Craig v. Lake Asbestos
United States Court of Appeals for the Third Circuit
843 F.2d 145 (1988)
After settling with the primary defendant over asbestos exposure, plaintiffs and defendant Lake Asbestos of Quebec (LAQ) sought to hold Charter (defendant), which owned 67% of Cape's stock and nominated three of ten board seats, directly liable for the conduct of Cape and its subsidiary NAAC by piercing Cape's corporate veil, since Cape itself was judgment-proof with no reachable U.S. assets. Charter was regularly consulted on major decisions and kept updated by Cape's CEO, but Cape sometimes made significant decisions independently, and the two companies maintained separate books, records, and accountants; the trial court pierced the veil to reach Charter, and Charter appealed.
Whether a court may pierce the corporate veil of a subsidiary corporation to hold a parent corporation directly liable if the parent has not so dominated the subsidiary that the subsidiary has no separate existence, or if the parent has not used the corporate form to perpetuate fraud or injustice.