The CCC is Ignoring the Federal Common Law as It Pierces Corporate Veils

Posted: 23 Aug 2017

Date Written: August 20, 2017

Abstract

The Commodity Credit Corporation (CCC) has a regulation which allows it to withhold payments to any farm corporation which has a shareholder who personally owes the CCC a debt (7 C.F.R. ยง 1403.7(q)). This regulation conflicts with the basic common law principle that a corporation cannot be held liable for debts of its shareholders. While corporate law is traditionally a matter of state law, corporate law has its foundation in the common law of England and the United States Supreme Court has recognized that federal agencies cannot violate the basic common law principles surrounding corporate liability. This Article will look into the history of the common law of corporate liability, apply its bedrock principles to the CCC's debt collecting regulation, and argue that the regulation is invalid because Congress has not given explicit authority to the CCC to preempt the federal common law regarding corporate veil piercing when collecting debts.

Keywords: Veil Piercing, Corporate, Corporations, Farm Service Agency, Commodity Credit Corporation Farm Programs

Suggested Citation

Smith, Beriah, The CCC is Ignoring the Federal Common Law as It Pierces Corporate Veils (August 20, 2017). Available at SSRN: https://ssrn.com/abstract=3022826

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