Hollowell v. Orleans Regional Hospita

1998 WL 283298 (E.D. Louisiana, 1998)

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Nature of the Case

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Facts

ORH (D) was a Medicaid funded hospital in New Orleans which provided psychiatric and substance abuse treatment for children and adolescents. D was a limited liability company whose members were NLRH, Precision, and NORS. D was operated by a partnership consisting of NLRH and Precision. William Windham and John Turner were each 50/50 partners of NLRH, and Richard Williams was the sole owner of Precision. MHS was also a limited liability company which consisted of NLRH and Precision. MHS served as a management company for NLRH and Precision. Because of changes to outpatient therapy, the census at D began to drop, and consequently, D began discharging employees. D eventually shut down operations on November 3, 1995. Under the Warn Act, employers were required to notify employees in relation to mass layoffs sixty days prior to a plant closing or mass layoff. Ps sued Ds as they contended they were never given notice as required under the Act. The district judge certified the case as a class action and then the case was transferred to this division. Ds filed a motion for summary judgment and Ps filed a cross-motion for partial summary judgment. Turner, Williams, ORH, and Windham argued that they were not employers as defined under the Act and that all of the defendants did not constitute a single business enterprise within the meaning of the WARN Act. The court eventually held that an individual may not be held directly liable for WARN Act violations. However, the issue of whether Louisiana law made them liable under the alter ego theory was then discussed. The laws of Louisiana were clear as to how to pierce the corporate veil, but there was no case directly on point that showed how to pierce the limited liability veil. (See the five elements listed on page 507 Eisenberg 8th on the bottom of the page).