Written by Don Byrd
Howard Friedman analyzes the corporate plaintiff claims against the Affordable Care Act’s contraception mandate at Religion Dispatches and notes an interesting irony. Whereas business owners typically go to great lengths to separate themselves from their businesses for liability protection, here they insist the business is an extension of themselves.
There is a vast amount of case law on when a court should allow “piercing the corporate veil” to reach shareholders’ personal assets, often focusing on abuse of the corporate form, misleading of creditors, or lack of corporate formalities. Business lawyers look to whether the corporation is the mere alter ego of its owners and routinely advise their corporate clients to emphasize the corporation’s separate existence from its owners.
However, the pleadings filed in many of the contraceptive mandate challenges purposely blur this line, collapsing the beliefs of the business with its owners, inviting “piercing.”
This is a great point and as he goes on to say, it may be an invitation business owners come to regret. Read the whole thing. And, of course, keep up with Howard’s amazing daily church-state blog, Religion Clause, if you don’t already.
