Corporate criminal liability under antitrust, environmental, securities, and other laws has grown rapidly over the last three decades both in the United States.
The imposition of criminal liability on corporations, as opposed to managers or employees, has become more prevalent as the scope of corporate criminal liability has broadened in recent years. Today, a corporation may be held criminally liable for almost any crime, except acts manifestly requiring commission by a natural person, such as murder.
Similarly, the typical standards that courts employ to attribute liability to a corporation are relatively easily satisfied.
In general, corporate liability in the United States is premised on the imputation of agent’s, (i.e., employees of the corporation), conduct to a corporation, typically through the application of the doctrine of respondeat superior. Moreover, a controlling parent corporation can be held criminally liable in a proper case for the acts of the employees or agents of its wholly owned subsidiary.
Flow-through liability may be maintained to hold liable a successor corporation for the predecessor corporation’s alleged criminal acts or omissions. Finally, a de facto successor corporation can be held criminally liable for the acts of its predecessor in interest.
Under the doctrine of respondeat superior, three requirements must be satisfied in order to impose liability on a corporation for the conduct of its agents. First, a corporate agent must have committed an illegal act, (i.e., the actus reus), coupled with the requisite state of mind, (i.e., the mens rea). This requires that a particular agent of the corporation, (regardless of his or her rank), had the necessary state of mind. If the agent had the necessary state of mind, that mental state can be imputed to the corporation.However, a statute may limit the liability imputed to corporations based on the theory of vicarious liability by imputing criminal liability to high managerial personnel only.
In the alternative, the requisite mental state can be evidenced on the basis of the collective knowledge of the agents/employees as a group, even though no individual employee had sufficient information to know that the crime was being committed.
In those jurisdictions, a corporation will only be found liable of crime if the criminal act or omission was approved, recommended, or implemented by high managerial personnel with authority to approve, recommend, or implement basic corporate policy. Second, the agent must have acted within the scope of his employment. In short, the scope of employment necessarily includes any act that took place while the offending agent/employee was carrying out a job-related duty or activity. Nevertheless, this requirement is so broad that courts have held corporations liable even when corporations have forbidden the wrongful activities at issue.
The agent must have intended to benefit the corporation in pursuing the wrongful activity. This final requirement is also rather easily met, as the employee need not act with the exclusive purpose of benefiting the corporation and the corporation need not (actually) receive the benefit.
A vast number of regulatory statutes, both federal and state, now subject corporations to criminal liability for offenses explicitly defined in the statute. The consequences of conviction are particularly severe for corporations that operate in regulated industries because a criminal prosecution can result not only in substantial fines but also in disqualification from doing business, (i.e., the corporation will lose its license, permit, or charter to do business in that particular regulated industry).
In response to the growing imposition of criminal liability, many corporations are developing compliance programs to forestall criminal activity or at least to detect such activity in time to take remedial action. Nonetheless, despite their best efforts to install comprehensive compliance programs, corporations still remain liable for acts which are contrary to corporate policy, (as noted above).