1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

MEMORANDUM OPINION AND ORDER Plaintiff TAC-Critical Systems, Inc. has brought this diversity action for breach of contract against Defendants Integrated Facility Systems, Inc. and its sole owner and officer, Mohan Jacob. IFS is now a defunct company th at closed its doors in 2009. To recover the $239,666.04 in damages it seeks on its breach-of-contract claim, Plaintiff asserts a veil-piercing theory to hold Jacob personally liable for IFS’s corporate debts. Jacob now moves for summary judgment, arguing that, even if IFS did breach the contract, TAC cannot, as a matter of law, pierce IFS’s corporate veil and r ecover from him personally. As the Court disagrees, it will deny the Motion. 1 I. Background Both TAC and IFS are contracting firms. In around 2005, they entered into an agreement to perform work on “three federal fa cilities in the District of Co lumbia.” Compl., ¶ 6. IFS was to be the general contractor, and TAC was to serve as a subcontractor. The arrangement was

1 The court has reviewed Defendant’s Motion for Summ ary Judgment, Plaintiff’s Opposition, Defendant’s Reply, Plaintiff’s Surreply on Delawa re Law, and Defendant’s Response. TAC-CRITICAL SYSTEMS, INC., Plaintiff, v. Civil Action No. 09-1512 (JEB) INTEGRATED FACILITY SYSTEMS, INC., et al. , Defendants.2 made contingent on IFS’s being awarded the pr ime contract from the federal government, which it ultimately obtaine d. Id., ¶¶ 6-7. Shortly after starting work on the federal contracts, the relatio nship between IFS and TAC began to sour. Despite the fact that IFS was the general c ontractor, Jacob felt that “TAC decided to run th[e] project on [its] own[,] . . . disregarding that [IFS] was the GC.” Pl. Opp., Exh. 1 (Deposition of Mohan Jacob) at 62. Frus trated by the situation, Jacob became “[un]happy with the whole process right th rough the contract” and generally believed that he had “lost control of the contract . . . .” Id. Animosity also developed between the parties with respect to the value of each company’s work on the relevant projects. While they “never had any problem with the scope of work,” the parties were not in accord regarding how much TAC would receive as payment. Id. at 66. Jacob avers that IFS paid TAC $840,000 for its work on the facilities and kept only $128,000 for itself. Id. at 79-80. He fu rther contends that, b ecause of TAC’s alleged conduct, IFS actually lost nearly $75,000 in unrecouped expenses on the federal projects. Id. at 69. Other than a $15,000 debt that Jacobs acknowle dges that IFS owes Plaintiff, see id. at 73, 78, 106, he asserts that TAC has been fully paid fo r its work on all pertinen t contracts. Id. at 105-06. Not surprisingly, TAC takes a different view of their contractual disp ute. In filing this breach-of-contract action against both IFS and Jacob, TAC alleges that IFS owes it almost $240,000. Compl., ¶ 14. Plaintiff a dditionally advances a veil-pie rcing theory to hold Jacob personally liable for these contractual damages. Jacob has now filed a Motion for Summary Judgment under F ED
. R. C IV
. P. 56(a), arguing that no genuine issues of ma terial fact remain with respect to his personal liability for the

contract.3 II. Legal Standard Summary judgment may be granted if “the m ovant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” F ED . R. C IV
. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986); Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006). “A part y asserting that a fact cannot be or is genuinely disputed must support the assertion by ci ting to particular part s of materials in the record.” F ED . R. C IV
. P. 56(c)(1)(A). “A fact is ‘material’ if a dispute over it might affect the outcome of a suit under the governing law; factua l disputes that are ‘i rrelevant or unnecessary’ do not affect the summary judgment determina tion.” Holcomb, 433 F.3d at 895 (quoting Liberty Lobby, Inc., 477 U.S. at 248). An issue is “genui ne” if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Scott v. Harris, 550 U.S. 372, 380 (2007); Liberty Lobby, Inc., 477 U.S. at 248; Holcomb, 433 F.3d at 895. The party seeking summary judgment “bears the heavy burden of establishing that the merits of his case are so clear that expedited action is justified.” Taxpayers Watchdog, Inc. v. Stanley, 819 F.2d 294, 297 (D.C.Cir.1987). “Until a m ovant has met its burden, the opponent of a summary judgment motion is under no obliga tion to present any evidence.” Gray v. Greyhound Lines, East, 545 F.2d 169, 174 (D.C. Ci r. 1976). When a motion for summary judgment is under consideration, “the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in [its] favor.” Libert y Lobby, Inc., 477 U.S. at 255; see also Mastro v. Potomac Electric Power Co., 447 F.3d 843, 849–50 (D.C. Cir. 2006); Aka v. Washington Hospital Center, 156 F.3d 1284, 1288 (D.C . Cir. 1998) (en banc); Washington Post Co. v. U.S. Dep't of Health and Human Services, 865 F.2d 320, 325 (D.C. Cir. 1989). The nonmoving party's opposition, however, must consist of more than mere unsupported4 allegations or denials and must be supported by affidavits, decl arations, or other competent evidence, setting forth specific facts showing th at there is a genuine issue for trial. F ED . R. C IV
. P. 56(e); Celotex Corp. v. Catrett, 477 U. S. 317, 324 (1986). The nonmovant is required to provide evidence that would permit a reasonable jury to find in its favor. Laningham v. United States Navy, 813 F.2d 1236, 1242 (D.C. Cir. 1987). If the nonmovant's evidence is “merely colorable” or “not significantly probative,” su mmary judgment may be granted. Liberty Lobby, Inc., 477 U.S. at 249–50; see Scott, 550 U.S. at 380 (“[W]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving pa rty, there is ‘no genuine issue for trial.’”) (quoting Matsushita Electric Industrial C o. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). III. Analysis A. Choice of Law Before addressing the merits of Jacob’s Motion, the Court must first sort through a complicated choice-of-law question. Because the case concerns – albeit i ndirectly – contracts with the federal government, the Court must determine whether federal or state common law applies to Plaintiff’s veil-piercing theory. If fe deral law controls, the Court must apply that veilpiercing common law. If state la w governs, however, the Court must then decide which of three jurisdictions’ common law is applicable here. The State of Delaware , the Commonwealth of Virginia, and the District of Columbia each has an ostensible interest in having its law applied to this dispute. Delaware is the state in whic h IFS is incorporated. IFS’s principal place of business is located in Virginia, and the Commonwealth is also wh ere the relevant contracts were executed. Finally, the District of Columbia is the jurisdiction in whic h this action was brought, where the relevant contracts we re performed, and where they were allegedly breached. The5 Court finds that District of Columbia veil-piercing law ultimately applies to this case. The question of which jurisdiction’s law applie s where a party to a diversity case seeks to pierce the corporate veil can be especially vexing where, as here, the facts present both vertical –
i.e. , should federal or state law apply? -- and horizontal – i.e. , which state’s law should apply? -- choice-of-law questions. See Roadway Pack age System, Inc. v. Kayser, 257 F.3d 287, 293-94 (3d Cir. 2001) (explaining distin ction between vertical and ho rizontal), abrogated on other grounds by Hall Street Assoc., L.L.C., v. Mattel, Inc., 552 U.S. 576 (2008). Where a veilpiercing case is brought under a fede ral statute, “[t]here is significant disagreement . . . over whether . . . courts should borrow state law, or instead apply a fede ral common law of veil piercing.” United States v. Best Foods, 524 U.S. 51, 63 n.9 (1998); see also U.S. Through Small Business Admin. v. Pena, 731 F.2d 8, 12 (D.C. Cir. 1984) (addressing the veil-piercing choiceof-law quandary). Diversity cases “involv[ing] situations in wh ich [a] federal interest [is] implicated by the decision whether to pierce the corporate veil” present the same obstacle. Id.; see also United States ex rel. Siewick v. Jamies on Science and Engineering, Inc., 191 F. Supp. 2d 17, 20 (D.D.C. 2002) (“[F]ederal common law governing the veil-piercing question is applicable to [diversity] cases where ‘some federa l interest is implicated by the veil-piercing inquiry.’”) (quoting Pena, 731 F.2d at 12) (int ernal citation omitted); Note, Piercing the Corporate Veil: The Alter Ego Doctrine Under Federal Common Law, 95 Harv. L. Rev. 853 (1982) (discussing, inter alia , diversity cases where courts ha ve applied federal veil-piercing common law)

. In veil-piercing cases where no federal intere st is implicated, the majority view applies the District of Columbia’s choi ce-of-law principles, see Pena, 731 F.2d at 11-12; Amore ex rel. Estates of Amore v. Accor, 529 F. Supp. 2d 85, 93 (D.D.C. 2008), which typi cally underpin the6 analysis in diversity cases. See Nationwide Mutual Ins. Co. v. Richardson, 270 F.3d 948, 953 (D.C. Cir. 2001) (“‘A federal cour t sitting in diversity jurisdiction applies th e choice of law rules of the forum state (or district or territory)[.]’” (quoting Liberty Mut. Ins. Co. v. Travelers Indem Co., 78 F.3d 639, 642 (D.C. Cir.1996) (citation omitted)). Another approach looks to the R ESTATEMENT (S ECOND ) OF C ONFLICT OF L AWS § 307 (1971), which has been interpreted to abrogate genera l choice-of-law principl es in veil-piercing cases. The rule of § 307 states that “[t]he local law of the state of incorporation will be applied to determine” whether piercing the corporate veil is justified. Some courts have been content to end the inquiry there. See Moran v. Harrison, 91 F.2d 310 (D.C. Cir. 1937) (“[T]he existence and extent of the liability of a stockholder for . . . the debts of a corporation is determined by the law of the state of incorpor ation.”) (footnote omitted); S.E.C. v. Levine, 671 F. Supp. 2d 14, 33 (D.D.C. 2009) (“Because [the cor poration] is incorporated in Ne vada, Nevada law controls the alter ego analysis.”) (citing R ESTATEMENT § 307). The only relevant decisions relying on § 307’ S rule, however, are Levine and Moran; neither case cites binding authority to support the R ESTATEMENT ’s proposition, nor have any other D.C. federal courts sitting in diversity jurisdiction subscribed to their rationale. Such an approach has, moreover, been harshly criticized in the academic literature and is arguably not even based on a proper reading of § 307. See Gregory S. Crespi, C hoice of Law in Veil-Piercing Litigation: Why Courts Should Di sregard the Internal Affairs Rule and Embrace General Choiceof-Law Principles, 64 N.Y.U. Ann. Surv. Am. L. 85 ( 2008-2009). If state, as opposed to federal, veil-piercing law governs this case, the Court thus believes it appropriate to apply District of Columbia’s choice-of-law rules to de termine the particular state. Under those principles, courts conduct a “‘governmental inte rest analysis,’” in which7 they “evaluate the governmenta l policies underlying the . . . conflicting laws[] and determine which jurisdiction’s policies would be most advan ced by having its law applied to the facts of the case under review.” Hartley v. Dombrowski , 744 F. Supp. 2d 328, 336 (D.D.C. 2010) (quoting Bledsoe, 849 F.2d at 641). “ In applying this balancing test, th e court considers various factors such as the place of contracti ng, the place of contract negotiati on, the place [of] performance of the contract, the location of the subject matter of the contract, the place of incorporation and the parties' place of business.” Turkmani v. Republic of Bolivia, 273 F. Supp. 2d 45, 51 (D.D.C. 2002) (citing Koro Co. v. Brystol-Myers Co., 568 F. Supp. 280, 286 (D.D.C. 1983)). Under such an analysis, Dist rict of Columbia law must be applied to Plaintiff’s veilpiercing theory. The District is the place wher e the relevant contract s were performed, the jurisdiction that would be most affected by perf ormance, and the place where the contracts were allegedly breached. “As th[e D.C. Circuit] ha s previously stated, ‘[t]he state where the defendant's [alleged] conduct occur[red] has the dominant interest in regulating it . . . .’” Bledsoe, 849 F.2d at 643 (quoting Biscoe v. Arlington County, 738 F.2d 1352, 1361 (D.C. Cir. 1984)). The Court thus concludes, in response to the horizontal choice-of-law question, that District of Columbia veil-piercing law is applicable in this case. The same result is required as to the vertical choice-of-law issue. Some courts suggest that “‘the choice between stat e and federal [veil-piercing] law may in many cases present questions of academic interest, but little practi cal significance.’” Best Foods, 524 U.S. at 63 n.9 (quoting In re Acushnet River & New Bedfor d Harbor Proceedings, 675 F. Supp. 22, 33 (D. Mass. 1987)) (alteration in original). This is one such case. Because “the difference between federal alter ego law and D.C. alter ego law is immaterial,” McWilliams Ballard, Inc. v. Broadway Management Co., 636 F. Supp. 2d 1, 7-8 (D.D.C. 2009) (footnote omitted), it is8 unnecessary to decide the vertic al choice-of-law question. Mo re specifically, the federal common-law test for piercing the corporate veil “p roceeds in two steps: ‘(1) is there such unity of interest and ownership that the separate personalities of th e corporation and the individual no longer exist?; and (2) if the acts are treated as those of the corpor ation alone, will an inequitable result follow?’” United States ex rel. Hock ett v. Columbia/HCA Healthcare Corp., 498 F. Supp. 2d 25, 60 (D.D.C. 2007) (quoting Labadie Coal C o. v. Black, 672 F.2d, 92, 97 (D.C. Cir. 1982)). The substantively identical District of Columbia veil-piercing standard is set out in Part III.B., infra

. The Court may thus proceed to apply Distri ct of Columbia law without affecting the outcome even if the circumstances woul d require applicati on of federal law.
B. Piercing the Corporate Veil The gravamen of the dispute in this Motion is whether Jacob is, as a matter of law, shielded from personal liability for IFS’s contract ual debts to TAC. In arguing that it can pierce IFS’s corporate veil and recover from Jacob personally, Plaintiff alleges that “Jacob has commingled his personal funds and IFS funds and has used IFS to pay for his personal obligations,” Compl., ¶ 23, and al so that “Jacob used and conti nues to use IFS to defraud TAC” and “others, including the United States Government.” Id., ¶¶ 25- 26. Plaintiff furthermore avers that “IFS was and is ‘void’ in its state of inco rporation and was and is in revoked status in the District of Columbia.” Id., ¶ 20. Jacob contends the undisputed evidence is to the contrary. It should be preliminarily not ed that both parties misapprehe nd some details regarding the doctrine of veil-piercing. C ounts II and III of Plaintiff’s Co mplaint allege, respectively, “Personal Liability for Acts of Void and Forfeite d Corporation” and “Insid er Reverse Piercing.” Id. at 3-4. Both sides routinely refer to these c ounts as discrete claims in their submissions.9 They are not. Plaintiff’s sole cause of action in this case is for common-law breach of contract; its assertions concerning veil-piercing merely comprise a legal theory by which it hopes to extend liability – on its underlying breach-of-contr act claim – beyond IFS as a corporate entity to Jacob as an individual. S ee Gallagher v. McClure Bintli ff, 740 S.W.2d 118, 119 (Tex. App. 1987) (“An attempt to pierce the corporate veil, in a nd of itself, is not a cause of action but rather is a means of imposing liability on an underlying cause of action such as a tort or a breach of contract.”); 1 William Meade Fletcher et al. , Fletcher Cyclopedia of the Law of Corporations § 41.10 (perm. ed., rev. vol. 2011) (“the alter ego theo ry is not in itself a claim for substantive relief, but rather is procedural”; it “creates no cause of action [b ecause it] is a means of imposing liability on an underlying cause of action”) (foot notes omitted); see also Franklin A. Gevurts, Piercing Piercing: An Attempt to Lift the Veil of Confusion Surr ounding the Doctrine of Piercing the Corporate Veil, 76 Or. L. Rev. 853, 854-55 (clarifying that “[p]iercing is an equitable remedy,” not a cause of action). Plaintiff, moreover, most certainly does not wish to “inside reverse pierce” IFS’s corporate veil. This is because such a feat is not possible here. Reverse veil-piercing – sometimes superfluously referred to as inside re verse piercing – typica lly “involves a corporate insider . . . attempting to pierce the corporate veil from within so that the corporate entity and the individual will be considered one and the sa me.” 1 Fletcher § 41.70. Plaintiff’s theory, therefore, is one of ordinary veil-piercing in which an outsider asks a court to disregard a corporate entity and impose liability on an individual owner. See id. § 41.10. Jacob also misstates the test for veil-pierci ng under District of Columbia law. He argues that Plaintiff’s veil-piercing theory is a “fraud-based claim, ” which has failed to satisfy F ED
. R. C IV
. P. 9(b)’s heightened pleading standard for fra ud. Def. Resp. to Pl. Surreply at 9; see also10 Mot. at 4. As noted, however, veil-piercing is not a “claim.” Even if it were, it requires neither allegations nor proof of fraud. It would certainly be to Defendant’s benefit if courts still required a showing that an entity “use[d] the corporate fo rm to perpetrate fraud or wrong,” Mot. at 8 (citing Vuitch v. Furr, 482 A.2d 811, 815 (D.C. 1984) , but that is no longer the case. Indeed, this is the exact point the Court in Vuitch made when it explicitly discarded the restrictive standard formerly ap plied in cases such as McAuli ffe v. C. & K. Builders, 142 A.2d 605 (D.C. 1958). See 482 A.2d at 815 (“More recently, the court has held that considerations of justice and equity can justify pier cing the corporate veil and has re jected the contention that . . . there must be a showing of fraud . . . .”). The core thrust of Vuitch is to explain how the veilpiercing principle has evolved into a doctrine of equity under which “the decision to pierce will be influenced by [many] considerations.” Id. at 816. The existence or no nexistence of fraud is, of course, relevant to the inquiry, bu t “the factor [that] predominates w ill vary in each case.” Id. Properly enunciated, the D.C. veil-piercing doct rine requires “(1) unity of ownership and interest [between the entities], and (2) [either] us e of the corporate form to perpetrate fraud or wrong, or other considerations of justice and equity justify it.” Estate of Raleigh v. Mitchell, 947 A.2d 464, 470 (D.C. 2008) (quoting Bingham v. Go ldberg. Marchesano. Kohlman. Inc., 637 A.2d 81, 93 (D.C. 1994) (citation omitted) (inter nal quotation marks omitted)). A commonly referenced, though not exhaustive, list of factors for determ ining when veil-piercing is appropriate includes “‘(1) whethe r corporate formalities have been disregarded, (2) whether corporate funds and assets have been extensively inte rmingled . . . , (3) inadequate initial capitalization, and (4) fraudulent use of the corporat ion to protect [an entity ] from the claims of creditors.’” Id. at 470-71. Far from the rigid doctrine Jacob intimates, “[t]he ultimate principle11 [of veil piercing] is one permitting its use to av oid injustice.” United States v. Andrews, 146 F.3d 933, 940 (D.C. Cir. 1998) (inter nal quotation marks omitted). Under the appropriate veil -piercing test, Jacob has not met his burden on summary judgment. Although the precise dates involved are unclear, IFS’s good corporate standing and its certificate to conduct business in the District of Columbia ha ve, during certain periods, been revoked. See Opp., Exh. 2 (showing IFS’s D.C. regist ration status as “revoke d”); see also Mot., Exh. 3 (Declaration of Mohan Jacob), ¶ 5 (ackno wledging that he “allowed [IFS’s] corporate status to lapse” in Delaware). If IFS was operati ng without either or both of these authorizations during the period in which its c ontracts with TAC were executed and performed, this would show that corporate formalitie s were being di sregarded. It should nevertheless be noted that the abse nce of only the D.C. Ce rtificate of Authority during the relevant period would not be suffici ent in itself to pierce IFS’s corporate veil: “Despite its lack of a certificate of authority from D.C ., a foreign corporation remains in existence and can continue to re ly on its corporate form to pr otect its officers from personal liability for corporate debt.” BDC Capital Properties, L.L.C. v. Trinh, 307 F. Supp. 2d 12, 14-15 (D.D.C. 2004) (citing A. Ta sker, Inc. v. Amsellem, 315 A .2d 178, 180 (D.C. 1974)). The circumstances leading to the re vocation of IFS’s certificate of authority, however, may well be relevant as to veil-piercing. It is furthermore uncertain whether Jacob disregarded other corporate formalities in his management of IFS. This is so because he alleges that virtually all documents germane to the inquiry were either “thrown away” during “one spring cleaning,” see Jacob Dep. at 16, or have been “damaged,” id. at 29, when they “got rain ed on” and “have been thrown out because [they were] completely covered with water.” Id. at 15-16. Likewise murky is whether Jacob’s12 decision to file all of IFS’s paperwork in “boxe s in an outside area . . . under a porch” itself constitutes an instance of disregarding corporate formalities. It is also notable that, accord ing to Jacob himself, he “was the only one in charge of all the activities” of IFS. Id. at 8. He was the pr esident of the company, the only officer, and there was only one other employee. Id. at 8-9. All of these facts surrounding IFS’s corporate status and Jacob’s handling of its records and affairs, wh en considered jointly, raise genuine issues of material fact concerning veil-piercing that ca nnot appropriately be re solved on this Motion. IV. Conclusion As a dispute of material fact exists on whether Plaintiff can pi erce IFS’s corporate veil and hold Jacob personally liable, the Court ORDERS that:
1. Jacob’s Motion for Summary Judgment is DENIED; and
2. The parties shall appear for a status hearing in Courtroom 19 on September 14, 2011, at 10:30 a.m..

SO ORDERED
/s/ James E. Boasberg JAMES E. BOASBERG United States District Judge Date: August 24, 2011