prod.liab.rep. (Cch) P 14,358 Marianne E. Fletcher, Nancy L. Bartley, Raphael Paganelli, and Charlotte Evans v. Atex, Inc., Eastman Kodak Company, and Jenny L. Hermanson and Christy Scattarella v. 805 Middlesex Corp., F/k/a Atex, Inc., and Apple Computers, Inc., Eastman Kodak Company

This is a consolidated appeal from a final judgment of the United States District Court for the Southern District of New York (Morris E. Lasker, Judge ), granting defendant-appellee Eastman Kodak Company's motion for summary judgment and dismissing all claims against it in two actions, Fletcher v. Atex, Inc., 92 Civ. 8758 and Hermanson v. 805 Middlesex Corp., Inc., 94 Civ. 1272. Fletcher v. Atex, Inc., 861 F.Supp. 242 (S.D.N.Y.1994). The plaintiffs-appellants filed suit against Atex, Inc. ("Atex") and its parent, Eastman Kodak Company ("Kodak"), to recover for repetitive stress injuries that they claim were caused by their use of computer keyboards manufactured by Atex.

Plaintiffs-appellants argue that the district court erred in granting summary judgment in favor of Kodak on the ground that Kodak could be held liable for the plaintiffs' alleged injuries. They contend that summary judgment was inappropriate because genuine issues of material fact existed regarding Kodak's liability as a defendant under each of the plaintiffs' four theories of liability, which we describe below.

The Fletcher and Hermanson plaintiffs filed their respective complaints on December 4, 1992, and February 25, 1994, seeking recovery from Atex and Kodak, among others, for repetitive stress injuries that they claim were caused by their use of Atex computer keyboards. From 1981 until December 1992, Atex was a wholly-owned subsidiary of Kodak. In 1987, Atex's name was changed to Electronic Pre-Press Systems, Inc., ("EPPS"), but its name was changed back to Atex in 1990. In December 1992, Atex sold substantially all of its assets to an independent third party and again changed its name to 805 Middlesex Corp., which holds the proceeds from the sale. Kodak continues to be the sole shareholder of 805 Middlesex Corp.

After extensive discovery, Kodak moved for summary judgment in Fletcher on April 21, 1994, and in Hermanson on April 28, 1994. The plaintiffs opposed Kodak's motion, arguing that genuine issues of material fact existed as to Kodak's liability under any number of theories, including (1) that Atex was merely Kodak's alter ego or instrumentality; (2) that Atex was Kodak's agent in the manufacture and marketing of the keyboards; (3) that Kodak was the "apparent manufacturer" of the Atex keyboards; and (4) that Kodak acted in tortious concert with Atex in manufacturing and marketing the allegedly defective keyboards.

In support of their first theory, the plaintiffs argued that Kodak "dominated and controlled" Atex by maintaining significant overlap between the boards of directors of the two companies, "siphoning" off funds from Atex through use of a cash management system, requiring Kodak's approval for major expenditures, stock sales, and real estate acquisitions, participating in negotiations involving the sale of Atex to a third party, and including references to Atex as a "division" of Kodak and to the "merger" between Atex and Kodak in Atex's promotional literature and Kodak's Annual Report. Second, the plaintiffs claimed that, at the very least, the references to Atex in the promotional literature raised a question of material fact regarding Kodak's intent to confer authority on Atex to act as its agent in the manufacturing and marketing of computer keyboards. In support of their third theory, the plaintiffs maintained that the use of Kodak's name in Atex's advertising, promotional, and packaging materials provided assurances to consumers that the Kodak name stood behind Atex's products, and Kodak could thus be held liable as the "apparent manufacturer" of the keyboards. Finally, they argued that the fact that Kodak was generally aware of the danger of repetitive stress injuries and the fact that Kodak had tested the ergonomics of three Atex keyboards in 1990 presented evidence of concerted tortious action between Atex and Kodak. The Fletcher and Hermanson actions were consolidated before the district court for the purposes of summary judgment proceedings.

On August 17, 1994, the district court rejected each of the plaintiffs' theories of Kodak's liability and granted Kodak's motion for summary judgment in both actions. In its opinion, the court referred to, but did not rely upon, an identical suit filed against Atex and Kodak in New York state court, King v. Eastman Kodak Co., No. 23439/92 (N.Y.Sup.Ct. June 9, 1994), in which Kodak's motion for summary judgment was granted on similar grounds. Fletcher, 861 F.Supp. at 243.

First, the district court found that Kodak and Atex observed all corporate formalities and maintained separate corporate existences. It held that Atex's participation in Kodak's cash management system and Kodak's control over Atex's major expenditures and asset sales were insufficient to raise an issue of material fact regarding Kodak's liability under an alter ego theory. Id. at 244-45. Second, it held that the representations in various advertisements, promotional literature, and annual reports were similarly insufficient as a matter of law to find Kodak liable under an agency theory. Id. at 247. Third, the court held that Kodak was entitled to summary judgment on the plaintiffs' apparent manufacturer theory because the company was not involved in the sale or distribution of the keyboards. Id. at 245-46. Finally, the court found that the plaintiffs' concerted action theory failed as a matter of law because they offered no evidence indicating that Kodak and Atex had agreed to commit a tortious act. Id. at 246. This appeal followed.

We review a district court's grant of summary judgment de novo to determine whether there is a genuine issue of material fact and whether the moving party is entitled to judgment as a matter of law. Healy v. Rich Prods. Corp., 981 F.2d 68, 72 (2d Cir.1992). Summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits ... show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.CIV.P. 56(c). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986) (emphasis in original). While the court must view the inferences to be drawn from the facts in the light most favorable to the party opposing the motion, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986), a party may not "rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir.1986), cert. denied, 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d 762 (1987). The non-moving party may defeat the summary judgment motion by producing sufficient specific facts to establish that there is a genuine issue of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Finally, " 'mere conclusory allegations or denials' " in legal memoranda or oral argument are not evidence and cannot by themselves create a genuine issue of material fact where none would otherwise exist. Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir.1980) (quoting SEC v. Research Automation Corp., 585 F.2d 31, 33 (2d Cir.1978)).

Plaintiffs argue that the district court should have denied Kodak's motion for summary judgment on the ground that genuine issues of material fact existed regarding each of the plaintiffs' four theories of liability. We consider the plaintiffs' arguments on each of these theories in turn.

The plaintiffs claim that the district court erred in granting Kodak's motion for summary judgment on their alter ego theory of liability. The plaintiffs offer two arguments in this regard. First, they contend that the district court was estopped from granting Kodak's motion for summary judgment because the New York state court found in King v. Eastman that issues of material fact existed regarding Kodak's domination of Atex. Second, they argue that even if collateral estoppel does not apply in the instant case, genuine issues of material fact remain that preclude a grant of summary judgment in favor of Kodak.

The district court correctly noted that "[u]nder New York choice of law principles, '[t]he law of the state of incorporation determines when the corporate form will be disregarded and liability will be imposed on shareholders.' " Fletcher, 861 F.Supp. at 244 (quoting Kalb, Voorhis & Co. v. American Fin. Corp., 8 F.3d 130, 132 (2d Cir.1993)). Because Atex was a Delaware corporation, Delaware law determines whether the corporate veil can be pierced in this instance.

Delaware law permits a court to pierce the corporate veil of a company "where there is fraud or where [it] is in fact a mere instrumentality or alter ego of its owner." Geyer v. Ingersoll Publications Co., 621 A.2d 784, 793 (Del.Ch.1992). Although the Delaware Supreme Court has never explicitly adopted an alter ego theory of parent liability for its subsidiaries, lower Delaware courts have applied the doctrine on several occasions, as has the United States District Court for the District of Delaware. See Geyer, 621 A.2d at 793; Mabon, Nugent & Co. v. Texas Am. Energy Corp., No. CIV.A. 8578, 1990 WL 44267, at * 5, (Del.Ch. Apr. 12, 1990); Harper v. Delaware Valley Broadcasters, Inc., 743 F.Supp. 1076, 1085 (D.Del.1990), aff'd, 932 F.2d 959 (3d Cir.1991). Thus, under an alter ego theory, there is no requirement of a showing of fraud. Id. at 1085. To prevail on an alter ego claim under Delaware law, a plaintiff must show (1) that the parent and the subsidiary "operated as a single economic entity" and (2) that an "overall element of injustice or unfairness ... [is] present." Id. (internal quotation marks omitted); see also Mabon, 1990 WL 44267, at * 5; Harco Nat'l Ins. Co. v. Green Farms, Inc., No. CIV.A. 1331, 1989 WL 110537, at * 5, (Del Ch. Sept. 19, 1989).

In the New York state action of King v. Eastman, the court granted Kodak's motion for summary judgment, relying on an erroneous interpretation of Delaware's alter ego doctrine. The court noted that although the plaintiffs had raised "ample questions of fact regarding the first element of the piercing theory--domination," they made "no showing that Kodak used whatever dominance it had over Atex to perpetrate a fraud or other wrong that proximately cause[d] injury to them." This was an error; under Delaware law, the alter ego theory of liability does not require any showing of fraud.

a. Collateral Estoppel

Although the plaintiffs acknowledge that the New York state court erred in its interpretation of Delaware law, they argue that the court's treatment of the question of Kodak's domination over Atex should preclude all further litigation of that issue. We disagree and hold that the New York court's findings in King v. Eastman regarding Kodak's domination over Atex do not have collateral estoppel effect under New York law.

The doctrine of collateral estoppel "precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party ... whether or not the tribunals or causes of action are the same." Ryan v. New York Tel. Co., 62 N.Y.2d 494, 500, 478 N.Y.S.2d 823, 826, 467 N.E.2d 487, 490 (1984) (citing Ripley v. Storer, 309 N.Y. 506, 517, 132 N.E.2d 87 (1956)). Under New York law, two conditions must be met to preclude relitigation in the second action: (1) "the issue must have been material to the first action or proceeding and essential to the decision rendered therein" and (2) "the party against whom collateral estoppel is asserted [must have been] afforded a full and fair opportunity in the prior administrative proceeding to contest the decision now said to be controlling...." 62 N.Y.2d at 500-01, 478 N.Y.S.2d at 826, 467 N.E.2d at 490. Neither condition was met in this case.

First, the state court's finding of "ample questions of fact" regarding Kodak's domination of Atex was not essential to its judgment in King. The state court did not decide the summary judgment motion based on its finding of factual disputes between the parties. To the contrary, it granted summary judgment to Kodak on the plaintiffs' alter ego theory of liability based on its erroneous interpretation of Delaware law. Since the court's finding of domination was not essential to the judgment, its conclusions should not be accorded preclusive effect in the present action.

The plaintiffs counter that the state court's finding of a factual dispute on the issue of domination should be given preclusive effect, even though it was not essential to the judgment, because it was fully litigated by the parties and fully considered by the court. They rely on Malloy v. Trombley, 50 N.Y.2d 46, 427 N.Y.S.2d 969, 405 N.E.2d 213 (1980), which held that a court's alternative holding, while not essential to the judgment, could be given conclusive effect. However, the Malloy court carefully limited its holding: "[W]ithout intending to enunciate any broad rule, we hold in this instance that the rule of issue preclusion is applicable notwithstanding that in a precise sense the issue precluded was the subject of only an alternative determination by the trial court." 50 N.Y.2d at 52, 427 N.Y.S.2d at 973, 405 N.E.2d at 216. In Malloy, the trial court articulated a viable alternative ground to support its conclusion, a ground that the Court of Appeals noted had "validating authenticity" because it was likely expressed by the trial court to provide another basis for affirmance in case the other ground was rejected on appeal. 50 N.Y.2d at 52, 427 N.Y.S.2d at 972, 405 N.E.2d at 215. Here, the trial court's finding of a factual dispute on the issue of domination was not an alternative holding at all. It was at odds with the court's conclusion that summary judgment was appropriate and certainly did not provide "validating authenticity" for the court's holding.

Second, the court's finding of a factual dispute cannot have collateral estoppel effect because Kodak did not have a "full and fair opportunity" to litigate the question that the plaintiffs are asserting against it. Under New York law, a party has not had a full and fair opportunity to litigate an issue if it has had no opportunity to appeal the adverse finding. People v. Medina, 208 A.D.2d 771, 617 N.Y.S.2d 491, 493 (2d Dep't 1994); see also Pinkney v. Keane, 737 F.Supp. 187, 195 (E.D.N.Y.) ("Under New York law, a party who has obtained a final judgment in its favor is not normally precluded from relitigating a subsidiary issue that was decided against it."), aff'd, 920 F.2d 1090 (2d Cir.1990), cert. denied, 501 U.S. 1217, 111 S.Ct. 2824, 115 L.Ed.2d 995 (1991). Kodak was in precisely this situation. It could not appeal the trial court's finding of a material factual dispute, because the final judgment--that is, the grant of summary judgment--was in Kodak's favor.

In sum, the collateral estoppel doctrine does not bar the relitigation of the question of Kodak's domination over its subsidiary, Atex, because the state court's finding was not essential to its judgment and because Kodak did not have a full and fair opportunity to litigate the issue.

b. Summary Judgment on the Alter Ego Theory

To prevail on an alter ego theory of liability, a plaintiff must show that the two corporations " 'operated as a single economic entity such that it would be inequitable ... to uphold a legal distinction between them.' " Harper, 743 F.Supp. at 1085 (quoting Mabon, 1990 WL 44267, at * 5). Among the factors to be considered in determining whether a subsidiary and parent operate as a "single economic entity" are:

"[W]hether the corporation was adequately capitalized for the corporate undertaking; whether the corporation was solvent; whether dividends were paid, corporate records kept, officers and directors functioned properly, and other corporate formalities were observed; whether the dominant shareholder siphoned corporate funds; and whether, in general, the corporation simply functioned as a facade for the dominant shareholder."

Harco, 1989 WL 110537, at * 4 (quoting United States v. Golden Acres, Inc., 702 F.Supp. 1097, 1104 (D.Del.1988)). As noted above, a showing of fraud or wrongdoing is not necessary under an alter ego theory, but the plaintiff must demonstrate an overall element of injustice or unfairness. Harco, 1989 WL 110537, at * 5.

A plaintiff seeking to persuade a Delaware court to disregard the corporate structure faces "a difficult task." Harco, 1989 WL 110537, at * 4. Courts have made it clear that "[t]he legal entity of a corporation will not be disturbed until sufficient reason appears." Id. Although the question of domination is generally one of fact, courts have granted motions to dismiss as well as motions for summary judgment in favor of defendant parent companies where there has been a lack of sufficient evidence to place the alter ego issue in dispute. See, e.g., Akzona, Inc. v. Du Pont, 607 F.Supp. 227, 237 (D.Del.1984) (rejecting plaintiffs' alter ego theory of liability on a motion to dismiss); Nelson v. International Paint Co., 734 F.2d 1084, 1092 (5th Cir.1984) ("[I]n the lack of sufficient evidence to place the alter ego issue in dispute, a corporate defendant may be entitled to summary judgment."); see also Japan Petroleum Co. (Nigeria) v. Ashland Oil Inc., 456 F.Supp. 831, 838, 846 (D.Del.1978) (finding that subsidiary was not instrumentality of parent on a motion for summary judgment).

Kodak has shown that Atex followed corporate formalities, and the plaintiffs have offered no evidence to the contrary. Significantly, the plaintiffs have not challenged Kodak's assertions that Atex's board of directors held regular meetings, that minutes from those meetings were routinely prepared and maintained in corporate minute books, that appropriate financial records and other files were maintained by Atex, that Atex filed its own tax returns and paid its own taxes, and that Atex had its own employees and management executives who were responsible for the corporation's day-to-day business. The plaintiffs' primary arguments regarding domination concern (1) the defendant's use of a cash management system; (2) Kodak's exertion of control over Atex's major expenditures, stock sales, and the sale of Atex's assets to a third party; (3) Kodak's "dominating presence" on Atex's board of directors; (4) descriptions of the relationship between Atex and Kodak in the corporations' advertising, promotional literature, and annual reports; and (5) Atex's assignment of one of its former officer's mortgage to Kodak in order to close Atex's asset-purchase agreement with a third party. The plaintiffs argue that each of these raises a genuine issue of material fact about Kodak's domination of Atex, and that the district court therefore erred in granting summary judgment to Kodak on the plaintiffs' alter ego theory. We find that the district court correctly held that, in light of the undisputed factors of independence cited by Kodak, "the elements identified by the plaintiffs ... [were] insufficient as a matter of law to establish the degree of domination necessary to disregard Atex's corporate identity." Fletcher, 861 F.Supp. at 245.

First, the district court correctly held that "Atex's participation in Kodak's cash management system is consistent with sound business practice and does not show undue domination or control." Id. at 244. The parties do not dispute the mechanics of Kodak's cash management system. Essentially, all of Kodak's domestic subsidiaries participate in the system and maintain zero-balance bank accounts. All funds transferred from the subsidiary accounts are recorded as credits to the subsidiary, and when a subsidiary is in need of funds, a transfer is made. At all times, a strict accounting is kept of each subsidiary's funds.

Courts have generally declined to find alter ego liability based on a parent corporation's use of a cash management system. See, e.g., In re Acushnet River & New Bedford Harbor Proceedings, 675 F.Supp. 22, 34 (D.Mass.1987) (Without "considerably more," "a centralized cash management system ... where the accounting records always reflect the indebtedness of one entity to another, is not the equivalent of intermingling funds" and is insufficient to justify disregarding the corporate form.); United States v. Bliss, 108 F.R.D. 127, 132 (E.D.Mo.1985) (cash management system indicative of the "usual parent-subsidiary relationship"); Japan Petrol., 456 F.Supp. at 846 (finding segregation of subsidiary's accounts within parent's cash management system to be "a function of administrative convenience and economy, rather than a manifestation of control"). The plaintiffs offer no facts to support their speculation that Kodak's centralized cash management system was actually a "complete commingling" of funds or a means by which Kodak sought to "siphon[ ] all of Atex's revenues into its own account."

Second, the district court correctly concluded that it could find no domination based on the plaintiffs' evidence that Kodak's approval was required for Atex's real estate leases, major capital expenditures, negotiations for a sale of minority stock ownership to IBM, or the fact that Kodak played a significant role in the ultimate sale of Atex's assets to a third party. Again, the parties do not dispute that Kodak required Atex to seek its approval and/or participation for the above transactions. However, this evidence, viewed in the light most favorable to the plaintiffs, does not raise an issue of material fact about whether the two corporations constituted "a single economic entity." Indeed, this type of conduct is typical of a majority shareholder or parent corporation. See Phoenix Canada Oil Co. v. Texaco, 842 F.2d 1466, 1476 (3d Cir.1988) (declining to pierce the corporate veil where subsidiary required to secure approval from parent for "large investments and acquisitions or disposals of major assets"), cert. denied, 488 U.S. 908, 109 S.Ct. 259, 102 L.Ed.2d 247 (1988); Akzona, 607 F.Supp. at 237 (same, where parent approval required for expenditures exceeding $850,000); Japan Petrol., 456 F.Supp. at 843 (finding no parent liability where parent approval required for expenditures exceeding $250,000). In Akzona, the Delaware district court noted that a parent's "general executive responsibilities" for its subsidiary's operations included approval over major policy decisions and guaranteeing bank loans, and that that type of oversight was insufficient to demonstrate domination and control. Akzona, 607 F.Supp. at 238 (internal quotation marks omitted). Similarly, the district court in the instant case properly found that the presence of Kodak employees at periodic meetings with Atex's chief financial officer and comptroller to be "entirely appropriate." Fletcher, 861 F.Supp. at 245 (citing Akzona, 607 F.Supp. at 238); see Acushnet, 675 F.Supp. at 34 ("The quarterly and annual reports made [to the parent] do not represent an untoward intrusion by the owner into the corporate enterprise. The right of shareholders to remain informed is similarly recognized in many public and closely held corporations.").

The plaintiffs' third argument, that Kodak dominated the Atex board of directors, also fails. Although a number of Kodak employees have sat on the Atex board, it is undisputed that between 1981 and 1988, only one director of Atex was also a director of Kodak. Between 1989 and 1992, Atex and Kodak had no directors in common. Parents and subsidiaries frequently have overlapping boards of directors while maintaining separate business operations. In Japan Petroleum, the Delaware district court held that the fact that a parent and a subsidiary have common officers and directors does not necessarily demonstrate that the parent corporation dominates the activities of the subsidiary. 456 F.Supp. at 841; see Scott-Douglas Corp. v. Greyhound Corp., 304 A.2d 309, 314 (Del.Super.Ct.1973) (same). Since the overlap is negligible here, we find this evidence to be entirely insufficient to raise a question of fact on the issue of domination.

Fourth, the district court properly rejected the plaintiffs' argument that the descriptions of the relationship between Atex and Kodak and the presence of the Kodak logo in Atex's promotional literature justify piercing the corporate veil. Fletcher, 861 F.Supp. at 245. The plaintiffs point to several statements in both Kodak's and Atex's literature to evidence Kodak's domination of its subsidiary. For example, plaintiffs refer to (1) a promotional pamphlet produced by EPPS (a/k/a Atex) describing Atex as a business unit of EPPS and noting that EPPS was an "agent" of Kodak; (2) a document produced by Atex entitled "An Introduction to Atex Systems," which describes a "merger" between Kodak and Atex; (3) a statement in Kodak's 1985 and 1986 annual reports describing Atex as a "recent acquisition[ ]" and a "subsidiar[y] ... combined in a new division"; and (4) a statement in an Atex/EPPS document, "Setting Up TPE 6000 on the Sun 3 Workstation," describing Atex as "an unincorporated division of Electronic Pre-Press Systems, Inc., a Kodak company." They also refer generally to the fact that Atex's paperwork and packaging materials frequently displayed the Kodak logo.

It is clear from the record that Atex never merged with Kodak or operated as a Kodak division. The plaintiffs offer no evidence to the contrary, apart from these statements in Atex and Kodak documents that they claim are indicative of the true relationship between the two companies. Viewed in the light most favorable to the plaintiffs, these statements and the use of the Kodak logo are not evidence that the two companies operated as a "single economic entity." See Coleman v. Corning Glass Works, 619 F.Supp. 950, 956 (W.D.N.Y.1985) (upholding corporate form despite "loose language" in annual report about "merger" and parent's reference to subsidiary as a "division"), aff'd, 818 F.2d 874 (1987); Japan Petrol., 456 F.Supp. at 846 (noting that representations made by parent in its annual reports that subsidiary serves as an agent "may result from public relations motives or an attempt at simplification"); American Trading & Prod. Corp. v. Fischbach & Moore, Inc., 311 F.Supp. 412, 416 (N.D.Ill.1970) ("boastful" advertising and consideration of subsidiaries as "family" do not prove that corporate identities were ignored).

Fifth, the plaintiffs contend that Atex's assignment of its former CEO's mortgage to Kodak in order to close the sale of Atex's assets to a third party is evidence of Kodak's domination of Atex. We reject this argument as well. The evidence is undisputed that Kodak paid Atex the book value of the note and entered into a formal repayment agreement with the former CEO. Formal contracts were executed, and the two companies observed all corporate formalities.

Finally, even if the plaintiffs did raise a factual question about Kodak's domination of Atex, summary judgment would still be appropriate because the plaintiffs offer no evidence on the second prong of the alter ego analysis. The plaintiffs have failed to present evidence of an "overall element of injustice or unfairness" that would result from respecting the two companies' corporate separateness. See Harper, 743 F.Supp. at 1085 (holding that plaintiff cannot prevail on alter ego theory "because he has failed to allege any unfairness or injustice which would justify the court in disregarding the [companies'] separate legal existences"). In the instant case, the plaintiffs offer nothing more than the bare assertion that Kodak "exploited" Atex "to generate profits but not to safeguard safety." There is no indication that Kodak sought to defraud creditors and consumers or to siphon funds from its subsidiary. The plaintiffs' conclusory assertions, without more, are not evidence, see Quinn, 613 F.2d at 445, and are completely inadequate to support a finding that it would be unjust to respect Atex's corporate form.

For all of the foregoing reasons, the district court's order entering summary judgment on the plaintiffs' alter ego theory of liability is affirmed.

The plaintiffs next contend that a genuine issue of fact was raised as to whether Kodak could be held liable on an agency theory--that is, whether Kodak, as principal, could be liable for the tortious acts of Atex, its agent. The plaintiffs rely on statements in Atex/EPPS literature to support their theory: (1) the statement in the Atex document "Setting Up TPE 6000 on the Sun 3 Workstation" that "Atex is an unincorporated division of Electronic Pre-Press Systems, Inc., a Kodak company"; and (2) the statements in the EPPS promotional pamphlet that "EPPS serves as Kodak's primary agent to supply electronic pre-press products" and that "Atex is the largest of the EPPS business units." In granting Kodak's motion for summary judgment, the district court rejected the plaintiffs' agency theory of liability, finding that there was no evidence that Kodak authorized the statements. Fletcher, 861 F.Supp. at 247.

The plaintiffs contend that the fact that Kodak permitted the use of its logo on these documents raises a question of fact as to whether Kodak authorized or appeared to authorize the references to Atex/EPPS as its agent. First, the plaintiffs' argument fails under a theory of actual authority. The Restatement (Second) of Agency states: "Authority is the power of the agent to affect the legal relations of the principal by act