Tuesday, April 1, 2014
According to the article, Toyota case shows it’s hard to prosecute execs,
Efforts to conceal the extent of dangerous car defects at Toyota Motor Corp. were so pervasive, prosecutors say, that an exasperated employee at one point warned that ‘‘someone will go to jail if lies are repeatedly told.’’
Yet no one has gone to jail, nor is anyone likely to.
The reason? The rules of evidence and more specifically the rule against hearsay.
According to Federal Rule of Evidence 801(d)(2),
A statement that meets the following conditions is not hearsay:
(2) An Opposing Party’s Statement. The statement is offered against an opposing party and:
(A) was made by the party in an individual or representative capacity;
(B) is one the party manifested that it adopted or believed to be true;
(C) was made by a person whom the party authorized to make a statement on the subject;
(D) was made by the party’s agent or employee on a matter within the scope of that relationship and while it existed; or
(E) was made by the party’s coconspirator during and in furtherance of the conspiracy.
Last week, the Justice Department socked the car company with a $1.2 billion penalty but brought no criminal charges against individual executives, an unsatisfying resolution for consumer activists who say prison is the best deterrence for corporate malfeasance.
Prosecutors say they had little choice, in part because of constraints with evidence and the challenge of gathering testimony and information from witnesses abroad.
The same internal memos and public statements that buttressed the case against the corporation might well have been inadmissible as evidence against individuals. And it can be hard to prove the person whose name is on a damning document was responsible for the misstatements or knew that they were wrong, experts say.
This gets to the heart of the matter of why Toyota could be fined while its executives likely could not be prosecuted. It would have been easy to admit the memos and public statements as employee statements under Rule 801(d)(2)(D) because they were clearly composed by Toyota employees. Conversely, because it would be difficult to attribute those statements to any particular employee, it in turn would have been difficult to admit them against the executives under Rule 801(d)(2)(A).