A Closer Look at Veil Piercing in Federal District Courts

Abstract:     
In this project, we utilize six years of original federal district court data to identify the first representative sample of corporate veil piercing litigation. This study will provide a more nuanced understanding of the process of litigation of piercing claims than previous studies, which have been modeled on Robert Thompson's (1991) groundbreaking work on this topic. Our method first identifies veil piercing litigation through Westlaw's trial pleadings database, and proceeds to code each case through detailed examination of PACER records.

We identify and model the differing types of success plaintiffs achieve when they seek to pierce the veil, including those related to jurisdiction, the merits, and discovery. As with all trial court cases, the interstitial motions and resolutions during litigation impact all subsequent case events. This can be the case even when the case is terminated through settlement and would go unnoticed in studies that merely examine reported opinions. Studying the stages of litigation with respect to piercing will also likely help illuminate the selection bias inherent in opinions-based empirical work.

Keywords: veil piercing, dockets, litigation, alter ego, trial courts, pleadings, settlement

JEL Classifications: K2, K22, K41

Working Paper Series