Opinion ID: 1595020
Heading Depth: 3
Heading Rank: 2

Heading: Piercing the Corporate Veil for a Tort Claim

Text: ¶ 9. Corporate veil claims are analyzed under state law. United States v. Bestfoods, 524 U.S. 51, 61-63, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998). We decline to pierce the corporate veil except in those extraordinary factual circumstances where to do otherwise would subvert the ends of justice. Gray, 541 So.2d at 1046 (citing Johnson & Higgins of Miss., Inc. v. Comm'r of Ins., 321 So.2d 281, 284 (Miss. 1975)). Consequently, we have adopted the general rule that the corporate entity will not be disregarded in contract claims unless the complaining party can demonstrate: (1) some frustration of expectations regarding the party to whom he looked for performance; (2) the flagrant disregard of corporate formalities by the defendant corporation and its principals; and (3) a demonstration of fraud or other equivalent misfeasance on the part of the corporate shareholder. Gray, 541 So.2d at 1047. ¶ 10. While we have never articulated whether a different standard applies to tort claims, precedent from other jurisdictions suggests that the same basic standard should apply. See Miles v. Am. Tel. & Tel. Co., 703 F.2d 193, 195 (5th Cir.1983) (Although the attitude toward judicial piercing of the corporate veil is more flexible in tort, the legal precepts governing both tort and contract suits are substantially the same.). It is similarly accepted that some misfeasance other than the tort itself must be shown. See LaSalle Nat'l Bank v. Perelman, 82 F.Supp.2d 279, 295 (D.Del.2000) (In order to prevail on a claim to pierce the corporate veil . . . a plaintiff must prove that the corporate form causes fraud or similar injustice. ) (emphasis added); Mobil Oil Corp. v. Linear Films, Inc., 718 F.Supp. 260, 268-69 (D.Del.1989) (The law requires that fraud or injustice be found in the defendant's use of the corporate form.). We therefore recognize that the corporate veil will not be pierced, in either contract or tort claims, except where there is some abuse of the corporate form itself.