The U.S. Supreme Court may soon get a chance to consider and review the “Responsible Corporate Officer” Doctrine (also sometimes referred to as the “Park doctrine,” in reference to the 1975 case in which the Court first described the doctrine) in a case in which corporate executives challenge their individual criminal imprisonment sentences for alleged corporate misconduct in which they were not involved and of which they had no knowledge. As discussed here, the executives’ sentences were affirmed by the Eighth Circuit, and the executives have now filed a petition for a writ of certiorari to the Supreme Court, in which they seek to have the Court take up the question of whether the imposition of a sentence of imprisonment for a supervisory liability offense violates constitutional due process requirements. As a May 3, 2017 memo from the Cadwalader law firm put it, the case may be the “most important Park doctrine case in over forty years.”
Continue Reading Supreme Court Asked to Review Responsible Corporate Officer Doctrine
responsible corporate officer doctrine
Ontario Statute: Directors and Officers of Dissolved Corporations May be Held Liable for Environmental Liabilities
A new Ontario statutory provision affecting the liability of directors and officers of dissolved corporations for environmental remediation costs recently caught my attention. As discussed in a December 5, 2016 memo from the Dentons law firm (here), apparently Ontario corporations have been in the past voluntarily dissolving in order to try to avoid environmental clean-up. Under provisions of the Forfeited Corporate Property Act 2015, which comes into force on December 10, 2016, along with related amendments to the Ontario Business Corporations Act, corporate dissolution will no longer protect former directors and officers from environmental liabilities. This statutory change, which is consistent initiatives in a number of jurisdictions to try to impose liability on corporate and officers without regard to culpability, raises a number of concerns and also highlights a number of larger issues.
Continue Reading Ontario Statute: Directors and Officers of Dissolved Corporations May be Held Liable for Environmental Liabilities
Eighth Circuit Split Spotlights Tensions with the Responsible Corporate Officer Doctrine
One of the bedrock principles of our legal system is that criminal liability attaches only to those who act with intent or knowledge – that is, as the legal scholars say, with mens rea (or a guilty mind). The “responsible corporate officer doctrine” sits uneasily with these notions, imposing liability as it does on corporate officers not for their involvement in or even awareness of wrongdoing, but simply for their status as persons responsible for the company involved. A recent decision from the Eighth Circuit, in which each judge on the three-judge panel that heard the case wrote a separate opinion, underscores the tensions the responsible corporate officer doctrine presents within our system of justice, and potentially sets the stage for further consideration of these issues. The Eighth Circuit’s July 6, 2016 opinion in U.S. v. DeCoster can be found here.
Continue Reading Eighth Circuit Split Spotlights Tensions with the Responsible Corporate Officer Doctrine
The Responsible Corporate Officer Doctrine Gets an Administrative Extension
One of the more troublesome trends in recent years has been the increasing willingness of lawmakers and regulators to try to impose liability on corporate officials without regard for the requirements of the corporate form and even without reference to whether the officials are culpable in any way. (Refer here for my most recent discussion…
Corporate Officials’ Strict Liability Conviction Under the Responsible Corporate Officer Doctrine Can Have “Career-Ending” Consequences
Under the Responsible Corporate Officer Doctrine, corporate officials can be held liable for misconduct in which they did not participate and of which they have been entirely unaware, based on their responsibility for the corporation itself. As shown in a July 27, 2012 opinion from the District of Columbia Court of Appeals (here…
Liability Without Culpability: A Deeply Troublesome Trend
One of the most basic notions in our legal system is that liability attaches only to those who act with intent or knowledge. But as detailed in a front-page September 27, 2011 Wall Street Journal article (here), Congress has in recent decades enacted numerous provisions imposing criminal liability regardless of intent. Among the…
More About the Responsible Corporate Officer Doctrine
Time-honored legal principles typically shield corporate officers and shareholders from direct personal liability for legal violations of the corporation itself, consistent with the notion that the corporation itself has a distinct and separate legal identity. However, as I noted in a prior post (here), courts have evolved a concept called "the responsible corporate…