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The Corporate Conspiracy Vacuum (Formerly "Corporate Conspiracy: How Not Calling A Conspiracy A Conspiracy Is Warping The Law On Corporate Wrongdoing"), J.S. Nelson Sep 2015

The Corporate Conspiracy Vacuum (Formerly "Corporate Conspiracy: How Not Calling A Conspiracy A Conspiracy Is Warping The Law On Corporate Wrongdoing"), J.S. Nelson

J.S. Nelson

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.
This vacuum at the center of American conspiracy law has now warped the doctrines around it. Especially in ...


The Corporate Conspiracy Vacuum Presentation, J.S. Nelson Aug 2015

The Corporate Conspiracy Vacuum Presentation, J.S. Nelson

J.S. Nelson

This is a presentation on my Corporate Conspiracy Vacuum article.


The Corporate Shell Game Presentation, J.S. Nelson Feb 2015

The Corporate Shell Game Presentation, J.S. Nelson

J.S. Nelson

This presentation on The Corporate Shell Game identifies for the first time the hardening of the corporate shell. It provides compelling evidence that shell-hardening pushes and disguises the way that corporations and agents commit large-scale wrongdoing, and it traces the contributing legal streams that protect the agents who engage in this behavior. The only way to combat widespread frauds that inflict damage on the public is for the corporate shell to become less opaque.


The Intracorporate Conspiracy Trap (Formerly "Perverse Incentives And Corporate Conspiracy: Why We Are Asking The Wrong Basic Question In Assessing Liability For Corporations And Their Agents"), J.S. Nelson Jan 2015

The Intracorporate Conspiracy Trap (Formerly "Perverse Incentives And Corporate Conspiracy: Why We Are Asking The Wrong Basic Question In Assessing Liability For Corporations And Their Agents"), J.S. Nelson

J.S. Nelson

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 ...


The Ethical Slide, Train Tickets, And Helping The Next Generation Of Corporate Leaders To Choose Differently, J.S. Nelson Jan 2015

The Ethical Slide, Train Tickets, And Helping The Next Generation Of Corporate Leaders To Choose Differently, J.S. Nelson

J.S. Nelson

It has been a pleasure to guest-blog for the last two weeks here at the Glom. (Previous posts available here: onetwothreefourfivesixseveneight, and nine.) This final post will introduce the book that Lynn Stout and I propose writing to give better direction to business people in search of ethical outcomes and to support the teaching of ethics in business schools

Sometimes bad ethical behavior is simply the result of making obviously poor decisions. Consider the very human case of Jonathan Burrows, the former managing director at Blackrock Assets group. Burrows’s two mansions outside ...


The Intracorporate Conspiracy Doctrine And D&O Litigation Incentives, J.S. Nelson Jan 2015

The Intracorporate Conspiracy Doctrine And D&O Litigation Incentives, J.S. Nelson

J.S. Nelson

My previous blogposts (onetwothreefourfivesixseven, and eight) discussed the dangers of granting intracorporate conspiracy immunity to agents who commit coordinated wrongdoing within an organization. The last two blogposts (here and here) highlighted the harm that public and judicial frustration with this immunity inflicts on alternative doctrines. 

In addition to exacerbating blind CEO turnover, substituting alternative doctrines for prosecuting intracorporate conspiracy affects an executive’s incentives under Director’s and Officer’s (D&O) liability insurance. This post builds on arguments that I have made about D&O insurance in articles here and here

In traditional ...


The Intracorporate Conspiracy Doctrine And Ceo Turnover, J.S. Nelson Jan 2015

The Intracorporate Conspiracy Doctrine And Ceo Turnover, J.S. Nelson

J.S. Nelson

My previous blogposts (onetwothreefourfivesix, and seven) discussed why conspiracy prosecutions were the best method to penalize coordinated wrongdoing by agents within an organization. Using alternative doctrines to impose liability on behavior that would otherwise be recognized as an intracorporate conspiracy results in flawed incentives and disproportionate awards.

The fundamental problem with substituting responsible corporate officer doctrine and control person liability for reforming the intracorporate conspiracy doctrine is that these alternative doctrines represent exactly what Professor Martin objects to: actual imposition of blind “respondeat superior” liability. For example, under these doctrines, “in most federal courts, it ...


Frustration With The Intracorporate Conspiracy Doctrine Distorts Other Areas Of Law, J.S. Nelson Jan 2015

Frustration With The Intracorporate Conspiracy Doctrine Distorts Other Areas Of Law, J.S. Nelson

J.S. Nelson

My previous blogposts (onetwothreefourfive, and six) discussed why conspiracy prosecutions should be used to reach coordinated wrongdoing by agents within an organization. The intracorporate conspiracy doctrine has distorted agency law and inappropriately handicaps the ability of tort and criminal law to regulate the behavior of organizations and their agents. 

My Intracorporate Conspiracy Trap article argues that the intracorporate conspiracy doctrine is not properly based in agency law, and that it should most certainly not be applied throughout tort law and criminal law. As a result of the immunity granted by the doctrine, harmful behavior is ordered ...


The Silenced Connecticut Sex-Abuse Case, J.S. Nelson Jan 2015

The Silenced Connecticut Sex-Abuse Case, J.S. Nelson

J.S. Nelson

My previous blogposts (onetwothreefour, and five) introduced why conspiracy prosecutions should be used to reach wrongdoing by agents within an organization. The 2012 prosecution of Monsignor Lynn for twelve years of transferring predator priests from parish to parish at the command and for the benefit of the Archdiocese of Philadelphia was defeated by the intracorporate conspiracy doctrine. Moreover, this was not the first time that the Roman Catholic Church had used the doctrine to help its bureaucrats escape liability for suppressing sex abuse cases. 

In 1997, employees of the Roman Catholic Church in Connecticut were alleged—very ...


How We Should Have Tried Monsignor Lynn, J.S. Nelson Jan 2015

How We Should Have Tried Monsignor Lynn, J.S. Nelson

J.S. Nelson

My previous blogposts (onetwothree, and four) introduced why conspiracy prosecutions should be used to reach wrongdoing by agents within a business organization. The same legal analysis applies to religious organizations

We should have been able to charge Monsignor Lynn and the Archdiocese of Philadelphia that directed his actions to hide the sexual abuse by priests with criminal conspiracy. Instead, Pennsylvania charged Lynn with two things: child endangerment and conspiracy with the priests

As international news outlets later reported, Lynn could not be guilty of child endangerment because the state’s statute could not apply to an administrative church ...


Sex Abuse, Priests, And Corporate Conspiracy, J.S. Nelson Jan 2015

Sex Abuse, Priests, And Corporate Conspiracy, J.S. Nelson

J.S. Nelson

My previous blogposts (onetwo, and three) introduced the topic of how the intracorporate conspiracy doctrine prevents the prosecution of coordinated wrongdoing by individuals within organizations. This post illustrates the doctrine’s effect in the context of a specific organization—here a religious one: the Roman Catholic Archdiocese of Philadelphia and the systematic transfer of predator priests. This post is based on my article The Intracorporate Conspiracy Trap to be published soon in the Cardozo Law Review. The article is available in draft form here

For twelve years, from 1992 to 2004, as Secretary for Clergy, Monsignor William Lynn’s ...


Where Are The Prosecutions For Corporate Conspiracy?, J.S. Nelson Jan 2015

Where Are The Prosecutions For Corporate Conspiracy?, J.S. Nelson

J.S. Nelson

My first and second blogposts introduced why conspiracy prosecutions are particularly important for reaching the coordinated actions of individuals when the elements of wrong-doing may be delegated among members of the group. 

So where are the prosecutions for corporate conspiracy??? The Racketeer Influenced and Corrupt Organizations Act of 1970 (“RICO”, 18 U.S.C.A. §§ 1961 et seq.), no longer applies to most business organizations and their employees. In fact, business organizations working together with outside agents can form new protected “enterprises.” 

What’s going on here? In this area and many other parts of the law, we are witnessing ...


Jpmorgan’S Witness And The Holes In Corporate Criminal Law, J.S. Nelson Jan 2015

Jpmorgan’S Witness And The Holes In Corporate Criminal Law, J.S. Nelson

J.S. Nelson

It is a pleasure to be guest-blogging here at The Glom for the next two weeks. My name is Josephine Nelson, and I am an advisor for the Center for Entrepreneurial Studies at Stanford’s business school. Coming from a business school, I focus on practical applications at the intersection of corporate law and criminal law. I am interested in how legal rules affect ethical decisions within business organizations. Many thanks to Dave Zaring, Gordon Smith, and the other members of The Glom for allowing me to share some work that I have been doing. For easy reading, my posts ...


Corporate Conspiracy Charges For The Financial Crisis, J.S. Nelson Jan 2015

Corporate Conspiracy Charges For The Financial Crisis, J.S. Nelson

J.S. Nelson

In my previous blogpost, I granted the merit of defense counsel’s argument that the actions of discrete individual defendants—when the law is not permitted to consider the coordination of those actions—may not satisfy the elements of a prosecutable crime.
But what is the coordination of individuals for a wrongful common purpose? That’s a conspiracy. And, for exactly the reasons that defense counsel articulates, these types of crimes cannot be reached by other forms of prosecution. The U.S. Supreme Court has recognized that conspiracy is its own animal. “[C]ollective criminal agreement—partnership in crime—presents ...