It’s axiomatic that the criminal justice system should punish corporations that commit crimes and not punish those that don’t. But when a criminal corporation reorganizes—whether by merging with others or spinning off lines of business—how can we tell which, if any, of the successors “committed” the predecessor’s crime? A lot turns on this question. Whether, how, and to what extent criminal liability flows through corporate reorganization affects how corporations treat past and future misconduct. Yet the answer—the doctrine of successor criminal liability—has been largely overlooked by legal scholars as a pressure point for tailoring corporate incentives. In an article forthcoming in the Yale Journal on Regulation, Successor Identity, I discuss the simplistic automaticity of successor criminal liability under current law. I propose that a better approach to successor liability would only punish successors who share compliance vulnerabilities with criminal predecessors.
Posted by Mihailis Diamantis (University of Iowa), on Friday, May 11, 2018
Editor's Note: Mihailis Diamantis is Associate Professor of Law at the University of Iowa College of Law. This post is based on a recent article authored by Professor Diamantis, forthcoming in the Yale Journal on Regulation.