Forecasting the How and Why of Corporate Crime’s Demise 

By | December 2, 2022

How would our world function if corporate criminal liability ceased to exist? This was the provocative question posed to the participants in the Journal of Corporation Law’s recently published symposium issue on corporate crime. Several of my colleagues argue for or against corporate crime’s end or survey the aftermath of such an implosion. My contribution seeks to identify the legal mechanisms that might contribute to corporate crime’s eventual demise. As I explained in the article, it is doubtful that any law or court case will bring about corporate crime’s sudden end. However, several emerging constitutional and interpretive doctrines could cause it to lose its potency. This post provides a roadmap for those wondering how corporate criminal liability could eventually become a hollow shell.  

The Law of Federal Corporate Crime 

Within the federal courts, corporate criminal liability functions as an attribution rule. Under the common law concept known as respondeat superior, the corporation is criminally liable for its employees’ crimes whenever the employee, acting within his apparent scope of authority, violates the law with at least a partial intention of benefitting his employer. Many corporations are theoretically criminally liable for the employees’ violations of law, even though the government frequently elects not to prosecute them. Indeed, because prosecutors are so loath to charge corporations (particularly systemically important ones), they have devised a shadow-law of liability that is neither duty-based nor pure strict liability. This shadow-law has thus far evaded the judiciary’s oversight and the legislature’s intervention. 

Despite its many critics, respondeat superior is at no risk of being overturned by the Supreme Court, much less superseded by federal statute. Still, for the reasons I lay out in my article, the doctrine remains vulnerable to various challenges. It may not suffer an outright reversal, but it will likely contract in scope and effect due to a series of constitutional and interpretive arguments gaining traction in the federal courts.  

Corporate Crime is Individual Crime, and Individual Crime is Due for a Correction 

Because it is an attribution rule, corporate criminal liability relies heavily on individual criminal liability. This area of law has been under attack for years, driven partly by society’s disgust with mass incarceration’s moral, social, and economic costs. Most critics of the carceral state focus on how the system mistreats misdemeanants, people of color, and the poor; the carceral state’s targets often possess far less political power or social capital than the corporate executive accused of securities fraud or foreign bribery. Nevertheless, robust efforts to reform the criminal justice system have impacted white-collar crime’s substantive and interpretive scope. A call for strictly construing statutes, for example, benefits the corporate fraudster as much as—if not more than—it benefits the individual accused of a violent offense.  

Fears that our government wields too much power, particularly where technology and privacy interests intersect, is another phenomenon that indirectly affects white-collar crime and its enforcement. A contraction in the government’s ability to obtain information via a subpoena and outside the Fourth Amendment’s search rules, for example, impacts the white-collar investigation as much as it impairs the investigation of robberies and local thefts. Thus, if individual criminal law is undergoing a correction involving its substantive and procedural contraction, we should expect that same correction to impact corporate crime and its enforcement.  

Doctrinal Developments: Delegation, Vagueness, and Lenity 

To illustrate this point, the article surveys three doctrines that have long played a role in how courts interpret federal criminal statutes expansively. For example, the Court has enabled Congress to outsource much of its lawmaking role to other actors through a feeble nondelegation doctrine and a light-touch approach to vagueness and lenity. One need not look back very far to find full-throated defenses of “open-textured” statutes. Nor would one encounter difficulty identifying complex regimes that allow fill-in-the-blank regulations, including those that trigger criminal liability. Finally, just a generation ago, a cramped definition of lenity that relegated it to last-resort tiebreaker status was the interpretation that dominated most court opinions.  

Courts justified these deferential interpretations on pragmatic grounds. In a complex and crime-ridden one such as ours, the government needed its statutes and regulatory regimes to prevent and punish wrongdoing. For decades, this practical—and somewhat conclusory—incantation was sufficient to fend off attacks from either the political left or right. Today, judges on both sides of the political aisle seem poised to revisit these doctrines. The Court’s contemporary delegation doctrine may be the first domino to fall, as Justice Gorsuch urged Gundy1. Vagueness and lenity may follow if Justice Gorsuch and his supporters find the right vehicle and enough votes. Moreover, unlike some of the Court’s other reversals, these changes will be far more palatable to academics, who will likely rejoice in a smaller carceral state and a narrower, more precise, federal criminal law.  

Procedural Contractions 

As I have written elsewhere, at the same time the judiciary embraces doctrines that have the effect of narrowing substantive criminal law, it is likely to continue its trajectory of dismantling the Fourth and Fifth Amendment procedural doctrines that have enabled government enforcers to investigate corporate and white-collar crime largely free of constraints. For example, under the current “state action” and “private search doctrines,” prosecutors can enjoy the fruits of “private” company searches and “internal” interrogations of employees suspected of wrongdoing. Never mind that many of these searches and interrogations are the product of a campaign to pressure the private sector to support the government in detecting and reporting wrongdoing. So long as the government prosecutor avoids interfering too much in the company’s investigation (such as directing a specific search or demanding a specific interrogation), the process will often be treated as private and, therefore, outside the Fourth and Fifth Amendments.  

Here too, the tides may be turning. Courts have begun to question just how “private” a given corporate investigation is, especially when its investigators report their results to government officials on a weekly basis and the government officials rely almost wholly on the “private” investigation and forego any independent work of their own.2 Furthermore, other rumblings exist, including the possibility that the Supreme Court may eventually revise its long-held view that the Fifth Amendment’s privilege against self-incrimination is inapplicable to organizations and entities. It may take a while, but commentators have begun to agitate for a new approach to corporations and corporate officers acting as custodians who deign to “take the Fifth” in response to government investigations.  

These recent and impending changes will profoundly alter the government’s relationship with white-collar crime and its enforcement. Core offenses such as fraud, bribery, and obstruction of justice are already difficult to prove. That should not surprise anyone; they occur amidst a backdrop in which legal and illegal behavior is often intertwined. Nevertheless, proving white-collar crime could become significantly more difficult if the judiciary radically alters its stance on delegation, vagueness, or lenity. Unproven crimes often imply a far deeper well of undetected crimes.  

What about the corporate entity? Consider the following: it has often been said that corporate criminal enforcement is a game of carrots and sticks. Sticks do not work very well, however, when detection ebbs below a certain level. If new interpretive approaches narrow substantive criminal law’s scope and new procedural doctrines weaken the enforcement of whichever crimes remain, these two developments will almost certainly prompt a downward drift in corporate crime’s enforcement. How should one feel about this development? If experience has taught us anything, it is that criminal law is far from the only or even primary answer to anti-social and harmful behavior. As I argue in my piece, state AGs and civil litigation can also powerfully restrain corporate offenders and perhaps even more effectively shame the executives responsible for the harm their businesses cause.  

In the same volume as my article, Jennifer Arlen posits that criminal liability is necessary because civil agencies can be controlled by the corporation’s participation in the political process. It is a plausible worry. Nevertheless, it may be a misplaced one for the public AG offices that have successfully attracted a strong, publicly-minded group of lawyers devoted to exposing and reforming corporate wrongdoing. Regulatory capture of these attorneys seems far less likely.  

Thus, we might conclude that corporate enforcement’s demise is far from inevitable. Respondeat superior may be in jeopardy of entering obsolescence, but that is not exactly the reason for hand-wringing. This common law doctrine has never delivered the degree of deterrence or retribution the public desperately desires. As our criminal laws change in shape and scope, we might not always rely on federal criminal prosecutors to battle with wayward corporations. Nevertheless, the enforcement approaches that emerge in corporate crime’s absence might ironically be the ones that procure better and more stable outcomes.   


Miriam Baer is the Vice Dean and Centennial Professor of Law at the Brooklyn Law School.  

This post is adapted from her paper, “Forecasting the How and Why of Corporate Crime’s Demise,” available on SSRN. 

One thought on “Forecasting the How and Why of Corporate Crime’s Demise 

  1. Interested Observer

    It is highly optimistic to presume that AG’s offices will not be subject to fiscal capture by corporate interests. In most jurisdictions, the Attorney General is publicly elected; they thus rely on campaign financing to win elections, which provides an opportunity for corporate interests to conduct regulatory capture. (The less-polite terms for this are “corruption” and “bribery,” but those also carry implications of a direct quid pro quo which would be difficult to substantiate.) All the “publicly-minded” attorneys in an agency are of little help if their leadership stymies or diverts them from the prosecution (civil or criminal) of key campaign contributors.

    Elected officials are, if anything, even more subject to regulatory capture than civil agencies. At least the civil agencies might enjoy some layer of operational insulation from gubernatorial/presidential disapproval due to merit system protections, procedural requirements and the inertial effects of bureaucracy. The recent mass-elections of woke prosecutors have demonstrated that AG’s offices can flagrantly quash whole swaths of statutorily-mandated enforcement systems in the name of prosecutorial discretion. It is mystifying why one would place faith in fixing this problem on a slew of offices that are subject to the relatively-inexpensive regulatory capture of campaign financing. If George Soros can do it, so can corporate criminals.


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