CORPORATIONS AND THE CRIMINAL LAW - AN UNEASY ALLIANCE

• NCJ Number: 40934
• Journal: Kentucky Law Journal Volume: 65 Issue: 1 Dated: (1976-1977) Pages: 73-129
• Author(s): J R ELKINS
• Date Published: 1977
• Length: 57 pages
• Corporate Author: University of Kentucky
• Publication Format: Article
• Language: English
• Country: United States of America

Annotation

THE DEVELOPMENT OF CRIMINAL LAW AS APPLIED TO CORPORATIONS IS TRACED FROM 18TH CENTURY ENGLAND TO THE STATE OF CORPORATE CRIMINAL LAW IN THE UNITED STATES TODAY.

Abstract

IN GENERAL, 18TH CENTURY ENGLISH CORPORATIONS WERE NOT SUBJECT TO CRIMINAL INDICTMENT, BUT THEY WERE LIABLE TO PROSECUTION FOR 'NONFEASANCE' (I.E., THE FAILURE TO PERFORM A PUBLIC DUTY IMPOSED BY THE STATE). AT THAT TIME, THE CORPORATE ENTERPRISE, WHICH WAS IN ITS INFANCY, HAD LITTLE IMPACT ON THE CITIZENRY. IT WAS NOT UNTIL 1842 THAT A CORPORATION'S RESPONSIBILITY FOR CRIMINAL ACTIONS WAS DELINEATED. THE LIABILITY OF ENGLISH CORPORATIONS FOR INTENTIONAL CRIMES WAS SANCTIONED IN THE EARLY 20TH CENTURY BUT NOT FULLY ESTABLISHED UNTIL WORLD WAR II. CORPORATE CRIMINAL LAW IN THE U.S. HAD A SIMILAR GROWTH PATTERN AND WAS INFLUENCED BY CORPORATE CIVIL LAW. IN THE EARLY 1900'S, CORPORATE CRIMINAL PROCEEDINGS USUALLY INVOLVED MUNICIPAL CORPORATIONS. CORPORATE CRIMINAL LIABILITY IS BASED ON IMPUTING ACTS AND INTENT OF CORPORATION MEMBERS TO THE CORPORATION ITSELF; ITS SCOPE DEPENDS LARGELY UPON WHICH INDIVIDUAL CRIMINAL ACTS WILL BE IMPUTED OR ASCRIBED TO THE CORPORATIONS. THIS QUESTION IS COMPLICATED BY THE HIERARCHICAL NATURE OF ORGANIZATIONS. COURTS MUST LOOK FOR AUTHORIZATION OR ACQUIESCING LINKS BETWEEN SUBORDINATE EMPLOYEES AND THE 'INNER CIRCLE' OF THE CORPORATION. CORPORATE DEFENSES TO CRIMINAL LIABILITY FOR SUBORDINATE EMPLOYEES ACTS, THEREFORE, ARE USUALLY BASED ON LACK OF KNOWLEDGE OF OFFENSE BY CORPORATE OFFICERS AND ARGUMENTS THAT EMPLOYEES ACTED OUTSIDE OF THE SCOPE OF EMPLOYMENT. ACCORDING TO A REVIEW OF COURT CASES, THE DEFINITIONS OF CORPORATE CRIMINAL LIABILITY FOUND IN THE PROPOSED FEDERAL CRIMINAL CODE AND THE MODEL PENAL CODE ARE MORE NARROW THAN THAT BEING USED BY FEDERAL COURTS. FEDERAL COURTS IMPUTE TO THE CORPORATE EMPLOYER LIABILITY FOR ALL CRIMINAL ACTS BY SUBORDINATE EMPLOYEES, REGARDLESS OF THE CORPORATION'S GOOD FAITH EFFORTS AND EXPLICIT INSTRUCTIONS TO SECURE COMPLIANCE. FOOTNOTES ARE PROVIDED.