A group of business, legal and defense organizations are undertaking an amicus effort in United States v. Ionia Management, No. 07-5801, pending on appeal in the 2d U.S. Circuit Court of Appeals. The goal is to persuade federal courts to re-examine the standard for holding corporations criminally liable for the acts of their agents.
In the Ionia Management case, a Greek company that manages a fleet of tanker vessels, was convicted and sentenced for its role in falsifying records to conceal the overboard dumping of waste oil from one of its vessels into international waters. The amicus effort in the Ionia appeal will ask the court to examine the development of vicarious corporate criminal liability.
The amicus brief argues that the trial court gave a common instruction to the jury on vicarious liability based on a mistaken application of the Supreme Court's ruling in New York Central & Hudson River Railroad v. United States, 212 U.S. 481 (1909). The argument set out is that the New York Central case determined only that Congress has the constitutional power to include respondeat superior principles in a criminal statute. The argument continues that the New York Central case said nothing whatsoever about the criteria that govern the imputation of corporate criminal liability for those federal criminal statutes where Congress has not specifically acted.
Typically, under instructions and jury charges typically delivered, a corporation is criminally responsible for the actions of any of its employees taken within the scope of their employment and for the benefit of the corporation. The amicus effort contends that the United States Supreme Court has never addressed how vicarious corporate criminal liability should be determined when a statute is silent on imputing liability of an employee to the corporation. Recent United States Supreme Court rulings in the job bias context limit the application of respondeat superior in determining vicarious corporate liability. The rulings created an affirmative defense for employers facing liability for the acts of supervisors (if the employer had reasonable and effective policies in place to deter the conduct and the employee did not avail him or herself of those policies). The Model Penal Code also provides an affirmative defense for corporations in those types of situations where there was an exercised due diligence to prevent the commission of a crime. Allowing corporations to present evidence of effective compliance programs as a defense is consistent with the recent United States Supreme Court rulings and the purpose of corporate criminal liability.
The evidence at trial demonstrated that Ionia Management had an explicit policy, trained its people rigorously on that policy and periodically put superintendents aboard vessels to observe. Crewmen testified that they knew the policy and of their duty. Contrary evidence was presented by the Department of Justice of a history of ignoring environmental laws and obstructing United States Coast Guard investigations.
More later.
As always, feel free to call me or e-mail me with any questions at walter.james@jamespllc.com.
WDJiii