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Editor: Kevin Cole
Univ. of San Diego School of Law

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Wednesday, October 28, 2009

Featured Download: Alschuler on Punishing Corporations

Alschuler Even when I've disagreed with him, I've always found Albert W. Alschuler (Northwestern University - School of Law) to be one of the most gifted and entertaining writers working in legal scholarship. He's even more fun when you agree with him, as I do with his recently posted work, Two Ways to Think About the Punishment of Corporations (American Criminal Law Review, 2009). He states his objections to corporate criminal liability with a withering clarity--the piece is worth reading just for his thought experiment about criminally prosecuting a barbershop quartet. Here is the abstract, which nicely summarizes the argument but comes nowhere close to capturing the engaging style of the piece:

This article compares the criminal punishment of corporations in the twenty-first century with two ancient legal practices - deodand (the punishment of animals and objects that have produced harm) and frankpledge (the punishment of all members of a group when one member of the group has avoided apprehension for a crime). It argues that corporate criminal punishment is a mistake but that viewing it as frankpledge is less ridiculous than viewing it as deodand. The article considers the implications of the choice between these concepts for standards of corporate guilt and for the sentencing of corporate offenders.

After a brief historical description of deodand and frankpledge, the article traces the history of corporate criminal liability from William Blackstone through Arthur Andersen. It emphasizes that this liability punishes the innocent, and it argues that the punishment of innocent shareholders and employees should not be regarded as “collateral” or “secondary.” The article notes that subjecting corporations and their officers to punishment for the same crimes creates sharp conflicts of interest. It reviews the history of the Justice Department’s efforts to exploit these conflicts - initially by encouraging corporate officers to deliver corporate guilty pleas to gain leniency for themselves and more recently by pressing corporations to gather and deliver information about their employees.

The article suggests that defenses of corporate criminal liability fall into two categories. Arguments in the first category are expressive and match those that once might have defended deodand. Arguments in the second category are instrumental and match those that once might have supported frankpledge. “Expressive retributivists” champion the deodand perspective. They blame mindless legal entities for crimes committed by their employees. This article considers the implications of their arguments. Other defenders of corporate criminal liability view it as frankpledge - a device for persuading everyone in an organization to monitor everyone else. This article questions the propriety of declaring some people guilty of other people’s crimes simply to encourage them to police one another. On the assumption that corporate liability is here to stay, however, the article argues that it is better regarded as a means to induce internal monitoring than as bona fide criminal punishment.

This article then considers the implications of the deodand and frankpledge positions. Neither of these positions justifies the federal rule of respondeat superior that authorizes the conviction of a corporation whenever an employee acting within the scope of his employment has committed a crime. The champions of both the deodand and frankpledge positions have in fact sought revision of this rule. Expressive retributivists propose replacing the rule with a “corporate ethos” standard. The article argues, however, that this standard is incoherent and unworkable.

The reform advocated by the frankpledge proponents is more sensible. If the goal of corporate criminal liability is to induce appropriate monitoring, the creation and maintenance of an appropriate corporate compliance program should provide a defense to liability. Proposals for such a defense have not fared well, and this article considers their prospects. It suggests that, although the respondeat superior standard is truly indefensible, it survives because it affords broad powers to prosecutors. The article examines how prosecutors have used and misused their extraordinary powers. A final section of this article considers the implications of the frankpledge perspective for sentencing corporate offenders. A judge’s goal in punishing a corporation should be to induce a level of monitoring that will prevent more criminal harm than the monitoring will cost.

KC

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