The Curious Case of Corporate Criminality
Luna, Erik, American Criminal Law Review
Corporations dominate the business world, accounting for an overwhelming majority of commercial revenues and serving as the nearly exclusive organizational form for large-scale enterprise. (1) They are, quite simply, the major vehicles of American capitalism and a primary source of socio-economic prosperity and innovation. But corporations are also implicated in serious harm to individuals and society: massive fraud in securities, banking, and health care; damage to the environment from air and water pollution and the generation of hazardous waste; and systematic bribery, tax evasion, and obstruction of justice. If these acts were committed by an individual, there would be little doubt that prosecution and punishment might be in store--and, indeed, contemporary law accepts the idea that corporations can be held criminally liable in such circumstances. Yet to this day corporate criminality remains a curious concept. As artificial creatures of the law, corporations per se have no emotions or culpable mental states. Nor are they subject to incarceration, the primary mode of punishment in America. To use the hoary phrase, there is "no soul to damn, no body to kick." (2)
This symposium brings together leading scholars to explore the past, present, and future of corporate criminal law. The following response will offer some brief observations about several written contributions, all of which, I believe, help elucidate the peculiar institution of corporate crime.
I. DEODAND AND FRANKPLEDGE
Professor Albert Alschuler's article takes issue with the very idea of corporations being convicted and sentenced like human defendants. (3) The modern doctrine traces back to 1909 and the (in)famous New York Central case, where the U.S. Supreme Court upheld corporate punishment based on the respondeat superior theory of tort law, thereby allowing a corporation to be held criminally liable for its agents' actions taken within the scope of their employment. (4) Although the Court suggested that "there are some crimes which in their nature cannot be committed by corporations," (5) Alschuler correctly notes that the opinion itself provided no guidance as to the boundaries of corporate criminality. In the ensuing decades, lawmakers and jurists have rejected most meaningful limits to the doctrine (6) and allowed corporations to be held liable not only for modern financial offenses but also for serious physical crimes (e.g., homicide). (7) Still, corporate criminal liability is an oddity, regardless of any approval or acquiescence by courts, politicians, and the public. Akin to saying "I love you" to an inflatable, it sounds strange to describe a corporation as a manslaughterer. (8)
Alschuler exposes the foibles of this practice through analogy to two ancient institutions. The first is deodand, a biblically derived custom of punishing inanimate objects or animals involved in the killing of human beings. British common law permitted actions against chattel, which if found to have caused a person's death, would be forfeited to the Crown. The tradition of suing non-human entities continued after the American Revolution, sometimes in the form of a distinct doctrine that allowed ships to be seized without having to bring their owners within the jurisdiction. (9) But whether the fiction was grounded in deodand or admiralty law, the courts were acquiescing to a type of "transcendental nonsense," (10) to use Felix Cohen's phrase: property is treated as a person, denominated a party to litigation, and adjudicated guilty of wrongdoing. The fiction persists to this day and has facilitated some unconscionable results, like the forfeiture of an innocent woman's car because her husband had used it for a tryst with a prostitute. (11)
Alschuler describes a second institution, frankpledge, which is "less silly than hating an artificial person." (12) Dating back to the Norman conquest of England, the practice held the male leaders of ten households responsible for keeping the peace within their community, and in particular, it required them to deliver any household member who had committed a crime. …