3/25/2014

By Daniel Colbert, ACLR Featured Blogger

           One of the more interesting aspects of Sebelius v. Hobby Lobby Stores, Inc., arguably the most controversial case the Supreme Court will hear this term, is a question that criminal law has struggled to answer for over a century: How does one identify the conscience of a corporation? In enforcing statutes that require an element of intent against corporations, courts have struggled to identify the source of corporate intent. The criminal law that has evolved in that area is potentially instructive as the Court considers whether a similarly personal attribute—religiosity—can be imputed to a corporation. Decades of trial and error have led courts to the same conclusion: Only human beings have consciences.

            Criminal liability is often based on the intent of a person, meaning a human being. Traditionally, the intent of an individual employee has been the basis for corporate liability as well, through the doctrine ofrespondeat superior.[i] That doctrine renders the corporation liable if an agent commits a criminal act within the scope of his employment and with the intent to benefit the corporation.[ii] For crimes that require intent, that intent is thus located within a human person: the agent.[iii]

            More recently, corporate criminal law has recognized that respondeat superior is both under- and over-inclusive. It is under-inclusive because it does not capture situations in which the act and the intent reside in different persons within the corporate entity.[iv] It is over-inclusive because it does render corporations liable even for the acts of rogue employees acting against corporate policy.[v]

            The shortcomings of respondeat superior have led to a number of recent proposals to reconsider corporate intent in ways that are analogous to the arguments in Hobby Lobby. Some observers, concerned about corporate liability for acts by individual employees that cannot be prevented by management, have proposed a standard that would take corporate compliance policies into account.[vi] This approach would only punish corporations whose management has created a “non-law-abiding corporate culture” leading to a criminal act.[vii] Others have suggested a “senior management mens rea” test that examines the culpability of corporate decision-makers at the relevant level.[viii]

            Neither of these proposals have been adopted by the courts, but another alternative to strict respondeat superior has found an audience with some courts. The collective knowledge doctrine allows the knowledge of corporate actors to be aggregated so that a corporation is liable even if the employee who committed the act (making a fraudulent statement, for example) did not have the knowledge necessary to have intent.[ix] Thus even if no single employee had the requisite intent, the corporation’s collective intent renders it liable.[x] This approach has been adopted by several courts.[xi] Though it seems to create an idea of “corporate intent,” it still requires intent to be present in at least one human person, even if that person is not the actor.

            The problem with corporate intent—like corporate religiosity—is that it is difficult to locate and easy to fake. No courts have adopted the view that corporate compliance policies are relevant to the question of intent, because it is easy for corporations to adopt such policies while looking the other way regarding employees’ actual conduct.[xii] Simply adopting a compliance policy does not demonstrate that a corporation does not want its employees to violate the law.

            Hobby Lobby therefore presents a problem that corporate criminal law has been aware of for decades. Secondary to the question of whether a corporation should be allowed to claim religious exemptions to a legal requirement is the question of how to determine what a corporation’s religious convictions are. The source of a corporation’s conscience is hard to identify. Like intent, a corporation’s religious convictions could differ based on which human beings within the corporate entity are considered—or could even be faked if a corporate policy was all that was required. Criminal law has refused to allow corporations to have consciences separate from those of actual human beings. There are many reasons for the Supreme Court to do the same in Hobby Lobby, but the experience of criminal law suggests that pure administrability has to be one of th