Academic journal article Defense Counsel Journal

Criminalization of Negligent Acts by Employees of U.S. and Foreign Corporations: More and More, Prosecutors in the United States and Elsewhere Are Mounting Criminal Proceedings in Traditional Tort Situations. There's Cause to Be Wary

Academic journal article Defense Counsel Journal

Criminalization of Negligent Acts by Employees of U.S. and Foreign Corporations: More and More, Prosecutors in the United States and Elsewhere Are Mounting Criminal Proceedings in Traditional Tort Situations. There's Cause to Be Wary

Article excerpt

WHILE the investigation of aircraft, maritime, train and pipeline incidents are normally regarded as the province of governmental administrative agencies, such as the U.S. National Transportation Safety Board (NTSB), increasingly they are becoming the subject of U.S. grand jury deliberations. Agencies such as the NTSB are charged with the duty of making factual determinations regarding the cause or causes of these accidents. Their findings sometimes lead to important operational changes that enhance safety. Now, however, many NTSB investigations are being superceded by federal and state prosecutor's offices, which, in cooperation with the Federal Bureau of Investigation and other prosecutorial agencies, are pursuing criminal allegations against companies that might otherwise be guilty of nothing more than negligence.

In view of this trend, it now behooves the civil defense practitioner to replace the familiar duality of parallel administrative and civil proceedings with a potential tripartite overlay of administrative investigations, civil suits and discovery, and criminal prosecutions.

Anticipating this triple threat is key. Often the criminal investigation remains undisclosed until after critical statements have been obtained by administrative agencies or important witnesses have been deposed by civil litigants. It is crucial for defense counsel to make an early assessment regarding potential criminal liability, because once disclosed, the statements and associated documents can and will be used by prosecutors against the client to support a criminal prosecution.

Indeed, defense and corporate counsel risk greater liability for their clients by making decisions regarding the degree of cooperation to be provided in civil matters without giving due consideration to the criminal ramifications. An unannounced criminal investigation will bring a level of subsequent scrutiny to bear on erroneous responses to written civil discovery requests or questions at deposition that can create consequences far different from those normally attending the civil proceeding.

The potential cooperation between the participants lined up against the client also creates some unique problems. Plaintiffs' attorneys will meet with prosecutors and supply information, documents and analysis obtained during the course of civil discovery. In turn, prosecutors will review court filings, depositions and other discovery to buttress their case. Prosecutors also can rely on the expertise of administrative agencies to guide their criminal inquiry. With prosecutors contacting former employees, grand jury subpoenas suddenly being issued for witnesses and documents and the need looming in the distance to coordinate three parallel proceedings, the job of leading a successful defense is simply growing more difficult.

SOME NEGLIGENCE PROSECUTIONS

In 1909, the U.S. Supreme Court set precedent against one of America's railroad giants by allowing the criminal prosecution of New York Central & Hudson River Railroad Co. and its agents for criminal liability to proceed. (1) For a broad host of reasons, including the interruption of two industry-favorable world wars, the next 75 years saw little in the way of similar corporate prosecutions. This trend began to reverse in 1978-80 when there was an attempt to prosecute Ford Motor Co. and its executives for the allegedly defective gas tank design of the Ford Pinto.

The trend now appears to be gaining steam. (2) According to the U.S. Sentencing Commission, somewhere between 200 to 300 corporations, partnerships and other business entities have been found guilty of criminal wrongdoing every year for the past 10 years. In some measure, the foundation for this trend was laid in the 1970s through enactment of criminal provisions to the Water Pollution Control Act, 33 U.S.C. [subsection] 1251-1387, the Clean Air Act, 42 U.S.C. [subsection] 7401-7462, and the Resource Conservation and Recovery Act, 42 U. …

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