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Criteria for Holding Parent Company Liable for Torts of Subsidiary

In a products liability case, the Third Department determined a question of fact had been raised about whether the parent company could be liable for the torts of a subsidiary.  The relevant legal standard was described as follows:

Liability of a parent company for the torts of a subsidiary does not arise from the mere ownership of a controlling shareholder interest. “Rather ‘there must be direct intervention by the parent in the management of the subsidiary to such an extent that the subsidiary’s paraphernalia of incorporation, directors and officers are completely ignored'” … .   The  parent  company  must  “exercise[] complete  dominion  and  control over the subsidiary” ….  Goodspeed, et al, v Hudson Sharp Machine Company, 515490, 3rd Dept, 4-11-13

 

 

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