Practice Area Ranking

Litigation: Mainly Plaintiffs (Pennsylvania) — Band 2

Firm Managing Member Edward Kang, who serves on the AABAGP Board of Directors, participated in the evening’s program and joined fellow board members in recognizing the extraordinary contributions of local nonprofit organizations.

The Gala also featured a special AAPI history video, produced by AABAGP and presented during the program. The video highlights the rich and diverse history of AAPI communities and their contributions to the region.

Watch the video here: https://youtu.be/jzWxQPrBV_o

The evening served not only as a celebration of heritage and achievement but also as a reminder of the importance of supporting AAPI‑owned businesses, advancing economic opportunity, and strengthening community networks across the tri‑state area. Kang Haggerty is honored to support AABAGP’s mission and looks forward to continuing its partnership in uplifting and empowering the region’s AAPI business community.

In the May 14, 2026 edition of The Legal Intelligencer, Edward Kang writes, “When the American Dream Stalls: Litigation Strategies for EB-5 Investors Seeking the Return of Their Capital.“

In the April 16, 2026 edition of The Legal Intelligencer, Edward Kang writes, “No Private Right? No Problem: Ninth Circuit Lets 340B Pricing Claims Proceed Under the False Claims Act.“

In the March 26, 2026 edition of The Legal Intelligencer, Edward Kang and Kandis Kovalsky co-authored, “Taking a Plaintiff’s Case to the Next Level, Part II: It Does Not Always Take Two—Why Naming Individuals as Defendants Is Not Always the Best Strategy.”

In the March 19, 2026 edition of The Legal Intelligencer, Kelly Lavelle writes, “AI Systems and the Question of Confidentiality.”Much of the attention surrounding generative AI in litigation has focused on hallucinated authorities and AI-generated filings. But a different litigation risk arises when lawyers, or even clients themselves, enter client information into an AI platform. Before privilege or production issues arise, the more basic inquiry is whether the information was ever confidential in the first place. This question is particularly significant in e-discovery, where electronically stored information generated by AI systems may later become discoverable.

The U.S. District Court for the Southern District of New York’s decision in United States v. Heppner brings that issue into focus. Although the case has been described as a privilege ruling, the court’s analysis turned on a more basic issue: whether the information was confidential when it was entered into the AI platform. If client information is submitted to a system under terms that allow the provider to access, retain, or disclose it, the protections that depend on confidentiality, including attorney-client privilege and work product, may never attach.

In Heppner, a corporate executive under criminal investigation used the publicly available generative AI platform “Claude” to generate written analyses of potential defenses after receiving a grand jury subpoena. He later shared those documents with counsel. Following his arrest, FBI agents executed a search warrant at Bradley Heppner’s home and seized numerous documents and electronic devices. Heppner’s counsel later informed the government that among the seized materials were approximately thirty-one documents memorializing Heppner’s communications with the AI platform.

Through his counsel, Heppner asserted privilege over these documents, arguing that the information entered into the AI platform was learned, that he created the documents to facilitate discussions with counsel and obtain legal advice, and that he subsequently shared the AI outputs with his attorneys. His counsel acknowledged, however, that they did not direct Heppner to conduct the AI searches. The court rejected those claims. It held that the documents were not communications with an attorney, were not prepared by or at the direction of counsel, and, critically, were not confidential in light of the platform’s privacy policy.

The court’s analysis centered on the conditions under which the information was entered into the system. The provider’s terms stated that user inputs and outputs were collected and retained and that the company reserved the right to disclose data to third parties, including governmental authorities. Under those conditions, the court concluded that Heppner lacked a reasonable expectation of confidentiality at the moment of disclosure.

The court also rejected Heppner’s contention that he communicated with Claude for the “express purpose of talking to counsel.” In doing so, the court looked to the platform’s own representations. Claude expressly disclaimed providing legal advice. When asked whether it could provide such advice, the system responded that it was not a lawyer, could not offer formal legal recommendations, and advised users to consult a qualified attorney.

The court acknowledged that the implications of artificial intelligence for the law are only beginning to be explored. The court emphasized that AI’s novelty does not place it outside established legal principles, including those governing attorney-client privilege and the work-product doctrine. AI does not change the basic rules.

The opinion highlights a familiar but often underemphasized principle that privilege attaches only when communications are intended to be confidential and were, in fact, kept confidential. In the AI context, if a platform’s terms allow provider use beyond delivering the requested service, such as model training, analytics, affiliate sharing, or extended retention, the user may be acting inconsistently with the intent to preserve confidentiality at the moment of disclosure. The issue is not a subsequent waiver. It is that the platform itself may defeat confidentiality at inception.

This reasoning extends beyond generative AI. Courts have consistently held that employees may waive attorney-client privilege when using employer email systems to communicate with counsel, with the analysis turning on whether the employee had an objectively reasonable expectation of confidentiality. In those cases, the inquiry focuses on whether the intent to communicate in confidence was objectively reasonable under the circumstances. Heppner suggests that AI platforms may be subject to similar scrutiny. The terms governing data retention and disclosure may determine whether any protection exists at all.

The court also reaffirmed that privilege remains grounded in professional accountability. Recognized privileges depend on a relationship with a licensed professional who owes fiduciary duties and is subject to discipline. Generative AI does not occupy that role. Even if an output resembles legal advice, it is not a communication with counsel.

However, the court suggested that if counsel had directed the use of the AI tool within a structured framework, the analysis might have been different. That distinction highlights the importance of control. When AI use is integrated into a counsel-directed process under defined terms, protection arguments may be stronger. When it is independent and unsupervised, confidentiality may fail at the start.

Platform terms of service are therefore central. Many providers claim licenses to user inputs and outputs broader than a confidentiality-preserving relationship would tolerate, sometimes including rights to use content for service improvement, analytics or model training. However, this concern does not apply in the same way to all AI tools. Paid legal research platforms or firm-licensed systems are often governed by professional services agreements that include confidentiality obligations and defined data controls. In those contexts, the vendor functions more like a traditional litigation support provider than a public AI service. Even there, however, the analysis may turn on the contract. Courts will look at the terms to determine what they permit and how the provider handles user content.

These issues directly affect attorney-client privilege. Privilege protects confidential communications made for the purpose of obtaining or providing legal advice. The problem is not simply waiver. It is that the basic requirements for privilege may never have been satisfied. The work-product doctrine raises a similar issue. Work product protects materials prepared in anticipation of litigation. If those materials are created on a public nonconfidential platform, it weakens the argument that they reflect protected legal strategy shielded from disclosure.

Heppner reinforces the basic rule that privilege depends on confidentiality at the time the communication is made. It does not arise simply because a document is later shared with counsel. In the AI context, that means platform terms, data handling practices, and professional controls must align with confidentiality requirements before client information is entered. The focus should be less on whether AI interactions are discoverable and more on whether confidentiality ever attached. As Heppner shows, confidentiality is not assumed simply because a document resembles legal analysis. It depends on the conditions under which the information was created and maintained.

Kelly A. Lavelle is Senior Counsel at Kang Haggerty. She focuses on e-discovery and information management, from preservation and collection to review and production of large volumes of electronically stored information. Contact her at klavelle@kanghaggerty.com.

Reprinted with permission from the March 19, 2026 edition of “The Legal Intelligencer” © 2026 ALM Global, LLC. All rights reserved. Further duplication without permission is prohibited. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more information visit Asset & Logo Licensing.

We’re grateful to everyone who joined us to strengthen the relationships that drive effective False Claims Act enforcement and support the mission of TAF. A special thank‑you to Kiddo for the warm hospitality and to all who helped make the evening a success.

We look forward to continuing to support TAF’s work and to creating more opportunities for connection across our community.

Walter O. Bourdaghs focuses his practice on complex commercial litigation, construction law, and civil rights matters, drawing on experience representing individuals, small businesses, and international companies. He earned his J.D. from Boston University School of Law and holds a B.A. from Beloit College. Walter is admitted to practice in Massachusetts, Connecticut, New Jersey, and Pennsylvania, and recently relocated to Philadelphia after working at MG+M law firm in Boston, following six years as Center Coordinator at the University of Chicago’s Center for East Asian Studies.

Kyle Hannigan focuses his practice on complex civil litigation, contract disputes, whistleblower claims, and creditors’ rights, bringing experience helping clients navigate a wide range of legal challenges. He earned his J.D. from Rutgers Law School and holds a B.A. in Law & Justice from Rowan University. Kyle is admitted to practice in Delaware and began his career at Kang Haggerty as a law clerk during law school; before entering the legal profession, he spent eight years in the automotive industry as a vehicle technician and service and parts coordinator.

Nicholas Cardoso focuses his practice on business disputes and employment law, representing clients on both the plaintiff and defense sides in matters involving complex commercial litigation, contract disputes, and workplace claims. He earned his J.D. from the University of Virginia School of Law and holds a B.A. in Criminology from The College of New Jersey. Nick is admitted to practice in New Jersey and Pennsylvania and previously practiced at an Am Law 200 firm, where he gained valuable insight into defense strategies that inform his work today.

“We are thrilled to welcome Walter, Kyle, and Nick to the firm,” said Edward T. Kang, Managing Member of Kang Haggerty. “Each of them brings strong litigation skills, intellectual rigor, and a client centered approach that enhances our ability to serve businesses and individuals across the region.”

Kang Haggerty LLC is a boutique business litigation firm with offices in Philadelphia, PA and Marlton, NJ. The firm was formed by lawyers with a wide range of professional, cultural, social, and political backgrounds.

In the February 19, 2026 edition of The Legal Intelligencer, Edward Kang and Kandis Kovalsky co-authored, “Taking a Plaintiff’s Case to the Next Level: Holding Individuals Liable Under Pennsylvania Law.”

For plaintiffs counsel, winning a verdict against a corporate entity is often only the opening act. The real contest begins post-judgment, when the defendant reveals itself to be a shell: a defunct LLC, a dissolved partnership, or a corporation with nominal assets. The plaintiff, having prevailed on liability, is left holding a judgment that is legally pristine but could be practically worthless.

This outcome is avoidable. Strategic practitioners do not need to treat entity liability as the finish line; they may treat it as a starting point. Holding individual owners or officers personally liable—whether as partners, corporate actors, alter egos, or signatories—fundamentally alters the litigation landscape. It expands the pool of recoverable assets, concentrates the minds of defense counsel, and aligns the case with the core purpose of civil liability: meaningful accountability against wrongdoers.

Why Individual Liability Matters

The pursuit of individual liability is not a secondary consideration; it is a force multiplier for three distinct reasons.

First, individual exposure changes behavior. A corporate entity, insulated by limited liability and defense counsel, often litigates with strategic detachment. An individual whose personal assets, reputation, and future earnings are at risk does not. Cases involving individual defendants often settle differently—earlier, at higher values, and with fewer procedural hurdles. Personal risk concentrates attention in ways that corporate liability rarely does.

Second, the assets often reside with the individuals. Commercial general liability policies carry limits and exclusions. Directors and officers (D&O) policies, by contrast, frequently provide broader coverage that follows the individual, not the entity. A dissolved corporation cannot respond to a judgment; a former officer with a D&O tail policy can. General partners remain personally liable for partnership obligations—a fact often forfeited when plaintiffs name only the partnership in the complaint.

Third, accountability is the product. The Department of Justice’s 2015 Yates Memo recognized that corporate enforcement is incomplete when it stops at the entity level. Civil plaintiffs experience this reality firsthand. A family suing a nursing home chain is not made whole by a judgment against a corporate shell. They seek accountability from the individuals who made the decisions that caused the harm. That impulse is not merely human—it is legally and strategically sound.

Direct Liability Under Pennsylvania Statutes

It is well known that general partners are jointly liable for the debts of a partnership. This most straightforward path to individual liability is often statutory—and frequently overlooked at the pleading stage. Under the Pennsylvania Uniform Partnership Act, a judgment against a partnership is not, by itself, a judgment against any individual partner. See 15 Pa.C.S. Section 8437. Pennsylvania Rule of Civil Procedure 2132 reinforces this principle: a judgment entered against a partnership sued only in its firm name supports execution only against partnership property. To reach a partner’s individual assets, the partner must be named and served in the lawsuit.

The same logic applies to limited partnerships, under 15 Pa.C.S. Section 8645. General partners are jointly and severally liable for partnership obligations, but only if they are properly joined. A judgment against the limited partnership alone does not reach them. This is not a substantive limitation on liability; it is a pleading requirement. Plaintiffs who fail to name individual partners at the outset may forfeit the ability to collect from them entirely.

The lesson is elementary: name the partners when warranted. The cost of doing so is negligible; the cost of failing to do so can be fatal to recovery.

Participation Theory: Liability Through Conduct

Beyond statutory partnership liability, Pennsylvania recognizes a common-law doctrine that imposes individual liability on corporate officers and directors based on their personal involvement in tortious conduct. This is the participation theory, articulated most clearly in the Pennsylvania Supreme Court case Wicks v. Milzoco Builders, 470 A.2d 86 (Pa. 1983). Under Wicks, a corporate officer is individually liable for torts committed in the course of employment if the officer personally participated in the wrongful conduct or directed it to occur. See our earlier article on this topic, here.

Participation theory is not veil-piercing. It does not require proof of fraud, undercapitalization, or disregard of corporate formalities. It does not attack the corporate structure. Instead, it reflects a bedrock principle: individuals remain liable for their own torts, even when acting on behalf of a corporation.

But the doctrine has limits. Alleging that a defendant held a corporate title or signed a document is insufficient. Plaintiffs must plead specific facts demonstrating personal involvement: directing the conduct, approving the scheme, making the misrepresentation, or physically engaging in the wrongful act. Courts are skeptical of boilerplate allegations of “participation.” Overreaching invites dismissal and damages credibility.

Participation theory applies only to individuals, not affiliated entities. To reach parent companies or sister corporations, plaintiffs must turn to other doctrines, such as alter ego or enterprise liability.

Contractual Liability: The Signatory Problem

In contract cases, the path to individual liability is narrower and more nuanced. The general rule is familiar: an agent who signs a contract on behalf of a disclosed principal is not personally liable on that contract (unless the agent specifically agrees to assume liability). See Vernon D. Cox & Co. v. Giles, 406 A.2d 1107, 1110 (Pa. Super. 1979). But the exceptions are where cases are won or lost.

One common exception arises from ambiguity. If a contract does not clearly indicate the signatory’s representative capacity, parol evidence may be admissible to determine whether the parties intended individual liability. See Trenton Trust v. Klausman, 296 A.2d 275, 277 (Pa. Super. 1972). Ambiguous signature blocks, inconsistent use of letterhead, or vague agency language can expose individuals to personal liability. See Hazer v. Zabala, 26 A.3d 1166, 1170 (Pa. Super. 2011).

Another fertile theory is misrepresentation of authority. An agent who warrants they have authority to bind a principal—but does not—may be personally liable for breach of warranty of authority. See Kribbs v. Jackson, 129 A.2d 490, 496 (Pa. 1957) Similarly, an individual who makes material misrepresentations to induce a contract may face tort liability for fraudulent inducement, even if the contract itself binds only the entity. See Felix v. Fraternal Order of Police, Philadelphia Lodge No. 5, 759 A.2d 34, 39 (Pa. Commw. Ct. 2000).

These theories should be explored early. Discovery into the signatory’s knowledge, the entity’s financial condition at the time of contracting, and the parties’ communications can reveal evidence of individual intent and responsibility. In the right case, contractual individual liability is not ancillary; it is central.

Alter Ego and Piercing the Corporate Veil

The most demanding—and most powerful—path to individual liability is veil piercing. Pennsylvania law requires a showing that the corporation was a mere alter ego or business conduit of the individual and that respecting the corporate form would sanction fraud, illegality, or fundamental unfairness. Put simply, veil-piercing is most viable when someone uses a corporate form to perpetrate fraud.

Unlike participation theory, veil piercing attacks the corporate structure itself. It can also extend beyond individuals to affiliated entities under enterprise liability theories. In Mortimer v. McCool, 255 A.3d 261 (Pa. 2021), the Pennsylvania Supreme Court recognized the viability of enterprise liability while declining to apply it on the facts. More recently, in Dewberry Group v. Dewberry Engineers, 604 U.S. 321 (2025), the U.S. Supreme Court reaffirmed the presumption of corporate separateness but left room for traditional veil piercing and equitable adjustments where corporate forms obscure economic reality. See our latest article on this topic, here.

These decisions offer both caution and opportunity. Courts will not disregard corporate form lightly, but they remain receptive to well-supported claims involving commingling, asset shifting, undercapitalization, and artificial inter-company transactions. Discovery into inter-company transfers, pricing practices, and the use of shell entities can provide the factual foundation necessary to overcome the presumption of separateness.

As a practical matter, veil piercing should rarely be pled in an initial complaint. The necessary facts are almost never available pre-discovery, and premature allegations risk early dismissal under Pennsylvania’s fact-pleading standards, and potentially, a loss of credibility with the court. A more effective strategy is to plead viable individual claims under participation theory and statutory liability, then develop the evidentiary record to support alter ego claims as the case progresses.

Choosing the Right Theory

Each individual liability doctrine serves a distinct function, and understanding their interplay is critical to effective case management.

• Partnership liability is mandatory, not discretionary. Name the partners.
• Participation theory is the primary tool for holding officers and managers accountable for their own tortious conduct.
• Contractual liability theories apply where ambiguity, misrepresentation, or extra-contractual conduct creates individual exposure.
• Veil piercing and enterprise liability are reserved for cases involving manipulation of corporate form to evade responsibility or to perpetuate fraud.

Used together, these doctrines transform litigation strategy. They expand the defendant pool, increase settlement leverage, and protect plaintiffs from the all-too-common scenario of winning on liability but losing on collectability.

Conclusion

The shift from entity liability to individual accountability is not merely tactical; it reflects the economic realities of modern commerce. Corporate entities can be created, dissolved, and restructured with ease. Individuals endure. They hold assets, carry insurance and bear responsibility for their conduct. On many occasions, individuals are the wrongdoers.

Plaintiffs who treat the corporate defendant as the endpoint of litigation will continue to obtain judgments against shell companies and wonder why their clients remain uncompensated. Plaintiffs who integrate individual liability into their strategy from the outset—by naming partners, pleading participation, scrutinizing contractual authority, and preserving alter ego theories—are likely to recover more. They will fulfill the fundamental promise of civil law: that wrongdoing leads to meaningful accountability, not empty judgments.

Edward T. Kang is the managing member of Kang Haggerty. He devotes the majority of his practice to business litigation and other litigation involving business entities. Contact him at ekang@kanghaggerty.com.

Kandis L. Kovalsky, a member with the firm, focuses her practice on a broad range of high stakes business-related civil litigation in Pennsylvania, New Jersey, and New York state and federal courts and arbitral tribunals, and representing relators in high stakes qui tam actions filed under the federal and state False Claims Acts. Contact her at kkovalsky@kanghaggerty.com. 

Reprinted with permission from the February 19, 2026 edition of “The Legal Intelligencer” © 2026 ALM Global, LLC. All rights reserved. Further duplication without permission is prohibited. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more information visit Asset & Logo Licensing.