District Court Refuses to Pierce ExxonMobil Corporate Veil in Denying Jones Act Liability

Plaintiff was the widow of Decedent, a German citizen who worked aboard several foreign vessels from December 1973 to December 1978. During this time period, Plaintiff alleged that her husband was exposed to asbestos in the course of his employment as a chief engineer and merchant seaman. Decedent’s employer during that time period was MOSAT, a Liberian corporation. Plaintiff filed a Jones Act claim on behalf of herself and her deceased spouse against twenty-two corporate defendants. One such corporation, ExxonMobil, filed a Motion for Summary Judgment on the grounds that ExxonMobil was neither Decedent’s employer, nor was it the owner of the subject vessels during the relevant time period. Plaintiff alleged that ExxonMobil’s subsidiaries, Mobil Oil and MOSAT, were essentially the same business entity for liability purposes under the Jones Act.

 

The District Court judge looked to several factors to determine whether a parent company so dominates a subsidiary as to warrant disregarding corporate separateness between the two entities. These factors included: (1) disregard of corporate formalities; (2) inadequate capitalization; (3) intermingling of funds; (4) overlap in ownership, officers, directors, and personnel; (5) common office space, address and telephone numbers of corporate entities; (6) the degree of discretion shown by the allegedly dominated corporation; (7) whether the dealings between the entities are at arm’s length; (8) whether the corporations are treated as independent profit centers; (9) payment or guarantee of the corporation’s debts by the dominating entity; (10) intermingling of property between the entities.

 

In granting ExxonMobil’s Motion for Summary Judgment, the District Court held that Plaintiff was only able to establish, at most, two alter ego factors: some interlocking officers and some common office space. The court placed greater weight on the evidence presented by ExxonMobil that the subsidiary company MOSAT had independent responsibility for the company’s international marine transportation. The court also found it significant the fleets were flown under the flags of various different countries.

 

Unterberg v. ExxonMobil Oil Corporation