Opinion ID: 518733
Heading Depth: 1
Heading Rank: 5

Heading: itt's liability

Text: 113 ITT argues that there is no evidence to support imposing liability on it. H.J.'s theory at trial and on appeal is that ITT is liable as an actor, 13 that from beginning to end ITT was part of the warp and woof of the dealings between the parties. The following is the sum of all the evidence concerning ITT: 114 1. Flygt Corporation is a wholly-owned subsidiary of ITT. We gather the financial statements are consolidated. The secretary of Flygt was an ITT attorney. Flygt's president, Mr. Bjernfalk, reports to an ITT vice-president who heads ITT's Fluid Products group. Mr. Bjernfalk once attended a two-week business seminar held by ITT. 115 2. When seeking financing to purchase Anderson Dairy, Mr. Larsen showed an ITT annual report (provided to him by Flygt salesmen) to a bank, which then lent money to H.J. The bank president, aware that Flygt was an ITT company, attached importance to that backing. 116 3. ITT attorneys reviewed or wrote Flygt's standard written distributor agreement. Mr. Bjernfalk submitted prepared distributor agreements to ITT lawyers for comments, revisions and suggestions. The lawyers approved the signed agreements and returned them to Mr. Bjernfalk. 117 4. The ITT logo was apparently sometimes used in conjunction with that of Flygt. 118 5. At trial, Mr. Bjernfalk agreed that as Flygt got more and more into the ITT system, more and more things that [Flygt] used to do outside were done in New York by ITT. 119 The evidence is insufficient to raise a jury question on the issue of ITT's liability as an actor. There was no proof that ITT was involved in the decisions upon which liability is based--the below-cost, predatory pricing which immediately followed the termination of H.J.'s distributorship. ITT cannot be held liable as an actor without proof that it performed acts sufficient to create liability, or actively influenced Flygt in its violations. Watson v. Gulf & Western Industries, 650 F.2d 990, 993 (9th Cir.1981) (parent corporation not liable for Title VII violations of its wholly-owned subsidiary in absence of evidence of participation or influence). 120 Nor can ITT be held liable as the sole shareholder of Flygt, since H.J. offered no evidence to show that Flygt was a mere instrumentality or alter ego of ITT, or that Flygt is a sham corporation formed to shield ITT from liability. See Contractors, Laborers, Teamsters & Engin. v. Hroch, 757 F.2d 184, 190 (8th Cir.1985); Victoria Elevator Co. v. Meriden Grain Co., 283 N.W.2d 509, 512-13 (Minn.1979). H.J. has not shown the substantial reasons necessary to disregard the presumption that a subsidiary is a legally separate entity from its parent, Hroch. 757 F.2d at 190; Busch v. Mann, 397 N.W.2d 391, 395 (Minn.App.1986). 121 Finally, we consider whether an alternate theory of ITT's liability was available to H.J.--that of principal and agent. See Erickson v. Minnesota & Ont. Power Co., 134 Minn. 209, 158 N.W. 979 (1916) (corporation liable for torts of another corporation acting as its agent). The theory was not argued, nor was the jury asked to make a finding on the issue of control. The verdict questions inquired only as to the conduct of defendants. If the submission of the verdict in that form implied a finding by the court that ITT was Flygt's principal, we believe it was in error. There can be no judgment against ITT.