Criminal liability for life-endangering corporate conduct.

• Author: Spurgeon, W. Allen

INTRODUCTION

Business corporations supply modern society with the necessities and comforts of life. Benefiting from the collective capital of many shareholders and laws favoring the artificial business entity, corporations are uniquely able to provide goods and services to the public. Corporations produce our transportation vehicles, process the food we eat, construct the buildings in which we live and work, and make a myriad of goods we use everyday. The manufacturing process provides employment and also profoundly affects our environment. Corporations are thus an essential element of modern life.

While corporations have dramatically improved the United States' standard of living, this progress has not been without social costs. Some corporate activity endangers life itself. Unsafe cars, drugs, and food additives endanger the health of consumers. Hazardous working conditions and toxic chemicals used in the manufacturing process pose life and health risks to industrial workers. Water and air pollution and the dumping of toxic chemicals threaten public health.

Such simultaneous beneficial and detrimental aspects of corporate conduct present lawmakers with the challenge of curtailing socially harmful activity without stifling the industrial process. Criminal law may operate as one device to restrain corporations from engaging in unreasonably harmful conduct. In the most recent attempt to codify and reform the Federal Criminal Code, (1) the Senate Judiciary Committee included an offense which would have punished conduct, manifesting an extreme indifference to or an unjustified disregard for human life, which knowingly places human life in imminent danger of death.

Because criminal law represents society's moral condemnation of certain activity, such an endangerment offense will most effectively deter corporate behavior if society casts moral blame upon life-endangering conduct. When corporate activity imperils human life to a degree substantially greater than the societal benefits it confers, that activity becomes morally blameworthy and properly subject to criminal sanctions. Even though conduct may be morally condemnable, criminal sanctions should be invoked only when the threat of punishment will deter behavior or fulfill a retributive function. Even though the corporate form reduces their impact, criminal sanctions do serve as a deterrent. Thus, an endangerment offense providing added criminal liability would provide corporations with an incentive to conform to social norms.

This article will analyze both the efficacy of utilizing criminal law to shape corporate behavior and the specific provisions of the proposed endangerment offense. Part I establishes the existence of socially harmful corporate conduct and the need for government regulation. This section will also elaborate the history and provisions of the endangerment offense. Part II considers whether corporate life-endangering conduct is morally blameworthy so as to be properly subject to criminal sanctions and whether punishing such conduct would have a different impact. This section attempts to illustrate some of the social policy problems associated with criminalizing some life-endangering activity. While Part II focuses on theoretical and policy questions, Part III discusses the implementation of criminal sanctions in a practical context. It analyzes the actual deterrent effect of inflicting criminal penalties on a corporation and its employees. Finally, Part III briefly considers whether the Senate Judiciary Committee's construction of the endangerment statute would reach most morally blameworthy and socially harmful conduct.

1. LIFE ENDANGERING ACTIVITY AND PROPOSED FEDERAL LEGISLATION

   A. SOCIALLY HARMFUL CORPORATE ACTIVITY

   As noted above, while corporations are responsible for the technological advancement of society, corporate activity also imposes serious social costs. In recent decades, these costs, in the form of deleterious effects on the public health, safety, and welfare, have become increasingly apparent. Corporate life-endangering activity can be divided into three categories: occupational harm, dangers to consumers, and deterioration of the environment affecting the general public. (2) A survey of the most notable recent occurrences in each of the areas illustrates the effect of such corporate conduct. (3)

   Millions of Americans are exposed to health and safety risks while they work. Before the advent of the Occupational Health and Safety Act (4) as many as 100,000 people died annually from occupational diseases. (5) After the Act's passage in 1970, federal health officials have estimated that 25 percent of the work force is exposed to regulated toxic substances and that 880,000 workers are exposed to carcinogenic chemicals. (6) Substances such as asbestos (7) and vinyl chloride (8) used in many industrial processes, cause widespread illness to those workers who use them.

   Some corporate activity also poses a danger to consumers. One study estimates that "approximately 20 million Americans are injured each year in the home as a result of accidents involving unsafe consumer products. These accidents result in about 30,000 deaths and 110,000 permanently disabling injuries." (9) In some cases, a single product with a design or testing defect may seriously endanger many consumers. For example, the Ford Pinto fuel system was shown to be susceptible to exploding upon near-impact at certain speeds. (10) The Firestone Tire and Rubber Company marketed the radial "500" tire which often proved faulty, causing many accidents and injuries. (11) The Richardson-Mervell Pharmaceutical Company produced the drug MER/29, designed to reduce cholesterol, which in fact had many harmful side effects. (12)

   In addition to conduct which endangers the life and health of employees and consumers, corporate activity also imperils the general populace by damaging the environment. Toxic chemicals, in particular, pose a grave health risk. In 1976, two million chemical compounds existed, with nearly a thousand new chemicals introduced into the market each year, ultimately entering the environment through use or disposal. (13) In Niagara Falls, New York, chemical contamination caused the evacuation of many homes. (14) In Hopewell, Virginia, production of the chemical Kepone by the Allied Chemical Company deteriorated employees' health and damaged the aquatic environment of the James River. (15) While toxic chemicals may harm significant numbers of people, corporate activity may also endanger a confined and concentrated community. For example, at Buffalo Creek, West Virginia, a solid waste dam built by a mining company collapsed, flooding the valley below and causing destruction of life and property. (16)

   These examples of occupational, consumer and environmental harm illustrate the need to prevent socially harmful conduct. Where a private right of action exists, the threat of a compensatory damage judgment may deter corporations, who aim to maximize profit, from engaging in certain harmful conduct. However, sporadic civil damage suits may not effectively alter behavior. In addition, market pressures may prevent corporations seeking growth and profit from taking voluntary, but costly, safety steps if other members of their industry do not also follow the same course of action. (17)

   Given the free enterprise ethic in America, government would avoid interference with corporate activity by means of regulatory laws if corporations were able to avoid significant social harm. However, the perceived inability of business to regulate its own activity led to government regulation in the nineteenth century. Due to the scope of interstate commerce and the need for uniformity, the federal government became active in monitoring business activity. Modern comprehensive federal public welfare offenses (18) first appeared in 1938 with the passage of the Food, Drug and Cosmetic Act. (19) In the last two decades, Congress has enacted laws to protect employees, (20) consumers, (21) and the environment. (22) Such legislation typically provides for administrative, (23) civil, (24) and criminal (25) remedies and sanctions.

   Despite this existing regime of regulation, some corporate acts continue to result in societal harm. Senators in the Ninety-Sixth Congress responded to the problem by introducing legislation criminalizing knowing life-endangering conduct by corporations.

   B. PROVISIONS AND HISTORY OF THE ENDANGERMENT OFFENSE

   Section 1617 of the 1979 Senate Federal Criminal Code Reform Act would have penalized a person when "he engages in conduct that he knows places another person in imminent danger of death or bodily injury, and (1) his conduct in the circumstances manifests an extreme indifference to human life, or (2) his conduct in the circumstances manifests an unjustified disregard for human life." (26)

   The concept of an endangerment offense is not new. In formulating the Model Penal Code, the American Law Institute established an offense for reckless conduct. (27) The National Commission on Reform of the Federal Criminal Laws suggested a similar offense, (28) and New York has enacted two statutes punishing reckless, endangering conduct. (29) These offenses impose criminal liability in two contexts. First, as many criminal codes specifically penalize certain life-endangering conduct, the endangerment offense constitutes an additional penalty. (30) Second, when a person's conduct did not violate a specific statute yet still placed lives in danger, the offense created general liability where none had previously existed. (31) In each of these previous models of endangerment, recklessness constituted the culpable state of mind.

   In the early draft of the 1979 Senate bills, S. 1722 and S. 1723, the Judiciary Committee relied on these early endangerment examples. The initial version of section 1617 proscribed reckless conduct that placed the life of another in imminent danger of...