The Corporate Conspiracy Vacuum
56 Pages Posted: 29 Aug 2014 Last revised: 4 Feb 2016
Date Written: January 1, 2014
The intracorporate conspiracy doctrine immunizes an enterprise and its agents from conspiracy prosecution based on the legal fiction that an enterprise and its agents are a single actor incapable of the meeting of two minds to form a conspiracy. The doctrine, however, misplaces incentives in contravention of agency law, criminal law, tort law, and public policy. As a result of this absence of accountability, harmful behavior is ordered and performed without consequences, and the victims of the behavior suffer without appropriate remedy.
The vacuum at the center of American conspiracy law has now warped the doctrines around it. Especially in the wake of the financial crisis, prosecutors and the public are searching for new tools to combat corporate conspiracy. The most obvious and tested tool would be to roll back the intracorporate conspiracy doctrine. In the absence of this solution, frustration with applying the doctrine has led to over-reliance on alternative methods to hold agents of enterprises responsible for their actions. Examples of such alternative doctrines include piercing the corporate veil doctrine, the responsible corporate officer doctrine, and unusual approaches such as denying the retroactive imposition of the corporate veil and adopting reverse piercings of the corporate veil.
But these doctrines were developed in and adapted to other circumstances. They do not take into account the coordination of actions within an enterprise and the unique nature of conspiracy that fall — and should fall — into the heart of behavior that would trigger liability if not for the intracorporate conspiracy doctrine. Using alternative doctrines to impose liability on behavior that would otherwise be recognized as an intracorporate conspiracy results in inconsistent decisions and disproportionate awards. In sum, not calling a conspiracy a conspiracy asks the wrong questions and sends the wrong signals throughout the law on corporate and individual responsibility.
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