## Facts

- Multiple plaintiffs alleged repetitive stress injuries from using computer keyboards designed and manufactured by Atex, Inc.
- Atex was a wholly owned subsidiary of Eastman Kodak Company during the relevant period.
- Plaintiffs sued Atex and Kodak, seeking to hold Kodak liable as the parent corporation under theories of alter ego/veil piercing, agency, apparent manufacturer, and concerted tortious action.
- After extensive discovery, Kodak moved for summary judgment, arguing the record could not support parent-company liability under any pleaded theory.
- The district court granted Kodak’s motion and dismissed all claims against Kodak; plaintiffs appealed.

## Issues

1. Under the law governing veil piercing, did the evidence raise a triable issue that Atex and Kodak operated as a single economic entity and that respecting corporate separateness would work an injustice?
2. Did the evidence raise a triable issue that Atex acted as Kodak’s agent with respect to the design, manufacture, or marketing of the keyboards?
3. Did the evidence support treating Kodak as the apparent manufacturer of the keyboards?
4. Did the evidence support liability against Kodak for concerted tortious action with Atex related to the alleged injuries?

## Decision

- The Second Circuit affirmed summary judgment for Kodak.
- Applying Delaware law to veil piercing, the court held plaintiffs failed to raise a genuine dispute that Kodak and Atex functioned as a single economic entity or that injustice or unfairness would result from honoring the corporate form.
- The court held plaintiffs failed to produce evidence sufficient to impose liability on Kodak under agency, apparent manufacturer, or concerted tortious action theories.

## Legal Principles

- In federal diversity cases, veil-piercing standards generally follow the law of the subsidiary’s state of incorporation; here, Delaware law governed because Atex was a Delaware corporation.
- Under Delaware law, veil piercing requires proof (1) that the entities operated as a single economic entity and (2) that an element of injustice or unfairness would result from recognizing corporate separateness.
- Factors relevant to the “single economic entity” inquiry include capitalization, solvency, corporate records and formalities, functioning of officers/directors, diversion of funds, and whether the subsidiary served as a facade for the parent.
- Common parent-subsidiary features—such as centralized cash management, some overlap of directors or officers, or parent approval of significant expenditures—do not, without more, establish alter ego status.
- Agency liability requires evidence that the parent authorized or controlled the subsidiary’s actions that allegedly caused the injury, or otherwise manifested authority such that third parties reasonably could attribute those acts to the parent.
- Apparent manufacturer liability requires proof that the parent held itself out as the product’s manufacturer in a way that would justify treating it as the producer.
- Concerted tortious action requires evidence of the parent’s participation in a common plan or coordinated conduct to commit the alleged tort.

## Conclusion

The court held that the evidentiary record could not support imposing liability on Kodak for injuries allegedly caused by keyboards manufactured by its wholly owned subsidiary, affirming summary judgment because plaintiffs failed to show a basis for veil piercing or parent liability under agency, apparent manufacturer, or concerted action doctrines.


Fletcher v. Atex, Inc., 68 F.3d 1451 (2d Cir. 1995)