Craig v. Lake Asbestos case brief summary
843 F.2d 145 (1988)
Appellant holding company, which was
impleaded as a third-party defendant in a personal injury action,
challenged the decision of the United States District Court for the
Eastern District of Pennsylvania, which found it liable for the tort
obligations of its subsidiary for injuries to appellees, employee and
his wife, that resulted from exposure to asbestos fiber.
CASE FACTS Appellees, employee and his wife,
brought a personal injury action in Pennsylvania state court against
asbestos manufacturers and suppliers for injuries suffered as a
result of exposure to asbestos fibers. A defendant impleaded
appellant holding company and its subsidiaries as third-party
defendants upon removal to federal court. All original defendants
settled with appellees and a district court found that appellant was
liable for the tort obligations of its subsidiary based on a piercing
the corporate veil theory.
On appeal, the court reversed and
remanded, holding that appellant was not involved in the affairs of
the subsidiary on a constant or day-to-day basis necessary to rise to
the high degree of domination required by New Jersey state law to
pierce the corporate veil.
The court found that appellant and its
subsidiary maintained separate financial and managerial operations
The court concluded that merely the potential for
control was insufficient, especially if appellant's actual amount of
control was not enough.
CONCLUSION The court reversed and remanded
district court's decision that appellant holding company was liable
for the tort obligations of its subsidiary to appellees, employee and
his wife, for injuries they incurred as a result of exposure to
asbestos fibers, because appellant did not exercise such dominance
and control over subsidiary to justify piercing of the corporate veil
under New Jersey state law.
Recommended Supplements for Corporations and Business Associations Law
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