Corporate Criminal Liability

THE CORE QUESTION is this: Can a corporation commit a crime? Some insist that the answer should be no. They argue that a corporation is an inanimate entity. It has no mind, no will, and no power to act except through the behavior of people who are in charge of it and those who work for it.

But the answer in the law that prevails in the United States is yes. A corporation may be convicted in a criminal court for acts that violate the penal law of the jurisdiction in which it is tried. The guilty corporation may be punished in a variety of ways: it can be made to surrender the license that allows it to carry on its business; it can be forced into bankruptcy; it can be placed on probation, and, as happens much more usually, it can be fined. The crimes that a corporation may commit include murder as well as offenses of omission, such as the failure to install safety precautions in a factory. A corporation presumably cannot be convicted for rape, and it cannot be imprisoned.

The current legal rules regarding corporate criminal liability came into being after earlier debate about the propriety of criminally punishing a corporate entity. A major argument was that a corporation lacked the required mens rea (that is, a guilty mind) that is usually essential for a determination of criminal guilt. John Marshall, an early chief justice of the U.S. Supreme Court, noted that a corporation is “invisible, intangible, and existing only in the contemplation of law.”

But arguments opposing inflicting criminal liability on corporations fell piecemeal over the years. Probably the most significant reason was that corporations were more readily identifiable than the humans within them who might have been responsible for criminal behavior. Second, the economic power accumulated by the corporate world seemed to demand that reins be imposed on it to restrain free-wheeling and destructive acts. Also, not insignificantly, corporations typically have deep pockets, that is, a good deal of money from which the state, by means of criminal convictions, can obtain recompense for financial or other harm or costs inflicted by corporate wrongdoing.