Suing Entities Other Than People

What if you want to sue a corporation, the government or the employer’s insurance company as opposed to an individual? While you can sue a third party-corporation, the law is unsettled with respect to whether an employee of a subsidiary can sue the parent company or vice versa. Generally speaking, the parent or subsidiary will seek immunity by alleging that the two entities form part of the same company. The injured employee can dispel this immunity by showing that these entities operate and exist independently from one another.

When the government is sued, it will similarly seek to shield itself with immunity. However, the Supreme Court has determined that this immunity disappears where the government’s acts fall under the Tort Claims Act.

With respect to an employer’s insurance carrier, it is now well recognized in most states that the employee can sue the carrier as a third party. There is no danger of double-dipping because the benefits paid out by the employer will be deducted from the common law damages obtained from the carrier. The carrier may seek to claim immunity on the grounds that it is operating in union with the employer. However, courts have rejected this argument on account of the principle that a contract between two entities (employer and carrier) cannot affect the rights of a third entity who is not a party to the contract (employee).