Crime and Punishment: Rehabilitating Retribution as a Justification for Organizational Criminal Liability

American Business Law Journal

Volumn 47, Issue 1, 2010, Pages 109-144

  Robson, Regina A ^a  

^a SAINT JOSEPH S UNIVERSITY   (United States)

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EID: 77953893203     PISSN: 00027766     EISSN: 17441714     Source Type: Journal    
DOI: 10.1111/j.1744-1714.2010.01090.x     Document Type: Article

References (213)

1. Organizational theorists frequently use machines and organisms as metaphors for the corporation. Linda Smircich, Concepts of Culture and Organizational Analysis, 28 Admin. Sci. Q. 339, 340 (1983).
2. Unless the context suggests otherwise, as used herein, the term "corporation" is used interchangeably with other collective forms of business organization.
3. Leonard Orland, Reflections on Corporate Crime: Law in Search of Theory and Scholarship, 17Am. Crim. L. Rev. 501, 503-04 (1980).
4. See infra note 95.
5. V.S. Khanna, Corporate Criminal Liability: What Purpose Does it Serve?, 109 Harv. L. Rev. 1477, 1532-34 (1996).
6. Id. See also infra notes 91-93 and accompanying text. Cf. John C. Coffee, "No oul to Damn: No Body to Kick": An Unscandalized Inquiry into the Problem of Corporate unishment, 79 Mich. L. Rev . 386, 386-87 n.4, 411-12 (1981) (suggesting that corporate riminal sanctions can be harnessed to prevent repetition and increase efficiency without xtensive third-party effects).
7. See infra notes 80-83 and accompanying text. Retribution is frequently confused with its evil cousin, vengeance. Vengeance or revenge can be defined as punishment exacted for an injury, which is unconstrained by the blameworthiness of the immediate object of the vengeance. See William Ian Miller, Eye For An Eye 146-55 (2006) (describing different approaches to revenge and analyzing what makes revenge "satisfying" to the avenger). In contrast to vengeance, retribution can be defined as imposition of punishment which is in proportion to the magnitude of the offense. Black's Law Dictionary 1431 (9th ed. 2009).
8. See infra notes 90-92 and accompanying text.
9. See infra notes 86, 88, 90, 96-97 and accompanying text.
10. See infra notes 28-30 and accompanying text. As an early English commentator noted, corporations "could commit neither sin or crime; and some said no tort. " James R. Elkins, orporations and the Criminal Law: An Uneasy Alliance, 65 Ky. L.J. 73, 86 (1976) (quoting 3 W. Holdsworth, History of English Law 471-74 (3rd ed. 1923)).
11. See infra notes 35-39 and accompanying text.
12. See infra notes 54-62 for a discussion of the role of symbolism in encouraging expansion of organizational criminal liability.
13. Oreland, supra note 3, at 504 (formulation of theoretical basis of organization criminal liability impeded by the complexity of the field and fragmented nature of legal education).
14. Elkins, supra note 10, at 76 (imposition of criminal liability is one means - albeit not the most effective means - of controlling corporate activities); John Hasnas, Ethics and the Problem of White Collar Crime, 54 Am. U. L. Rev. 579, 601-02 (2005) (evolution of rganizational criminal liability was outgrowth of effort to police business practices).
15. See generally Meir Kohn, The Origins of Western Economic Success: Commerce, Finance, and Government in Preindustrial Europe 2-30 (Dartmouth College Working Paper No. 00-05, 2001), available at http://www.dartmouth.edu/~mkohn/Papers/00-05.pdf.
16. In Anglo-Saxon times, the "frankpledge" functioned as a system of compulsory suretyship through which each member of the frankpledge guaranteed the performance of the others, such as payment of tithes or appearance at court proceedings. See Elizabeth E. Joh, Conceptualizing the Police Force, 2005 Utah L. Rev. 573, 580-82. Medieval guilds were voluntary associations of artisans engaged in the same craft or trade who joined to regulate and protect the interests of their trade. Black's Law Dictionary, supra note 7, at 776.
17. Kathleen F. Brickey, Corporate Criminal Liability: A Treatise on the Criminal Liability of Corporations, Their Officers and Agents § 2 (1984).
18. Kathleen F. Brickey, Corporate Criminal Accountability: A Brief History and an Observation, 60 Wash. U. L.Q. 393, 397-400 (1982).
19. Christopher Stone, Where the Law Ends 18 (1975). In an example of misguided prognostication, Adam Smith noted that, absent a monopoly, corporations "have little promise except in limited fields of operations where all the operations are capable of being reduced to what is called 'routine.'" Id. (quoting Adam Smith, Wealth of Nations (1776)). See also Elkins, supra note 0, at 90 (the small number of corporations at the turn of the eighteenth century made them economically insignificant).
20. 0Although imposition of criminal liability on business organizations has been a part of U.S. jurisprudence for over a century, it was not a part of European civil law until recently, fueled in part by the emergence of large, multinational corporations. Khanna, supra note 5, at 1487-92.
21. Stone, supra note 19, at 18-24. For accessible treatments of the evolution of corporate crime, see generally Brickey, supra note 17, at §§ 2:06-2.09; Tony G. Poveda, Rethinking White-Collar Crime 112-30 (1994) (focusing on corporate crime in the twentieth century); Barbara A. Belbot, Corporate Criminality, in nderstanding Corporate Criminality 211, 219-23 (Michael B. Blankenship ed., 1993); Brickey, supra note 18, at 396-400; Elkins, supra note 10, at 88-99.
22. See infra note 56 and accompanying text.
23. Prior to 1800, there were fewer than 225 charters granted for general commercial activity. Brickey, supra note 17, at § 2.05. See also Elkins, supra note 10, at 90 (corporations were few in number with insignificant impact).
24. Gregory A. Mark, Comment, The Personification of the Business Corporation in American Law, 54 U. Chi. L. Rev. 1441, 1455 (1987) (corporations progressed from doing only what was allowed by their charters to doing anything not prohibited by their charters).
25. William W. Bratton Jr., The New Economic Theory of the Firm: Critical Perspectives from History, 41 Stan. L. Rev. 1471, 1487 (1989).
26. See, e.g., First Nat'l Bank of Boston v. Bellotti, 435 U.S. 765, 780 n.15 (1978) (stating that corporations are "persons" distinct for equal protection purposes) (citing Santa Clara County v. S. Pac. R.R., 118 U.S. 394 (1886)); Hale v. Henkel, 201 U.S. 43, 72-73, 76 (1906) (denying corporation's Fifth Amendment protection against self-incrimination while recognizing some Fourth Amendment protections), overruled on other grounds by Murphy v. Water Comm'n of N.Y. Harbor, 378 U.S. 52 (1964).
27. For a comprehensive analysis of the development of corporate constitutional rights, see Peter J. Henning, The Conundrum of Corporate Criminal Liability: Seeking A Consistent Approach o the Constitutional Rights of Corporations in Criminal Prosecutions, 63 Tenn. L. Rev. 793 (1996).
28. See, e.g., People v. Rochester RR & Light Co., 195 N.Y. 102, 108 (1909) (corporation incapable of committing murder). See also Daniel R. Fischel & Alan O. Sykes, Corporate Crime, 25 J. Legal Stud. 319, 333 (1996) (early common law rejected the concept of corporate guilt as a self-evident proposition requiring no elaboration).
29. Elkins, supra note 10, at 87-88.
30. See Brickey, supra note 17, at § 2.01.
31. Brickey, supra note 18, at 401.
32. Brickey, supra note 17, at § 2.04.
33. Id. § 2.07 (citing People v. Corp. of Albany, 11 Wend. 539, 542 (N.Y. Sup. Ct. 1834)).
34. 4Elkins, supra note 10, at 93-96. This was unlike the situation under British law where courts, although holding corporations liable for crimes of nonfeasance, were reluctant to extend liability to crimes of misfeasance. Brickey, supra note 17, at § 2.08.
35. Elkins, supra note 10, at 106-10.
36. Coffee, supra note 6, at 386 (quoting the Lord Chancellor of England, Edward, First Baron Thurlow (1731-1806)).
37. Although courts appeared willing to hold corporations liable for crimes which required only a general intent, courts generally did not extend liability to crimes requiring a showing of "malice" or "willfulness." Elkins, supra note 10, at 107.
38. See, e.g., United States v. John Kelso Co., 86 F. 304, 305-06 (N.D. Cal. 1898) (denying the corporation's motion to quash criminal information, holding that the only intent required to hold a corporation liable is the intent to do the prohibited act). The Kelso court limited imposition of criminal liability to those statutes which included a punishment that could be imposed on a corporation, such as a fine. Id. at 306. However, this barrier was effectively removed in United States v. Van Schaick, 134 F. 592, 602 (S.D.N.Y. 1904) which held, in a case involving the death of nine hundred ferry boat passengers because of inadequate life preservers, that the failure of Congress to prescribe a penalty applicable to business organizations was inadvertent and not intended to exempt corporate violators.
39. See, e.g., Telegram Newspaper Co. v. Commonwealth, 52 N.E. 445, 446 (Mass. 1899) (no more difficulty imputing specific intent to a corporation in criminal proceedings than in civil proceedings). But see People v. Canadian Fur Trappers Corp., 161 N.E. 455, 458 (N.Y. 1928) (knowledge and intent of the agent insufficient to make a corporation guilty, absent authorization of action by corporation). In United States v. MacAndrews & Forbes, Co., 149 F. 823, 835-36 (S.D.N.Y. 1906), the federal court rejected the defendant corporation's argument that an organization could not form the specific intent required to form a conspiracy subjecting it to liability under the Sherman Act. The MacAndrews court, however, did not announce any standard for evaluating such intent.
40. In the Kelso case, for example, the court reasoned that exempting a corporation from criminal sanctioning would vitiate the purpose of the statute, which set an eight-hour limit on the workday. Kelso, 86 F. at 306-07.
41. 212 U.S. 481 (1909).
42. Id. at 491.
43. Id. at 494-95.
44. But see Henning, supra note 27, at 824 (suggesting that, had the New York Central Court required a showing of a separate corporate intent, it might have undermined its decision in Hale v. Henkel, 201 U.S. 43, 69-70 (1906), where it rejected the argument that a corporation was a person for purposes of self-incrimination protection).
45. New York Central, 212 U.S. at 495-96.
46. Id. at 496.
47. See infra notes 48-52 and accompanying text. While the Court's holding in New York Central could have been limited to its facts, the decision was read as endorsing a broader concept of criminal liability for business organizations. Fischel & Sykes, supra note 28, at 335-36.
48. Standard Oil Co. of Texas v. United States, 307 F.2d 120, 127 (5th Cir. 1952).
49. 9United States v. Bank of New Eng., 821 F.2d 844, 856 (1st Cir. 1987).
50. 0United States v. Hilton Hotels Corp., 467 F.2d 1000, 1008 (9th Cir. 1972), cert. denied, 409 U.S. 1125 (1973).
51. United States v. Automated Med. Labs., Inc., 770 F.2d 399, 407 (4th Cir. 1985); United States v. Cincotta, 689 F.2d 238, 242-43 (1st Cir. 1982).
52. Hilton Hotels, 467 F. 2d at 1008.
53. Orland, supra note 3, at 501. See also infra notes 86-97 and accompanying text for a summary of the criticisms of organizational criminal liability.
54. One 1929 essayist viewed corporations as establishing "despotisms" which ultimately threatened to become "masters of their creators." See Brickey, supra note 17, at § 2:09 n.88 (citation omitted).
55. 55The language of John Steinbeck is an elegant expression of popular feelings about corporations during the Depression: "[T]hose creatures [banks] don't breathe air, don't eat side-meat. They breathe profits; they eat the interest on money. If they don't get it, they die the way you die without air, without side-meat. It is a sad thing, but it is so. It is just so." John Steinbeck, The Grapes of Wrath And Other Writings 1936-1941 243 (1996).
56. Poveda, supra note 21, at 110-14. Such populist outrage frequently prompted calls for government intervention. Poveda notes that publication of The Jungle by Upton Sinclair prompted action in the meatpacking industry; an article by Samuel Hopkins Adams in Collierson the pharmaceutical industry led to passage of the Pure Food and Drug Act; and Ralph Nader's book, Unsafe at Any Speed, influenced creation of the National Highway Traffic Safety Administration. Id. at 108, 113-14.
57. One commentator summarized the attitudes of the public as simply:We resent crime, and in our rush to express our indignation, we may truly personify and hate the corporation. We may hate the mahogany paneling, the Lear jet, the smokestack, the glass tower, and all of the people inside. They - the mahogany and all of them - are responsible for the oil spill, the price-fixing and the illegal campaign contributions. To superstitious people, villains need not breathe; they may include Exxon and the phone company. Albert W. Alschuler, Ancient Law and the Punishment of Corporations: Of Frankpledge and Deodand, 71 B.U. L. Rev. 307, 312 (1991).
58. See, e.g., Antitrust Criminal Penalty Enhancement and Reform Act of 2004, Pub. L. No. 108-237, 118 Stat. 665 (codified at 15 U.S.C. § 1 (2006) (increasing penalties for organizational violators of the antitrust laws); 18 U.S.C. § 3571(d) (2006) (providing for alternative fines equal to twice the gross profit achieved or loss suffered); Pub. L. No. 97-248, 96 Stat. 618 (codified at 26 U.S.C. § 7201 (2006) (increasing organizational fines for tax evasion).
59. See, e.g., Federal Insecticide, Fungicide and Rodenticide Act Amendments of 1988, Pub. L. 100-
60. 102 Stat. 2681 (codified at 7 U.S.C.A. § 136 (2009) (expanding registration requirements and imposing criminal penalties for violation of reporting requirements); Federal Water Pollution Control Act Amendments of 1977, Pub. L. 95-217, 91 Stat. 1591, 1592, 1606 (codified at 33 U.S.C. § 1319(c) (2006) (expanding scope of criminal penalties for reporting violations). See also Fischel & Sykes, supra note 28, at 339-41 (criminal liability expanded in response to public concern with corporate misbehavior); Hasnas, supra note 14, at 609-19 (noting expansion of organizational criminal liability for "secondary" offenses such as actions which hinder the government's ability to investigate or establish a case).
61. See, e.g., Toxic Substance Control Act, Pub. L. 94-469, 90 Stat. 2037 (1977) (codified at 15 U.S.C.A. 2601 et. seq. (2009) (requiring registration and reporting and providing criminal penalties for violations); Foreign Corrupt Practices Act of 1977 (codified at 15 U.S.C. § 78dd-1-78dd-2 (2006) (making it a federal crime to bribe a foreign entity); Racketeer Influenced and Corrupt Organizations Act (codified at 18 U.S.C. § 1961 et seq. (2006) (making it a federal offense to invest or participate in an organization engaged in a pattern of illegal activity).
62. Poveda, supra note 21, at 119-20. Poveda divides a 100-year period into three distinct periods of agency creation. First, the Progressive Era (1880s-1920s) created the Food and Drug Aministration and the Federal Trade Commission. Second, pressures during the New Deal era triggered creation of the Securities and Exchange Commission and the Federal Deposit Insurance Corporation. Third, in what has been termed the Consumer Era (1960s-1970s), modern needs encouraged the creation of the Occupational Safetly and Health Administration, the Environmental Protection Agency, and the Consumer Protection Safety Commission. Id. At least 116 federal agencies and approximately 5000 state agencies are involved in monitoring and regulating economic activity. Pamela H. Bucy, Corporate Ethos: A Standard for Imposing Corporate Criminal Liability, 75 Minn. L. Rev. 1095, 1118 (1991).
63. Richard A. Posner, Antitrust Law: An Economic Perspective 30-31 (1976) (activities which are criminal under the antitrust laws may actually be procompetitive).
64. T. David Evans et al., Public Perceptions of Corporate Crime, in Understanding Corporate Criminality, supra note 21, at 85, 98-108.
65. Id. at 100 (quoting L.M. Friedman, Total Justice 4 (1985)). A safe environment is perceived to be attainable because foreseeable accidents are preventable accidents. Id. at 100-01.
66. John T. Byam, The Economic Inefficiency of Corporate Criminal Liability, 73 J. Crim. L. & Criminology 582, 582-83 (1982).
67. Id. at 583. See also Developments in the Law - Corporate Crime: Regulating Corporate Behavior Through Criminal Sanctions, 92 Harv. L. Rev. 1227 (1979) [hereinafter Developments], for a concise summary of consequentialist approach to sanctioning.
68. In the context of organizational criminal liability, the principal means of deterring criminal misconduct is the assessment of criminal fines. However, commentators have considered other modes of criminal sanctioning including equity fines and continual monitoring. See Brent Fisse, Reconstructing Corporate Criminal Law: Deterrence, Retribution, Fault, and Sanctions, 56 S. Cal. L. Rev. 1141, 1159 (1983) (suggesting required revision of policy and procedures as methods of rehabilitating corporate offenders); Coffee, supra note 6, at 413-24 (discussing an "equity fine" which would transfer some equity in the corporation to the state's crime victim compensation fund).
69. Byam, supra note 65, at 582-83.
70. Id. at 582-83.
71. Developments, supra note 66, at 1232-34.
72. Jeffrie G. Murphy, Legal Moralism and Retribution Revisited, 1 Crim. L. & Phil. 5, 6 (2007). See also Developments, supra note 66, at 1231-33 (discussing the application of utilitarian theory to the deterrence goal of organizational criminal liability).
73. Byam, supra note 65, at 583. But see Developments, supra note 66, at 1232 n.4 (suggesting that a consequentialist might view blameworthiness as a necessary condition to punishment because otherwise the lack of public support for sanctioning would diminish its deterrent effect).
74. See Developments, supra note 66, at 1231-32, 1241-43; Fisse, supra note 67, at 1167.
75. Immanuel Kant, The Metaphysical Elements of Justice (John Ladd trans., Bobbs-Merrill Co. 1965) (1797).
76. The concept of the lex talionis (an "eye for an eye") dates from Biblical times and spans many cultures. Miller, supra note 7, at 20-24.
77. Developments, supra note 66, at 1232-33. See also Byam, supra note 65, at 583-84 (stating that a Kantian retributivist would impose punishment even in the face of the reform or rehabilitation of the actor).
78. Developments, supra note 66, at 1234. Unlike a consequentialist, a proponent of Kantian retribution would view sanctioning as justified without regard to whether it succeeded in bringing about deterrence.
79. See supra notes 44-46 and accompanying text.
80. See, e.g., Fischel & Sykes, supra note 28, at 323-25; Byam, supra note 65, at 586; Khanna, supra note 5, at 1494-97.
81. 80Byam, supra note 65, at 586; Khanna, supra note 5, at 1494. But see Developments, supra note 66, at 1238-39 (while deterrence is the primary goal, there may be some retributive limits on pursuit of such a goal).
82. Byam, supra note 65, at 584-85; Howard M. Friedman, Some Reflections on the Corporation as Criminal Defendant, 55 Notre Dame L. Rev. 173, 180 (1979); Developments, supra note 66, at 1369.
83. For the most part, courts did not squarely address the issue of deterrence versus retribution in applying the law to organizational defendants. But see United States. v. Nearing, 252 F. 223, 231 (S.D.N.Y. 1918) ("[T]here is no distinction in essence between the civil and the criminal liability of corporations, based upon the element of intent or wrongful purpose."); Gregg v. Georgia, 428 U.S. 153, 183 (1976) (retribution is not forbidden under the law in the context of individual defendants). See also Fisse, supra note 67, at 1194 (corporate blameworthiness was not seriously considered by the courts because organizational theory had not sufficiently developed the structural framework for such an assessment).
84. Khanna, supra note 5, at 1494. But see Fisse, supra note 67, at 1168 (retributive requirement of defendant culpability was viewed as a meaningful limitation on inefficient deterrence).
85. See infra notes 181-82, 161-64 and accompanying text.
86. See, e.g., Patricia S. Abril & Ann Morales Olazábal, The Locus of Corporate Scienter, 2006 Colum. Bus. L. Rev. 81, 113 (application of vicarious liability sometimes results in inefficiencies); Richard A. Bierchbach & Alex Stein, Overenforcement, 93 Geo. L.J. 1743, 1773-74 (2005) (overenforcement is inescapable under the current system of organizational criminal liability); Gilbert Geis & Joseph F.C. Dimento, Empirical Evidence and the Legal Doctrine of Corporate Criminal Liability, 29 Am. J. Crim. L. 341, 356 (2002) (failure to collect empirical data makes system of criminal liability suspect) (citing Gerhard O.W. Mueller, Mens Rea and the Corporation, 19 U. Pitt. L. Rev. 21 (1957)); Hasnas, supra note 14, at 667 ("[T]he solution to the problem of white collar crime might not consist in more vigorous federal enforcement efforts, but in no such efforts at all.").
87. Fischel & Sykes, supra note 28, at 320.
88. John S. Baker Jr., Reforming Corporations through Threats of Federal Prosecution, 89 Cornell L. Rev. 310, 334 (2004) (questioning effectiveness of deterrence rationale for corporate criminal liability).
89. See John C. Coffee Jr., Does "Unlawful" Mean "Criminal"?: Reflections on the Disappearing Tort/Crime Distinction in American Law, 71 B.U. L. Rev. 193, 196 (1991) ("The bottom line is that the criminal law seems to be expanding into a variety of areas where it is infeasible or even irrational to ignore the costs of law compliance.").
90. See Byam, supra note 65, at 588-93 (noting that, when the sanction is higher or lower than the social damage of the crime, the sanction is inefficient).
91. Fisse, supra note 67, at 1183.
92. See Hasnas, supra note 14, at 667 (prosecution of business entities creates ethical issues in treatment of employees who are targets of criminal investigation); v Sanford H. Kadish, Some Observations on the Use of Criminal Sanctions in Enforcing Economic Regulations, 30 U. Chi. L. Rev. 423, 434 (1963) (questioning the efficacy of criminal sanctioning when applied to economic regulations).
93. Khanna, supra note 5, at 1503-10; Byam, supra note 65, at 588-93.
94. Bierchbach & Stein, supra note 85, at 1771-72; Coffee, supra note 6, at 401-05.
95. Lawrence Friedman, In Defense of Corporate Criminal Liability, 23 Harv. J.L. & Pub. Pol'y 833 (2000) (the expressive function of criminal law provides unique validation for community values). 95Bierchbach & Stein, supra note 85, at 1756-61 (proposing changes to evidentiary and procedural policies to reduce overdeterrence); Susanna M. Kim, Characteristics of Soulless Persons: The Applicability of the Character Evidence Rule to Corporations, 2000 U. Ill. L. Rev. 763, 805-08 (proposing elimination of the prohibition on character evidence in cases against organizational defendants); Andrew Weissmann & David Newman, Rethinking Criminal Corporate Liability, 82 Ind. L.J. 411, 450 (2007) (shift burden of proof to government to prove the inadequacy of the corporation's compliance policies); Mary Kreiner Ramirez, The Science Fiction of Corporate Criminal Liability: Containing the Machine Through the Corporate Death Penalty, 47
96. Ariz. L. Rev. 933, 937 (2005) (proposing a "corporate death penalty" for repeat offenders); Bucy, supra note 61, at 1099 (proposing a corporate "ethos" as a means of assessing culpability)
97. Khanna, supra note 5, at 1477.
98. Id. at 1534.
99. Cf. Evans et al., supra note 65, at 103 (stating that a sustained period of "good news" would be required to alleviate institutional skepticism arising from the political and social turmoil of the 1960s and 1970s).
100. Even before the recent turmoil in the financial markets, one commentator observed a willingness on the part of regulators to treat legitimate businesses as if they were terrorists. See Baker, supra note 87, at 348-49.
101. Khanna, supra note 5, at 1532-34 (improvements in civil sanctioning and inequities in criminal sanctioning of organizational defendants make criminal sanctioning system unnecessary in most cases).
102. See supra note 95 and accompanying text. While the suggested reforms of the system of organizational sanctioning are valuable, such remedial actions fail to consider whether the primacy of deterrence as a goal of organizational criminal sanctioning makes systemic problems unavoidable.
103. David Skeel & William Stuntz, Another Attempt to Legislate Corporate Honesty, N.Y.Times, July 10, 2002, at A21.
104. Friedman, supra note 94, at 841-42. Kantian ethics are sometimes considered a "reaction" to the utilitarian approach which links moral principles to the consequences of actions. Robert C. Solomon & Jennifer K. Greene, Morality and the Good Life: An Introduction to Ethics Through Classical Sources 19-20 (3rd ed. 1999).
105. This human characteristic - termed "autonomy" in Kantian ethics - is a necessary predicate to moral action. See Jeffrie G. Murphy, Retribution, Justice, and Therapy 68-69 (1979). See also Solomon & Greene, supra note 103, at 297-98.
106. In Kantian terms, such duty is unconditional, unaffected by the benefit of such actions to others or to the actor. For example, a decision to donate money for relief victims would be ethical in Kantian terms only if the donor received no recognition or had no expectation that he or she would benefit from the transaction. See Solomon & Greene, supra note 103, at 264.
107. 6"Ought implies can" - that is, obligations are predicated on the actor's freedom to choose whether or not to carry on to fulfill a duty. Id. at 297.
108. See Murphy, supra note 104, at 76 (citing Kant, supra note 74) ("Judicial punishment can never be used merely as a means to promote some other good for the criminal himself or for society it must in all cases be imposed on a person solely on the ground that he has committed a crime[.]"). See also Solomon & Greene, supra note 103, at 264-65 (an action has "moral worth," not because of the results which it engenders, but because of the principle - the categorical imperative - on which it is based).
109. Kant, supra note 74, at 102-03.
110. See Byam, supra note 65, at 583 (retribution regards punishment as the proper response to an offender's moral culpability).
111. See Murphy, supra note 104, at 66. Kantian ethics is reflected in the "legal moralism" school of jurisprudence which posits that the criminal law must protect the moral values of society, even in those instances where there is no "harm," or where the victim has consented to such "harm." See also Murphy, supra note 71, at 5-11 (discussing legal moralism and offering an interesting discussion of the lively debate between Lord Patrick Devlin and Professor Herbert Hart on the subject).
112. See Solomon & Greene, supra note 103, at 273.
113. Punishment for violation of community values is justified for the sake of both the victim and the community. Friedman, supra note 94, at 842. See also Joel Feinberg, Doing and Deserving: Essays in the Theory of Responsibility 98-101 (1970).
114. See Jean Hampton, The Retribution Idea, in Forgiveness and Mercy 111, 125-26 (Jeffrie G. Murphy & Jean Hampton eds., 1988).
115. Friedman, supra note 94, at 845-46.
116. Dan M. Kahan, What Do Alternative Sanctions Mean?, 63 U. Chi. L. Rev. 591, 598 (1996).
117. Feinberg, supra note 112, at 98 (emphasis added).
118. For a concise discussion of the distinction between classical retribution and expressive retribution, see Friedman, supra note 94, at 842-43.
119. Id. at 854.
120. Murphy, supra note 104, at 77.
121. Fisse, supra note 67, at 1170-71.
122. Id. at 1180-83. Fisse suggests that, while the justification for punishment is rooted in retribution, appropriate sanctioning should be determined based on the principles of deterrence. Id.
123. Some commentators suggest the inclusion of a third criterion - that the conduct results in social harm - as a necessary condition to punishment. See, e.g., Stuart P. Green, Why It's A Crime to Tear the Tag Off a Mattress: Overcriminalization and the Moral Content of Regulatory Offenses, 46 Emory L.J. 1533, 1547 (1997). It seems unlikely that there is any action which results in significant social harm which is not morally offensive, assuming that it is the action of a culpable actor. Conversely, there may be moral offenses, which arguably do not result in social harm - so-called "victimless" crime. However, such a distinction most likely reflects a lack of societal consensus on the nature of such activities which might make such activities inappropriate for criminal sanctioning.
124. 123See Byam, supra note 65, at 584 (difficulty in determining corporate intent and knowledge makes application of retributive theory difficult); Fisse, supra note 67, at 1169 (Kant's theory of morally fitting punishment is "highly vulnerable").
125. Coffee, supra note 6, at 386.
126. For examples of strict liability crimes, see infra notes 162-66 and accompanying text.
127. Green, supra note 122, at 1547-48.
128. Black's Law Dictionary, supra note 7, at 1075.
129. Model Penal Code § 2.02 (1963).
130. The Model Penal Code, for example, incorporates a link between mens rea and culpability by assigning organizational liability if the misconduct was directed, performed, or recklessly tolerated by a higher echelon employee. Id. § 2.07.
131. The definition of culture whether in the context of anthropology or business organizations is exceedingly complex. See Smircich, supra note 1, at 339-42 (noting that different assumptions about the nature of culture have an impact on research and analysis in organizational behavior).
132. Id. at 344.
133. Id. at 350-51.
134. Id. at 348-50.
135. Id. at 351-52.
136. See Marshall B. Clinard & Peter C. Yeager, Corporate Crime 25 (1980); Poveda, supra note 21, at 86-98 (describing early theories of white collar crime). One author posits that the importance of individuals has been minimized in large organizations; natural persons are basically fungible components of larger organizations whose existence continues virtually unaffected by changes in employee "component parts." James S. Coleman, Power and the Structure of Society, in Corporate and Governmental Deviance 21, 26-27 (M. David Ermann & Richard J. Lundman eds., 1978).
137. See generally Steven H. Appelbaum et al., The Relationship of Ethical Climate to Deviant Workplace Behavior, 5 Corp. Governance 43 (2005) (presenting literature review of empirical studies on organizational deviance).
138. See Smircich, supra note 1, at 347-50 (organizations can be understood, not in economic terms but in terms of an expression of human consciousness).
139. Id. at 347.
140. Clinard & Yeager, supra note 135, at 60. Although impacted by the beliefs and values of their employees and communities, studies suggest that organizations themselves create distinct cultures as a "by-product" of producing good and services. Smircich, supra note 1, at 344.
141. Ronald R. Sims, The Challenge of Ethical Behavior in Organizations, 11 J. Bus. Ethics 505, 510 (1992).
142. See generally Bart Victor & John B. Cullen, The Organizational Bases of Ethical Work Climates, 33 Admin. Sci. Q. 101 (1988). One study postulated that differences in environment or available resources can impact whether a firm is more likely or not to engage in criminal activity. Melissa S. Baucus & Janet P. Near, Can Illegal Corporate Behavior Be Predicted? An Event History Analysis, 34 Acad. Mgmt. J. 9, 28-30 (1991). Other commentators cite a "motivational strain" in which organizations strive to achieve profits in an uncertain environment as a chief contributor to illegal behavior. Steven Box, Power, Crime and Mystification 35-36 (1983).
143. See, e.g., Stone, supra note 19, at 43-44 (legal penalties focused on profit fail to recognize that corporations engage in economically nonrational behavior); Ann Foerschler, Comment, Corporate Criminal Intent: Toward a Better Understanding of Corporate Criminal Misconduct, 78 Cal. L. Rev. 1287, 1306-11 (1990) (proposing a multipart test for corporate intent which considers not only an organization's actual policies and behavior but also considers the reasonably foreseeable consequences of such policies); James V. Dolan & Richard S. Rebeck, Note, Corporate Criminal Liability for Acts in Violation of Company Policy, 50 Geo. L.J. 547, 563 (1962) (proposing that sanctions be mitigated for organizational defendants who can establish their diligence in enforcement of company policies).
144. Box, supra note 141, at 35-37 (five external factors which influence the degree to which organizations are criminogenic).
145. Appelbaum, supra note 136, at 44-45 and studies cited therein (identifying six different ethical climates).
146. Box, supra note 141, at 36.
147. Bucy, supra note 61, at 1099.
148. Id. at 1129-46. These factors included hierarchy, goals, education, monitoring, treatment of prior offenses, reaction to violation, compensation structure, and indemnification. Id. at 1101.
149. Fisse, supra note 67, at 1201-13.
150. Id. at 1198. Reactive corporate fault assigns blame based on an organization's failure to implement a prevention and cure strategy. Organizational culpability would attach independent of the state of mind of individual managers. Id.
151. U.S. Dep't of Justice, United States Attorneys' Manual, Principles of Federal Prosecution of Business Organizations § 9-28.000 (2008) [hereinafter Attorneys' Manual], available at http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/title9/28mcrm.htm. Among the factors to be considered in charging an organization are the "pervasiveness" of the wrongdoing; the existence of a preexisting compliance program; the organization's discipline of culpable employees, including termination; and the organization's efforts at remediation and restitution. Id. §§ 9-28.300-9.28.400.
152. U.S. Sentencing Guidelines Manual § 8C2.5 (2007), available at http://www.ussc.gov/2007guid/TABCON07.html (providing a "culpability" score which considers many of the same factors considered by the prosecutor in the charging decision).
153. Recitations in a recent decision provide an interesting glimpse into the process of negotiating a deferred prosecution agreement. In United States v. Stein, 435 F. Supp. 2d 330 (S.D.N.Y. 2006), aff'd, 541 F.3d 130 (2d Cir. 2008), KPMG was desperate to avoid prosecution and conditioned advancement of fees to target employees on the employees' willingness to provide statements to the government. Id. at 344-45. While acknowledging that the prosecutor did not explicitly require KPMG to pressure its employees to waive their constitutional privileges, the court found that KPMG "gets the message" that it could avert prosecution only by pressuring employees to cooperate. Id.
154. Lance Cole, Revoking Our Privileges: Federal Law Enforcement's Multi-Front Assault on the Attorney-Client Privilege (and Why it is Misguided), 48 Vill. L. Rev. 469, 543 (2003)
155. Bennett L. Gershman, The New Prosecutors, 53 U. Pitt. L. Rev. 393, 410 (1992). 155See Wilson Meeks, Corporate and White-Collar Crime Enforcement: Should Regulation and Rehabilitation Spell an End to Corporate Criminal Liability?, 40 Colum. J.L. & Soc. Probs. 77, 108-09 (2006) (noting that the decision to prosecute may be influenced by the size of the organizational defendant because some entities are too big to fail and others are too small to save). But see Green, supra note 122, at 1545-46 (noting some critics have maintained that the reduction in organizational prosecutions is due to prosecutors having been "captured" by the entities they regulate).
156. Preet Bharara, Corporations Cry Uncle and Their Employees Cry Foul: Rethinking Prosecutorial Pressure on Corporate Defendants, 44 Am. Crim. L. Rev. 53, 72-74 (2007).
157. Although recent changes in the guidance provided to the U.S. Attorneys prohibits requests for waiver of attorney client and work product privileges and eliminates consideration of the routine advancement of legal fees by an organization as a factor in charging decisions, corporations can "volunteer" such actions to demonstrate their own cooperation with the hopes of avoiding prosecution. Attorneys' Manual, supra note 150, at §§ 9-28.710-9-28.730
158. Lisa Kern Griffin, Compelled Cooperation and the New Corporate Criminal Procedure, 82 N.Y.U. L. Rev. 311, 332-33 (2007).
159. While the existence of a vigorous corporate compliance program may be considered in both charging decisions and sentencing, it is not a consideration at trial and, in some cases, has been excluded from evidence. Bharara, supra note 156, at 109-10.
160. As one commentator noted, "[w]hether it is wise or just to rely on prosecutorial discretion to compensate for overly expansive criminal laws, that is in fact what we do in the United States today." Gerard E. Lynch, The Role of Criminal Law in Policing Corporate Misconduct, 60 Law & Contemp. Probs. 23, 26 (1997).
161. Murphy, supra note 71, at 12.
162. 21 U.S.C.A. §§ 301-399 (2009).
163. Id. § 333(a)(1) provides that "any person who violates a provision of section 331 shall be imprisoned for not more than one year and fined not more than $1000.00, or both." No intent is required for a violation of Section 333(a)(1). A second violation, or a violation with "intent to defraud" merits more severe punishment. Id. § 333(a)(2).
164. United States v. Dotterweich, 320 U.S. 277, 281 (1943) (emphasis added).
165. 33 U.S.C. § 407 (2006).
166. 18 U.S.C. § 1957(a) (2006). 167See Richard A. Posner, An Economic Theory of the Criminal Law, 85 Colum. L. Rev. 1193, 1195-96 (1985) (stating that a party which acts with mens rea is investing resources to commit a socially harmful act).
167. See, e.g., Khanna, supra note 5, at 1487-88 (current enforcement powers of civil regulators have increased significantly, rendering most criminal sanctioning redundant).
168. Feinberg, supra note 112, at 97.
169. See, e.g., United States v. White Fuel Corp., 498 F.2d 619, 620-21 (1st Cir. 1974) (corporation found liable for discharge of oil into navigable waters despite their immediate efforts to divert and remediate the discharge).
170. Jennifer Arlen & Reinier Kraakman, Controlling Corporate Misconduct: An Analysis of Corporate Liability Regimes, 72 N.Y.U. L. Rev. 687, 707-08 (1997).
171. Id. at 708-09.
172. Darryl K. Brown, Street Crime, Corporate Crime, and the Contingency of Criminal Liability, 149 U. Pa. L. Rev. 1295, 1313-14 (2001) (discussing the importance of informal, nonlegal means of fostering compliance).
173. Although consideration of palliative measures and cooperation by a defendant are consistent with the retributive concept of "just desserts" which would meter sanctioning in proportion to the wrong which was committed, retribution also requires a blameworthy actor as a predicate to imposition of punishment. See supra note 104 and accompanying text.
174. Griffin, supra note 158, at 343-46. Moreover, prosecutors, both by training and experience, may lack the inclination to successfully manage a collaborative compliance model. Id. at 344. See also Baker, supra note 87, at 320 (guidelines allow for increased punishment for failing to be a "good citizen" but standards are vague and put law abiding organizations at risk).
175. See Khanna, supra note 5, at 1500.
176. Coffee, supra note 6, at 424 (referring to the unfortunate heroine of Nathaniel Hawthorne's The Scarlet Letter).
177. Khanna, supra note 5, at 1504-05.
178. See Coffee, supra note 6, at 425-26 (stating that government is a "poor propagandist" which is ill equipped to systematically exact a reputational sanction on an organization convicted of a criminal offense).
179. Khanna, supra note 5, at 1505 n.62 (citing Jonathan M. Karpoff & John R. Lott Jr., The Reputational Penalty Firms Bear from Committing Criminal Fraud, 36 J.L. & Econ. 757, 775-85 (1993)).
180. L.C. Green, Law and Morality in a Changing Society, 20 U. Toronto L.J. 422, 424 (1970) (quoting Patrick Devlin, The Enforcement of Morals 33 (1965)).
181. It can be exceeding difficult to determine the number of laws imposing criminal liability on business entities. Statutes frequently do not distinguish between corporate and individual liability, and each statute may contain multiple offenses. Moreover, such statistics as are available only consider federal statutes and do not include regulations which also carry criminal penalties. One estimate speculates that there may be over 300,000 federal regulations which carry criminal penalties. Green, supra note 122, at 1546 n.25. Other data suggest that there are over 10,000 administrative regulations which are criminally enforceable. Task Force on the Federalization of Criminal Law, Am. Bar Ass'n, The Federalization of Criminal Law 10 (1998).
182. Kadish, supra note 91, at 445 (quoting H. L. A. Hart, The Aims of the Criminal Law, 23 Law & Contemp. Probs. 401, 418 n.42 (1958)).
183. Feinberg, supra note 112, at 98-99.
184. Richard J. Lazarus, Assimilating Environmental Protection into Legal Rules and the Problem with Environmental Crime, 27 Loy. L.A. L. Rev. 867, 883 (1994).
185. See supra note 111 and accompanying text.
186. Black's Law Dictionary, supra note 7, at 1045.
187. Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart, J., concurring).
188. Donald J. Rebovich & John L. Kane, An Eye for an Eye in the Electronic Age: Gauging Public Attitudes Toward White Collar Crime and Punishment, 1 J. Econ. Crime Mgmt. 1, 6-7 (2002). See also Poveda, supra note 21, at 60 (citing Francis T. Cullen et al., The Seriousness of Crimes Revisited, 20 Criminology 102 (1983) (noting that perceived seriousness of white collar crime increased more than any other category)); Kristy Holtfreter et al., Public Perceptions of White-Collar Crime and Punishment, 36 J. Crim. Just. 50, 57 (2008) (data from a 2005 survey suggest that the public prefers white collar criminals to be punished as harshly as street criminals).
189. Evans et al., supra note 63, at 92-93. But see Rebovich & Kane, supra note 190, at 7 (data suggest that an offense need not result in physical injury to be deemed serious by the public).
190. Green, supra note 122, at 1547.
191. As one commentator notes, "[b]y modern standards, the Sherman Act could well have been too vague to be accepted as constitutional on due process grounds." Donald I. Baker, The Use Of Criminal Law Remedies To Deter And Punish Cartels and Bid-Rigging, 69 Geo. Wash. L. Rev. 693, 694-95 (2001).
192. 15 U.S.C. §§ 1-7 (2006).
193. Criminal fines for antitrust violations are significant. Fines are calculated using a point system, with amounts in excess of the statutory limits authorized for "additional factors" identified in the Sentencing Guidelines. Baker, supra note 193, at 700-01. Prior to the 1990s, antitrust fines averaged $500,000; however, as a result of the alternative sentencing program provided for in 18 U.S.C. § 3571(d) (2006), the Department of Justice was able to collect fines in the $100 million to $500 million range from international cartel members. Id. at 700-02.
194. Standard Oil Co. v. U.S., 221 U.S. 1, 57 (1911) (purpose of Sherman Act is prohibition of contracts or acts which unduly diminish competition); Spectrum Sports Inc. v. McQuillan, 506 U. S. 447, 458 (1993) ("The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market ."). See also 1 Earl W. Kintner, Federal Antitrust Law § 1.1(1980) (purpose of antitrust laws is promotion of competition and open markets). 1971 Earl W. Kintner, Legislative History of the Antitrust Laws and Related Statutes 116 (1978) (citing Senator Sherman's comments, 21 Cong. Rec. 2457 (1890)). See also Posner, supra note 62, at 23-34 (many activities prohibited by the Sherman Act can promote market efficiency).
195. See Posner, supra note 62, at 31 ("Practices are forbidden that should not be, and other practices that in fact contravene the policy of the antitrust laws are left alone"); Kadish, supra note 91, at 436 ("conduct prohibited by economic regulatory laws is not immediately distinguishable from modes of business behavior that are not only socially acceptable, but affirmatively desirable" in a free enterprise economy). 19915 U.S.C. § 1 (2006).
196. In general, price fixing, bid rigging, and allocations of market are deemed to merit criminal prosecution while other conduct such as vertical restraints, monopolization, and improper use of joint ventures have been pursued civilly. Baker, supra note 193, at 695. However, there is nothing in the law which would require this distinction. See, e.g., United States v. Cuisinart, Inc., Civ. No. H80-559, 1981 WL 2062 (D. Conn. 1981) (defendant entered into a consent decree in a criminal action which involved vertical price fixing - conduct which usually merits only civil enforcement).
197. Posner, supra note 62, at 189-90.
198. 18 U.S.C. §§ 1961-1968 (2006).
199. H.J. Inc. v. Northwestern Bell Telephone, Co., 492 U.S. 229, 252 (1989) (Scalia, J., concurring).
200. 551 U.S. 877 (2007).
201. 220 U.S. 373 (1911). The Dr. Miles Court held that resale price maintenance is analogous to a horizontal combination among competing distributors for purposes of the Sherman Act. Id. at 407-08.
202. Resale price maintenance is the practice in which a manufacturer and its distributors agree that the distributor will sell the manufacturer's product at certain prices. See Roger D. Blair et al., Resale Price Maintenance and the Private Antitrust Plaintiff, 83 Wash. U. L.Q. 657, 658 n.2 (2005).
203. Leegin, 551 U.S. at 907.
204. Dr. Miles, 220 U.S. at 407-08.
205. Leegin, 551 U.S. at 889-90 (citations omitted). The Court's rationale was primarily economic. However, it did acknowledge the risks faced by manufacturers trying to navigate between requiring suggested resale prices, which are permissible, while trying to avoid criminal liability for minimum resale price maintenance under Dr. Miles. Id. at 904.
206. Id. at 907.
207. The Discount Pricing Consumer Protection Act was first introduced in 2007 but died in committee. Discount Pricing Consumer Protection Act, S.2261, 110th Cong. (2007). It was recently reintroduced and, as of October 2009, is in committee. Discount Pricing Consumer Protection Act, S.148, 111th Cong. (2009). A similar bill, H.R. 3190 was introduced in the House and, as of October 2009, is in committee. Discount Pricing Consumer Protection Act, H.R. 3190, 111th Cong. (2009).
208. See Richard A. Duncan & Alison K. Guernsey, Waiting for the Other Shoe to Drop: Will State Courts Follow Leegin?, 27 Franchise L.J. 173, 173-78 (2008) (discussing various reactions of states to Leegin decision).
209. The Discount Pricing Consumer Protection Act would amend the Sherman Act to make any agreement to set a minimum price a violation of the Sherman Act. Discount Pricing Consumer Protection Act S. 148, 111th Cong. § 3 (2009). See also Joseph Pereira, State Law Targets "Minimum Pricing," Wall St. J., Apr. 28, 2009, at D1 (noting that Maryland state statute effectively rolls back Leegin).
210. The "Leegin" Decision: The End of the Consumer Discounts or Good Antitrust Policy? Hearing Before the S. Subcomm. on Antitrust, Competition Policy and Consumer Rights, of the S. Judiciary Comm., 110th Cong. (July 31, 2007); The Discount Pricing Consumer Protection Act: Do We Need to Restore the Ban on Vertical Price Fixing?, Hearing Before the S. Subcomm. on Antitrust, Competition Policy and Consumer Rights of the S. Judiciary Comm., 111th Cong. (May 19, 2009).
211. The "Leegin" Decision: The End of the Consumer Discounts or Good Antitrust Policy? Hearing Before the S. Subcomm. on Antitrust, Competition Policy and Consumer Rights, of the S. Judiciary Comm., 110th Cong. 2-5 (July 31, 2007) (statement of Pamela Jones Harbour).
212. Id. at 3.
213. Justice Breyer acknowledged this issue when he noted, "One cannot fairly expect judges and juries in such cases to apply complex economic criteria without making a considerable number of mistakes, which themselves may impose serious costs." Leegin, 551 U.S. at 917 (Breyer, J., dissenting).