enterprise liability

Definition of enterprise liability

Noun

enterprise liability (uncountable)

1. A legal doctrine and form of secondary liability under which individual entities can be held jointly liable for some action on the basis of being part of a shared enterprise.

Further reading

Enterprise liability is a legal doctrine under which individual entities (for example, otherwise legally unrelated corporations or people) can be held jointly liable for some action on the basis of being part of a shared enterprise. Enterprise liability is a form of secondary liability.

For example, suppose high-risk manufacturing activities are shunted into one corporation, while a second "marketing" corporation keeps all the profits. In the case that someone was injured by the manufacturing activity, a court might apply the enterprise liability doctrine to allow recovery from the marketing corporation, which holds all the assets.

The doctrine emerged from litigation in the wake of the 1977 Beverly Hills Supper Club fire.[1][2][3] The doctrine is examined in Walkovsky v. Carlton, 223 N.E.2d 6 (N.Y. 1966).

References

1. Alexander, Roberta Sue (2005). A place of recourse: a history of the U.S. District Court for the Southern District of Ohio, 1803-2003. Ohio University Press, ISBN 9780821416020
2. In Re: Beverly Hills Fire Litigation, 695 F.2d 207 (6th Cir. 1982), cert, denied 461 US 929 (1983)
3. In Re: Beverly Hills Fire Litigation, 672 S.W.2d 922 (Ky.1984)