RULE B AND THE ALTER EGO – HAVE THE COURTS PIERCED THE CORPORATE VEIL?

Rule B attachment – the pre-judgment seizure of assets in maritime cases — has been a hot topic for several years now. Rule B cases have, in some areas, substantially altered the traditional application of otherwise well-settled principles of law. For instance, though ostensibly two sides of the same coin, alter ego analysis under Rule B appears to have become divergent from, and more lax than, the established standards of “piercing the corporate veil” in corporate law. In many ways, it is now easier for a maritime claimant to pierce the corporate veil – and attach the assets of alleged “alter egos” – than it is under general jurisprudence. This development has wide-ranging practical ramifications. (As discussed in this article and as used in court decisions, an “alter ego” is an affiliated company whose identity is virtually indistinguishable from the defendant who allegedly committed the tort or breached the contract at issue; courts often refer to the principal defendant as a “mere instrumentality” of the alter ego.)

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