July 26, 2017 10:54AM

How FDR’s Court Approved Vicarious No‐​Fault Criminal Liability

In a series of cases of which Dotterweich v. U.S. (1943) is emblematic, the U.S. Supreme Court has upheld the idea that a business executive can be criminally convicted over underlings’ violation of public welfare regulations, with no need to show that an executive facing charges knew of the violation, participated in it, intended it, or was negligent in failing to prevent it. This idea of vicarious criminal liability without a showing of mens rea (guilty intent) was controversial at the time, and the “responsible corporate officer” doctrine, as it is called, continues to be controversial today. Yet despite requests (as in this Cato amicus brief) that they consider scaling the doctrine back, the courts have generally declined to do so. 

Now Craig Lerner of George Mason/​Scalia Law School has written an important working paper analyzing the origins of the doctrine in the trial of Joseph Dotterweich, general manager of a pharmaceutical company whose employees had allegedly shipped drugs that were misbranded and adulterated under FDA definition. From the abstract:

…with respect to Dotterweich as the corporation’s general manager, the government argued that he was strictly liable because he stood in “responsible relation” to the company’s acts. The government never tried to prove that the company, Buffalo Pharmacal, was negligent, nor did it try to prove that Dotterweich was negligent in his supervision of the employees of Buffalo Phamacal. The prosecutor and judge were candid about this theory throughout the trial, although the judge conceded that it seemed bizarre and unfair. The defense lawyer repeatedly sought to inject what became known throughout the trial as “the question of good faith,” but was circumvented at almost every turn. What would thus seem to be the crux of any criminal trial — the personal fault of the defendant — was carefully shorn from the jury’s consideration. …

The article argues that the “responsible corporate officer” doctrine can never enjoy a secure place in our legal system. First, the doctrine is at a minimum in tension with, and often in direct opposition to, basic principles of the criminal law; and second, the doctrine fails, when followed to its logical conclusions, to accord with basic notions of fair play. The article concludes that the responsible corporate officer doctrine is either unnecessary, in cases in which the evidence establishes personal fault, or unjust, in cases in which it creates liability in the absence of personal fault through the unspecified notion of “responsibility.” …

I call the responsible corporate officer doctrine “ripe with potential for injustice,” and discuss its relation to criminal laws that are ambiguous or not ascertainable by persons at risk of criminal liability, in my (newly written) chapter on white‐​collar prosecution in this year’s Cato Handbook for Policymakers.