviso applies not when there is a “gap” or difference between the respective coverages of the two policies, but when the later acquired group coverage excludes or limits coverage specific to the beneficiary’s pre-existing condition. It is this “gap” between different coverage provisions of the non-COBRA plan, not a gap between the coverage provisions of the COBRA plan and the non-COBRA plan, that Congress was legislating about.

But even leaving textual inadequacy aside, there is further trouble under the “significant gap” approach. Needless to say, when the proviso (as written) arguably does apply, its applicability is easy to determine. Once the beneficiary’s pre-existing condition is identified, a court need only look among the terms of the later policy for an exclusion or hmitation peculiar to that condition. If either is found, COBRA continuation coverage is left undisturbed; if neither is found, the consequence of obtaining this later insurance is automatic. Applying the significant gap rule, on the other hand, requires a very different kind of determination, essentially one of social policy. Once a gap is found, the court must then make a judgment about the adequacy of medical insurance under the later group policy, for this is the essence of any decision about whether the gap between the two regimes of coverage is “significant” enough. This is a powerful point against the gap interpretation for two reasons. First, the required judgment is so far unsuitable for courts that we would expect a clear mandate before inferring that Congress meant to foist it on the judiciary. What is even more strange, however, is that Congress would have meant to inject the courts into the policy arena, evaluating the adequacy of non-COBRA coverage that happened to be in place prior to the COBRA election, while at the same time intending to limit the judicial intrusion, and leave the beneficiary to the unmediated legal consequences of the terms of the non-COBRA coverage that happened to become effective after the election. One just cannot credibly attribute such oddity to congressional intent.

In sum, there is no justification for disparaging the clarity of § 1162(2)(D)(i). The judgment of the Court of Appeals is vacated, and the ease is remanded for further proceedings consistent with this opinion.

It is so ordered.

       On November 8,1994, the District Court granted the plaintiffs motion to dismiss Lowndes without prejudice.

       Pursuant to 28 U. S. C. § 636(c), the parties agreed to have a magistrate judge conduct all proceedings in this case.

       This subsection provides that a beneficiary may seek relief under 29 TI S. C. § 1132(c), which provides that a plan administrator who fails to comply with a beneficiary’s request for plan information within 30 days of the request is personally liable to that beneficiary in the amount of up to $100 a day from the date of the failure.
      Before us, Moore suggests that Geissal lacks standing to maintain this suit. They assert that Aetna has paid all of the medical bills, and that the only apparent difference between the Aetna and Moore policies was a $350 difference in their respective deductibles, a difference far exceeded by the premiums Geissal would owe for COBRA coverage if successful. Despite Moore’s assertions to the contrary, however, nothing in the record indicates one way or another whether Aetna has fully reimbursed Geissal for James Geissal’s medical bills. Geissal’s counsel represented at oral argument that at a minimum there are unpaid medical bills incurred on a trip to the Greek Islands. Quite apart from this, we cannot tell from the record whether Geissal may be entitled to recover from Moore even if sometime later Aetna would have a claim against Geissal to recover the insurance costs that it paid.

       Compare Lutheran Hosp., Inc. v. Business Men’s Assurance Co., 51 F. 3d 1308 (CA7 1995) (an employer may not cease providing COBRA continuation coverage under its plan merely because its former employee has pre-existing coverage under another group health plan), and Oakley v. City of Longmont, 890 F. 2d 1128 (CA10 1989) (same), cert. denied, 494 U. S. 1082 (1990), with National Cos. Health Benefit Plan v. St. Joseph’s Hosp., Inc., 929 F. 2d 1558 (CA11 1991) (an employer may suspend the COBRA continuation coverage of a former employee who had pre-existing coverage under another group health plan), and Brock v. Primedica, Inc., 904 F. 2d 295 (CA5 1990) (same).

       Employers with fewer than 20 employees are exempt from COBRA’s requirements. 29 U. S. C. § 1161(b).

       Under § 1166(a)(2), an employer has a duty to report most qualifying events, including the termination of employment, to its group health plan administrator within 30 days of the qualifying event.

       When originally enacted, § 1162(2)(D)(i) provided that coverage could cease when a qualified beneficiary “first becomes, after the date of the election ... a covered employee under any other group health plan,” and a separate provision, § 1162(E), provided that in the case of an individual who was a qualified beneficiary as the result of being a spouse of a covered employee, coverage could cease on “the date on which the beneficiary remarries and becomes covered under a group health plan.” COBRA, Pub. L. 99-272, 100 Stat. 228. Congress later struck § 1162(E) and amended subsection (i) to provide that coverage could cease when a qualified beneficiary “first becomes, after the date of the election... covered under any other group health plan (as an employee or otherwise).” Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2938-2989. Congress again amended subsection (i) in 1989, when it added the qualification, “which does not contain any exclusion or limitation with respect to any preexisting condition of such beneficiary.” Omnibus Budget Reconciliation Act of 1989, Pub. L. 101-239, 103 Stat. 2297, 2432. The Health Insurance Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 2087-2088, amended § 1162(2)(D)(i) yet again by inserting before “, or”: “(other than such an exclusion or limitation which does not apply to (or is satisfied by) such beneficiary by reason of chapter 100 of the Internal Revenue Code of 1986, part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, or title XXVII of this Act).” The 1996 amendment was not in effect at the time this case arose.

       Moore also argues that Congress could not have intended to render COBRA eligible those individuals with pre-existing coverage under another health plan at the time of election, because such individuals who in fact elect COBRA coverage are typically high risk. As a result, Moore contends, covering them under COBRA tends to increase an employer’s overall cost of providing a group health plan, and may cause some employers to cease offering a group health plan entirely. This may or may not be true. If substantiated, the argument would be considered in construing the scope of a vague provision; § 1162(2)(D)(i), however, is not vague.

       The lower courts have disagreed about whether this “significant gap” interpretation should be made by evaluating the actual expenses an employee incurs as a result of COBRA cancellation, or by comparing the policies’ provisions in light of the information available to the employer on the day of the COBRA election. See 114 F. 3d, at 1464-1465 (comparing approaches).

       The unlikelihood, indeed, appears overwhelming when one considers that the same comparison would have to be made when the beneficiary was covered under Medicare, which is treated like a separate group plan for present purposes, see § 1162(2)(D)(ii).


author: Justice Thomas Justice Stevens,

text:
    HOPKINS, WARDEN v. REEVES
    No. 96-1693.
    Argued February 23, 1998 —
    Decided June 8, 1998

      Thomas, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O’Connor, Scaua, Kennedy, Souter, Ginsburg, and Breyer, JJ., joined. Stevens, J.', filed a dissenting opinion, post, p. 101.

      Don Stenberg, Attorney General of Nebraska, argued the cause for petitioner. With him on the briefs was J. Kirk Brown, Assistant Attorney General.

      Roy W. McLeese III argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Waxman, Acting Assistant Attorney General Keeney, and Deputy Solicitor General Dreeben.

      Paula Hutchinson, by appointment of the Court, 522 U. S. 1074, argued the cause for respondent. With her on the brief were Kent Gipson and Timothy K. Ford

      A brief of amici curiae urging reversal was filed for the State of Arizona et al. by Grant Woods, Attorney General of Arizona, Paul J. McMur-die, and Jon G. Anderson, Assistant Attorney General, joined by the Attorneys General for then* respective States as follows: Daniel E. Lungren of California, M. Jane Brady of Delaware, Alan G. Lance of Idaho, James E. Ryan of Illinois, Mike Moore of Mississippi, Jeremiah W. (Jay) Nixon of Missouri, Joseph P. Mazurek of Montana, Frankie Sue Del Papa of Nevada, Philip T. McLaughlin of New Hampshire, Deunis C. Vacco of New York, Michael F. Easley of North Carolina, Betty D. Montgomery of Ohio, W. A Drew Edmondson of Oklahoma, Mark W. Barnett of South Dakota, John Knox Walkup of Tennessee, and Richard Cullen of Virginia.

        David Porter and Helen C. Trainor filed a brief for the National Association of Criminal Defense Lawyers as amici curiae urging affirmance.

   Justice Thomas

delivered the opinion of the Court.

In Beck v. Alabama, 447 U. S. 625 (1980), we held unconstitutional a state statute that prohibited lesser included offense instructions in capital eases, when lesser included offenses to the charged crime existed under state law and such instructions were generally given in noncapital cases. In this ease, we consider whether Beck requires state trial courts to instruct juries on offenses that are not lesser included offenses of the charged crime under state law. We conclude that such instructions are not constitutionally required, and we therefore reverse the contrary judgment of the Court of Appeals.

I

In the early morning hours of March 29, 1980, police received an emergency call from the Religious Society of Friends meetinghouse in Lincoln, Nebraska. Responding to the call, they found Janet Mesner, the live-in caretaker, lying on the floor in the rear of the house with seven stab wounds in her chest. When an officer asked who had stabbed her, Mesner gave respondent’s name. The officers then went to an upstairs bedroom and found the partially clad dead body of 'Victoria Lamm, a friend of Mesner who had been visiting the meetinghouse. She had been stabbed twice, the first blow penetrating the main pulmonary artery of her heart and the second her liver. A billfold containing respondent’s identification was lying near Lamm’s body. The police found underwear, later identified as respondent’s, in the middle of the blood-soaked sheets of the bed; subsequent examination of the underwear revealed semen of respondent’s blood type. Near the bed, the police found a serrated kitchen knife with Mesner’s blood on it. Before dying, Mesner told an officer that respondent had raped her. Shortly thereafter, the police arrested respondent, who told them that although he could not remember much about the murders due to severe intoxication, he did recall stabbing and raping Mesner.

The State proceeded against respondent for both murders on a felony-murder theory. Under Nebraska law, felony murder is a form of first-degree murder and is defined as murder committed “in the perpetration of or attempt to perpetrate” certain enumerated felonies, including sexual assault or attempt to commit sexual assault in the first degree. Neb. Rev. Stat. §28-303 (1995). When proceeding on such a theory, Nebraska prosecutors do not need to prove a culpable mental state with respect to the murder because intent to kill is conclusively presumed if the State proves intent to commit the underlying felony. State v. Reeves, 216 Neb. 206, 217, 344 N. W. 2d 433, 442 (1984). Although a conviction for felony murder renders a defendant eligible for the death penalty, see § 28-303, the jury is not charged with sentencing the defendant; under Nebraska law, capital sentencing is a judicial function, § 29-2520.

At trial, respondent requested that the jury be instructed on both murder in the second degree and manslaughter, which, he argued, were lesser included offenses of felony murder. App. 6-9. The trial court refused on the ground that the Nebraska Supreme Court consistently has held that second-degree murder and manslaughter are not lesser included offenses of that crime. Id., at 10. Respondent’s jury thus was presented with only the two felony-murder counts. Although respondent raised an insanity defense, the jury rejected it and convicted him on both counts. A three-judge sentencing panel then convened to consider aggravating and mitigating circumstances. It sentenced respondent to death on both convictions.

After the Nebraska Supreme Court affirmed his convictions and sentences, State v. Reeves, 216 Neb. 206, 344 N. W. 2d 433, cert. denied, 469 U. S. 1028 (1984), respondent unsuccessfully pursued state collateral relief, State v. Reeves, 234 Neb. 711, 453 N. W. 2d 359 (1990). This Court then vacated the Nebraska Supreme Court’s judgment for further consideration in light of Clemons v. Mississippi, 494 U. S. 738 (1990), because respondent’s death sentence had been based in part on an invalid aggravating factor. See Reeves v. Nebraska, 498 U. S. 964 (1990). On remand, the Nebraska Supreme Court followed Clemons, independently reweighed the applicable aggravating and mitigating factors, and reaffirmed respondent’s sentences. State v. Reeves, 239 Neb. 419, 476 N. W. 2d 829 (1991), cert. denied, 506 U. S. 837 (1992).

Respondent then filed a petition for a writ of habeas corpus in Federal District Court. He raised 44 claims, including a claim that the trial court’s failure to give his requested instructions was unconstitutional under Beck. The District Court rejected the Beck claim but granted relief on an unrelated ground. 871 F. Supp. 1182, 1202, 1205-1206 (Neb. 1994). After the Court of Appeals for the Eighth Circuit reversed the latter determination and remanded the ease, 76 F. 3d 1424, 1427-1431 (1996), the District Court again granted respondent’s petition, finding a due process violation arising out of the reaffirmance of his sentences by the Nebraska Supreme Court. See 928 F. Supp. 941, 959-965 (Neb. 1996).

On the State’s appeal, the Court of Appeals held that although respondent was not entitled to relief on his due process claim, the Nebraska trial court had committed constitutional error in failing to give the requested second-degree murder and manslaughter instructions. 102 F. 3d 977 (1997). The Court of Appeals reasoned that the constitutional error was the same as that in Beck, despite the fact that there are no lesser included homicide offenses to felony murder under Nebraska law: In both cases, state law “prohibited instructions on noncapital murder charges in cases where conviction made the defendant death-eligible.” 102 F. 3d, at 983 (emphasis in original). Because respondent “could have been convicted and sentenced for either second degree murder or manslaughter,” the Court of Appeals concluded that he was constitutionally entitled to his proposed instructions. See id., at 984. It further stated that denial of the instructions could not be justified by the fact that felony murder in Nebraska does not require a culpable mental state with respect to the killing, because in Enmund v. Flor ida, 458 U. S. 782 (1982), and Tison v. Arizona, 481 U. S. 137 (1987), this Court held that the death penalty could not be imposed in a felony-murder ease if the defendant was a minor participant in the crime and neither intended to kill nor had shown reckless indifference to human life. See 102 F. 3d, at 984-985. The Court of Appeals therefore granted respondent’s petition and, relying on Circuit precedent holding that Beck applies only where the defendant is in fact sentenced to death, gave the State the option of retrying respondent or agreeing to modify his sentence to life imprisonment. See 102 F. 3d, at 986.

Because the decision below conflicted with a prior decision of the Court of Appeals for the Ninth Circuit, see Greenawalt v. Ricketts, 943 F. 2d 1020 (1991), cert. denied, 506 U. S. 888 (1992), we granted certiorari. 521 U. S. 1151 (1997).

HH HH

The Court of Appeals erred in concluding that its holding was compelled by Beck, as the two cases differ fundamentally. In Beck, the defendant was indicted and convicted of the capital offense of “ ‘[^Jobbery or attempts thereof when the victim is intentionally killed by the defendant.’” 447 U. S., at 627 (quoting Ala. Code § 13-ll-2(a)(2) (1975)). Although state law recognized the noncapital, lesser included offense of felony murder, see 447 U. S., at 628-630, and although lesser included offense instructions were generally available to noncapital defendants under state law, the Alabama death penalty statute prohibited such instructions in capital eases, id., at 628. As a result, Alabama juries had only two options: to convict the defendant of the capital crime, in which case they were required to impose the death penalty, or to acquit. Id., at 628-629. We found that the denial of the third option of convicting the defendant of a noncapital lesser included offense “diminish[ed] the reliability of the guilt determination.” Id., at 638. Without such an option, if the jury believed that the defendant had committed some other serious offense, it might convict him of the capital crime rather than acquit him altogether. See id., at 642-643. We therefore held that Alabama was “constitutionally prohibited from withdrawing that option from the jury in a capital ease.” See id., at 638.

bti Nebraska, instructions on offenses that have been determined to be lesser included offenses of the charged crime are available to defendants when the evidence supports them, in capital and noncapital cases alike. Respondent’s proposed instructions were refused because the Nebraska Supreme Court has held for over 100 years, in both capital and noncapital cases, that second-degree murder and manslaughter are not lesser included offenses of felony murder. See, e. g., State v. Price, 252 Neb. 365, 372, 562 N. W. 2d 340, 346 (1997); State v. Masters, 246 Neb. 1018, 1025, 524 N. W. 2d 342, 348 (1994); State v. Ruyle, 234 Neb. 760, 773, 452 N. W. 2d 734, 742-743 (1990); State v. McDonald, 195 Neb. 625, 636-637, 240 N. W. 2d 8, 15 (1976); Thompson v. State, 106 Neb. 395, 184 N. W. 68 (1921); Morgan v. State, 51 Neb. 672, 695, 71 N. W. 788, 794-795 (1897). If a Nebraska trial court gives instructions on those offenses, and the defendant is convicted only of second-degree murder or manslaughter, that conviction must be reversed on appeal. See Thompson v. State, supra, at 396, 184 N. W., at 68. Thus, as a matter of law, Nebraska prosecutors cannot obtain convictions for second-degree murder or manslaughter in a felony-murder trial.

Beck is therefore distinguishable from this case in two critical respects. The Alabama statute prohibited instructions on offenses that state law clearly recognized as lesser included offenses of the charged crime, and it did so only in capital cases. Alabama thus erected an “artificial barrier” that restricted its juries to a choice between conviction for a capital offense and acquittal. Brief for United States as Amicus Curiae 20 (citing California v. Ramos, 463 U. S. 992, 1007 (1983)). Here, by contrast, the Nebraska trial court did not deny respondent instructions on any existing lesser included offense of felony murder; it merely declined to give instructions on crimes that are not lesser included offenses. In so doing, the trial court did not create an “artificial barrier” for the jury; nor did it treat capital eases differently from noncapital cases. Instead, it simply followed the Nebraska Supreme Court's interpretation of the relevant offenses under state law.

By ignoring these distinctions, the Court of Appeals limited státé sovereignty in a manner more severe than the rule in Beck. Almost all States, including Nebraska, provide instructions only on those offenses that have been deemed to constitute lesser included offenses of the charged crime. See n. 5, supra. We have never suggested that the Constitution requires anything more. The Court of Appeals in this ease, however, required in effect that States create lesser included offenses to all capital crimes, by requiring that an instruction be given on some other offense — what could be called a “lesser related offense” — when no lesser included offense exists. Such a requirement is not only unprecedented, but also unworkable. Undér such a scheme, there would be no basis for determining the offenses for which instructions are warranted. The Court of Appeals apparently would recognize a constitutional right to an instruction on any offense that bears a resemblance to the charged crime and is supported by the evidence. Such an affirmative obligation is unquestionably a greater limitation on a State’s prerogative to structure its criminal law than is Beck’s rule that a State may not erect a capital-specific, artificial barrier to the provision of instructions on offenses that actually are lesser included offenses under state law.

The Court of Appeals justified its holding principally on the ground that respondent had been placed in the same position as the defendant in Beck — that there had been a distortion of the factfinding process because his jury had been “ Torced into an all-or-nothing choice between capital murder and innocence.'” 102 F. 3d, at 982 (quoting Spaziano v. Florida, 468 U. S. 447, 455 (1984)). In so doing, the Court of Appeals again overlooked significant distinctions between this ease and Beck. In Beck, the death penalty was automatically tied to conviction, and Beck’s jury was told that if it convicted the defendant of the charged offense, it was required to impose the death penalty. See Beck v. Alabama, 447 U. S., at 639, n. 15. This threatened to make the issue at trial whether the defendant should be executed or not, rather than “whether the State ha[d] proved each and every element of the capital crime beyond a reasonable doubt.” Id., at 643, n. 19. In addition, the distortion of the trial process earned over directly to sentencing, because an Alabama jury unwilling to acquit had no choice but to impose the death penalty. There was thus a significant possibility that the death penalty would be imposed upon defendants whose conduct did not merit it, simply because their juries might be convinced that they had committed some serious crime and should not escape punishment entirely.

These factors are not present here. Respondent’s jury did not have the burden of imposing a sentence. Indeed, with respect to respondent’s insanity defense, it was specifically instructed that it had “no right to take into consideration what punishment or disposition he may or may not receive in the event of his conviction or . .. acquittal by reason of insanity.” App. 24. In addition, the three-judge panel that imposed the death penalty did not have to consider the dilemma faced by Beck’s jury; its alternative to death was not setting respondent free, but rather sentencing him to life imprisonment.

Moreover, respondent’s proposed instructions would have introduced another kind of distortion at trial. Nebraska proceeded against respondent only on a theory of felony murder, a crime that under state law has no lesser included homicide offenses. The State therefore assumed the obligation of proving only that crime, as well as any lesser included offenses that existed under state law and were supported by the evidence; its entire case focused solely on that obligation. To allow respondent to be convicted of homicide offenses that are not lesser included offenses of felony murder, therefore, would be to allow his jury .to find beyond a reasonable doubt elements that the State had not attempted to prove, and indeed that it had ignored during the course of trial. This can hardly be said to be a reliable result: iCWhere no lesser included offense exists, a lesser included offense instruction detracts from, rather than enhances, the rationality of the process.” Spaziano v. Florida, supra, at 455.

The Court of Appeals also erroneously relied upon our decisions in Tison v. Arizona, 481 U. S. 137 (1987), and Enmund v. Florida, 458 U. S. 782 (1982), to support its holding. It reasoned that because those cases require proof of a culpable mental state with respect to the killing before the death penalty may be imposed for felony murder, Nebraska could not refuse lesser included offense instructions on the ground that the only intent required for a felony-murder conviction is the intent to commit the underlying felony. See 102 F. 3d, at 984. In so doing, the Court of Appeals read Tison and Enmund as essentially requiring the States to alter their definitions of felony murder to include a mens rea requirement with respect to the killing. In Cabana v. Bullock, 474 U. S. 376 (1986), however, we rejected precisely such a reading and stated that “our ruling in Enmund does not concern the guilt or innocence of the defendant — it establishes no new elements of the crime of murder that must be found by the jury” and “does not affect the state’s definition of any substantive offense.” Id., at 385 (internal quotation marks and citation omitted). For this reason, we held that a State could comply with Enmund’s requirement at sentencing or even on appeal. See 474 U. S., at 392. Accordingly, Tison and Enmund do not affect the showing that a State must make at a defendant’s trial for felony murder, so long as their requirement is satisfied at some point thereafter. As such, these cases cannot override state-law determinations of when instructions on lesser included offenses are permissible and when they are not.

Finally, respondent argues that the Nebraska Supreme Court’s longstanding interpretation that felony murder has no lesser included homicide offenses is arbitrary because, in his view, it is based only on recitations from prior cases, rather than on application of the lesser included offense tests in place since his conviction. See Brief for Respondent 40-43. This contention is certainly strained with respect to the crime of second-degree murder, which requires proof of intent to kill, while felony murder does not. See Neb. Rev. Stat. §§28-303, 28-304 (1995). It appears that the Nebraska Supreme Court has not undertaken respondent’s suggested analysis with respect to unlawful act manslaughter— unintentional killing, committed in the perpetration of an unlawful act. See §28-305. On his direct appeal, however, respondent did not challenge the Nebraska Supreme Court’s interpretation on this ground, and the clearest statement in his briefs on why a manslaughter instruction should have been given referred to manslaughter generally, for the following reason: “As the Court ruled in State v. Ellis, 208 Neb. 379, 303 N. W. 2d 741 (1981), such an instruction is necessary Vhere there is no eye witness to the act, and the evidence is largely circumstantial.’” Reply Brief for Appellant in No. 81-706 (Neb. Sup. Ct.), p. 11. We will not second-guess the Nebraska Supreme Court’s 100-year-old interpretation of state law when respondent failed to present his challenge to that court in the first instance.

the foregoing reasons, the Court of Appeals’ judgment granting respondent a conditional writ of habeas corpus is reversed.

It is so ordered.

Justice Stevens,

dissenting.

As a matter of Nebraska law, second-degree murder is not ordinarily a lesser included offense of felony murder. Based in part on this fact, the Court holds that it was not necessary for the trial judge to grant respondent’s request for an instruction authorizing the jury to find respondent guilty of that offense. The Court’s logic would be unassailable if the State had not sought the death penalty.

The reason that Nebraska generally does not consider second-degree murder a lesser included offense of felony murder is that it requires evidence of an intent to cause the death of the victim, whereas felony murder does not. But in this case the State sought to impose the death penalty on respondent for the offense of felony murder. As a matter of federal constitutional law, under Enmund v. Florida, 458 U. S. 782 (1982), it could not do so without proving that respondent intended to kill his victim, or under Tison v. Arizona, 481 U. S. 187 (1987), that he had the moral equivalent of such an intent. The rationale for Nebraska’s general rule that second-degree murder is not a lesser included offense of felony murder does not, therefore, apply to this case. To be faithful to the teaching of Beck v. Alabama, 447 U. S. 625 (1980), the Court should therefore hold that respondent was entitled to the requested instruction.

Accordingly, I respectfully dissent.

       Under Nebraska law, second-degree murder is defined as “caus[ing] the death of a person intentionally, but without premeditation,” §28-304, and manslaughter as “kill[ing] another without malice, either upon a sudden quarrel, or caus[ing] the death of another unintentionally while in the commission of an unlawful act,” § 28-305.

       Respondent did not request an instruction on sexual assault in the first degree.

       One of the questions on which we granted certiorari was whether the Court of Appeals’ holding was a “new rule” under Teague v. Lane, 489 U. S. 288 (1989). See Pet. for Cert. i. Because the State raised this argument for the first time in its petition for a writ of certiorari, we choose to decide the case on the merits. Cf. Godinez v. Moran, 509 U. S. 389, 397, n. 8 (1993) (declining to address whether the Court of Appeals created a “new rule” because the petitioner did not raise a Teague defense in the lower courts or in its petition for certiorari).

       If the jury imposed the death penalty, the trial judge had the authority to reduce the sentence to life imprisonment without the possibility of parole. The jury, however, was not instructed to this effect; rather, it was told that it was required to impose the death penalty if it found the defendant guilty. See 447 U. S., at 639, n. 15.

       We noted this fact in Beck in distinguishing Alabama’s scheme from the practices in the rest of the States. See 447 U. S., at 636, n. 12 (citing State v. Hegwood, 202 Neb. 379, 275 N. W. 2d 605 (1979)).

       In determining whether an offense is a lesser included offense of a particular crime, the States have adopted a variety of approaches. See, e.g., State v. Berlin, 133 Wash. 2d 541, 550-551, 947 P. 2d 700, 704-705 (1997) (en banc) (comparing statutory elements of the lesser offense to determine whether all of them are contained in the greater offense); People v. Beach, 429 Mich. 450, 462, 418 N. W. 2d 861, 866-867 (1988) (applying the “cognate evidence” approach: a lesser included offense instruction may be given even though all of the statutory elements of the lesser offense are not contained in the greater offense, if the “overlapping elements relate to the common purpose of the statutes” and the specific evidence adduced would support an instruction on the eognate offense (internal quotation marks and citation omitted)); State v. Curtis, 130 Idaho 522, 524, 944 P. 2d 119, 121-122 (1997) (court looks both to the statutory elements and to the information to determine whether it “charges the accused with a crime the proof of which necessarily includes proof of the acts that constitute the lesser included offense”). Cf. Schmuck v. United States, 489 U. S. 705 (1989) (adopting statutory elements test for federal criminal law).
      Since the time of respondent’s conviction, Nebraska has alternated between use of the statutory elements test and the cognate evidence test; it currently employs the former. See State v. Williams, 243 Neb. 959, 963-965, 503 N. W. 2d 561, 564-565 (1993) (readopting statutory elements test), overruling State v. Garza, 236 Neb. 202, 207-208, 459 N. W. 2d 739, 743 (1990) (reaffirming cognate evidence test), disapproving State v. Lovelace, 212 Neb. 356, 359-360, 322 N. W. 2d 673, 674-675 (1982) (applying statutory elements test). It has nonetheless consistently reaffirmed its holding that felony murder has no lesser included homicide offenses.

       We are not, of course, presented with a case that differs from Beck only in that the jury is not the sentencer, and we express no opinion here whether that difference alone would render Beck inapplicable. • The crucial distinction between Beck and this case, as noted, is the distinction between a State’s prohibiting instructions on offenses that state law recognizes as lesser included, and a State’s refusing to instruct on offenses that state law does not recognize as lesser included.

       The dissent also appears to be of this view, contending that Nebraska’s justification for not providing an instruction on second-degree murder is inapplicable when the death penalty is sought. See post, at 101-102.

       See, e. g., State v. Price, 252 Neb. 365, 373, 562 N. W. 2d 340, 346 (1997); State v. Masters, 246 Neb. 1018, 1025, 524 N. W. 2d 342, 348 (1994); State v. Ruyle, 234 Neb. 760, 773, 452 N. W. 2d 734, 742-743 (1990); State v. McDonald, 195 Neb. 625, 636-637, 240 N. W. 2d 8, 15 (1976).

       Moreover, a recent Nebraska Supreme Court decision suggests that Nebraska law may be in flux on the question whether second-degree murder is a lesser included offense of felony murder. Only a few weeks ago, the Nebraska Supreme Court held that a jury verdict finding a defendant guilty of second-degree murder constituted an implied acquittal of the crime of first-degree murder, as defined in §28-303 of Nebraska’s criminal code, and therefore barred a second prosecution under that section for either felony murder or premeditated murder. Nebraska v. White, 254 Neb. 566, 577 N. W. 2d 741 (1998). In reaching that holding the Court explained: "The conduct prohibited by §28-303 is first degree murder. Premeditated murder and felony murder are not denominated in Nebraska’s statutes as separate and independent offenses, but only ways in which criminal liability for first degree murder may be charged and prosecuted.” Id., at 577, 577 N. W. 2d, at 748. The difference between a charge of premeditated murder and a charge of felony murder “is a difference in the State’s theory of how [the defendant] committed the single offense of first degree murder.... Therefore, we hold that the crime of first degree murder, as defined in §28-303, constitutes one offense even though there may be alternate theories by which criminal liability for first degree murder may be charged and prosecuted in Nebraska.” Ibid. Given this holding, the Nebraska Supreme Court may conclude that second-degree murder is a lesser included offense of both premeditated and felony murder, as they are both part of the “one offense” of first-degree murder.