## Facts

- In 1962, Jonas Jackson (a servicemember) purchased a General Electric appliance in Texas and financed the purchase through General Electric Credit Corporation (GECC).
- In 1964, GECC sent a defamatory collection letter to Jackson’s military superiors regarding his account.
- Jackson sued only General Electric Company (GE), GECC’s parent, in Alaska; GE was licensed in Alaska when suit was filed, while GECC was not yet licensed there.
- Jackson moved to add GECC as a defendant before trial, but GE opposed the joinder and GECC was not added.
- GECC was a wholly owned subsidiary of GE and conducted substantial consumer and commercial financing business, much of which was unrelated to GE products.
- GE and GECC had overlapping officers/directors, filed consolidated federal tax returns, and GE provided advisory services to GECC; GE also had repurchase/recourse arrangements tied to some GECC receivables.
- The trial judge submitted defamation and damages to the jury, but reserved the parent-subsidiary liability (veil-piercing) issue for the court.
- The jury awarded Jackson $5,000, after which the judge dismissed the claim against GE, concluding GE was not responsible for GECC’s conduct.

## Issues

1. Whether GE could be held liable for GECC’s defamatory letter on an alter-ego or “mere instrumentality” theory warranting piercing the corporate veil.
2. Whether facts such as 100% ownership, shared management, consolidated tax filings, advisory services, and product-related financing agreements were sufficient to disregard corporate separateness in a tort claim.

## Decision

- The Alaska Supreme Court affirmed the dismissal of the action against GE.
- The court held Jackson failed to show GECC was GE’s alter ego or mere instrumentality.
- The court treated common ownership and overlapping management, consolidated tax returns, and intercompany support arrangements as insufficient, without additional equitable factors, to impose parent liability for the subsidiary’s tort.

## Legal Principles

- A parent corporation is not liable for a subsidiary’s torts solely because it wholly owns the subsidiary and exercises general oversight, including shared officers/directors and consolidated tax reporting.
- Veil-piercing requires a showing that the subsidiary was used as a mere instrumentality and that respecting corporate separateness would sanction fraud or result in injustice.
- Factors supporting veil-piercing commonly include undercapitalization, insolvency, misuse of the corporate form, disregard of separateness, or use of the subsidiary to evade legal obligations; absence of such factors weighs against parent liability.
- A solvent, adequately capitalized subsidiary that conducts substantial, diverse operations is more likely to be treated as a separate entity, even when its business supports the parent’s products.

## Conclusion

The court refused to pierce the corporate veil between GE and GECC and held GE not liable for GECC’s defamatory collection letter because the evidence showed a functioning, solvent subsidiary and no fraud, undercapitalization, or other inequitable use of the corporate form.


Jackson v. Gen. Elec. Co., 514 P.2d 1170 (Alaska 1973)