With corporate personhood corporations are given the power to influence elections via money, and they are given the ability to enter and negotiate contracts.
So what about criminal law? How are corporations, as personal entities, reflected in that? Can Aetna or BCBS be tried for manslaughter by rescinding a health care policy when someone gets sick? If so, how would you do that?
Corporations can be convicted of criminal charges, as a general principle. (E.g., on a finding that the company itself, as opposed to its individual executives, determined to commit larceny by fraud against complainants; by proof that the corporation was criminally negligent in its business actions.)
The appropriate sentence for a guilty corporate defendant is a fine – in such circumstances, usually a whopping big one.
One famous example was the accounting firm of Arthur Andersen, which was convicted of obstructing justice in 2002 for shredding Enron-related documents. It was sentenced to five years’ probation and a fine of $500,000. It amounted to a corporate death penalty, however: the SEC prohibits convicted felons from serving as CPAs, so essentially all of its business and all of its accountants departed.
Ironically, its conviction was overturned by the Supreme Court on the basis of faulty jury instructions, but its business has never been reconstituted.
Just to nitpick, but Arthur Andersen wasn’t a corporation. It was an LLP, which is a kind of partnership, albeit one with limited liability.
I believe CEOs have gone to prison for crimes done by a business.
But that isn’t holding the corporation criminally responsible. That is holding a corporate officer criminally responsible–one who probably committed criminal acts in his job as CEO–but I need a cite for the claim that a CEO has been sentenced to prison for corporate acts he had no part in–i.e. solely for acts of the corporation, rather than his own.
But even that isn’t enough–since a corporation isn’t its CEO–and even if you could hold an officer to be guilty of a crime for his company’s acts, that is different from holding the company itself to be guilty of a crime.
As stated, corporations can be found guilty of crimes. Because they don’t have bodies, you can’t put them in jail. So the penalties for corporate criminal acts is a fine and, as Poly noted, usually a really big one. Indeed, the U.S. Sentencing Guidelines, IIRC, explicitly allow judges to take corporate size into account when sentencing them to ensure the fine isn’t simply subsumed as the cost of doing business.
In addition, it is theoretically possible for a corporation to commit a crime even if no particular officer or even employee acted illegally. For example, if a crime has multiple elements – you have to do X and then do Y – a corp. can be convicted if one employee does X and another, unbeknownst to anyone, does Y. As I say, this is theoretically possible, but it’s extremely rare in my experience, and defense lawyers in such a case will usually argue, often with some success, that it’s unfair to hold the corporation liable for uncoordinated actions such as these. I myself don’t think this is a valid defense, but it usually works.
–Cliffy
A company can be held liable for acts done as a natural person is and be punished according to law. Usually this is in the form of a fine, but it should be noted ijf sufficiently culpable the companys Directors can be sent to prison.
I think the OPs question is an interesting one, and I’d like to hear more of the legal pros here chime in on the aspect on the manslaughter aspect. Companies get in trouble for financial malfeasance every year, but, given the recent Supreme Court ruling, I’m very interested to know if corporations are liable for other things now.
At common law, there are two varieties of manslaughter: voluntary and involuntary.
Since I assume we can agree there is no intent on the part of the corporation to cause a death, that would generally eliminate a charge of voluntary manslaughter.
There are in turn two types of involuntary manslaughter. One is criminal negligence manslaughter, which happens when the death is caused by an act that is legal, but committd with a high degree of negligence or recklessness. The other is when an unlawful criminal act causes the death.
It’s worth pointing out that these are very general rules. States are all over the map in terms of how seriously they criminalize these acts, what degree of negligence is associated with them, and whether or not the actor had to be aware of the risk.
The hypothetical act is: rescinding a health care policy when someone gets sick, and having that person die of the illness.
Assuming the rescinding of the policy is legal – that is, not a criminal act – we have to answer if it’s negligence. As I understand insurance law (and I am no expert) it’s classic bad faith to rescind a policy and not cover an injury that arose during the policy. Of course, that conclusion means that not only is there a spectre of manslaughter, there’s also civil liability for the bad faith insurance decision and civil liability for the wrongful death.
So I’m not i understand the specifics of the hypothetical. From what I’m seeing, the hypo is already a powderkeg of tortious conduct on the part of the company, putting asideany criminal penalities.
What am I missing?
Good catch. The salient point for this thread, though, is that the firm was convicted, not the individual partners.