Alter Ego, LLCs And Choice Of Law

In deciding whether to impose alter ego liability with respect to a limited liability company, a federal court has several possible choices. It could apply the law of the state of formation of the LLC, it could apply the forum state's law, or it could apply federal common law. In Pro 49 Dev., LLC v. Ness Express 1, LLC, 2024 WL 4712389 (E.D. Cal. Nov. 7, 2024), U.S. District Court Judge John A. Mendez chose the first option:

The Court must first determine the law that will apply to its alter ego analysis. “Where a statute dictates the choice-of-law, the court need not apply a common law choice-of-law analysis.” Wehlage v. EmpRes Healthcare Inc., 821 F. Supp. 2d 1122, 1128 (N.D. Cal. 2011) (citing Barclays Discount Bank Ltd. v. Levy, 743 F.2d 722, 725 (9th Cir. 1984)). California Corporations Code Section 17708.01 states that “[t]he law of…