Chapter One

Mens Rea, Public Welfare Offenses, andthe Responsible Corporate Officer Doctrine

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“You cannot punish corporations. . . . If you dissolve the offendingcorporation. . . .[y]ou merely drive what you are seeking to check into other forms or temporarily disorganize some important businessaltogether, to the infinite loss of thousands of entirely innocentpersons, and to the great inconvenience of society as a whole."

Woodrow WilsonAddress to the Annual ABA Meeting (1910)

Chapter One

MENS REA, PUBLIC WELFARE OFFENSES, ANDTHE RESPONSIBLE CORPORATE OFFICER DOCTRINE

Mens Rea. Historically, Anglo-American jurisprudence has required

the government to prove that a defendantcharged with a crime has performed a wrongfulact ("actus rea") with a wrongful intent ("mensrea"), that is, "an evil-doing hand" and "an evil-meaning mind." See Morissette v. UnitedStates, 342 U.S. 246, 251 (1952). The SupremeCourt has described this principle as being "asuniversal and persistent in mature systems oflaw as belief in freedom of the human will." Id.at 250. Generally speaking, prosecutors arerequired to prove that a defendant had thespecific intent or purpose to commit a crimethat is inherently evil or wrongful, or malum inse, such as robbery or assault. Society hastraditionally dealt with these common law ormala in se crimes by criminal prosecution anda p p ro p r i a t e p u n i s h m e n t , i n c l u d in gincarceration, to serve the purposes ofretribution and deterrence.

However, with the dramatic growth of theadministrative and regulatory state in the lastseveral decades, many commercial activities

that were otherwise not considered criminal —and indeed, were socially useful because theyproduced needed goods and services — weremade subject to a vast array of complex lawsand regulations. By 1900, there were onlyapproximately 165 federal criminal laws on thebooks. By 1970, the number increased morethan ten-fold to approximately 2,000. In 1998,an American Bar Association task force chairedby former Attorney General Edwin Meese III,issued a report, The Federalization of CriminalLaw, which estimated the number of federalcriminal statutes to be 3,300. By 2004, therewere more than 4,000 separate criminaloffenses scattered throughout 27,000 pages ofthe U.S. Code. JOHN S. BAKER, JR., THE

FEDERALIST SOC'Y FOR L. & PUB. POL.,MEASURING EXPLOSIVE GROWTH OF FED.CRIME LEGISLATION (2004). As onecommentator aptly described it, the "federalc r i m i n a l c o d e " i s " s i m p l y a n'incomprehensible,' random and incoherent,'duplicative, incomplete, and organizationallynonsensical' mass of federal legislation thatcarries criminal penalties." Julie R. O'Sullivan,

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The Federal Criminal "Code" is a Disgrace:Obstruction Statutes as Case Study(SYMPOSIUM 2006: THE CHANGING FACE OF

WHITE-COLLAR CRIME), 96 J. CRIM. L. &CRIMINOLOGY 643 (2006) (citations omitted).

In addition to the plethora of federalcriminal laws, the number of regulations in theCode of Federal Regulations (CFR), many ofthem criminally enforceable, far exceeds thestatutes, with estimates ranging up to 300,000.See John C. Coffee, Jr., Does Unlawful MeanCriminal?: Reflections on the DisappearingTort/Crime Distinction in American Law, 71B.U.L. REV. 193, 216 (1991). Regulationsissued by the Environmental Protection Agency(EPA) alone fill 30 volumes of the CFR, whichis 50 percent more than the dense InternalRevenue Service (IRS) regulations. Indeed, theregulations just for three of the more thandozen environmental statutes — the Clean AirAct (CAA), Clean Water Act (CWA), and theResource Conservation and Recovery Act(RCRA) — number 9,000 pages. Violations ofany one of these may lead to criminalprosecution. Some members of Congressregard this explosive growth of regulations asan usurpation of its lawmaking role, and haveperiodically introduced remedial legislation tothat affect. See, e.g., CongressionalResponsibility Act of 2005 (H.R. 931),introduced by Rep. J.D. Hayworth (R-AZ),which would prohibit a regulation from takingeffect unless the text of the regulation isenacted into law by Congress. Unfortunately,those legislative proposals have not beensuccessful.

Environmental regulations are just ascomplex and confusing, if not more so, as theIRS code and regulations. As one former EPAofficial acknowledged, "RCRA is a regulatorycuckoo land of definition . . . . I believe wehave five people in the agency who understandwhat `hazardous waste' is." United States v.

White, 766 F. Supp. 873, 882 (E.D. Wash.1991). See also Inland Steel Co. v. EPA, 901F.2d 1419, 1421 (7th Cir. 1990) (describingRCRA as a "statutory Cloud Cuckoo Land").Environmental regulations are so vast andcomplex that most corporate officials candidlyadmit that it is simply impossible to complywith all of them. For example, if certainsolvents are poured onto a surface to becleaned, the rag used to wipe the surfacebecomes a hazardous waste, which is thensubject to strict storage and disposal rules.However, if the solvent is first poured onto therag, then the rag is not a hazardous waste.Businesses and individuals are faced with a"regulatory hydra" and regulatory termssuggestive of "Alice In Wonderland," as onecourt put it. United States v. Mills, 817 F.Supp. 1546, 1548 (N.D. Fla. 1993).

For the most part, sanctions available forviolating these so-called mala prohibitaoffenses — conduct that is deemed wrongfulonly because a law or regulation prohibits orregulates it — range from administrativepenalties or sanctions imposed by theappropriate regulatory agency, to civilproceedings in federal court in the form ofinjunctive relief, restitution, and penalties, andfinally to criminal sanctions involving fines,incarceration, debarment from governmentcontracts, and a variety of conditions forprobation. Yet, unlike bank robbery, assaultand other mala in se crimes, violations whichcannot be brought before an administrative lawjudge or a civil court, regulatory offenses arewell-suited for non-criminal treatment by usingmore appropriate administrative and civilremedies. This is especially true for thoseinfractions that are committed in the course ofcarrying out otherwise socially useful businessactivities.

Unfortunately, as the next two chapters inthis Report demonstrate, EPA and the

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Department of Justice (DOJ) have been abusingtheir discretion by increasingly resorting tocriminal penalties instead of utilizing morereasonable administrative and civil remediesfor regulatory offenses, particularly in theenvironmental area. This criminalenforcement trend is due to a number of factors,including an increase in enforcement staff,increased statutory criminal penalties, andincreased punishment provided for under theSentencing Guidelines. In some cases, bothcivil and criminal charges are brought inparallel prosecutions by the agency and U.S.Attorneys, which can lead to abusive practicesas further described in Chapter Five.

Corporate Criminal Liability. Becausea corporation is an artificial or fictional entity,it cannot form any intent, criminal or otherwise;rather, it can act only through its officers,employees, and agents. Corporations have longbeen held to be vicariously liable for tortscommitted by their employees and agents in thescope of their duties. In 1909, that concept wasextended by the Supreme Court when it ruledfor the first time that a corporation may be heldcriminally responsible for the acts of its agentsor employees if they were motivated in part tobenefit the company and if the law required ashowing of "specific intent." New York Central& Hudson River R.R. Co. v. United States, 212U.S. 481 (1909).

Shortly after this decision, the idea ofcriminally punishing a corporation drew sharpcriticism, most notably from future U.S.President Woodrow Wilson, who stated beforethe Annual ABA Meeting in 1910:

You cannot punish corporations. . . .If you dissolve the offendingcorporation . . . [y]ou merely drivewhat you are seeking to check intoo ther form s or tem porar i lydisorganize some important business

altogether, to the infinite loss ofthousands of entirely innocentp e r s o n s , a n d to th e g re a tinconvenience of society as a whole.

Over the last decade, even as morecorporations are criminally prosecuted, therehas been a growing consensus that holdingcorporations vicariously liable for the criminalacts of their employees is both wrong andunnecessary. As Professor Jeffrey S. Parkersuccinctly stated, "[c]orporate criminal liabilityconflicts with the fundamental moral preceptsof criminal law, and arose only as a nineteenthcentury expedient to fill a gap in public lawenforcement institutions that has long sinceclosed. Under current conditions, there is nolegitimate law enforcement purpose forcorporate criminal liability that cannot beequally or better served by the alternative legalprocesses of civil liability." Jeffrey S. Parker,Doctrine of Destruction: The Case ofCorporate Criminal Liability, 17 MANAGERIAL

& DECISION ECON. 381 (1996). Despite theavailability of administrative and civil remediesas alternatives to criminal sanctions, regulatorsand prosecutors have continued to criminalizebusiness activity and target the corporation, itsofficers, and employees.

While the concept of imputing mens rea orcriminal intent of employees and agents to thecorporation is troubling enough, the boundaryhas been pushed even farther by holding acorporation criminally liable even when noindividual in the corporation possessed anymens rea or intent to commit an offense. InUnited States v. Bank of New England, 821 F.2d844 (1st Cir. 1987), cert. denied, 484 U.S. 943(1987), the court held that under the so-called"collective knowledge" doctrine, theknowledge of individual employees can becombined to reach the critical mass of criminalintent, even if separately, they do not possessthe necessary intent to be punished

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individually. Indeed, even if the acts of theemployee are in direct conflict with corporatepolicy, the company can still be held criminallyliable. The Bank of New England court furtherfound that a corporation can also be foundcriminally liable if it is "willfully blind" orindifferent to the misconduct of its employees.

Individual Criminal Liability. Manyregulatory statutes give prosecutors broaddiscretion to enforce the law administratively,civilly, or criminally. When the governmentchooses the criminal option, corporate officersor employees can be easily branded as felonsand sent to prison for many years because thelevel of mens rea or intent required to beproven has been greatly watered down by thecourts and Congress over the years. The levelof criminal intent necessary to prosecute anindividual depends to a great extent upon thelevel of intent specified in the statute beingenforced. Unfortunately, there are now over100 states of mens rea specified in federalcriminal statutes that have been given differentinterpretations by federal judges, causingconfusion in this area of the law. William S.Laufer, Culpability and the Sentencing ofCorporations, 71 NEB. L. REV. 1049, 1065(1992).

While the nomenclature used by federalcourts varies widely, mens rea is generallycategorized in descending order of culpabilityas follows:

(1) specific intent, perhaps the highestlevel of intent, requires conduct that is"knowing, purposeful, and willful" as wellas factual knowledge of the law orregulation;

(2) general intent, where the conduct is"knowing," that is, the person may notknow that the conduct was against the law,but intentionally committed the act in

question;

(3) negligence, where the person failed totake reasonable steps to prevent theconduct, or was "willfully blind,""consciously avoided," or "reckless"regarding the consequences of theirconduct; and

(4) strict liability, where criminal liabilitycan be imposed even though the actor hadno mens rea or intent to commit theoffense, and was not negligent. As thischapter demonstrates, the trend has been totransform even knowing offenses intostrict liability offenses.

On the other hand, the American LawInstitute's Model Penal Code (MPC) hascategorized criminal intent, from most to leastculpable, as follows: (1) purpose, (2)knowledge, (3) recklessness, (4) negligence,and (5) strict liability. As the Supreme Courthas noted, "`purpose' corresponds loosely withthe common-law concept of specific intent,while ̀ knowledge' corresponds loosely with theconcept of general intent." United States v.Bailey, 444 U.S. 394, 405-06 (1980). Whilemost States have adopted the MPC'sclassifications of mens rea, Congress has notdone so, thus leaving the federal law in thisarea more confusing than it need be. See alsoKenneth W. Simons, Should the Model PenalCode's Mens Rea Provisions Be Amended?, 1OHIO ST. J. CRIM. L. 179 (2003).

Over the last few decades, the case law hasdevolved to allow criminal prosecutions andconvictions of "public welfare offenses" tostand without a showing of criminal intent oractual knowledge, which is tantamount toimposing strict liability. To make mattersworse, targets of criminal prosecution includenot only the individuals who actuallycommitted the regulatory offense, but also the

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company, under the doctrine of vicariousliability, and company officers, under the so-called responsible corporate officer doctrine,even though they neither were aware of norcondoned the employee's conduct. See DANIEL

RIESEL, The Elements of Mens Rea,ENVIRONMENTAL ENFORCEMENT: CIVIL AND

CRIMINAL § 6.03 (Law Journal Press 2007).

Moreover, regulatory agencies promulgaterules that not only depart from the intent ofCongress, but also impose criminal penaltiesthat dispense with the showing of criminalintent. For example, at the 2002 FederalistSociety annual meeting, the General Counsel ofthe Department of Treasury publicly boastedabout his agency's "invention" of a bankregulation designed to prevent a particular formof money laundering by eliminating mens reaand making bank employees strictly liable,contrary to the intent of Congress. This erosionof the mens rea requirement has taken a heavytoll on individuals, employees, andcorporations that are being increasinglyensnared by unfair and unwarranted criminalprosecution.

Categories of Criminal RegulatoryOffenses. Generally speaking, any violation ofregulatory statutes, such as the CWA, CAA,and RCRA, can be prosecuted administratively,civilly, or criminally. For example, under theCWA, the EPA may (1) seek penalties of up to$10,000 per day per violation and "cease anddesist" orders in administrative proceedings; (2)file a civil action in federal district ourt andseek civil penalties of up to $25,000 per day perviolation as well as injunctive relief; or (3) filecriminal charges. In turn, criminal charges canbe brought under three different levels orcategories of intent: (1) "negligence" or amisdemeanor violation subject up to one-yearimprisonment; (2) "knowing violation," afelony subject up to three-years imprisonment;and (3) "knowing endangerment," a violation

subject up to 15 years imprisonment. 33 U.S.C.§§ 1319(a)-(g). Unlike the CWA and CAA,RCRA does not have a misdemeanor provision;any knowing violation is a felony.

The question that the courts face when thegovernment elects to file a criminal action iswhat standard of intent is required to be shown.For "negligence" cases, the government hasargued that simple negligence akin to thatfound in the tort law will suffice instead ofhaving to prove highly reckless conduct orgross disregard of risks, standards which aregenerally required for proving criminalnegligence. Defendants have argued that"knowing" or felony violations require proof ofthe more rigorous specific intent rather than themore relaxed general intent standard, whereprosecutors need only prove that the defendantcommitted the act in question, namely, that heknowingly discharged a substance or filed afalse monitoring report, regardless of whetherhe knew it was unlawful to do so, or that thereport was in error.

However, for "knowing endangerment"violations, which can subject a person to up to15 years in prison, Congress required thatviolators must possess actual knowledge thattheir conduct places someone in imminentdanger of death or serious bodily injury, andthat such knowledge cannot be imputed to themby another employee's knowledge. 33 U.S.C. §1319(c)(3)(B); 42 U.S.C. § 6928(f). As will bediscussed, corporate officials nevertheless havebeen prosecuted and convicted for knowingendangerment where it appears that they didnot cause or have actual knowledge of theconditions causing the endangerment.

In 1985, the Supreme Court, in Liparota v.United States, 471 U.S. 419 (1985), was facedwith that question in interpreting a food stampfraud statute that makes it a crime to"knowingly" possess, transfer or use food

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"[W]e have never held that any statute can be described as creating apublic welfare offense so long as the statute regulates conduct that isknown to be subject to extensive regulation and that may involve a risk tothe community. Indeed, such a suggestion would extend this narrowdoctrine to virtually any criminal statute applicable to industrial activities."

Associate Justice Clarence ThomasHanousek v. United States (dissenting from denial ofcertiorari) (2000).

stamps not authorized by law or applicableregulations. The Court required that theprosecutor must prove that the defendant knewhis conduct was unauthorized; otherwise, todispense with a showing of mens rea "would beto criminalize a broad range of apparentlyinnocent conduct." Id. at 426. Similarly, inCheek v. United States, 498 U.S. 192 (1991),the Court held that a defendant could not beconvicted of a "willful" violation of IRS law ifthere was a subjective good faith confusionwith the complex code, even if the belief wasirrational.

The Supreme Court reaffirmed thenecessity of proving mens rea for "knowing"violations in subsequent cases involvingregulatory requirements. For example, inStaples v. United States, 511 U.S. 600 (1994),the Court held that prosecution under theNational Firearms Act, which made it unlawfulto possess a machine gun not properlyregistered with the government, required thegovernment to prove the defendant knew thespecific features of his weapon came within thedefinition of a regulated firearm under the law.Because violations of the firearm law subjecteda person to lengthy prison terms, the Courtconcluded that Congress did not intend toeliminate the mens rea requirement.

Initially, some lower courts also began torequire that "knowing" violations of

environmental laws also required a showing ofspecific intent. General intent, on the otherhand, only requires a showing that the personintended to commit an act that is prohibited,even if the person was unaware of theprohibition. For example, in United States v.Johnson & Towers, Inc., 741 F.2d 662 (3d Cir.1984), the court held that the prosecution ofdefendants charged with disposing hazardouswaste without a permit required the governmentto show that the defendants had a specific intentto violate RCRA. Similarly, in United States v.Speach, 968 F.2d 795 (9th Cir. 1992), the NinthCircuit reversed a conviction in another RCRAillegal storage case, holding that thegovernment had to prove that the defendant hadactual knowledge that the facility did notpossess the required RCRA permit; otherwise,removing the knowledge requirement "wouldcriminalize innocent conduct." Id. at 796.

Unfortunately, this line of cases did notpredominate in the courts. Instead, another lineof case law has developed over the years, whichhas condoned the government's attempt tocircumvent even the more relaxed generalintent requirement for prosecuting regulatoryoffenses, particularly environmental offenses.This troubling jurisprudence was ushered in bythe courts under the rubric of the public welfareoffense doctrine and the related responsiblecorporate officer doctrine.

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Public Welfare Offenses. In United Statesv. International Minerals & Chemical Corp.,402 U.S. 558 (1971), the Supreme Courtconsidered whether the defendant could becharged with a "knowing" violation for failingto properly identify a highly corrosive chemicalon shipping documents without actualknowledge of the law. The Court held thatwhere "dangerous or deleterious devices orproducts or obnoxious waste materials areinvolved, the probability of regulation is sogreat that anyone who is aware that he is inpossession of them or dealing with them mustbe presumed to be aware of the regulation." Id.at 565. Violating safety laws meant to protectthe public is considered a "public welfareoffense," which essentially eliminates the mensrea requirement altogether and imposes strictliability upon those who violate the law,whether wittingly or not.

However, extending the InternationalMinerals holding to all environmentalregulations is problematic in two majorrespects. First, International Minerals involveda misdemeanor violation, where punishmentwould likely result in a small fine rather than inlengthy prison sentences for felony violationsavailable under current environmental statutes.Second, the chemical substance at issue washighly dangerous, whereas many pollutantssubject to environmental laws, such as theCWA and CAA, include benign substancessuch as sand, dirt, and other substances which,at low levels, pose no immediate or irreparableharm, or threat to health or the environment.

Nevertheless, the first major case toaddress mens rea issues stemming from the1987 CWA Amendments in the felony context,extended the logic of International Minerals.In United States v. Weitzenhoff, 35 F.3d 1275(9th Cir. 1993), municipal workers wereconvicted of discharging waste-activated sludgein violation of the permit. The Court classified

the violation as a public welfare offense andheld that the "knowingly violated" provision ofthe statute means only that a person"knowingly engages in conduct that results ina permit violation, regardless of whether thepolluter is cognizant of the requirements oreven the existence of the permit." Id. at 1284.Thus, a prosecutor need only show generalintent to engage in the conduct, a relativelyeasy standard to meet.

As noted by five Ninth Circuit judges whovigorously dissented from the denial ofrehearing en banc in Weitzenhoff by the other19 circuit judges, Congress did not criminalize"knowing discharges," but "knowingviolations," and thus specific intent to violatethe permit requirements was required to beshown. Id. at 1293-94. Since the plant workerswere hired to discharge pollutants up to acertain level, they could easily be prosecutedunder a general intent standard whenever thosepollutants happened to exceed permit levels.Inadvertent exceedances are not a rareoccurrence. Furthermore, since Congress alsoprovided for negligent violations — which donot require a showing of any intent — knowingand negligent violations would becomeimpermissibly blurred if the two categories ofoffenses were treated the same.

More importantly, the dissent clearlydistinguished the public welfare offense rulingin International Minerals from that upon whichthe Weitzenhoff majority relied. First, unlike themisdemeanor statute at issue in InternationalMinerals, the defendants in Weitzenhoff werefacing prison sentences up to 10 years. As theSupreme Court noted in Staples, "the cases thatfirst defined the concept of the public welfareoffense almost uniformly involved statutes thatprovided for only light penalties or short jailsentences. . . [A] severe penalty is a furtherfactor tending to suggest that Congress did notintend to eliminate a mens rea requirement."

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511 U.S. at 616-18. Furthermore, the chemicalsubstance at issue in International Minerals washighly caustic and dangerous to handle. Yet, asthe dissent noted in Weitzenhoff, under theCWA, one could violate the law's prohibitionon unpermitted discharges of "pollutants"simply by "skipping a stone into a lake" or"pouring hot stale coffee down the drain." 35F.3d at 1298. Unfortunately, the SupremeCourt declined to review this critical case. Onthe other hand, in United States v. Ahmad, 101F.3d 386 (5th Cir. 1992), the Fifth Circuit wasthe lone appeals court that did require thegovernment to show that the defendant knew hewas discharging a pollutant in violation of theCWA, ruling that "[s]erious felonies . . . shouldnot fall within the [public welfare] exception`absent a clear statement from Congress thatmens rea is not required.'" Id. at 391.

The Ninth Circuit would again have theopportunity to address the issue of mens reaunder the CWA, but this time in the context ofnegligent conduct. In United States v.Hanousek, 176 F.3d 1116 (9th Cir. 1999), apipeline company hired an independentcontractor to straighten out a section of railwaytrack that required using a backhoe to loadrocks onto rail cars. Unfortunately, when thebackhoe operator attempted to pick up some ofthe rocks that fell onto the track, he accidentallystruck the pipeline. The operator quicklyradioed the pipeline's pump station and thepipeline was shut down. Nevertheless, a smallamount of oil flowed into the nearby SkagwayRiver.

Even though Mr. Hanousek, the railmaster,was off duty and at home, he was criminallycharged and convicted of "negligently"discharging oil in harmful quantities to watersof the United States, a violation of the CWA,because of the negligence of the backhoeoperator. As discussed in the next twochapters, this was a clear case of prosecutorial

abuse because it violated both EPA and DOJguidelines that non-criminal remedies shouldbe used where there is little environmentalharm and an absence of culpable conduct.Moreover, this once-removed negligentconduct was based on ordinary tort negligencestandards instead of typical criminal negligencerequiring reckless conduct. Nevertheless, forhis "crime," Mr. Hanousek, a first-offender,was sentenced under the harsh SentencingGuidelines to the maximum sentence of twelvemonths' imprisonment for a misdemeanor (sixmonths' incarceration and six months in ahalfway house) and an additional six months ofsupervised release. The Ninth Circuit upheldthe conviction and sentence.

The Supreme Court denied review, but ina rare dissent from a denial of certiorari, JusticeClarence Thomas, joined by Justice O'Connor,decried the notion that the CWA could becategorized as a public welfare offense: "[t]heseriousness of these penalties counsels againstconcluding that the [CWA] can accurately beclassified as a public welfare statute."Hanousek, 528 U.S. 1102, 1104 (2000)(Thomas, J., dissenting from denial ofcertiorari). Thus, Justice Thomas recognizedthat substantial prison terms, which can be (andindeed have been) imposed under the CWA andother environmental statutes, should disqualifythese laws as public welfare offenses wherestrict liability can be imposed. Justice Thomasfurther observed that the doctrine couldvirtually cover all criminal laws applicable tocommercial activity when he remarked:

[W]e have never held that any statute canbe described as creating a public welfareoffense so long as the statute regulatesconduct that is known to be subject toextensive regulation and that may involvea risk to the community. Indeed, such asuggestion would extend this narrowdoctrine to virtually any criminal statute

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"The message should be clear that prosecutions will go as high up thecorporate hierarchy as the evidence permits and we will hold seniormanagers of corporations accountable, as well as the corporationitself."

Granta Y. NakayamaEPA Assistant Administrator Office of Enforcement and Compliance Assurance June 12, 2006

applicable to industrial activities. Ipresume that in today's heavilyregulated society, any person engagedin industry is aware that his activitiesare the object of sweeping regulationand that an industrial accident couldthreaten health or safety. To the extentthat any of our prior opinions havecontributed to the Court of Appeals'overly broad interpretation of thisdoctrine, I would reconsider thosecases. Because I believe the Courts ofAppeals invoke this narrow doctrine

too readily, I would grant certiorari tofurther delineate its limits.

Id. at 1104-05. Subsequent petitions to theSupreme Court in other cases urging it toreview and clarify this important issue havealso been denied. See, e.g., United States v.Rubenstein, 403 F.3d 93 (2d Cir. 2005), cert.denied, 546 U.S. 876 (2005). Nevertheless,future opportunities for review are likely toarise as more convictions and prison sentencesare imposed for public welfare offenses.

Responsible Corporate Officer Doctrine.Both the EPA and the Justice Department havebeen overly aggressive in pursuing criminalcharges and prison sentences against companyofficers and the company itself forenvironmental offenses. Under the so-calledresponsible corporate officer doctrine,corporate officers can be held criminally liablefor conduct of their employees even if they didnot participate in the conduct, were unaware ofthe conduct, or specifically forbade the activity.This imputation of criminal liability toindividual officers is a corollary to the publicwelfare offense doctrine in that mens rea couldessentially be dispensed with when consideringboth the nature of the offense and thesupervisory role of the "offender." Accordingly,the responsible corporate officer doctrine

suffers from the same flaws that allow forabusive prosecution of public welfare offenses.

The Supreme Court articulated the doctrinein United States v. Dotterweich, 320 U.S. 277(1943), and later in United States v. Park, 421U.S. 658 (1975). In Dotterweich, the presidentof a pharmaceutical company was prosecutedfor shipping adulterated and misbranded drugsin violation of the Federal Food, Drug andCosmetic Act (FFDCA). Although theadulteration of the drugs was found to havebeen accidental, the defendant's conviction wasaffirmed. Balancing the relative interests andburdens, the Supreme Court stated:

Hardship there doubtless may be under astatute which thus penalizes the transaction

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though consciousness of wrongdoingbe totally wanting. Balancing relativehardships, Congress has preferred toplace it upon those who have at leastthe opportunity of informingthemselves of the existence ofconditions imposed for the protectionof consumers before sharing in illicitcommerce, rather than to throw thehazard on the innocent public who arewholly helpless.

320 U.S. at 284-85.

Thirty years later, the Court once againreviewed a CEO's conviction for adulterationunder the FFDCA. In United States v. Park, theCEO of a retail grocery chain received a noticefrom the Food and Drug Administration ofunsanitary conditions at one of the company'sfood warehouses. Later inspections revealedthat the unsanitary warehouse conditions hadnot been corrected. Because the CEO was in aposition to have prevented the violation, theCourt affirmed the CEO's conviction, stating:

[T]he Act imposes not only a positive dutyto seek out and remedy violations whenthey occur, but also, and primarily, a dutyto implement measures that will insure thatviolations will not occur. Therequirements of foresight and vigilanceimposed on responsible corporate agentsare beyond question demanding, andperhaps onerous, but they are no morestringent than the public has a right toexpect of those who voluntarily assumepositions of authority in businessenterprises whose services and productsaffect the health and well-being of thepublic that supports them.

421 U.S. at 672. Central to the Court's decisionto affirm the convictions in Dotterweich andPark was its finding that the FFDCA violations

at issue were "public welfare offenses."

However, unlike these misdemeanor publicwelfare offenses, many environmental lawsestablish felony penalties for knowing conduct.For example, criminal provisions of the CWA,33 U.S.C. § 1319(c)(2)(A), and RCRA, 42U.S.C. §§ 6928(d)(2)(e) & (f) require"knowing" conduct on the part of thedefendant, and for which substantial prisonterms of several years are not only possible,but, likely to be imposed. Prosecutors haveapplied the responsible corporate officerdoctrine to environmental offenses, which hasgenerated conflicting decisions.

For example, in United States v.MacDonald & Watson Waste Oil Co., 933 F.2d35 (1st Cir. 1991), the First Circuit reversed theconviction of a company president for violatingRCRA, because there was no evidence that theofficer actually knew of the violations. TheCourt explicitly stated that the responsiblecorporate officer doctrine should not be appliedto statutes requiring actual knowledge as acriterion for conviction. However, the Courtsuggested that a jury could infer actualknowledge from circumstantial evidence.Indeed, in United States v. Baytank, Inc., 934F.2d 599 (5th Cir. 1991), the Fifth Circuitapparently applied the responsible corporateofficer doctrine implicitly. The Court affirmedthe convictions of two of Baytank's officersapparently without direct evidence that theyactually knew of the RCRA violations, because"both individuals were intimately versed in andresponsible for Baytank's operations." Id. at616-17.

More recently, the Third Circuit reverseda district court judge who dismissed a guiltyverdict against the owner of a dry cleaningbusiness for a RCRA violation. In UnitedStates v. Wasserson, 418 F.3d 225 (3d. Cir.2005), the owner of a dry cleaning business

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was deemed criminally liable for improperdisposal of certain dry cleaning chemicals byan employee who contacted a salvage companyto dispose of the chemicals. The Third Circuitruled that RCRA liability is not limited to thosewho actually cause the unlawful disposal;therefore, the owner himself could be heldvicariously liable.

The CWA and CAA's definition of"person" raises potential due process issues,because the definition includes "responsiblecorporate officer[s]," under 33 U.S.C. §1319(c)(6); 42 U.S.C. § 7413(c)(6). Thiswould mean that a person could be responsiblefor crimes that she neither committed, nor forwhich she possessed the requisite knowledge.CEOs have no choice but to delegateresp ons ib i l i ty for compliance w i thenvironmental laws and regulations tocorporate environmental managers. Under theresponsible corporate officer doctrine, however,delegating responsibility is no defense; aresponsible corporate officer can be convictedwithout knowledge that a specific violation isoccurring. Expanding the responsible corporateofficer doctrine to CWA, CAA, and RCRAfelonies will cause corporate industrialmanagers to rethink their career choice.Applying the responsible corporate officerdoctrine to the prosecution of environmentalfelony offenses, in effect, confers "designatedfelon" status on industrial business managers.As the dissenters noted in Weitzenhoff, it wouldimpose on these officers "a massive legal risk,unjustified by law or precedent." 35 F.3d at1299.

One alarming case that illustrates how theresponsible corporate officer doctrine canensnare company officials is United States v.Hansen, 262 F.3d 1217 (11th Cir. 2001). In1998, Christian Hansen, the owner of a Georgiachemical facility, his son Randall, and AlfredTaylor, the plant manager, were all indicted

four years after the facility was shut down, forviolating the CWA and RCRA, including one"knowing endangerment" count under RCRA,for violations that occurred nearly six yearsearlier. The last count, which provides for upto 15 years in prison, was based on allegationsthat workers had been exposed to wastewatercontaining mercury. Randall Hansen, aHarvard MBA, who lived with his wife and twochildren in New Jersey, agreed to temporarilyhelp his father operate and manage the Georgiacompany that was in bankruptcy. The plantmanager, Alfred Taylor, accepted the positionafter the relevant period and resigned once thecompany was unable to make repairs to thefacility.

At the trial, only one employee testifiedthat he recalled slipping in the wastewater, butcould not remember in which decade, let alonethe year, the accident took place. He didremember, however, that he failed to report theincident to the company as required bycompany policy and did not seek medicalattention; he simply rinsed himself off andreturned to work. As for the dangerousness ofthe exposure to the mercury in the wastewater,the government's so-called "expert" told thejury that the basis for the Mad Hatter's"madness" in Alice in Wonderland was due tomercury exposure, once used in curing the feltin the hatmaking process.

The jury convicted all defendants on theCWA and RCRA counts, including the oneRCRA "knowing endangerment" count basedon the court's jury instructions on theresponsible corporate officer doctrine: that ifcorporate officers "failed to detect" violationsthat may have been caused by others, thatwould amount to "knowing endangerment"even if they did not know the violation existed.The government argued that Randall Hansenshould have shut the plant down even though,as temporary CEO, he had no authority to do

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so. Such decisions were subject to approval bythe Board of Directors, the creditors' committeeand the Bankruptcy Court. Indeed, RandallHansen went so far as to seek funds to helpremediate any lingering environmentalproblems after the plant was shut down, but hisfunding request was denied by the BankruptcyCourt. For their "crimes," Christian Hansenreceived eight years in prison, his son Randallreceived four years, and the plant managerreceived six years under the draconianSentencing Guidelines.

It is clear that Congress did not intend tocriminalize, what is, at most, managerialnegligence, as a major felony "knowingendangerment" violation under RCRA whichrequires a willful scienter. Indeed, Congressstated that criminal liability under § 6928(e)should not attach to corporate officers whowere "making difficult business judgments" or"for errors in judgment made without thenecessary scienter, however dire may be thedanger in fact created." S. Rep. No. 96-172 at37-39. The Hansen case starkly illustrates howthe responsible corporate officer doctrine canbe abused by overly aggressive prosecutors andcompliant courts. See also United States v.Hong, 242 F.3d 528 (4th Cir. 2001), cert.denied, 534 U.S. 823 (2001) (criminal liabilityand three-year sentence imposed on owner andinvestor in facility even though he was (1) notan officer of the company, (2) unaware of theviolation, and (3) did not exercise directsupervision over wastewater treatmentoperations).

More recent prosecutions by DOJunderscore the risk corporate officers, and evendirectors face under the responsible corporateofficer doctrine. In March 2007, RoderickHills, an outside director of Chiquita BrandsInternational, and former chairman of the SEC,was being threatened with a felony indictmenteven though he was not a corporate officer. His

"crime" was that he voluntarily revealed to theJustice Department that Chiquita's subsidiary inColombia had been making payments to a localmilitia group, which had extorted the company,in order to protect its employees from militiaviolence. When DOJ was asked whether thecompany should stop the payments, thenAssistant Attorney General for the CriminalDivision, Michael Chertoff, said he would getback to the company, but never did. Paymentscontinued for the protection of the employeesbut finally stopped. The company was indictedand subsequently was forced to plead guilty inSeptember 2007 for supporting a terroristorganization. Mr. Hills was fortunate to havebeen spared prosecution.

In another miscarriage of justice, threesenior executives of Purdue FrederickCompany were prosecuted and pled guilty inMay 2007 for the unlawful marketing ofOxyC on t in b y th e com pany sa lesrepresentatives, even though they had no actualknowledge of or involvement in the offense,thus making them strictly liable under theresponsible corporate officer doctrine.

Willful Blindness and ConsciousAvoidance. Although many federal statutesrequire a conviction based on "knowing"violation of the law, prosecutors have tried todilute the mens rea requirement further andmake their jobs easier by requesting a"conscious avoidance" jury instruction. Suchan instruction allows a jury to convict thedefendant not on actual knowledge hepossessed, but on the grounds that he couldhave known the facts of the unlawful conduct,but was unaware of them because of eitherwillful blindness or conscious avoidance.

The circuit courts are split over whether a"conscious avoidance" jury instruction ispermissible where the statute requires a"knowing" violation. As Circuit Judge

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Easterbrook has noted, "[k]nowledge in acriminal statute means actual knowledge. Whatone ought to have known, but did not know, isnot knowledge; it is not even (necessarily)recklessness." United States v. Ladish MaltingCo., 135 F.3d 484, 488 (7th Cir. 1998). Othercircuits are more liberal in allowing a"conscious avoidance" instruction. See, e.g.,United States v. Svoboda, 347 F.3d 471 (2d Cir.2003); United States v. Heredia, 483 F.3d 913(2007) (en banc). In Heredia, the Ninth Circuitheld, in an opinion written by Judge Kozinski,that a person can be convicted of a "knowing"violation if the defendant did not want to knowthe facts. In a strong dissent, Judge Graber,joined by three other judges, said, "[i]fCongress wants to criminalize willfulignorance, it is free to amend the statute to sayso." Id. at 932 (Graber, J., dissenting). TheSupreme Court declined to review thisimportant mens rea issue on December 10,2007, Heredia v. United States, 128 S. Ct. 804(2007), and before that in Ebbers v. UnitedStates, 458 F.3d 110 (2d Cir. 2006), cert.denied, 127 S. Ct. 1483 (2007).

However, in 2005, the Supreme Courtreversed the conviction of Arthur Andersen onobstruction of justice charges because the juryinstructions "failed to convey the requisiteconsciousness of wrongdoing" with regard tothe shredding of company documents that werelater sought by the SEC in its investigation ofthe collapse of Enron. Arthur Andersen, LLP v.United States, 544 U.S. 696, 706 (2005).Hopefully, the Supreme Court will eventuallyclarify whether "willful blindness" or"conscious avoidance" is sufficient to showcriminal knowledge.

R e c e n t C r im i na l L e g i s la t io n .Unfortunately, other recently enactedlegislation has the potential to be abused byDOJ. For example, in March 2006, the USAPATRIOT Act, intended to detect potential

terrorist activity, was amended to allowwiretapping of boardrooms and executives'phone conversations, if a suspected antitrustviolation exists. DOJ has also used otherlegislation in ways not intended by Congress.For example, the Racketeer Influenced &Corrupt Organizations Act (RICO), enacted in1970 to be used against the Mafia, was laterdirected against legitimate businesses. In 1986,Drexel-Burnham Lambert was threatened bythen-U.S. Attorney Rudy Giuliani with acriminal RICO charge for securities violations,pled nolo contendere, and paid a $650 millionfine. Since then, RICO has been invoked inother criminal cases, but more frequently incivil cases by one business against another orby the federal government against a business.

Other recent legislation that unfairlyexposes corporations to criminal liability is theHealth Insurers Portability & AccountabilityAct (HIPAA) enacted in 1996 and theTransportat ion Reca l l Enhancem ent ,Accountability, and Documentation (TREAD)Act enacted in 2000, criminalizing productliability with respect to defective tires. OnFebruary 25, 2008, Senator Pryor introduced S.2663, a substitute for his Consumer ProductSafety Commission Reform Act of 2007, inresponse to the recall of toys from China. Hisbill would impose massive fines for technicalviolations, allow state attorneys general andplaintiffs' lawyers to bring crippling civillawsuits, and impose five-year prison terms forknowing and willful violations of productsafety laws. The Senate approved the bill onMarch 6, 2008, which will be reconciled with aslightly less severe bill passed by the House inDecember 2007.

S a r b a n e s - O x l e y : C e r t i f i c a t i o nRequirements. While Congress and the courtshave imposed greater liability on corporateofficers for environmental offenses, includingthe filing of false discharge monitoring reports,

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Congress has also greatly expanded criminalliability in the securities law area with the 2002passage of the Sarbanes-Oxley Act (SOX).SOX has been widely criticized as anoverreaction to the Enron and WorldComscandals. "SOX is one of many examples of therecent trend toward using criminal sanctions todeter and punish social and commercialconduct that traditionally has been subject onlyto civil sanctions." HENRY N. BUTLER & LARRY

E. RIBSTEIN, THE SARBANES-OXLEY DEBACLE:WHAT WE'VE LEARNED; HOW TO FIX IT 60(AEI Press 2006). The direct costs ofcomplying with SOX, including its undulyburdensome reporting requirements underSection 404, have been estimated to be $6billion in 2006, with incalculable indirect costs,including reallocating corporate resources frommaximizing shareholder value, reducing accessto markets, and criminalizing corporate agencycosts. Id.

Section 807 of SOX increases the penaltyfor knowingly committing securities fraud upto 25 years, and Section 903 increases relatedmail fraud violations from five to 20 years. Butmore troubling is the certification provision thatimposes criminal liability upon CEOs andCFOs for certifying that complicated financialreports "fairly represent in all material respectsthe financial condition and results of theoperations of the issuer." This criminalprovision alone forces companies to overspendon compliance costs to prevent threats ofcriminal prosecution. Indeed, some publiccompanies are going private and privatecompanies are reconsidering whether theyshould go public.

Moreover, the criminalization of businessactivities by SOX and similar laws may causethe best and brightest to avoid takingresponsible positions for fear that any misstepcould trigger career-destroying prosecution. Astwo critics have pointed out, "[s]oaring

penalties for corporate crimes and dilution of amens rea requirement could have theparadoxical consequence of creating morecorporate crime and not, as the standard storygoes, less." Craig S. Lerner & Moin A. Yahya,`Left Behind' after Sarbanes-Oxley 30 REG. 44(Cato Inst. Fall 2007).

Conclusion. The trend over the last twodecades has been to eliminate mens rea as arequirement for criminal conviction of manyregulatory offenses. Courts have even allowedprosecutors to use "knowing" statutes as if theywere strict liability offenses. Because bothcorporations and corporate officers are beingheld vicariously criminally liable for employeemisconduct, DOJ exerts tremendous leverageover them to waive their rights, extract guiltypleas, and accept severe punishments forregulatory offenses that should be handledadministratively or civilly. Unless legislativereforms are instituted to prevent further erosionof the mens rea requirement in criminalprosecutions, the only recourse is a two-pronged approach: a more judicious use ofprosecutorial discretion (as discussed in thenext two chapters), and more vigilance by thecourts.

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RECOMMENDATIONS

1. The categories of mens rea should be standardized and clarified by the courts and theCongress similarly to the categories of mens rea in the Model Penal Code.

2. Convictions under the public welfare offense and responsible corporate officer doctrinesshould be appealed to circuit courts and the Supreme Court. The lower courts shouldaddress the issue in light of Justice Thomas's dissent to the denial of certiorari in UnitedStates v. Hanousek, and in light of the severe prison sentences currently imposed, whichare in sharp contrast to the lenient sentences that informed the Court's early public welfareoffense jurisprudence.

3. Corporate officers and managers charged with criminal prosecution of federalenvironmental and other regulatory laws should request jury instructions requiring ashowing of criminal intent or actual knowledge, and object to "conscious avoidance" juryinstructions. Convictions for "conscious avoidance" or "willful blindness" for "knowing"offenses should be appealed to the Supreme Court, which should review the issue in lightof the split in the circuits.

4. Violation of agency-promulgated regulations should not be subject to criminal prosecutionunless Congress codifies the regulations.

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REFERENCE MATERIALS

Note: A listing of WLF publications relevant to this chapter can be found in the Appendix.

Randall S. Abate & Dayna E. Mancuso, It's All About What You Know: The Specific IntentStandard Should Govern "Knowing" Violations of the Clean Water Act, 9 N.Y.U. ENV. L. J. 304(2001).

AM. BAR ASS'N, CRIMINAL JUSTICE SECTION, TASK FORCE ON FEDERALIZATION OF CRIMINAL

LAW, THE FEDERALIZATION OF CRIMINAL LAW (1998).

John S. Baker, Jr., Reforming Corporations through Threats of Federal Prosecution, 89CORNELL L. REV. 310 (2004).

JOHN S. BAKER, JR., THE FEDERALIST SOC'Y FOR L. & PUB. POL., MEASURING EXPLOSIVE

GROWTH OF FED. CRIME LEGISLATION (2004).

HENRY N. BUTLER & LARRY E. RIBSTEIN, THE SARBANES-OXLEY DEBACLE: WHAT WE'VE

LEARNED; HOW TO FIX IT (AEI Press 2006).

Kepten D. Carmichael, Strict Criminal Liability for Environmental Violations: A Need forJudicial Restraint, 71 IND. L.J. 729 (1996).

John C. Coffee, Jr., Does Unlawful Mean Criminal?: Reflections on the DisappearingTort/Crime Distinction in American Law, 71 B.U.L. REV. 193 (1991).

Barbara DiTata, Proof of Knowledge Under RCRA and Use of the Responsible CorporateOfficer Doctrine, 7 FORDHAM ENVTL. L.J. 795 (1996).

Lisa M. Fairfax, Form Over Substance?: Officer Certification and the Promise of EnhancedPersonal Accountability under the Sarbanes-Oxley Act, 55 RUTGERS L. REV. 1 (2002).

GENE HEALY, GO DIRECTLY TO JAIL: THE CRIMINALIZATION OF ALMOST EVERYTHING (CatoInst. 2004).

Brenda S. Hustis & John Y. Gotanda, The Responsible Corporate Officer Doctrine: DesignatedFelon or Legal Fiction?, 25 LOY. C. CHI. L. J. 169 (1994).

Han Hyewon & Nelson Wagner, Corporate Criminal Liability, 44 AM. CRIM. L. REV. 337(2007).

Vikramaditya S. Khanna, Corporate Liability Standards: When Should Corporations be HeldCriminally Liable?, 37 AM. CRIM. L. REV. 1239 (2000).

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Amiad Kushner, Applying the Responsible Corporate Officer Doctrine Outside the PublicWelfare Context, 93 J. CRIM. L. & CRIMINOLOGY 681 (2003).

William S. Laufer, Culpability and the Sentencing of Corporations, 71 NEB. L. REV. 1049(1992).

Craig S. Lerner & Moin A. Yahya, `Left Behind' after Sarbanes-Oxley 30 REG. 44 (Cato Inst.Fall 2007).

Erik Luna, The Overcriminalization Phenomenon, 54 AM. U. L. REV. 703 (2005).

Note, Mens Rea in Federal Criminal Law, 111 HARV. L. REV. 2402 (1998).

Julie R. O'Sullivan, The Federal Criminal "Code" is a Disgrace: Obstruction Statutes as CaseStudy, 96 J. CRIM. L. & CRIMINOLOGY (SYMPOSIUM 2006: THE CHANGING FACE OF WHITE-COLLAR CRIME) 643 (2006).

Jeffrey S. Parker, Doctrine of Destruction: The Case of Corporate Criminal Liability, 17MANAGERIAL & DECISION ECON. 381 (1996).

DANIEL RIESEL, The Elements of Mens Rea, ENVIRONMENTAL ENFORCEMENT: CIVIL AND

CRIMINAL, § 6.03. (Law Journal Press 2007).

Kenneth W. Simons, Should the Model Penal Code's Mens Rea Provisions Be Amended?, 1OHIO ST. J. CRIM. L. 179 (2003).

Andrew J. Turner, Mens Rea in Environmental Crime Prosecutions: Ignoratia Juris and theWhite Collar Criminal, 23 COLUM. J. ENVTL. L. 217 (1998).

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TIMELINE: MENS REA, PUBLIC WELFARE OFFENSES, AND THE RESPONSIBLECORPORATE OFFICER DOCTRINE

1909: New York Central & Hudson River R.R. Co. v. United States, 212 U.S. 481 (1909). Supreme Court holds that corporations can be held criminally liable forthe acts of its employees and agents.

1943: United States v. Dotterweich, 320 U.S. 277 (1943). Corporate officers can becriminally liable for conduct even though they did not engage in or condone theconduct under the Responsible Corporate Officer Doctrine.

1952: Morissette v. United States, 342 U.S. 246, 250 (1952). The Supreme Courtunderscores importance of proving mens rea or an evil intent.

1970-1976: Congress enacts Clean Air Act (CAA) (1970); Clean Water Act (CWA) (1972);Resource Conservation and Recovery Act (RCRA) (1976).

1971: United States v. International Minerals & Chemical Corp., 402 U.S. 558, 565(1971). The Supreme Court upholds misdemeanor conviction of "knowing"violation of a law without showing actual knowledge of violation for so-calledPublic Welfare Offenses, e.g., handling dangerous products or hazardouswastes.

1975: United States v. Park, 421 U.S. 658 (1975). Similar to the Dotterweich case, theSupreme Court affirms conviction of corporate officer for a misdemeanor safetyviolation that he did not commit but over which he had authority and control.

1984: United States v. Johnson & Towers, Inc., 741 F.2d 662 (3d Cir. 1984). Courtholds that the prosecution of defendants charged with disposing hazardous wastewithout a permit required the government to show that the defendants had aspecific intent to violate RCRA.

1985: Liparota v. United States, 471 U.S. 419 (1985). In a food stamp fraud case,Supreme Court holds that government must show specific intent.

1987: Congress amends the CWA to provide for felony penalties of up to three yearsin prison for "knowing" violations and up to 15 years for "knowingendangerment" violations.

1987: United States v. Bank of New England, 821 F.2d 844 (1st Cir. 1987), cert. denied,484 U.S. 943 (1987). "Collective knowledge" doctrine allows corporation andofficial to be convicted of crime even though no employee individuallypossesses criminal intent.

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1990: Congress amends the CAA to provide for felony violations similar to those inthe 1987 amended CWA.

1992: United States v. Speach, 968 F.2d 795 (9th Cir. 1992) (government had to provethat the defendant had actual knowledge that the facility did not possess therequired RCRA permit). United States v. Ahmad, 101 F.3d 386 (5th Cir. 1992)(defendant must have actual knowledge that discharged substance waspollutant).

1993: United States v. Weitzenhoff, 35 F.3d 1275, 1284 (9th Cir. 1993). The NinthCircuit classified a felony violation of the CWA as a public welfare offense andupheld conviction when person "knowingly engages in conduct that results in apermit violation, regardless of whether the polluter is cognizant of therequirements or even the existence of the permit." Supreme Court deniesreview.

1994: Staples v. United States, 511 U.S. 600 (1994). The Court held that theprosecution under the National Firearms Act for possessing a machine gun notproperly registered with the government requires showing of specific intent.

1998: United States v. Ladish Malting Co., 135 F.3d 484, 488 (7th Cir. 1998) ("Knowledge in a criminal statute means actual knowledge. What one ought tohave known, but did not know, is not knowledge; it is not even (necessarily)recklessness.").

1999: United States v. Hanousek, 176 F.3d 1116 (9th Cir. 1999). Ninth Circuitupholds conviction for negligent violation of the CWA of manager as result ofnegligent conduct of an independent contractor who accidentally caused pipelinebreak. The Supreme Court denies review, but Justice Thomas dissent criticizesmisuse of the public welfare offense doctrine. 528 U.S. 1102, 1104 (2000).

2001: United States v. Hansen, 262 F.3d 1217 (11th Cir. 2001). Eleventh Circuitupholds conviction and prison sentences of eight, six, and four years forchemical facility's president, vice-president, and plant manager for "knowingendangerment" RCRA violation under responsible corporate officer doctrine.

July 2002: Congress enacts Sarbanes-Oxley Act that imposes duties on corporate officers tocertify that financial reports filed with the Securities and Exchange Commission(SEC) are accurate.

2003: United States v. Svoboda, 347 F.3d 471 (2d Cir. 2003) ("conscious avoidance"jury instruction can result in convicting defendant of a "knowing" violation).

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2005: United States v. Wasserson, 418 F.3d 225 (3d. Cir. 2005) (owner of dry cleaningbusiness could be held vicariously liable for employee's wrongful act).

2005: Arthur Andersen, LLP v. United States, 544 U.S. 696 (2005) (Supreme Courtreverses the conviction on obstruction of justice charges because different juryinstruction "failed to convey the requisite consciousness of wrongdoing").

June 2006: Granta Nakayama, EPA's Assistant Administrator for Enforcement andCompliance, vows that EPA "will go as high up the corporate hierarchy as theevidence permits and we will hold senior managers of corporations accountable,as well as the corporation itself."

2007: Supreme Court declines to review question of whether "knowing" violations canbe based on "willful ignorance." Heredia v. United States, 128 S. Ct. 804 (2007);Ebbers v. United States, 127 S. Ct. 1483 (2007).

May 2007: Three executives of Purdue Frederick Company were prosecuted under theresponsible corporate officer doctrine and pled guilty in May 2007 for theunlawful marketing of drug, even though they had no actual knowledge orinvolvement in the offense.

Mar. 2008: U.S. Senate passes consumer product safety law (S. 2663) sponsored by SenatorPryor in response to China toy recall, which increases criminal penalties to $20million and prison terms to five years.