Ionia: Second Circuit Upholds Criminal Respondeat Superior

In United States v. Ionia Management, the Second Circuit Court of Appeals upheld the corporate conviction of Ionia, a Greek shipping concern.  The case had garnered attention in the news because Andrew Weissmann, the famous/infamous former Enron Task Force head, filed an amicus brief on behalf of the United States Chamber of Commerce arguing for a change in corporate criminal law. In the brief, Weissmann had argued that the trial court wrongly instructed the jury that a corporate defendant could be held criminally responsible for the acts of a single employee, even when those acts violated company policy.  Weissmann argued that, for close to a century, lawyers and judges had misconstrued a 1909 Supreme Court decision that allowed a company to be held criminally liable any time an employee committed a crime intended to further the corporation's interests.

The Second Court made short work of Weissmann's argument.  The court held:

Furthermore, we refuse to adopt the suggestion that the prosecution, in order to establish vicarious liability, should have to prove as a separate element in its case-in-chief that the corporation lacked effective policies and procedures to deter and detect criminal actions by its employees.  We note that this argument is made only by amici curiae and not by Ionia, and so we are not obligated to consider it.  But the argument, whoever made it, is unavailing.  Adding such an element is contrary to the precedent of our Circuit on this issue. [citation omitted]  And this remains so regardless of asserted new Supreme Court cases in other areas of the law.

Stanley Twardy of the Day Pitney firm in Stamford, CT, wrote of the opinion:

On Tuesday, the U.S. Court of Appeals for the Second Circuit missed an opportunity to reign in the unchecked power of federal prosecutors to destroy companies whose low-level employees commit crimes in violation of company policy.