The titular question was recently posed and I suppose deserves an answer.
As regular readers know, I have argued in two articles--Using Reverse Veil Piercing to Vindicate the Free Exercise Rights of Incorporated Employers (March 6, 2013). The Green Bag, Vol. 16, No. 3, Spring 2013; available at SSRN:http://ssrn.com/abstract=2229414 and A Critique of the Corporate Law Professors’ Amicus Brief in Hobby Lobby andConestoga Wood (February 21, 2014), available at SSRN: http://ssrn.com/abstract=2399638 (forthcoming Virginia Law Review Online)--that the US Supreme Court should use reverse veil piercing in the pending Afordable Care Act contraception mandate cases.
The Supreme Court touched on reverse veil piercing in Domino's Pizza, Inc. v. McDonald, 546 U.S. 470 (2006), which raised the ability of a "shareholder and contracting officer of a corporation" to raise claims under 42 U. S. C. §1981 in connection with the termination of contracts between Dominos Pizza and the corporate franchisee. A section 1981 claim requires that plaintiff first establish the existence of a contractual relationship to which the plaintiff is a party or otherwise has rights. Id. at 476. The Court ruled that plaintiff was unable to do so because "it is fundamental corporation and agency law--indeed, it can be said to be the whole purpose of corporation and agency law--that the shareholder and contracting officer of a corporation has no rights and is exposed to no liability under the corporation's contracts." Id. at 475.
I don't take McDonald very seriously as a problem for my argument. First, the Court made no effort to analyze the issues raised by reverse veil piercing, but simply dismissed it out of hand. Indeed, the quoted passage on which my opponents place so much weight is the full extent of the court's "analysis." There is no citation of authority, no justification of the claims made, and no effort to address the points I have been making in my articles. All of which makes McDonald a fairly weak precedential reed.
Second, the McDonald case involved solely contractual and statutory rights as opposed to the fundamental First Amendment concerns presented here.
Finally, the Court relied on the plain text of §1981 to hold that "plaintiffs must identify injuries flowing from a racially motivated breach of their own contractual relationship, not of someone else's." Id. at 479. No such statutory limitation is at issue here.
All of which is why McDonald is anything but dispostive of the issues.
In any case, I've asked the law review to add a footnote citing and rejecting McDonald.
