NFIB Asks Pennsylvania Supreme Court to Follow Long-standing Precedent and Shield Small Business from Personal Liability

Date: September 08, 2020

HARRISBURG, Pa. (Sept. 8, 2020) – NFIB filed an amicus brief in the case Mortimer v. McCool in the Supreme Court of Pennsylvania arguing that Pennsylvania law has long-held that a court may only “pierce the corporate veil” and hold individual business owners personally liable in very limited circumstances.

“Small business is asking the Pennsylvania Supreme Court to uphold long-standing law that only allows business owners to be held personally liable in very limited circumstances,” NFIB Pennsylvania State Director Gordon Denlinger. “The plaintiff is asking the Court to adopt a new theory on ‘piercing the corporate veil’ that would disproportionately harm small businesses by dramatically expanding the instances in which the owner of an LLC could be held personally liable. Businesses of all sizes will flee the Commonwealth if the Supreme Court changes decades of Pennsylvania law.”

The case primarily concerns “piercing the veil” of limited liability companies (LLCs), which presumes that separate legal entities should be treated as such and not held liable for another entity’s debts under Pennsylvania law. The new theory that the plaintiff requested would pierce the veil between “sister” companies based on an “enterprise” or “single entity” theory. Adopting this theory would be potentially devastating for Pennsylvania’s small businesses.

NFIB filed this amicus brief with the Chamber of Commerce of the United States of America, the Pennsylvania Chamber of Business and Industry, the Pennsylvania Coalition for Civil Justice Reform, Pennsylvania Medical Society, UMPC, the Marcellus Shale Coalition, and the Pennsylvania Manufacturers’ Association Supporting Appellees.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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