Opinion ID: 574314
Heading Depth: 2
Heading Rank: 4

Heading: The Requirements of Alter Ego Liability.

Text: 73 Ekco's final argument is that the district court imposed sanctions based upon an erroneous interpretation of the requirements of alter ego liability, pointing to a colloquy during the July 16, 1991 hearing which assertedly establishes that the court took too relaxed a view of those requirements. We reject Ekco's effort to construe this rather casual discussion as a definitive expression of the district court's views concerning alter ego liability. More fundamentally, however, this contention misconstrues the nature and function of the sanctions imposed in this case. 74 Plaintiffs-appellees were precluded from any attempt to prove the elements of alter ego liability by Ekco's willful failure to comply with discovery orders. It is the relationship between this misconduct and plaintiffs-appellees alter ego claim that provides the rationale for the Rule 37(b)(2) sanctions imposed by the district court. See Insurance Corp. of Ireland, 456 U.S. at 707, 102 S.Ct. at 2106 (Rule 37(b) sanction must be specifically related to claim at issue in the order to provide discovery). 75 Had Ekco not intentionally frustrated the discovery process, an adjudication on the merits would have been possible. In view of Ecko's misconduct, the district court justifiably entered an order taking as established the claim whose proper adjudication Ekco deliberately endeavored to frustrate, and precluding Ekco from offering contrary evidence. In these circumstances, the precise requirements of alter ego liability are irrelevant to an assessment of the propriety of the district court's action.