corporate culpability and the limits of law
TRANSCRIPT
-
8/18/2019 Corporate Culpability and the Limits of Law
1/15
CORPORATE CULPABILITY AND THE LIMITS OF LAW
William S. Laufer
bstract
Ethicists and legal theorists have proposed models of corporate
culpability that shift the standard of guilt determination from vicarious
attribution of individual action and intention to an assessment of
culture, policies, as well as organizational action and inaction. This
paper briefly reviews four prominent models of corporate culpability,
arguing that each m akes claims that ex tend well beyond the limits of
existing law. s an alternative to these models, a constructive corpo-
rate fault is described that relies on both objective and subjective
reasonableness judgments. The paper concludes with a consideration of
constructive corporate fault in relation to an Accountability model of
corporate liability.
F
or nearly a century, the criminal law has imputed individual action to
corporate entities. Corporations under both state and federal law have
been vicariously liable for the criminal acts of agents and employees (Brickey,
1984).
The law 's strong allegiance to vicarious liability has thwarted any
serious consideration of a genuine corporate liability, or culpable policies and
attributes of organizations. The distinction between vicarious and genuine
corporate liability was highlighted w ith the passage of the federal sentencing
guid elines for organ izations in 1991 (Nagel Sw enson , 1993;
Rakoff
Blum kin, Sauber, 1993). The guidelines are the first codified references to
corporate actions and inactions in federal and state criminal law. Corporate
action before and after the commission of the offense is critical in determining
an entity's culpability score (a proxy for an entity's blameworthiness) at sen-
tencing. Aggravating factors, such as evidence that the organization ob-
structed or impeded justice during the investigation or prosecution of the
offense or failed to report the commission of the offense, reveal an unprece-
dented consideration of corporate action and corporate fault. This considera-
tion of corporate action and fault, however, is strictly limited to the
determination of proportional sentences after conviction. Substantive criminal
law, responsible for the adjudication of culpability in relation to liability,
considers the acts and intentions of corporate agents, not corporate entities
(Laufer, 1992).
Even with the law's strong individualistic bias, a number of business ethicists
and legal commentators have proposed models of corporate culpability that shift
the inquiry of guilt determination from vicarious liability to genuine corporate
liability. Models of genuine corporate liability consider the proactive efforts of
-
8/18/2019 Corporate Culpability and the Limits of Law
2/15
312 BUSINESS ETHICS QUA RTERLY
organizations to prevent the commission of crime, the reactions of organizations
to the discovery of illegalities, the organizational ethos or personality that toler-
ates illegalities, and policies that may have contributed to the commission of an
offense. This pape r briefly reviews four prom inent m odels of corp orate culpa-
bility, arguing that each makes assumptions or relies on constructs that extend
well beyon d the limits of existing federal and state law. A second and third pa rt
of this paper discu ss the prosp ects of a m odel of corporate liability that co nside rs
both objective and subjective judgments of fault (Laufer, 1994).
Vicarious Liability and Corporate Fault
Courts find corporations criminally liable for the conduct of employees acting
within the scope of employment and with an intent to benefit the corporation.
The doctrine of respondeat superior derived from tort law, views corporations
as princ ipals, and officers, direc tors, and em ploy ees as age nts. U nder federal
law, the intentions of agents are simply imputed or attributed to the principal.
State laws vary, but most require acts authorized, requested, performed, or
tolerated by the board of directors or by high managerial agents (See, Model
Penal Code, 1962; Brickey, 1984, 1993). Both federal and state law hold stead-
fast to the princip le that: A corporation can only act through its em ploy ees and ,
consequently, the acts of its employees, within the scope of their employment,
constitute the acts of the corpo ration (United States v. T.I.M .E.-D .C, 1974).
The only notable exception to vicarious liability was proposed in United States
Bank of New England (1987) where the First Circuit Court of Appeals ruled
that a bank m ay be presumed to have that knowledge representing the collective
know ledge of all em ployee s. Ag gregate emp loyee know ledge constitutes cor-
porate know ledge. No other court has ventured so far from a com m itment to
respondeat superior.
There are at least two sources of the law's allegiance to vicarious liability.
First, there is evidence that vicarious liability rules were adopted as a matter of
judicial conve nience and expediency (Mueller, 1957). According to one English
court, vicariou s liability is a neces sary doctrine for the proper enforcem ent of
much modern legislation {Coleman
v
Mills 1897). At the turn ofthe century,
when the substantive criminal law was first applied to corporations in the United
States, it appeared to courts as if employees were the only source of criminal
action and intention. [T]he re are som e servants or agents of a corp oratio n, one
jud ge wr ote, w ho can be treated as 'the directing mind and will of the corpora-
tion, the very ego and centre of personality of the corporation'.... (Len/iarrf's
Carrying Co. v. Asiatic Petroleum Co. 1915). Typically, senior managem ent
were considered the mens ofth e corporation. Judges had not considered the role
that the collective or group plays in shaping employee behavior (May, 1989).
Further, corporations were not yet considered capable of possessing an organ-
-
8/18/2019 Corporate Culpability and the Limits of Law
3/15
CORPORA TE CULPABILITY 313
Second, courts and legislative bodies have made two critical assumptions
about the application of vicario us liability to illegal corpo rate action . First,
courts use the doc trine of responde t superior in the corp orate crim inal law with
the assum ption tha t it achiev es fairness in risk and loss allocation . Th is is not
surprising given that the tort law doctrine of
responde t superior
allocates risks
and economic losses based on the abilities of the parties to compensate for
realized losses (Prosser, 1971). It seem s obvious that entities are in a better
position to assum e responsibility for losses due to the acts of ag en ts. An d
second, courts assume that in practice responde t superior induces organiza-
tions to enforce individual accountability (Braithwaite & Fisse, 1985). Th ere is
an intuitive appeal to the notion that upper level management will exercise
greater care in supervising subordinate em ployees w ho may bind the entity w ith
any acts, committed in the scope of their authority, that may be said to benefit
the corporation.
Notwithstanding this allegiance, commentators have been critical of the fic-
tional imputation of action and intention that is the hallmark of vicarious liabil-
ity. A corp orate fault m akes little sense when it is based on the actions of a
rogue em ployee w ho, under the scope of her authority, acts to benefit the co rpo-
ration by violating express corporate policy, administrative regulations, or the
criminal law. The sam e criticism ap plies when co urts attribute culpability to a
parent corporation for the actions of several departments in a remote subsidiary.
In large part, it is the tenuous connection between entity and agent that has
resulted in the emergence over the last decade of four models of corporate
culpability that attemp t to capture a genuine corporate intention. Credit also
must be given to an increasing prominence of research on organizational deci^
sion mak ing and culture (Sims, 1994;; Trevino, 1990; M arch, 1 989). There is
considerable support for the notion that corporate entities share characteristics
or attributes that are distinct from the sum of their mem bers . Finally, it appears
as if the often lively deba te over the place of criminal law in relation to co rporate
personhood has reached an impasse. Many philosop hers, ethicists, and crim i-
nologists question w hether corporate entities should be criminally, no less m or-
ally, resp on sible for the action s of em ploy ees (Keeley, 19 81 ; Velasqu ez, 198 3;
M anning , 1984; Cressey, 1988; Wolgast, 1992; Ge is, 1995). They argue pe rsua-
sively that corporate acts are found strictly in the actions of corporate agents;
that the corporation is a convenient fiction through w hich autonom ous individu-
als act; and that corp orate inten tions are insufficient for the purp ose of a scribing
moral responsibility. This debate, however, has only theoretical impo rtance
(Walt & Laufer, 1 99 1, 1992). As a practical matter, the law has granted the
fiction of corporate action and intention for nearly a century through the sor-
tilege of vicariou s liability. Th ere is no mean ingful legal distinction m ade
betwe en, for exam ple, corporate action and individual em ployee action, or indi-
-
8/18/2019 Corporate Culpability and the Limits of Law
4/15
314 BUSINESS ETHICS QUAR TERLY
reasons of public policy, commentators have turned their attention to how this
may be best accomp lished. Each model of genu ine corporate liability d escribed
below is notable for its departure from or rejection of vicarious liability, and
exploration of culpability in relation to features of the corporate form.
Models of Corpo rate Culpab ility
It took some time for common law courts to demonstrate confidence with rules
that held corp oration s liable for crim es. At the turn of the century, many courts
and legal com me ntators app eared to have difficulty justifying a crim inal indict-
ment again st an entity, rather than its em ploy ees. Even so , the law becam e clear
after the landmark case
of New York Central Hudson River Railroad
v
United
States
(19 09). Th e Suprem e Cou rt, in quoting from Bish op's treatise
New
Criminal Law,
acknowledged an equivalence between the actions and intentions
of corpo rate agents and the corporate entity. According to Bishop (1901),
[s]ince a corporation acts by its officers and agents, their purposes, motives,
and intent are ju st as much those of the corpo ration as are the things d one . If,
for example, the invisible, intangible essence of air, which we term a corpora-
tion, can level mountains, fill up valleys, lay down iron tracks, and run railroad
cars on them it can intend to do it, and can act therein as well viciously as
virtuously.
With this reference to Bishop, the Supreme Court signaled an appreciation of
the distinct capacity of the corpo rate entity to act and intend. The doctrine of
respondeat superior
allowed the court to find equivalence between agents and
principals. Over the last decade, comm entators have revisited this equivalence
and the prev ailing allegian ce to vicarious liability. Shou ld cou rts con sider the
efforts of corp oration s to preve nt crimes? Shou ld the inquiry regarding entity
liability and culpability turn on the reactions of the entity to the discovery of
illegal beha vior? Should courts focus on corporate cultures that encourage
crime com mission or corporate policies that tolerate, if not promo te, law viola-
tion? Nea rly a century after the crimina l law was first applied to the corpo rate
entity, com men tators are considering pro active, reactive, culture-based, and cor-
porate policy models of culpability.
Proactive Corporate fault (PCF) assumes culpability where a corporation's
practices and procedures are inadequate to prevent the commission of a crime
(Fisse, 1983 ). Corpo rations are culpable when they fail to take reasona ble steps
to imp lement policies and practices that reduce the likelihood of crime com mis-
sion. Eviden ce of reasonable efforts to prevent crime comm ission w ould com e
from: (1) the development and implementation of certain proactive safeguards,
and (2) the effective delivery to employees of ethical and legal prohibitions.
Pro active efforts in clude the ordering of internal aud its, external audits, and
com pliance review s. Th e proactive exercise of due diligence (i.e., that amo unt
-
8/18/2019 Corporate Culpability and the Limits of Law
5/15
CORPORA TE CULPA BILITY 315
measures serve as a proxy for the reasonableness of corporate practices and
procedures.
Reactive corporate fault (RCF) considers the corporate reaction to the crimi-
nal act or inquiry from fault prior to the time of the criminal act (or actus reus ,
to fault in reaction to the actus reus (Fisse, 1983; Fisse and French, 1985).
Evidence of a reactive due diligen ce or responsiv e adjustment following the
discovery of an offense becomes the basis of finding both liability and culpabil-
ity. Failure to undertake reasonable co rrective or remedial measu res in reaction
to the disco very of an offense is eviden ce of fault (No te, 19 79). Both PC F and
RCF abandon the legal convention that fault must be time-bound or contempo-
raneous w ith the comm ission of an offense. This departure s justified given the
dynamic nature of corporate action (Fisse and Braithwaite, 1993).
Where an organization's ethos or personality encourages agents to commit
crim inal acts there is liability unde r a theory of corporate etho s (CE) (F oersch ler,
1990; Bucy, 19 91, 1993; M oore, 1992). A corporate ethos or personality may
be deciphered from the corporate hierarchy, corporate goals and policies, efforts
to ensure compliance with ethics codes and legal regulations, and the indemni-
fication of em ploy ees. Q uestions relating to the role of the board of direc tors,
and how the corporation has reacted to past violations, if any, will be asked as
w ell. CE falls under the broad rubric of Co rporate Ch aracter Theory (see
M oore , 1992 ). Corpo rate Character Theory con siders those features of a corpo-
ration—its policies, structures, and procedures—that cause employees to com-
mit crime in the nam e of the company. Three circumstances a re required: (1)
the presence of an illegal policy and an agent responsible to act on the policy,
(2) an illegal act committed, authorized, ordered, or endorsed by a high mana-
gerial agent, and (3) an implicit ratification of the violation by the organization.
Finally, commentators have argued that corporate action and intention may be
found in decisions and choices that are com mu nicated through corp orate policy
(CP) (French, 1984). It has been argued, for exam ple, that the comp onen ts of
the corporation's internal decision structure, consisting of the corporation's
flowchart and procedural and recognition rules, define corporate intentionality.
The corporation establishes certain goals and objectives that reflect prosocial as
w ell as crim inal action or intention. A summ ary of the pos tulate s, cons tructs and
hypotheses of all four models appears below in Table One.
-
8/18/2019 Corporate Culpability and the Limits of Law
6/15
-
8/18/2019 Corporate Culpability and the Limits of Law
7/15
CORPOR ATE CULPAB ILITY 317
culpability and liability generally ignore the requirem ents of substantive crim i-
nal law. PC F, R CF and CE mo dels do not require a finding of crim inal intention
mens rea)
in relation to the illegal corporate act. In particular, all three models
neglect the fact that the criminal law requires proof of a culpable mental state,
i.e., purp ose, know ledge, recklessness, or negligence (Robinson & Grail, 1983).
This requirement, true for individuals and organizations alike, reflects a strong
commitment to restrict the reach of the criminal law to those who have acted
intentionally. Models of corporate culpability that fail to consider
mens rea
can
not be incorporated into existing statutory provisions without significant revi-
sion to the Federal Criminal Code and state criminal codes, which at present
seems quite unlikely.
Models of corporate culpability also obscure the difference between the as-
sessment of pre- and post-conviction culpability. Prior to a conviction, culpabil-
ity is raised in relation to an en tity's liability. The prosecu tion m ust establish
that the organization is sufficiently culpable so as to render it criminally liable.
The task is a narrow one, limited to establishing proof of culpable mental states
in relation to the elemen ts of the offense. A second exa mina tion of cu lpability,
which is considerably m ore broad, occurs after conviction. Here courts consider
culpability in relation to sentence severity. The effort is to fashion a sentence
that is proportional to the crime committed, and the culpability of the corporate
offender. U nder the federal senten cing gu ideline s, federal courts conside r a w ide
range of evidence including PCF, RCF, and the existence of an effective ethics
code Rakoff, Blumkin, & Sauber, 1993).
In many cases, the assessment of culpability before trial informs the post-con-
viction assessm ent of blam e. An entity's reckless disregard of an illegality, for
exa m ple, m ay satisfy a standard of culpa bility in relation to liability and provide
useful evidence to a sentencing judge regarding the extent to which that entity
was to blam e for the com m ission of the offense. Th e inverse, how ever, is not
true.
Inquiry reg arding the proactive or reactiv e culpab ility of an entity does not
provide evidence of culpability in relation to liability (cf. Fisse and Braithwaite,
1988,
1993). Un less existing standard s of liability are all but aban don ed PCF ,
RCF, and CE should be considered as models of post-trial culpability. Th e
narrow inquiry required by pre-conviction culpability is simply not satisfied.
This is implied or acknowledged by architects of ethos and culture-based mod-
els. M oo re (19 92 ), for exa m ple, goes so far as to say that, the corpora te
character theory is
more
suitable for use at senten cing than at trial (p. 768 ).
A number of models of corporate culpability fail because the criminal law
requires a contem poraneity or concurrence betw een the
mens rea
and
actus reus
of an offense (A shw orth, 1991 ). In short, a m ental state must actuate a related
or concurrent act (W hite, 1985). As Ashw orth (199 1) has noted, this requirement
forms part of the ideology that the function of the criminal law is not to judge
a person's general character or behaviour over a period of time; its concern is
only with the distinct criminal conduct charged (p. 133). This requiremen t
-
8/18/2019 Corporate Culpability and the Limits of Law
8/15
318
BUSINESS ETHICS QUARTERLY
The inquiry must center on culpable mental states in concurrent relation to the
prohibited act, not its antecedents or its sequ els (Ashwo rth, 199 1, p. 134),
Reactive fault, in particular, fails to the extent that a reactive program of a
corporation reflects an entity's response to the discovery of an illegal act, rather
than the commission itself A corpo ration's failure to respond reasonab ly may
reveal blam e— but it is blam e in relation to its failure to act. It is not n ecessarily
evidence of a distinct intention in relation to acts that gave rise to the omission.
Thus, even though blameworthiness in general may not be limited to an absolute
temporal standard, culpability in relation to ctus reus must be . An entity's
disregard of an agen t's act creating an un reason able risk of injury is not the same
as an intention to com m it the act. This is ma de clear in con sidering M ay 's
(1983) notion of vicarious neg ligence. Vicarious negligence is determined by
evidence of a failure on the part of a person with authority to assume preventive
measures w hen a harm or offense could have heen predicted. Standing alone,
vicariou s negligenc e is an inade quate liability rule for corporate illegality. At
present, there is no distinct criminal offense associated with failing to assume
prev entive m easu res. Vicarious neg ligence is also too narrow to capture the
culpability associated with many corporate offenses.
Moore, Bucy, and Foerschler also do little to distinguish culpability from
liability in their treatmen t of corporate personality, ethos and character. Dis -
cussion of the foreseeability that a corpo rate policy or practice w ould lead to the
crim e; the authorization or approval of high manag erial officials; and the rati-
fication of employee violations are couched in terms of culpability when each
app ears , in their respec tive mod els, to reflect a set of liability rules (M oore ,
1992, pp . 769 -77 0). Th ere is only passing reference to a neg ligence standard
for corpo rate fault (M oore , 1992, p. 769 ), Lim itations of this sort suggest the
need for a model of corporate intention that remains w ithin the limits of existing
law (see Table Tw o). It is of utmo st imp ortance that this model co nsider attrib-
utes and processes of the organization. This conceptualization, however, must
mak e use of existing stand ards of culpability and be capab le of imp lemen tation
withou t significant c hang es to existing law. A construc tive corpora te liability
and culpability, proposed in some detail in an earlier article (Laufer, 1994), is
outlined below.
Table Two
imit tions
PC F
RCF
CE
Proof of
Culpable
Mental State
No
No
No
Most
ppropriate as
Post Conviction
Culpability
Yes
No
Yes
Temporal
Fallacy
Yes
Yes
No
Reveals
Evidence of
LiablUty and
^ not Culpability
No
Yes
Yes
-
8/18/2019 Corporate Culpability and the Limits of Law
9/15
CORPORATE CULPABILITY 319
Constructive Liability and Culpability
In law, the word
constructive
stands for that which has not the cha racter
assigned to it in its own essential nature, but acquires such character in conse-
que nce of the way in wh ich it is regarded by a rule or policy of law (Black ,
1968).
Constructive corporate liability and culpability are implied or inferred
where there is proof of: (1) an illegal corporate act, and (2) a concurrent corpo-
rate crim inal state of mind. Th e former is satisfied by evidence of a prim ary act,
defined as an act own ed or authored by the entity. Primary a ction is identified
through an objective test where it is determined that given the size, complexity,
formality, functionality, decision making process and structure of the corporate
organization, it is reasonable to conclude that the agents' acts are the actions of
the corp oration . This reasonablene ss test is a thresho ld assessm ent that sepa-
rates cases in wh ich primary corporate acts have occurred, from secondary acts,
defined as acts attributab le to agen ts rather than to the corpora te entity. It is
argued that this constructive test of primary corporate action should replace
vicario us liability. In those cases where the acts are con structively tho se of the
entity, cou rts would a lso require proof of a culpab le state of min d. To avoid the
vagaries of obscure mental states, the Model Penal Code's four part conceptu-
alization of culpable mental states is adopted, requiring proof of purposeful,
knowing, reckless, or negligent corporate acts.
Constructive Corpo rate ctioti
In determining whether or not there is a corporate criminal act, courts and
juries would consider evidence relating to delegation, authorization, reckless
toleration, as well as the status of the agent who has acted and the scope of her
authority. The stronger the agent-entity relationship, the more reasonable it is to
consider an agent's action to be a construction of the corp oration 's. Agents
given the authority, through delegation, to carry out their duties, with a certain
power and responsibility, act for the organization, on behalf of the organization,
and with a consideration of organizational goals and objectives. Th e reason-
ableness test looks to the relationship of the agent to the entity and determines
who, constructively, is the author.
Corporate Mental States
Proof of a constructive corporate act must be accompanied by proof of a
corresponding and concurrent corporate mental state. With the assistance of
reasonableness judgments, constructive corporate culpability considers pur-
pose,
know ledge, recklessness, or negligenc e. Evide nce of actual kno wledg e by
the entity also may be considered . Th us, cons tructive culpab ility is not strictly
objective (i.e., derived from evidence of what a reasonable corporation would
have done in like circumstances.) Unlike a model of culpability that makes
reference to the behavior of an average or reasonable co rporation, constructive
-
8/18/2019 Corporate Culpability and the Limits of Law
10/15
-
8/18/2019 Corporate Culpability and the Limits of Law
11/15
CORPORATE CULPABILITY 321
awareness or knowledge, indifference or recklessness? Would the average cor-
poration of like size, structure, and complexity have known of the risks of
injury? Th ese questio ns are addressed in relation to the four part hierarch y of
culpability found in the M odel Penal Co de: purpo se, know ledge, recklessne ss,
and negligence.
Constructive Corporate Culpab ility and the Limits of Law
No court or commentator has maintained that the corporate criminal law
requires v icarious liability. On the other hand , for a model of corpo rate liability
to find acceptance in legislatures and courts, it is not too much to ask that it is
set within the requirem ents of the substan tive law. To da te, attem pts to define
corporate liability have required evidence that defies extant law. Theorists have
disrega rded the fact that evid enc e of a certain culture or etho s, for exam ple, m ust
accom mo date the substantive law. Notw ithstanding problems with accom mo-
dation, this inattention to legal requirements has limited the application of cul-
pability provision s, as well as obscured the boundary between torts and crime s.
Th is is illustrated in the recen t prop osal of an Acco untability M odel of co rporate
liability and culpability, proposed by professors Fisse and Braithwaite (1993).
A corporation is liable, Fisse and Brathwaite argue, when and where it fails to
eng age in reactive due diligence for actions that violate the crim inal law. Ac -
cording to these theorists: Und er the Accou ntability Mo del, the corporation
may be held responsible for the
actus reus
of the offence and then required to
conduct a rigorous self-investigation which may lead to individual discipline,
remediation of defective SOPs, compensation to victims, or other relevant re-
spo nse s. If the reme dial and disciplinary me asures docum ented in the self-in-
vestigation are insufficient and inexcusable, then the court can proceed to
criminal conviction and sentencing of the corpo ration (Fisse and Braithwaite,
1993,
p. 163). The elaborate set of liability rules and related sanctions found in
the Accountability M odel are quite impressive. They are , however, limited by a
disregard of certain legal requirements. Fisse and Braithwaite do not require
concurrence between actus reus and mens rea arguing that restricting the notion
of culpability to a strict temporal standard disregards the dynamic nature and
character of corporate offending.
At least two con ceptual pro blem s arise with a system of corporate liability that
dismisses the need for contemporaneity and yet requires a criminal act, as well
as a failure of the entity to respo nd. First, the Acc ountab ility M odel un nec es-
sarily limits the crimina l law to corporate ne gligence or reckless nes s. A failure
to reasonably respond or engage in reactive due diligence is negligence or, at
most, recklessness. The corporation should have known of the risk of harm
associated with the
actus reus
(similar to a corpo rate me ntal state of neglig enc e).
The organization was aware of the potential for harm and, with the awareness,
disregarded a substantial and unjustifiable risk of injury (similar to a reckless-
ness mental state).
-
8/18/2019 Corporate Culpability and the Limits of Law
12/15
322 BUSINESS ETHICS QUARTERLY
place at all. W ithout concurrence betw een the corporate act and an associated
mens rea, courts risk the imposition of strict liability for omissions. Corporate
action in response to the perception of an illegality resembles due diligence and
the duty to exercise reasonable care which already exists in statutory and com-
mon law (Kn epp er and Bailey, 199 3). The duty of directors to m onitor and
supervise the activities of the corporation, for example, raises questions in tort
law of neglig en ce. Of course , failing to act in such a way as to prev ent harm , or
failing to act reasonably after the discovery of an illegality reveals culpability.
Unless or until there is a meaningful connection between the actus reus of a
corporate offense and departures from reasonable action, however, any resulting
blame should derive from tort law. To be fair, Fisse and Braithwaite acknow-
ledge and acce pt the notion of corp orate blame w orthin ess. They write freely
about corporate negligence and recklessness. The Acco untability Mo del, how -
ever, like PCF, RCF, CE, and CP models, does little to unite culpability provi-
sions and liability rules.
The challenge for ethicists and legal theorists alike is to address critical fea-
tures of the corporate form in the context of culpability provisions and liability
rules.
Proposing a conceptualization of genuine corporate fault without attend-
ing to existing law, as has been demonstrated, severely limits the usefulness of
any resulting m ode l. D evelop ing mode ls of corporate fault that are incom pat-
ible with law is nothin g short of a m issed opportunity. As corporation s in creas-
ingly implem ent ethics codes, com pliance program s, and procedures to insulate
the entity from criminal liability, ethicists and legal theorists should collaborate
in reconceptualizing corporate fault (Pitt & Groskaufmanis, 1990; Laufer
Ro bertso n, in pre ss). This collaboration m ust, how ever, allow for the idiosyn-
crasies and limits of law.
ibliogr phy
American Law Institute (1962), Model Penal Code (Philadelphia: A LI)
Ashworth, A. (1991) Principles of Criminal Law (Oxford: Clarendon Press)
Bishop, J. P. (1901) New Comm ents on the C riminal Law Upon a New System of
Legal Exposition
(Bostoti: Little Brown)
Black, H. C. (1968) Black's Law Dictionary (St. Paul, MN; West)
Bra ithwa ite, J. and Fisse, B . (1985) Varieties of Responsibility and Organ iza-
tional Crime, Law and Policy, vol. 7, pp. 315-43.
Brickey, K. F. (1984)
Corporate Criminal Liability
(Deerfield, IL: Clark Board-
man Callaghan)
Brickey, K. F. (1993) Corpo rate Sentencing: Close Corporations and the Criminal
Law: On 'Mom and Pop ' and a Curious Rule, Washington University Law
Quarterly, vol. 71, p. 189.
Bucy, P. H. (1991) Corporate Ethos: A Standard for Imposing Corporate Criminal
Liability,
Minnesota Law Review,
vol. 75, p. 1095.
-
8/18/2019 Corporate Culpability and the Limits of Law
13/15
CORPORA TE CULPABILITY 323
Cressey, D. R. (1988) 'The Poverty of Theory in Corporate Crime Research,
Advances in Criminological Theory
vol. 1, pp . 31-56
Fisse, B . (1983) Reconstructing Corporate Criminal Law: Deterrence, Retribu-
tion, Fault, and Sanctions,
Southern California Law Review
vol. 56, pp.
1141-1246.
Fisse, B . and Braithwaite, J. (1988) The Allocation of Responsibility for Corpo-
rate Crime: Individualism, Collectivism and Accountability,
Sydney Law Re-
view vol. 11, pp. 469-513.
Fisse, B. and Braithwaite, J. (1993) Corporations Crime and Accountability.
(Cambridge: Cambridge University Press)
Fisse, B. and F rench, P. A. (1985) Corrigible Corporations and U nruly Laws. (San
Antonio: Trinity Press)
Foerschler, A. (1990) Corp orate Criminal Intent: Toward a Better Under-
standing of Corporate Misconduct,
California L aw Review
vol. 78, p. 1287.
French, P. A. (1984)
Collective and Corporate Responsibility
(New York: Colum-
bia University Press).
Geis,
G. (1995) A Review, Rebuttal, and Reconciliation of Cressey and B raith-
waite and Fisse on Criminological Theory and Corporate Crime, Advances in
Criminological Theory vol. 6, pp. 399-428.
Keeley, M. (1981) Organizations as No n-Persons,
Joumai of
Value
Inquiry
vol.
15, p. 149.
Laufer, W. S. (1994) Corporate Bodies and Guilty M inds ,
Emory Law Journal
vol. 43, pp. 647-730
Laufer, W. S. (1992) Cu lpability and the Sentencing of Co rporations,
Nebraska
Law Review vol. 71 , pp. 1049-1094.
Laufer, W. S. & Robertson, D . C. (in press) Corporate Ethics Initiatives as Social
Control,
Joumai of Business Ethics
Len nard's C arrying Co. v. Asiatic Petroleum Co. (1915) App. Cas. 705
Mann ing, R. C. (1984) Corporate Responsibility and Corporate Personh ood,
Journal of Business Ethics vol. 3, pp. 77-84.
March, James G. (1989) Decisions and Organizations (Oxford: Blackwell)
May, L. (1983) Vicarious Agency and Corporate Responsibility, Philosophical
Studies
p. 69.
M oore, J. (1992) Corporate Culpability Under the Federal Sentencing Guide-
lines, Arizona Law Review p. 743.
Mueller, G. O. W. (1957) Mens Rea and the Corporation—A Study of the Model
Penal Code Position on Corporate Criminal Liability,
University of Pittsburgh
Law Review vol. 19, p. 21 .
Nage l, I. H. & Swenson, W. M. (1993) The Federal Sentencing Gu idelines for
Corporations: Their Development, Theoretical Underpinnings, and Some
Thoughts About Their Future, Washington University Law Quarterly vol. 71 ,
p.
205.
New
York
Central
Hudson R iver Railroad
v.
United States
(1909 ), 212 U. S. 48 1.
Note (1979), Developm ents in the Law— Corporate Crim e: Regulating Corporate
Behavior Through Criminal Sanctions, Harvard Law Review vol. 92, p. 1227.
Pitt, H., and Groskau fman is, R. (1990) M inimizing Corporate Civil and Crim inal
-
8/18/2019 Corporate Culpability and the Limits of Law
14/15
324 BUSINESS ETHICS QUARTERLY
Prosser, W. L. (1971) The Law of Torts (St. Paul, MN: West Publishing Co.)
akoff J., Blum kin, L. & Suber, R. A. (1993) Corporate Sentencing Guidelines:
Compliance and Mitigation (New York: Law Journal Seminars-Press)
Rob inson, P. H. & Grail, J. A. (1983) Elemen t Analysis in Defining Criminal
Liability: The Model Penal Code and Beyond, Stanford Law Review, vol. 35,
p.
681 .
Sims, R. R. (1994)
Ethics and O rganizational Decision M aking: A Call for Re-
newal (Westport, CT: Quorum)
Trevino, L. K. (1990) A Cultural Perspective on Changing and Develop ing
Organizational Ethics, Research in Organizational Change and Developm ent,
vol. 4, pp. 195-230.
United States
v anic
of New England
(1987) 821 F.2d 844
United States v. TLM .E.-D.C.. Inc. (1974) 381 F. Sup p. 730 (W.D. Va.)
Velasquez, M.G. (1983), Why Corp orations Are Not Morally Resp onsible for
Anything They Do,
Business Professional Ethics Journal,
vol. 2, pp. 1-17.
Walt, S. and Laufer, W. S. (1991) Why Personhood Do esn 't Matter: Corporate
Criminal Liability and Sanctions,
American Journal of Criminal Law,
vol. 18,
pp . 263-87,
Walt, S. and Laufer, W, S. (1992) Co rpo rate Criminal Liability and the Com para-
tive Mix of Sanctions, in K. Schlegel & D. Weisburd (eds.)
White Collar Crime
Reconsidered (Boston, MA: Northeastern University Press)
White, A. R. (1985) Grounds of Liability: An Introduction to the Philosophy of
Law
(New York: Oxford)
Wolgast, E. (1992)
Ethics of an Artificial Person: Lost Responsibility in Profes-
sions and Organizations
(Stanford, CA: Stanford University Press).
-
8/18/2019 Corporate Culpability and the Limits of Law
15/15