Law Commons^™

New headlines each day reveal wide-spread misconduct and large-scale cheating at top international companies: Volkswagen’s emissions-defeat devices installed on over eleven million cars trace back to a manager’s PowerPoint from as early as 2006. Mitsubishi admits that it has been cheating on emissions standards for the eK and Dayz model cars for the past 25 years—even after a similar scandal almost wiped out the company 15 years ago. Takata’s US $70 million fine for covering up its exploding air bags in Honda, Ford, and other car brands could soon jump to US $200 million if a current …

Not only does the 2015-16 Volkswagen emissions cheating scandal have the potential to destroy a $227 billion-dollar multinational company, but it contains eerie echoes of other recent white collar scandals that have claimed lives and cost the public trillions of dollars. Through a case study of Volkswagen, this Essay pioneers a new way to look at these scandals by focusing on their common element: the growing insulation and entrenchment of middle management to coordinate such large-scale wrongdoing.

This Article 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 be-come less opaque.