Todd Leany v. Zurich American Ins. Co., 18-17056

Century Steel sold most assets in 2008 for $150 million and set aside $2.1 million as a reserve for future debts; the remainder was distributed.
Unanticipated litigation exhausted the $2.1 million reserve.
In 2013, Zurich American Insurance sought to collect about $300,000 from Century and sought to enforce an arbitration agreement between Zurich and Century.
Zurich attempted to pierce the corporate veil to bind Todd Leany (Century’s president, sole board member, and majority shareholder) to Century’s arbitration agreement.
The district court granted summary judgment for Leany; the Ninth Circuit reviewed the decision de novo and affirmed.

Issue	Plaintiff's Argument (Zurich)	Defendant's Argument (Leany)	Held
Whether Zurich can pierce Century’s corporate veil to compel Leany to arbitrate	Zurich argued Century and Leany were so intertwined and undercapitalized that veil piercing is warranted to enforce the arbitration agreement against Leany	Leany argued Zurich failed to prove the required elements for veil piercing, especially that adhering to the corporate form would sanction fraud or injustice	Court held Zurich failed to show fraud/injustice; cannot pierce veil or compel Leany to arbitrate
Whether Century’s $2.1M reserve and later insolvency show a sham or fraudulent undercapitalization	Zurich contended the reserve was inadequate and Century’s financial setup functionally deprived creditors (a sham)	Leany showed the reserve was established for legitimate business reasons and that exhaustion resulted from unforeseen litigation, not an intent to defraud	Court held no evidence Century’s capitalization was a sham or that Leany acted to defraud creditors; legitimate reasons explained the financial setup
Who bears the burden and the required showing for veil piercing under Nevada law	Zurich bore the burden to prove all elements by a preponderance of the evidence	Leany relied on Nevada precedent requiring a showing of influence, unity of interest, plus fraud or injustice, all by preponderance	Court reiterated Zurich’s burden and found the fraud/injustice element unmet, so veil piercing fails

Frank McCleary Cattle Co. v. Sewell, 317 P.2d 957 (Nev. 1957) (establishes Nevada veil-piercing test requiring influence, unity, and fraud or injustice)
Callie v. Bowling, 160 P.3d 878 (Nev. 2007) (discusses limits and later modifications of veil-piercing principles)
Ecklund v. Nevada Wholesale Lumber Co., 562 P.2d 479 (Nev. 1977) (places burden on party seeking to pierce the corporate veil)
Paul Steelman, Ltd. v. Omni Realty Partners, 885 P.2d 549 (Nev. 1994) (refuses to pierce veil when undercapitalization served legitimate business purposes)
Carson Meadows Inc. v. Pease, 533 P.2d 458 (Nev. 1975) (pierced veil for egregious manipulation and use of corporate shell for personal enterprise)
Caple v. Raynel Campers, Inc., 526 P.2d 334 (Nev. 1974) (pierced veil where corporation existed solely for defendant’s personal business)
Animal Legal Def. Fund v. U.S. FDA, 836 F.3d 987 (9th Cir. 2016) (summary-judgment standard and de novo appellate review)