NYSBA Journal Re-Publishes Di Lorenzo’s Article on Tort Liability for Corporate Directors

The New York State Bar Association Journal has re-published Professor Vincent Di Lorenzo’s article, “Individual Liability of Board Members After Fletcher v. The Dakota”  in its February 2014 issue.  The Fletcher decision changed the legal standard under which corporate directors would be held individually liable for tortious conduct including violations of the civil rights laws.  In 2006 the appellate court in Pelton v. 77 Park Avenue Condominium had ruled that directors could be held individually liable based on allegations of discrimination or other similar wrongdoing only if plaintiffs could plead with specificity “independent tortious acts by each individual defendant.” In the Fletcher decision, the appellate court concluded the Pelton decision had misinterpreted the governing case law. It rejected the independent tortious act requirement and ruled that the “participation of an individual director in a corporation’s tort is sufficient to give rise to individual liability.”

This article first explores if the Fletcher court was correctly interpreting earlier decisions in the New York courts. Second, the article explores the possible meaning of the “participation” requirement embraced in Fletcher, and asks the Court of Appeals to clarify this requirement. The article concludes that earlier decisions in the federal courts can be read as requiring active participation or personal involvement by the individual corporate director in the discriminatory action or conduct before imposing personal liability. Ultimately, however, the differing viewpoints in the Pelton and Fletcher decisions reflect a difference as to which public policy deserves primacy under the New York civil rights laws and laws governing homeowner communities. Professor Di Lorenzo’s article had previously appeared in the N.Y. Real Property Law Journal.

 

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