I’m currently enrolled in a year-long independent study course in which I have been focusing my research on the scope and application of the Responsible Corporate Officer (RCO) doctrine. The doctrine originated in the Supreme Court decision, United States v. Dotterweich, 320 U.S. 277 (1943), and was given further articulation in the Court’s later decision in United States v. Park, 421 U.S. 658 (1975). In each case, the Court upheld the conviction of a high-level corporate officer for food and drug violations. The doctrine essentially states that a corporate officer may be held vicariously – and strictly – liable for a subordinate’s violation of a public welfare statute. The Park Court recognized that the requirements of “foresight and vigilance” which were thus placed on corporate officers “are beyond question demanding, and perhaps onerous, but they are no more stringent than the public has a right to expect of those who voluntarily assume positions of authority in business enterprises whose services and products affect the health and well-being of the public that supports them.” Park, 421 U.S. at 672.
The doctrine’s application has generally been limited to statutory violations of the Food, Drug, and Cosmetic Act, as well as the Clean Water Act and the Clean Air Act. Some of the literature I’ve encountered has also considered the question of how the RCO doctrine might be applied beyond the FDA and EPA contexts. That question is particularly interesting to think about in light of the Justice Department’s recently issued guidelines concerning “Individual Accountability for Corporate Wrongdoing.” In describing the content of these new guidelines, Deputy Attorney General Sally Yates emphasized that the Department will now ensure that individual accountability lies at the heart of its corporate enforcement strategy.
I have found that the topic of corporate officer liability is as interesting as it is challenging to approach: it is fraught with concerns about the degree to which mens rea ought to be required in a criminal prosecution; a case currently on appeal before the Eighth Circuit, United States v. DeCoster, also raises a number of questions regarding the constitutionality of the RCO doctrine. Accordingly, it has been difficult for me to draw any one conclusion with absolute certainty; but I have been considering how the RCO doctrine might be applied if it made recourse to a criminal negligence standard of culpability, rather than strict liability. Viewed from this perspective, the standard for corporate criminal liability might harmonize with the duty of care shareholders may reasonably expect corporate officers to live up to in the civil context: both the duty of care and a criminal negligence standard proscribe a similar type of corporate officer behavior – gross negligence.
On a more personal note, I also want to use this blog post to thank the LPS Community for all the assistance I’ve been afforded so far in my research and writing process. I especially appreciate having had the recent opportunity to share and discuss an early draft of my thoughts with fellow students in the program. The feedback I received will doubtless prove to be instrumental as I continue my work on the topic.
Eric Teszler is a third-year law student from Orange County, California. After graduating from UC Berkeley in 2011, he worked as a writing tutor at a community college and then spent a year with the AmeriCorps VISTA program at Los Angeles Unified School District. Following graduation, he will be working as a business litigation associate in New York.