Forecasting the How and Why of Corporate Crime's Demise.

AuthorBaer, Miriam H.
  1. INTRODUCTION 887 II. THERE IS NO SUCH THING AS CORPORATE CRIME 891 III. WHITE-COLLAR CRIME UNDER SIEGE 895 A. Vagueness and Lenity 895 B. Nondelegation 898 C. Statutory Construction 899 D. The Prosecutor's Response: Risk Aversion and Sticky Substitution 900 IV. PROCEDURAL CONTRACTION 902 V. SILVER LININGS 906 VI. CONCLUSION 909 I. INTRODUCTION

    Periodically, scholars who write in the field of corporate crime are apt to conjure alternatives to the existing order, sometimes going so far as to imagine a world in which corporate crime ceases to exist and is replaced by something demonstrably different. Recognizing the implausibility of corporate crime's disappearance, I prefer instead to explore an adjacent topic, namely the identification of those dynamics most likely to depress corporate crime's enforcement to intolerably low levels. After all, if we think corporate crime's laws and institutions are worth saving, then we ought to probe the factors that most threaten its enforcement.

    The law of corporate criminal liability--which is simply the federal law of corporate crime--has elicited deep criticism from many quarters. (2) Respondeat superior, the judge-created attribution rule that affixes criminal blame to corporations, simultaneously enables the government to exercise too much power while securing too little accountability and deterrence. No contemporary scholar enthusiastically embraces respondeat superior, and many observers have ably identified the flaws in the guidance documents federal prosecutors have constructed in respondeat superior's place. Nevertheless, neither the Supreme Court nor Congress has shown the slightest inclination to replace the formal rule, much less to extinguish the government's soft law treatment of corporate crime.

    This Article accordingly assumes that corporate crime's "demise" will arise, not from a direct attack, but from a series of indirect punches. Corporate criminal liability does not rest upon a coherent theory of punishment. Rather, it is a blunt attribution rule that premises the corporation's liability on that of one of its agents or employees. (3) Thus, corporate criminal liability relies quite a bit on individual criminal liability. And whereas corporate liability is both vicarious and faultless, (4) individual liability is far more often premised on proof of culpable misconduct. (5)

    Some might say the relationship is reciprocal and that individual liability relies just as much on the threat of corporate liability. (6) But that dependence is more a matter of policy than law. The government can prosecute individuals without the corporation's assistance; it's just more difficult and costly to do so. (7) By contrast, the government cannot prosecute the corporation without evidence of some underlying crime. (8) Accordingly, if we want to better understand corporate crime's future, we should direct our focus to the substantive and procedural rules we rely on to redress instances of individual wrongdoing. (9)

    Conventional wisdom insists that white-collar crime's problems lie primarily with federal prosecutors, who lack the resources or will to make white-collar crime a high-level priority. (10) Even if this narrative expresses several kernels of truth, it remains incomplete insofar as it ignores the judiciary and legislature. It takes no account of changes in constitutional and statutory interpretation, in the substantive criminal laws Congress has either enacted or failed to enact, and in the background procedural rules that govern complex investigations of corporate and white-collar crime. It projects corporate enforcement weaknesses as ones that can be easily redressed and reversed, rather than more complex consequences of how our social, political, and legal institutions are organized.

    Moreover, the "bad prosecutor" narrative fails to capture an emerging dilemma, which is that white-collar crime represents a narrow slice of a criminal justice system that has become the focus of broad and sustained critique. (11) Long-simmering feelings about biased policing and mass incarceration (12) place white-collar crime's enforcers in a tough spot, in that they must defend tools that have played direct and supporting roles in propping up a system widely viewed as racist, pathologically punitive, and highly inefficient. (13)

    Meanwhile, an amalgamation of social and political developments has propelled to the forefront a series of legal arguments that seek to rein in executive branch power, whatever the cost: from debates over delegation and statutory interpretation to questions of government surveillance and privacy, commentators across the ideological spectrum seem to prefer a smaller, less powerful government presence, particularly in the realm of criminal law. Indeed, this is one area where the efforts to reduce government power have been notably bipartisan. (14)

    Whatever their merits, these developments cannot possibly help the federal enforcers tasked with investigating and prosecuting white-collar and corporate crime. Arguments that have gained traction over the past decade could easily narrow the substantive statutes and government-friendly procedural rules that make corporate crime's enforcement possible. Accordingly, the remainder of this Article explores the scenario in which white-collar offenses become narrower and more difficult to prove. If federal white-collar crime narrows in scope, so too should the government's ability to credibly threaten corporate offenders. In a world where many already view corporate accountability as excessively weak and an insufficient deterrent, this trajectory ought to trigger concern.

    Several elements of this prediction have already fallen into place. First, district and appellate courts have reduced the deference they have previously granted prosecutors in interpreting federal criminal statutes. (15) Several Supreme Court justices, in turn, have conveyed their interest in revisiting the nondelegation doctrine and revising the meaning of the concept known as "lenity." (16) And finally, a handful of ideologically diverse justices have signaled their inclination to rewrite the procedural doctrines that have long promoted the government's collection of information from business entities. (17)

    Many, but not all, of these developments have been met with cautious enthusiasm or agnostic shrugs of the shoulders, particularly where criminal law is the backdrop. When the judiciary's intervention threatens regulatory power, pro-government voices are quick to speak up. But when the rollbacks impact the government's criminal enforcement powers, these doctrinal narrowing developments have elicited more support and less outcry than one might have expected even a decade ago. The government can no longer claim a reliable, cheerleading "enforcement lobby" among judges or academics. Plenty of commentators still cheer the occasional takedown of a greedy executive or corporate behemoth, but many more jurists and public thinkers are just as apt to question the scope and exercise of government surveillance and punishment. Whereas prosecutors and FBI agents may have once been perceived as heroes, today, they are just as easily portrayed as villains. Surely, these revised perceptions of the government's essential enforcement institutions imply important spillover effects for how and how well the government enforces corporate and white-collar crime,

    Federal prosecutors would thus do well to examine the handwriting on the wall. As a nation emerges from the inescapable conclusion that mass incarceration has inflicted tremendous harm and that its corresponding bureaucracy is overdue for top-to-bottom reform, it is inconceivable that the dual phenomena of broadly written criminal statutes and unchecked procedural powers will remain intact. (18) To the contrary, government enforcers should be prepared for a gradual eclipse of the advantages they have long enjoyed: broad laws, extensive delegations of power, and expansive investigative powers.

    It may take a while to get fully underway, but once the process begins, it will be difficult to reverse. Rather than try to blunt it, policymakers should cast their attention to other legal actors who might fill the federal government's enforcement vacuum where white-collar and corporate misconduct are concerned. Years ago, scholars wrote of the potential taming effects of civil enforcement proceedings and punitive damages, which functioned as potential middle-ground solutions to the debate over tort law and criminalization. (19) Today, we can see the practical benefits of those in-between solutions playing out in various venues, many of them emerging from the offices of state attorneys general. (20) The silver lining here is that a corporate enforcement system untethered from its federal framework might eventually give way to a type of liability that is more democratic, more responsive, and ultimately more coherent.

    The remainder of this Article proceeds as follows. Part I briefly discusses the implications of corporate crime's status as a judge-made attribution rule. Part II examines several emerging trends that subtly threaten federal white-collar (21) crime's continuing vitality, which in turn impacts corporate crime. Part IV ends on a more positive note, revealing several upsides of evolving from a system that perceives the response to corporate wrongdoing as a predominantly federal or criminal task.


    The "corporate crime" of which most commentators speak is not a singular, statutorily defined offense but rather a broad and unforgiving attribution rule. (22) The federal criminal code (23) (found mostly in Title 18 and scattered throughout other titles) prohibits and punishes behavior by "persons" and, in some cases, "organizations." The definitional provisions of the federal code, 1 U.S.C. Section 1 and 18 U.S.C. Section 18 make clear that a "person" includes...

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