Incomplete Sentences: Hobby Lobby's Corporate Religious Rights, the Criminally Culpable Corporate Soul, and the Case for Greater Alignment of Organizational and Individual Sentencing

• Author: Kenya J.H. Smith
• Position: Kenya J.H. Smith is an Associate Professor of Law at St. Thomas University School of Law, and a former Deputy Mayor for the City of New Orleans. He received his B.A. in Political Science from Southern University at New Orleans and J.D. from the University of Wisconsin Law School. The author gratefully thanks all who have supported and...
• Pages: 75-108

Incomplete Sentences: Hobby Lobby ’s Corporate Religious Rights, the Criminally Culpable Corporate Soul, and the Case for Greater Alignment of Organizational and Individual Sentencing Kenya J.H. Smith  INTRODUCTION “Corporations are people, my friend.” 1 This now-famous statement by presidential candidate Mitt Romney has come to symbolize the predominant American perspective on the personhood of juridical entities and the similarities between their recognized personhood and that of natural persons under the law. Many American companies enjoy names and brands as famous as any American citizen. McDonald’s and Coca-Cola are as well-known as LeBron James and Taylor Swift. 2 Individuals Copyright 2016, by KENYA J.H. SMITH.  Kenya J.H. Smith is an Associate Professor of Law at St. Thomas University School of Law, and a former Deputy Mayor for the City of New Orleans. He received his B.A. in Political Science from Southern University at New Orleans and J.D. from the University of Wisconsin Law School. The author gratefully thanks all who have supported and contributed to this Article, including the administration, faculty, and staff of St. Thomas University School of Law, as well as the members of the Southeast/Southwest People of Color Legal Scholarship Conference, and the John Mercer Langston Black Male Law Faculty Writing Workshop. The author is particularly grateful to Dean Raymond T. Diamond and Professor Mitchell F. Crusto for their comments, support, and mentoring. The author is also grateful for the research assistance of Alexis A. Peacock, Alicia N. Diaz, Frank R. Cannata, Ana Perez-Dorrego, and Dania L. Sancho. Thank you also to Ceeon D. Quiett Smith for her tireless dedication and support. 1. Ashley Parker, ‘ Corporations Are People,’ Romney Tells Iowa Hecklers Angry Over His Tax Policy , N.Y. TIMES (Aug. 11, 2011), http://www.nytimes.com /2011/08/12/us/politics/12romney.html [https://perma.cc/AZB5-A3HE] (“Mitt Romney was confronted on Thursday by hecklers on corporate tax policy and told one of them, ‘Corporations are people, my friend.”’). 2. Kurt Badenhausen, Technology Brands Rule The Top 25 , FORBES (May 13, 2015), http://www.forbes.com/powerful-brands/ [https://perma.cc/HJ5S-7FZ4] (ranking Coca-Cola and McDonald’s, along with six other American companies, among the ten most powerful brands in the world). See also Daniel Roberts & Leigh Gallagher, 40 Under 40 , FORTUNE (Sept. 24, 2015), http://fortune.com/40-under-40/taylor-swift-6/ [https://perma.cc/LJN4-BJAD] (ranking Taylor Swift the sixth 76 LOUISIANA LAW REVIEW [Vol. 77 and organizations have also shared undesired notoriety and public scorn because of their own wrongdoing and that wrongdoing committed on their behalf. Mere mention of Enron, Arthur Andersen, WorldCom, and BP by name can evoke strong emotional responses similar to those caused by uttering Bernard Maddoff or Charles Ponzi himself. 3 Key disparities exist, however, in the sentencing approaches for organizations and individuals under the Sentencing Reform Act of 1984 (“Reform Act”) and attendant sentencing guidelines. 4 Most profound are the disparities exhibited by the goals articulated for sentencing organizations and individuals, as well as the availability of incarceration as a sentencing option for individuals, but not for organizations. Courts and scholars justify this disparate treatment with the historical and commonly accepted philosophy that juridical persons have no soul to damn. 5 The Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc ., (“ Hobby Lobby ”) recognizing religious rights for business corporations, implicates the existence of a corporate soul and corresponding criminal culpability and justifies greater alignment of sentencing options for individuals and organizations. 6 Part I of this Article explores the history and policies that explain the disparate sentencing treatment of organizations and individuals under the Reform Act and attendant sentencing guidelines. Part II examines the history and evolution of personhood theories underlying these policies and resulting statute and guidelines. Part III examines the Hobby Lobby decision and how the Supreme Court’s recognition of a business corporation’s religious rights necessarily implicates the existence of a corporate soul, making those entities morally culpable and justifying greater alignment of the goals and sentencing options provided in the Reform Act and attendant guidelines. Part IV addresses the arguments most influential person under 40 years old); Tyler Conway, LeBron James Passes Michael Jordan as America's Favorite Athlete in Harris Poll , BLEACHER REPORT (Jul. 17, 2014), http://bleacherreport.com/articles/2133370-lebron-james-passes-michael-jordan-as-americas-favorite-athlete-in-harris-poll [https://perma.cc/DYK8 -QH4X] (ranking LeBron James ahead of Michael Jordan, Derek Jeter, and Peyton Manning in a Harris Poll measure of America’s favorite athlete, measured after LeBron’s return to play for the Cleveland Cavaliers). 3. Mary Darby, In Ponzi We Trust , SMITHSONIAN, http://www.smithsonian mag.com/people-places/in-ponzi-we-trust-64016168/?all [https://perma.cc/Z8UT-6VAX] (last updated Dec. 19, 2009). 4. See infra Part I (discussing Sentencing Reform Act of 1984). 5. John C. Coffee, Jr., “ No Soul to Damn : No Body to Kick ”: An Unscandalized Inquiry into the Problem of Corporate Punishment , 79 MICH. L. REV. 386, 445 (1981). 6. Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014). 2016] INCOMPLETE SENTENCES 77 against amending the Reform Act and attendant guidelines for greater alignment of individual and organizational sentencing. The Article concludes that the Reform Act and attendant sentencing guidelines should be amended to better reflect the organizational soul and corresponding criminal culpability implicated by the Hobby Lobby Court’s recognition of business corporations’ religious rights. I. AN OVERVIEW OF THE HISTORY AND PURPOSES OF THE FEDERAL SENTENCING GUIDELINES The Reform Act, part of the Comprehensive Crime Control Act of 1984, 7 established the United States Sentencing Commission (the “Commission”) as an independent agency of the judicial branch of the federal government. The Commission, under Congressional oversight, is charged with regulating and standardizing federal sentencing policies and procedures for convicted individuals and organizations. 8 The Commission promulgated the original set of Federal Sentencing Guidelines in 1987 to further two articulated goals of the Reform Act—preventing and deterring criminal conduct. 9 However, at the time, the Commission did not promulgate final guidelines for the sentencing of organizations “[d]ue to the complexity of the subject matter and the tight deadlines imposed by the Sentencing Reform Act.” 10 While finalizing the individual sentencing guidelines, the Commission began yielding to the perspective “that corporate offenders were neither exempt nor should be exempted from 7. Pub. L. No. 98-473, 98 Stat. 1837 (1984) (codified at 18 U.S.C. § 3551; 28 U.S.C. §§ 991–998). 8. John R. Steer, Changing Organizational Behavior—The Federal Sentencing Guidelines Experiment Begins to Bear Fruit (Apr. 26, 2001) (unpublished paper presented at the Twenty-Ninth Annual Conference on Value Inquiry, Tulsa, Oklahoma) (on file with author), http://www.ussc.gov/sites/default/files/pdf/train ing/organizational-guidelines/selected-articles/CorpBehavior2.pdf [https://perma.cc /AHW8-XLSX]. 9. Diana E. Murphy, The Federal Sentencing Guidelines for Organizations: A Decade of Promoting Compliance and Ethics , 87 IOWA L. REV. 697, 699–702 (2002); 18 U.S.C. § 3553 (a)(2)(B) (1994) (stating that sentences should “afford adequate deterrence to criminal conduct”); see also 28 U.S.C. § 992(b)(1994) (requiring the Commission to promulgate guidelines “to assure the meeting of the purposes of sentencing as set forth in section 3553(a)(2) of title 18”). 10. U.S. SENTENCING COMM’N, SUPPLEMENTARY REPORT ON SENTENCING GUIDELINES FOR ORGANIZATIONS 1 (1991) [hereinafter SUPPLEMENTARY REPORT]. 78 LOUISIANA LAW REVIEW [Vol. 77 Congress’ scheme for sentencing reform” 11 and decided “that drafting workable and reasonable corporate sentencing rules would serve [its] broader mandate of establishing sound and effective sentencing policies for the federal courts.” 12 A. Developing the Federal Sentencing Guidelines The Commission began conducting research on the sentencing practices for organizations in 1986. 13 The Commission employed a range of methods to determine the best way to draft these guidelines, including consulting with experienced “white-collar” attorney-practitioners. 14 A very flexible set of non-binding “policy statements” were recommended, calling for a substantial fine reduction when the organization had implemented an effective compliance program. 15 The U.S. Department of Justice also provided a set of draft guidelines, focusing more on the aggravating factors that could increase an organization’s base fine. 16 The Commission finalized the organizational sentencing guidelines in 1991, using the offense levels from the guidelines for individuals to determine the initial fine, or the primary sanction, as well as to determine restitution, remedial orders, and probation. 17 The organizational guidelines also included mitigation credits for defendants who implemented self-policing programs and cooperated with investigative officials. 18 The emphasis on the mitigation credits stems from the Commission’s belief that organizations should be self-policing and should be rewarded when they exercise the proper due diligence. 19 The guidelines describe due diligence as including effective 11. Ilene H. Nagel & Winthrop M. Swenson, The Federal Sentencing Guidelines for Corporations: Their Development, Theoretical Underpinnings, and Some Thoughts About Their Future , 71 WASH. U.L.Q. 205, 259 (1993). 12. Id. at 216. 13. See Murphy, supra note 9. See also...