Fletcher v. Atex, Inc. case brief

Fletcher v. Atex, Inc. case brief summary 
68 F.3d 1451

SYNOPSIS: Plaintiffs, computer keyboard users, appealed a summary judgment entered in favor of defendant, manufacturer's parent company, by the United States District Court for the Southern District of New York in an action to recover for repetitive stress injuries from computer keyboards.

FACTS:

-The action of plaintiffs, computer keyboard users, for damages from repetitive stress injuries from computer keyboards made by manufacturer, who was owned by defendant, manufacturer's parent company, was dismissed on summary judgment. 

The court affirmed because there were no material issues of genuine fact and defendant was entitled to judgment as a matter of law. 

ANALYSIS:

-The alter ego theory had insufficient evidence. Where the factual findings from another action were not essential to that judgment and defendant was unable to fully and fairly litigate the issue because it succeeded on other grounds, collateral estoppel did not apply against defendant. 

-The agency theory failed because plaintiffs offered no evidence that defendant authorized or appeared to authorize the manufacturer to act on its behalf. 

-The apparent manufacturer theory failed because defendant could not have been liable where it was not the seller or distributor. 

-The concerted tortious theory failed because there was no evidence that defendant and manufacturer agreed to commit a tortious act or that defendant provided substantial assistance or encouragement to the manufacturer to act tortiously.

RULES:

-To pierce the corporate veil on an alter ego theory, a plaintiff must show that the two corporations operated as a single economic entity and that an overall element of injustice or unfairness is present.
-Among the factors to be considered in determining whether the two corporations operate as a single economic entity are: whether the corporation was adequately capitalized; whether the corporation was solvent; whether corporate formalities were observed; whether the dominant shareholder siphoned corporate funds; and whether in general the corporation simply functioned as a facade.

OUTCOME: The court affirmed the summary judgment for defendant, manufacturer's parent company, against plaintiff injured persons in an action to recover for repetitive stress injuries from computer keyboards where there were no genuine issues of material fact and defendant was entitled to judgment as a matter of law.
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