## Facts

- Thousands of product-liability actions concerning silicone gel breast implants were centralized in an MDL in the Northern District of Alabama.
- Plaintiffs alleged injuries from implants supplied by Medical Engineering Corporation (MEC), including polyurethane-coated implants.
- Bristol-Myers Squibb Co. (Bristol) was MEC’s sole shareholder and did not itself manufacture or distribute breast implants.
- Plaintiffs sought to hold Bristol liable for MEC’s alleged torts through (a) piercing the corporate veil (alter-ego/instrumentality) and (b) direct-liability theories based on Bristol’s own conduct.
- After coordinated discovery, Bristol moved for summary judgment.
- The record included evidence that MEC’s board was dominated by Bristol officers, that MEC depended on Bristol for budget and compensation decisions, that MEC used Bristol departments (legal, research, marketing, regulatory), and that Bristol’s name was used on MEC products and marketing.

## Issues

1. Whether, under the applicable state laws in the transferred diversity cases, the summary-judgment record created a triable issue that MEC functioned as Bristol’s alter ego such that the corporate veil could be pierced in tort actions.
2. Whether the evidence created a triable issue of Bristol’s direct tort liability based on its own involvement in functions such as testing, marketing, regulatory activity, and branding of the implant products.
3. Whether Rule 56 permitted judgment as a matter of law given the fact-intensive nature of veil-piercing and the disputed inferences regarding Bristol’s control and conduct.

## Decision

- The court denied Bristol’s motion for summary judgment.
- The court held that, viewing the record in the light most favorable to plaintiffs, genuine disputes of material fact existed on both veil-piercing and direct-liability theories.
- The court applied the substantive law (including choice-of-law rules) of the transferor forums in the MDL cases, requiring examination of multiple states’ standards rather than a single uniform rule.
- The court concluded that the disputes over Bristol’s relationship to and involvement with MEC were for a fact-finder, not resolution on summary judgment.

## Legal Principles

- Summary judgment is appropriate only when no genuine dispute of material fact exists and the movant is entitled to judgment as a matter of law; the nonmovant receives favorable inferences on disputed facts.
- In multidistrict litigation, the transferee court applies the substantive law, including choice-of-law rules, of the transferor courts in diversity cases.
- Veil-piercing in tort is a totality-of-the-circumstances inquiry and is commonly ill-suited for summary judgment when evidence supports competing inferences about domination, control, and misuse of separateness.
- In tort cases, veil-piercing does not necessarily require proof of actual fraud; plaintiffs may proceed by showing the subsidiary operated as an instrumentality/alter ego of the parent under the governing state standard.
- A parent corporation may face direct tort liability independent of veil-piercing when its own conduct (such as undertaking testing/marketing functions, exercising control over safety-related activities, or branding products) could create duties and causal links to alleged injuries under applicable state law.

## Conclusion

The MDL court denied summary judgment to a corporate parent where the discovery record supported triable issues that the subsidiary implant supplier may have operated as the parent’s instrumentality and that the parent’s own involvement in product-related functions could support direct tort liability, requiring resolution by a fact-finder under the various governing state laws.


In re Silicone Gel Breast Implants Prods. Liab. Litig., 887 F. Supp. 1447 (N.D. Ala. 1995)