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The Intracorporate Conspiracy Trap

57 Pages Posted: 10 Sep 2014 Last revised: 20 Mar 2015

J.S. Nelson

Villanova Law School; Villanova School of Business; The Wharton School, University of Pennsylvania

Date Written: January 12, 2015

Abstract

In the recent case of Commonwealth v. Lynn, Pennsylvania prosecuted a Roman Catholic priest who had not abused children himself but who, to protect the archdiocese that employed him, covered up information about priests who had abused children and reassigned the priests to new parishes. This case was the first of its kind to bring criminal charges against an official of the Church solely for how he supervised the careers of priests to protect his employer.

Because the intracorporate conspiracy doctrine prohibits it, the state — as is now typical of both state and federal jurisdictions around the country — was unable to prosecute Monsignor Lynn and the Archdiocese for their involvement in the conspiracy. This failure illustrates the misalignment of current conspiracy law with the way the law should be designed to incentivize employees and organizations to prevent harm from both the commission and the cover-up of crimes.

The intracorporate conspiracy doctrine provides immunity from conspiracy suits to enterprises based on the legal fiction that an enterprise and its employees are a single actor incapable of the meeting of two minds to form a conspiracy. This Article argues that the un-checked growth of the intracorporate conspiracy doctrine from its proper place in antitrust and sovereign immunity cases to swallow criminal law and tort claims misplaces employee and employer incentives in contravention of agency law, criminal law, tort law, and public policy. Ultimately, the doctrine’s uninhibited growth permits harmful behavior to be ordered and performed without consequences, and it leaves the victims of the behavior without appropriate remedy.

As the Nuremberg trials famously taught the world, for human beings to operate responsibility in social groups, each individual in the group must be responsible for his or her own actions. This same moral hazard exists when the intracorporate conspiracy doctrine swallows the penalties that should otherwise be in place for the coordinated harms that employers and their employees inflict in tort and criminal law.

Notes: Formerly "Perverse Incentives and Corporate Conspiracy: Why We are Asking the Wrong Basic Question in Assessing Liability for Corporations and Their Agents."

Suggested Citation

Nelson, J.S., The Intracorporate Conspiracy Trap (January 12, 2015). 36 Cardozo L. Rev. 3, 969 (2015).. Available at SSRN: https://ssrn.com/abstract=2488910

Josephine Sandler Nelson (Contact Author)

Villanova Law School ( email )

299 N. Spring Mill Road
Villanova, PA 19085
United States

Villanova School of Business ( email )

800 Lancaster Avenue
Villanova, PA 19085-1678
United States

The Wharton School, University of Pennsylvania ( email )

3730 Walnut Street
Room 668 Jon M. Huntsman Hall
Philadelphia, PA 19104-6340
United States

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