Waste Conversion Systems, Inc. v. Greenstone Industries, Inc.

33 S.W.3d 779 (2000)

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Waste Conversion Systems, Inc. v. Greenstone Industries, Inc.

Tennessee Supreme Court
33 S.W.3d 779 (2000)

  • Written by Sharon Feldman, JD

Facts

Greenstone Industries-Atlanta, Inc. (GSI-A) was a wholly owned subsidiary of Greenstone Industries, Inc. (GSI) (defendant). Waste Conversion Systems, Inc. (WCS) (plaintiff) sued GSI for inducing GSI-A to breach its contract to purchase a minimum monthly quantity of fiber from WCS at a fixed price. WCS alleged that the price of fiber fell during the contract period and GSI-A refused to accept fiber from WCS so that it could purchase fiber at a lower price. The federal court certified the following questions to the Tennessee Supreme Court: (1) Can a parent corporation be held liable for inducing its wholly owned subsidiary to breach a contract with another party? (2) Can a parent corporation lose immunity for acting contrary to its subsidiary’s interest, and who bears the burden of proof? (3) Can the parent lose its privilege by using wrongful means, and what constitutes wrongful means?

Rule of Law

Issue

Holding and Reasoning (Holder, J.)

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