Punishing Corporations: The Food-Chain Schizophrenia in Punitive Damages and Criminal Law

Abstract

Both criminal law and the law of punitive damages feature a division of authority over when a corporation may be punished. In both fields, some states allow punishment when any employee misbehaves in the scope of employment, but other states allow corporations to avoid punishment by claiming that a misbehaving employee's mental states should not be imputed to the corporation because he was not sufficiently important in the corporate hierarchy. However, these divisions of authority do not match: there is no correlation between the rules individual states follow for criminal law and the rules they follow for punitive damages. This article argues that this mismatch is unjustified; the same rules should govern the food-chain question for punitive damages and for criminal law.

Keywords: Punishing Corporations, Corporate Punishment, Corporate Punitive Damages, Corporate Crime, Corporate Criminal Liability, Due-Diligence Defense