Revisiting 'Mortimer v. McCool': Applying It to Future Cases Remains Unclear
Although the court adopted the enterprise theory, it declined to apply the theory to the facts presented in Mortimer and did not adopt a standard for determining when the doctrine should be applied.
July 05, 2022 at 11:13 AM
9 minute read
One year ago this month, the Pennsylvania Supreme Court in Mortimer v. McCool, 255 A.3d 261 (Pa. 2021) adopted the "enterprise theory" of piercing the corporate veil, thereby placing Pennsylvania among the minority of states that have adopted the theory and expanding the scope of veil piercing under Pennsylvania law to "sister" or "affiliated" business entities. Although the court adopted the enterprise theory, it declined to apply the theory to the facts presented in Mortimer and did not adopt a standard for determining when the doctrine should be applied.
Given the lack of guidance provided by the court in Mortimer, there remains a great deal of uncertainty as to how it will be applied in future cases. However, it is notable that although Mortimer marks a clear change in Pennsylvania law, much of the opinion is actually devoted to reaffirming longstanding principles that are intended to preserve the legal form of business entities. In addition, the handful of decisions that have relied on Mortimer are beginning to provide insight into how it may impact the courts' view of Pennsylvania law with respect to corporate veil piercing.
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