The Discordance of New York Central Jazz: It Is Time to Abandon the Notion of Corporate Criminal Liability
Hasnas, John, Regulation
In 1909, the Supreme Court decided the case of New York Central & Hudson River R.R. Co. v. United States, which held corporations vicariously liable for the crimes their employees commit within the scope of their employment. Because vicarious criminal liability is utterly inconsistent with the ethical values that lie at the heart of Anglo-American criminal law, this was a serious mistake. Nevertheless, for the past 101 years, federal courts have consistently upheld this form of vicarious criminal liability.
I once heard jazz defined as the musical form in which one legitimizes a mistake by repeating it. If this is accurate, then the federal judiciary has been playing New York Central jazz for more than a century. It is high time that it changed its tune.
MORAL AND CRIMINAL RESPONSIBILITY
Criminal law is penal law. Its purpose is punishment. It is not designed to compose disputes, provide compensation to wronged parties, or impose administrative sanctions. It is designed to punish. This implies that the criminal sanction may be applied only to those persons and entities that can be deserving of punishment; that is, to those that are capable of acting in a morally blameworthy way.
Are corporations, separate and apart from the individual human beings who comprise them, capable of bearing moral responsibility? Does it make sense to ascribe moral blame to an abstract entity with no mind in which to form intentions and no body with which to carry them out? If not, then we need go no further; criminal punishment is unjustified, and for the last 101 years the American criminal justice system has been making a fundamental category mistake in visiting criminal punishment on corporations.
But let us assume that corporations can be morally responsible agents. That does not close the matter; although moral responsibility is a necessary condition for criminal punishment, it is not a sufficient one. We apply the criminal sanction only to morally blameworthy conduct, but we do not apply it to all morally blameworthy conduct because there is a principled difference between moral and criminal responsibility. Moral responsibility indicates that one is deserving of punishment. Criminal responsibility authorizes some human beings to punish others. Criminal responsibility inherently involves an element of human agency that moral responsibility does not.
In making a determination of moral responsibility, we are concerned only with the actions of one party, the agent whose conduct is being evaluated. The only relevant issue is whether the agent has acted in a morally unacceptable way. Determining that the agent has acted in a morally blameworthy manner does not in itself authorize anyone else to take action against him or her. The inquiry is an abstract one involving no practical enforcement issues.
The case is different when we make a determination of criminal responsibility. Such a determination requires not only a finding that an agent has acted in a manner deserving of punishment, but also that it is proper for government officials to impose punishment upon the agent. Here, we are necessarily concerned with the actions of two parties, the wrongdoer and the government enforcement agents. Unless the enforcement agents are both omniscient and incorruptible, the class of cases in which the wrongdoer has behaved culpably cannot be coextensive with the class of cases in which the imposition of the criminal sanction is justified. There will always be some cases in which the effort to impose punishment on a class of wrongdoers who morally deserve it would subject the public to an unacceptable risk of harm from the errors or venality of the human beings charged with enforcing the law. If the criminal justice system were guaranteed to be administered with godlike perfection, then the realms of criminal responsibility and moral responsibility would coalesce. But this is not the world we live in. …