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White Collar Crime
University of Mississippi School of Law
Harrold, Marc M.

White Collar Crime
Fall 2006
Professor Marc Harrold
 
I.                   CORPORATE AND INDIVIDUAL LIABILITY (CHAPTER TWO)
 
A.     When are Corporations Derivatively Liable?
1.       When the actions of the agents bring about the corporate liability.
 
2.      Debate over Corporate Criminal Liability
a.       Corporate criminal liability is overly broad, particularly under Respondeat Superior
                                                                                             i.            Arguments:
1.      Lack of Mens Rea Requirement – there is no requirement that the corporation itself have possessed a mens rea – generally a pre requisite for criminal liability in English and American law
2.      Tortification – It is not appropriate to apply standards developed in the civil law torts context to criminal matters
a.       Tort doctrine developed as a way of shifting costs – had nothing to do with criminal liability
b.      Corporate criminal liability is appropriate
                                                                                             i.            Arguments:
1.      Prevention – Such liability is necessary to ensure that corporations adequately supervise their agents and employees
2.      Deterrence – Corporate liability encouraged corporations to develop general policies to deter wrongdoing
3.      Unjust Enrichment – Corporate liability appropriately places responsibility on the entity that benefits from the wrongdoing rather than solely upon the individual wrongdoer
 
3.      Corporations can be held liable either under (1) the doctrine of Respondeat Superior OR (2) the Model Penal Code
a.       Comparing Respondeat Superior and MPC
                                                                                             i.            First, MPC applies only to criminal case where MPC general interpretive principles apply but where the specific criminal offense is not itself defined under the MPC
1.      There must be a clear legislative intent to impose liability on corporations under the applicable statute
2.      This requirement of clear legislative intent is NOT a requirement for Respondeat Superior
                                                                                           ii.            Second, in MPC cases, the govt must show that the agent’s act was approved of or “recklessly tolerated” by high-level management
1.      Respondeat Superior imposes no such requirement
                                                                                          iii.            MPC narrows the scope of corporate criminal liability compared to Respondeat Superior
 
 
 
4.      Respondeat Superior
a.       In a federal action
                                                                                             i.            Although Respondeat Superior is the basis of corporate criminal liability in the federal system, it is not applied when t

     ii.            RULE: Under Respondeat Superior, the federal courts are not going to be concerned with the traditional prong of RS “for the benefit” – most activities under an agent’s authority will be deemed “for the benefit” of the corporation
e.       United States v. Hilton Hotels
                                                                                             i.            ISSUE: Should corporations be liable for acts of agents in the scope of employment even though contrary to general corporate policy and express instructions to the agent?
                                                                                           ii.            RULE: Corporations can be held criminally liable when agents are told not to do something and still do it
1.      REASONING: It is appropriate to punish the corporation because it, rather than its employees, will profit from the illegal activity, and because it is often difficult to identify the particular agent who engaged in the activity
DISTINGUISH from AML: AML told employees to do something illegal; Hilton told employees not to do something and then rewarded them when the result occurred through improper means