Criminal Law

Business, Criminal Law, and the Constitution

Constitutional Protections for Businesses in Criminal Law

Corporations have most of the same constitutional rights in criminal proceedings as individual defendants.

Before the Constitution was created, corporations were classified as "artificial persons" and did not have legal rights. Instead, the government provided artificial persons with privileges that could be revoked at any time. Artificial personhood allowed corporations to pay taxes and employees, sign contracts, sue and be sued, and collect dues. The Constitution made courts reconsider the status of corporations. Corporate personhood is the idea that a corporation—separate from its owners, managers, or employees—has some of the same legal rights and responsibilities as people. As long as a business is incorporated, it benefits from corporate personhood. An incorporated business is one that has completed the legal process of becoming a corporation. The benefits of corporate personhood include legal protection from unreasonable searches and seizures.

In the criminal justice system, corporations enjoy most of the same constitutional rights as individual defendants. The 1st Amendment protects many types of corporate speech. The 4th Amendment protects corporations against unreasonable searches and seizures on their commercial property during a criminal investigation. The 5th Amendment provides the right to due process under law. Corporations receive the protection of due process from the federal government under the 5th Amendment and from the states in the 14th Amendment. Due process comes in two forms. Substantive due process prohibits the government from interfering with fundamental constitutional rights and requires that laws be fair. Procedural due process requires notice and an opportunity to be heard when the government denies life, liberty, or a property interest. The 5th Amendment also protects corporations from double jeopardy (being tried twice for the same crime). The 6th Amendment guarantees criminal defendants the right to a public and speedy trial, help from counsel, an impartial jury, the ability to confront accusers, and knowledge of the nature of the charges. Under the 6th Amendment, corporations have the right to be put on notice of the charges against them, help from counsel, and a public and speedy trial before a jury in the appropriate venue (district). Because of 6th Amendment protections, corporations may confront their accusers and subpoena witnesses. A subpoena is an official document that requires someone to come to court. It can appear in two forms. A subpoena ad testificandum is a writ that summons a witness to testify orally. A subpoena duces tecum orders the witness to bring specific evidence to court.

Finally, the 8th Amendment protects corporations against excessive fines. A fine is excessive if it is grossly disproportionate to the crime committed. For example, a corporation may engage in criminal activity that results in $4 million in profits from illegal practices. If the corporation is convicted based on these practices and ordered to pay $20 million in fines, it is likely that the fines are excessive, considering the amount of profit that the corporation received. However, what is considered excessive varies; a fact-intensive analysis is performed on a case-by-case basis.

Business Rights versus Individual Rights

Corporations cannot be incarcerated and will most likely be fined if found guilty. Individuals working for the corporation can be incarcerated for their guilty acts because corporations cannot act on their own. The 5th Amendment may protect the individuals who face criminal liability as part of the prosecution of a corporation.

Historically, criminal liability could not be imposed on a corporation because it has no mind and therefore it could not have the mental state necessary to commit a crime. Today, courts impose liability on corporations for the criminal acts of their employees by imputing the employee's state of mind to the corporation. Generally, a corporation can be held liable for any crime except those that are only punishable by incarceration, simply because a corporation cannot be incarcerated. A corporation can be held liable for the acts of its lowest-level employees to its executives, as long as two conditions are met. First, the employee's conduct must have been within the scope of the employee agent's authority. Second, the action must have been taken to benefit the corporation in some way. Corporate prosecutions rarely result in a criminal trial and usually result in a guilty plea or some other type of prosecution agreement. A prosecution agreement is one in which the accused person, their lawyer, and the lawyer or government agency prosecuting the case decide to dismiss a case instead of bringing it to trial, as long as the accused person meets certain conditions.

The 5th Amendment protection against self-incrimination that applies to the individual defendant does not apply to corporations. The 5th Amendment may protect individual defendants who face criminal liability in connection with the prosecution of a corporation, but other individuals of the corporation that do not face criminal liability are not allowed to claim this privilege. Self-incrimination happens when a person implicates themselves in a crime or exposes themselves to the possibility of criminal prosecution. The 5th Amendment protects the individual from being forced to incriminate themselves. This privilege can be asserted in a variety of settings, including civil, criminal, administrative, and investigatory proceedings. The privilege can only be asserted when the witness reasonably believes disclosure could be used in a criminal prosecution or lead to other evidence that might be so used. The witness can also waive this privilege.

Application of the 5th Amendment's Right against Self-Incrimination

The 5th Amendment right against self-incrimination applies only in certain situations. If the witness cannot invoke the right, the government can require them to respond to questions.
The 5th Amendment requires that a grand jury be the first to hear serious federal criminal charges and the evidence supporting those charges. The grand jury returns an indictment if it believes the prosecution has presented enough evidence. However, unlike individual defendants, corporations are not entitled to a grand jury under the 5th Amendment. Although corporations cannot be incarcerated, they face many of the same possible punishments as individuals. These include fines, probation, restitution, and a bar from engaging in various types of commercial activity.