SENTENCING CO-OFFENDERS.

• Author: Guttel, Ehud

ABSTRACT

Tort law and criminal law are the two main vehicles utilized by the state to deter wrongful behavior. Despite the many similarities between the two legal fields, they differ in their treatment of collaborations. While tort law divides liability among joint-tortfeasors, criminal law abides by a no-division rule that imposes on each co-offender the full brunt of the sanction. Thus, each of two offenders who jointly steal $1,000, will be subject to the full corresponding penalty (rather than the divided penalty for stealing $500).

This Article demonstrates that in property and financial crimes, the nodivision regime of criminal law harms both offenders and victims. Specifically, it creates three troubling distortions that have been overlooked by theorists and judges. First, the no-division rule violates the frugality principle, which mandates that sanctions be kept to the minimum level necessary to prevent the offense. Second, it disadvantages vulnerable victims, while favoring the well-to-do. Third, it prompts all potential victims to engage in excessive procurement of private precautions, to the detriment of society at large. The Article proposes two possible solutions to these problems. One option is to substitute the no-division rule with a division regime similar to the one endorsed by tort law. Alternatively, if lawmakers opt to retain the no-division rule, they can, and should, allocate greater public resources to the protection of the vulnerable.

TABLE OF CONTENTS INTRODUCTION I. THE ROLE OF LOSS AND GAIN IN SENTENCING A. The Federal Sentencing Guidelines B. The Role of the Victim's Loss in Sentencing C. The Role of the Offender's Gain in Sentencing II. THE NO-DIVISION RULE III. THE DISTORTIVE EFFECTS OF THE NO-DIVISION RULE A. Co-Offenders and the Frugality Principle B. Discrimination Against Vulnerable Victims C. Private Investment in Precautions IV. POLICY IMPLICATIONS A. Splitting Losses and Gains Among Co-Offenders B. Diverting Public Resources to the Vulnerable CONCLUSION INTRODUCTION

Criminal law bears important similarities to tort law. Both domains are designed to spur actors to behave in a socially desirable manner, by forcing them to internalize the cost of harms they inflict on others. (1) As Judge Posner and others have observed, the two disciplines "frequently overlap.... [T]he crime of theft is the tort of conversion; the crime of assault is the tort of battery--and the crime of fraud is the tort of fraud." (2) It is thus not surprising that there are many doctrinal commonalities between the two fields. (3)

Yet, tort law and criminal law critically diverge in their approach to transgressions and offenses perpetrated by more than one actor. When a crime is committed by co-offenders, criminal law ignores one of the most fundamental teachings of tort law. Under tort law, if multiple tortfeasors jointly harm a victim, their liability will be split. (4) To be sure, vis-a-vis the victim, their liability is often joint and several, meaning that the victim can recover the full amount from either of them. But their duty to compensate is shared? Any portion of the harm paid by one tortfeasor will be deducted from the other's liability. Each of two (similar) tortfeasors jointly liable for stealing $1,000 will ultimately pay $500 in damages.

Criminal law, by contrast, treats co-offenders as if each inflicted the full harm on the victim. Insofar as punishment is concerned, criminal law treats each of the co-offenders as though she committed the crime alone. (6) Accordingly, if two offenders jointly steal $1,000, each will be subject to the penalty prescribed for stealing $ 1,000 (not $500). (7) Given that both criminal law and tort law are designed to deter wrongful behavior, this difference is puzzling. Why would liability for harm be indivisible under criminal law if tort law always divides liability between joint tortfeasors? While our example focuses on theft, the question arises in a host of offenses in which the motivation for illicit behavior is the attainment of tangible goods.

Criminal law's adherence to the no-division rule is more than a theoretical puzzle. Practically, it raises three important concerns. First, the rule of no-division is at odds with the fundamental "principle of frugality." (8) Moral dictates generally mandate that sanctions should not exceed the level needed to deter offenders. (9) As Jeremy Bentham famously explained: "[T]he punishment ought in no case to be more than what is required ... since, if it be, all that is above that quantity is needless." (10) But the no-division rule means that co-offenders are subject to excessive sanctions. Suppose that criminal law makers--the legislature or the courts--determine that the optimal penalty for deterring stealing $100,000 is a two-year imprisonment term, whereas the sanction for stealing $50,000 is one year in prison. Under the frugality principle, to deter two offenders from jointly stealing $100,000, it suffices to impose a penalty of one year in prison on each of them. After all, each expects to pocket only $50,000. Yet given criminal law's no-division rule, if they commit the crime together, each offender would be sentenced to a two-year imprisonment term.

Even more troubling, the no-division rule also disadvantages vulnerable victims. A second concern emerging from the no-division rule is its disparate impact on underprivileged members of society. Collaboration among offenders is often a necessity when targeting well-off victims." However, the no-division rule makes collaboration particularly unattractive. Offenders operating together must share their gains. Each offender only pockets some of the proceeds obtained from the crime. But under the no-division rule, an apprehended co-offender is subject to the full, undivided penalty. The no-division rule thus imposes a "tax" on offenders' collaboration, thereby providing greater protection to the well-off.

To gain a quick insight into how the no-division rule disfavors the vulnerable, consider two burglars who face the choice between stealing from a bank or from two small mom-and-pop shops. The bank is a large establishment, so a sole offender trying to break into the safe may be unable to see a police officer nearing the building until it is too late. The burglary thus requires two offenders. In the mom-and-pop shops, by contrast, a single burglar can monitor the entrance as he is breaking into the cashbox. Therefore, each offender can burglarize a mom-and-pop shop by himself. Suppose further that the amount deposited in the bank's safe is $2,000, whereas the cashbox in a mom-and-pop shop contains $1,000. From the offenders' standpoint, breaking into the bank (together) or into a mom-and-pop shop (alone) provides the same expected individual gain: $1,000. But since under the no-division rule the penalty for stealing $2,000 (together) is greater than for stealing $1,000 (alone), breaking into the mom-and-pop shops represents a more attractive option--the same payoff, with a lower sanction. The offenders will thus target the shops, leaving the bank unharmed.

This brings us to the third concern. Not only does the no-division rule disfavor poor victims, but it also reduces overall social welfare. Particularly, we suggest that the no-division rule induces potential victims to invest in private precautions. Current estimates evaluate victims' annual expenditures on private precautions in the range of "$160 billion to $300 billion," a figure exceeding "the entire public law enforcement budget." (12) But one may wonder why victims invest so much in precautions. After all, a home-security system does not prevent a break-in; it only makes it somewhat more complicated. We contend that the actual attractiveness of these private precautions often stems from their effect on offenders' need to collaborate. A home security system requires offenders to team up. But this in itself does not change much if the expected gain from the break-in is sufficiently large. The real bite comes from the no-division rule. As we have seen, the no-division rule renders criminal collaboration particularly unattractive. While co-offenders must share the proceeds from crime, each will bear the entire penalty alone if apprehended. Thus, investment in private precautions allows victims to significantly raise the cost of crime by forcing collaboration among offenders. Because private precautions often only displace crime from one victim to another, other potential victims must follow suit and similarly invest in such measures. (13) Ultimately, the no-division rule induces large investments that result in little social benefit. (14)

Against this backdrop, this Article offers a new approach to the sentencing of co-offenders. We claim that the rule of no-division is not always justified. As we explain, splitting penalties among co-offenders in economically motivated crimes might be desirable for both offenders and victims. Particularly, the sentence should be split in accordance with the offenders' individual share of the overall gains. The application of a division regime will eliminate all three distortions. We also appraise this solution in view of retributive goals, showing that these goals should not challenge our proposal. But even if the legal system chooses to retain the current no-division rule, its implications must be accounted for. We thus offer a second solution. We delineate how the government can neutralize the perverse effects of the no-division rule by allocating public resources to the economically disadvantaged.

This Article proceeds as follows. Part I describes the sentencing process set by the Federal Sentencing Guidelines and the centrality of the victim's loss and offender's gains in meting out penalties. Part II points to the systematic adherence to the no-division rule in property and financial crimes, showing its blanket application in both loss-based and...