NCJ Number
153600
Journal
Criminal Law Bulletin Volume: 31 Issue: 1 Dated: (January-February 1995) Pages: 3-18
Date Published
1995
Length
16 pages
Annotation
This article discusses theories of liability presented by the government in its prosecution of Exxon Corporation for the 1989 grounding of the Exxon Valdez in Prince William Sound, Alaska.
Abstract
According to the doctrine of respondeat superior, a corporation may be held liable for the conduct of its employees, regardless of their status or level, as long as the employees were acting within the scope of their employment and for the apparent benefit of the corporation. In some cases, a parent company may also be criminally liable for the conduct of its subsidiary. First, liability may rest on the application of common-law agency principles if it can be proven that the subsidiary was acting on behalf of the parent. A second theory, enterprise liability, holds that when parent and subsidiary companies are part of an economically integrated enterprise, there is in effect only one corporate actor. The government may seek to impose liability on a parent company for its failure to supervise the subsidiary. The functional test for these three theories rests on control. A fourth theory, which assumes fraud, would hold the parent company liable in cases when a subsidiary is organized as a separate corporation but in fact lacks a separate existence. 78 notes