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Fletcher v. Atex, Inc.

United States Court of Appeals for the Second Circuit
68 F.3d 1451 (1995)


Facts

Atex, Inc. (defendant) is a Delaware corporation wholly owned by Eastman Kodak, Inc. (Kodak) (defendant). Atex produces keyboards. The plaintiffs sued Atex and Kodak, arguing that Atex’s keyboards caused repetitive stress injuries. The individuals claiming to have been harmed by the keyboards wish to hold Kodak directly liable for the injuries on the theory that Kodak abused the corporate form and Atex was simply its alter ego. Atex participated in a cash management system in which its funds were pooled with other Kodak subsidiaries and managed by Kodak. Kodak’s approval was required for Atex’s major decisions or expenditures. There was a small degree of overlap between the boards of Kodak and Atex. Some Kodak corporate documents referred to a merger between Kodak and Atex, and referred to Atex as a division of Kodak. Finally, Atex assigned its CEO’s mortgage to Kodak as part of a transaction with a third party. With regard to the mortgage assignment and corporate business generally, Atex observed all the corporate formalities. The trial court granted summary judgment in favor of Kodak, holding that the alleged actions did not meet the requirements for piercing the corporate veil under the alter ego theory or otherwise. The plaintiffs appealed.

Rule of Law

Issue

Holding and Reasoning (Cabranes, J.)

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