## Facts

- Clark Refining and Marketing, Inc. operated an oil refinery in Blue Island, Illinois; Clark USA, Inc. was the parent corporation and sole shareholder.
- Two refinery mechanics, Michael Forsythe and Gary Szabla, were killed in a refinery fire while on a lunch break.
- The fire allegedly began when refinery employees attempted to replace a valve without ensuring the pipe was depressurized, and the employees were allegedly untrained and unqualified for the task.
- The decedents’ estates received workers’ compensation benefits from Clark Refining under the Illinois Workers’ Compensation Act.
- The estates sued multiple defendants and ultimately pursued claims against Clark USA only.
- The estates alleged Clark USA was directly liable (not vicariously liable) because it imposed cost-focused budgetary control and strategy that reduced training, maintenance, supervision, and safety spending and constrained capital investments needed for safety-related improvements, allegedly contributing to the deaths.

## Issues

1. Whether a parent corporation may be held directly liable in tort under a “direct participant” theory when it controls a subsidiary’s budget and cost-cutting strategy in a manner that allegedly compromises safety and causes employee deaths.
2. Whether the Illinois Workers’ Compensation Act’s exclusive-remedy provision bars employees (or their estates) from suing a parent corporation for the parent’s own alleged negligence.

## Decision

- The Illinois Supreme Court affirmed the appellate court’s reversal of summary judgment for Clark USA and remanded for further proceedings.
- The court held a parent corporation may face direct tort liability where its own conduct—alleged budgetary control and cost-cutting directives—directly participates in the subsidiary’s wrongdoing and proximately causes injury.
- The court held workers’ compensation exclusivity did not immunize Clark USA because it was not the decedents’ employer and was sued for its own alleged negligence.
- The court concluded factual disputes remained on duty, breach, and proximate cause, making summary judgment improper.

## Legal Principles

- A parent corporation is not liable for a subsidiary’s torts merely due to ownership or ordinary oversight; liability may arise when the parent directly participates in the specific injurious conduct.
- Direct participant liability does not require veil piercing or vicarious liability; it rests on the parent’s own duty and breach based on the parent’s conduct.
- Workers’ compensation exclusivity generally protects the statutory employer; it does not bar claims against a separate entity sued as a third party for its own negligence, even if that entity is a corporate parent.
- Where evidence could permit differing conclusions about breach of duty or proximate cause, summary judgment is inappropriate.

## Conclusion

The court permitted the estates to proceed against the parent corporation on a direct-participation negligence theory based on alleged safety-compromising budget control, and it rejected workers’ compensation exclusivity as a bar because the parent was a distinct non-employer entity sued for its own conduct.


Forsythe v. Clark USA, Inc., 864 N.E.2d 227 (Ill. 2007)