BUSINESS LAW
Supreme Court of Alaska (2025)
Lily Skopp
In Kaiser-Francis Oil Co. v. Deutsche Oil & Gas, S.A., 566 P.3d 252 (Alaska 2025), the Supreme Court of Alaska determined that the law governing whether to pierce the corporate veil of a foreign corporation should be assessed using an interest-based analysis rather than strictly following the internal affairs doctrine. (Id. at 262). Kaiser-Francis Oil (a Delaware Co.) and a related LLC sold Aurora Gas (an Alaska LLC) to Rieck Oil (a Delaware Co.). (Id. at 255). When Rieck Oil breached its contract related to well remediation on Alaska Native lands, Kaiser-Francis sought to hold Rieck personally liable by attempting to pierce Rieck Oil’s corporate veil. (Id. at 256). The superior court applied Delaware law—since Rieck Oil was incorporated in Delaware—and declined to pierce the veil, finding no evidence of fraud or injustice. (Id.). On appeal, the Alaska Supreme Court ruled that this was the incorrect legal framework. The Court explained that veil-piercing does not concern an internal corporate affair. (Id. at 262). Therefore, Alaska courts should, instead, employ an interests-balancing approach derived from the Restatement (Second) of Conflict of Laws. (Id. at 262). Applying that test, the Court concluded that Alaska had the predominant interest in this case: the conduct, parties, and environmental liabilities were all connected to Alaska (Id. at 266–67); Rieck Oil had no operational ties to Delaware. (Id. at 267). Moreover, since Alaska’s veil-piercing standard could lead to a different outcome than Delaware’s standard, the Court vacated the judgment and remanded the case for reconsideration under Alaska law. (Id.).
