Posted on July 10, 2008 by Anthony Lake

Time for a "Good Faith" Defense to Corporate Liability for Criminal Acts or Omissions of Agents

   Criminal prosecutions involving corporations in many cases involve a corporation being exposed to criminal liability for the criminal acts or omissions of its agents which the corporation may not have known of and which were contrary to its express policies or procedures. The Eleventh and former Fifth Circuits have long held that a corporation may be held criminally liable. Steere Tank Lines, Inc. v. United States, 330 F.2d 719, 721-22 (5th Cir. 1963) (citing New York Cent. & H. R.R. Co. v. United States, 212 U.S. 481 (1909); United States v. Illinois Central R. Co., 303 U.S. 239 (1938); United States v. A & P Trucking Company, 358 U.S. 121 (1958)). A corporation may be held criminally liable for the acts or omissions of its agents which were committed within the scope of their employment and which the agent intended to “produce[ ] some benefit to the corporation or some benefit to himself and the corporation second.” United States v. Gold, 743 F.2d  800, 823 (11th Cir. 1984).

   Now an array of legal and business organizations are trying to get courts to re-examine the standard for imposing liability on corporations for the acts of their agents, according to an article today in the National Law Journal. The test case is an appeal in the Second Circuit Court of Appeals, United States v. Ionia Management, No. 07-5801, which involved a Greek tanker company which was convicted for the acts of its employees on one of its vessels in dumping oil into international waters and falsifying records. The Association of Corporate Counsel, the United States Chamber of Commerce, the National Association of Criminal Defense Lawyers, the National Association of Manufacturers, the New York State Association of Criminal Defense Lawyers and the Washington Legal Foundation have filed an amicus brief in the case, authored, surprisingly, by Andrew Weissmann, an attorney with the Chicago law firm of Jenner & Block, who was formerly the Director of the Department of Justice’s specially-formed Enron Task Force. The groups argue that courts should modify the now century-old standard of corporate criminal liability of New York Cent. and permit a good faith affirmative defense to liability, based on factors such as whether the corporation had reasonable and effective policies in place to prevent the commission of the crime, citing recent decisions involving employer defenses in employment discrimination cases, the Model Penal Code, and similar provisions in state criminal codes.

    Weissmann noted the irony that it is easier to impute liability to a corporation in a criminal case than in some civil cases. As acknowledged by John Hasnas, professor of business and law at Georgetown University, the Department of Justice frequently misuses the standard in order to extract pleas, fines, or deferred-prosecution agreements from corporate defendants, and agreements to cooperate in the prosecution of their officers or employees. In any event, in cases involving rogue agents whose crimes may benefit the corporation but are against its policies, it seems time to give corporations a fighting chance.

Tags: , , , , , , , ,
Posted on March 26, 2008 by Anthony Lake

Medellin v. Texas: The Effect on International Law on Domestic Criminal Law and Procedure

            Defense counsel with foreign clients will not be pleased with the latest offering from the United States Supreme Court and its take on international law. José Ernesto Medellín, a Mexican national, was convicted and sentenced in a Texas state court for the capital murder of two girls. Fortunately, Mexico brought an action in the International Court of Justice (ICJ) in the Hague against the United States on behalf of Medellin’s and 51 other Mexican nationals in Case Concerning Avena and Other Mexican Nationals (Mex. v. U. S.), 2004 I. C. J. 12 (Judgment of Mar. 31) (Avena). The ICJ held that, based on violations of the Vienna Convention, the nationals were entitled to review and reconsideration of their convictions and sentences in state courts in the United States, regardless of whether the defendants had waived their rights to raise challenges under the Vienna Convention on Consular Relations (Vienna Convention or Convention) for failure to comply with generally-applicable state rules governing challenges to criminal convictions. President George W. Bush even showed his support for the international tribunal by issuing a Memorandum to the Attorney General in which he directed that the United States discharge its international obligations by having State courts give effect to Avena. Medellin did not raise any Vienna Convention claims prior to his conviction. After the state court dismissed Medellin’s petition for writ of habeas corpus to raise his Vienna Convention claims, the United States Supreme Court granted certiorari in the case of Medellin v. Texas.

            Chief Justice John Roberts, writing for the majority, recognized that the Vienna Convention, which had been ratified by the United States, guarantees that a person detained by a foreign country may require authorities of the detaining country to inform consular authorities of the detainee’s home country, and that the detainee may request assistance from the consul of his country. Furthermore, “Optional Protocol” of the Convention provides that disputes arising out of an interpretation or application of the Convention shall lie within the compulsory jurisdiction of the ICJ.

            The majority acknowledged that the ICJ’s decision in Avena constituted an international law obligation on the United States. However, it held that “not all international law obligations automatically constitute binding federal law enforceable in United States courts.” It noted that there was a distinction between treaties which automatically have effect as domestic law and those which do not and that treaties do not become domestic law “‘unless Congress has either enacted implementing statutes or the treaty itself conveys an intention that it be ‘self-executing’ and is ratified on these terms.’” (Citing Igartúa-De La Rosa v. United States, 417 F. 3d 145, 150 (1st Cir. 2005)). The majority concluded that “[b]ecause none of these treaty sources creates binding federal law in the absence of implementing legislation, and because it is uncontested that no such legislation exists… the Avena judgment is not automatically binding domestic law.”

            The Court held that the Convention’s Optional Protocal was a “bare grant of jurisdiction,” which said nothing about the effect of ICJ decisions and did not require signatories to comply with ICJ judgments. It noted that the Convention itself merely represented a “commitment” by member nations to comply with an ICJ decision, and that there was no indication that Congress, in ratifying the United Nations Charter, ever intended to vest ICJ decisions with immediate legal effect in U.S. courts. Also, the fact that the ICJ was required to enforce its judgments through the U.N. Security Council, on which the United States possesses a veto, indicated that its decisions were not immediately and directly binding in the U.S. Finally, the majority held that the President could not convert a non-self-executing treaty into a self-executing one by merely issuing a Memorandum. Justices Breyer, Souter and Ginsburg, naturally, dissented.
Tags: , , , , , , ,