Enforcement Piercing in the United States: An Overlooked Dimension

Abstract

The article discusses the overlooked aspect of piercing the corporate veil, namely, the enforcement of subsidiary’s judgment debt against parent company through piercing the corporate veil (“Enforcement Piercing”). Through empirical research of 1,044 piercing cases in the U.S. during a three-year period (2012-2014) conducted by the author, it is found that enforcement piercing cases have a substantially higher piercing rate (52.22%) than non-enforcement piercing cases (33.65%). The article seeks to explain this anomaly by analyzing the potential advantages afforded to plaintiffs in enforcement piercing cases due to favorable conflict of laws rules, particularly those relating to choice of law rules and unclear jurisdictional limitations. It is concluded with suggestions to improve the current regime so as to provide a level playing field to litigants in cross-border piercing cases.