Professor Seth C. Oranburg examines horizontal veil piercing, a doctrine that allows courts to disregard the separateness between sibling entities under common ownership. Instead of moving “up” to owners or “down” to subsidiaries, horizontal piercing reaches laterally across affiliated companies—typically to prevent an entity from shielding assets by isolating operations into separate but unified businesses. The analysis connects back to Episode 2’s unity of interest and injustice tests, but applies them in a lateral context. Courts look for indicators such as undercapitalization, commingling of funds, shared officers or directors, and asset transfers designed to evade liabilities. While legitimate multi-entity structuring is common for tax efficiency and risk management, the doctrine targets situations where separateness is more form than substance. Jurisdictional approaches vary: Delaware applies the test cautiously, requiring strong proof of abuse to avoid disrupting lawful corporate planning. California is more willing to pierce, especially in cases involving strong public policy concerns such as environmental cleanup, as in California ex rel. Van de Kamp v. Texaco. The takeaway: horizontal veil piercing polices corporate families and affiliated companies, particularly when dealing with involuntary creditors like tort victims, but remains a high-threshold remedy to preserve legitimate business flexibility.

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