February 07, 2010
Corporate Crime and Entitivity
Posted by Miriam Baer

On Friday, I attended and moderated a panel for an extremely interesting Symposium at Brooklyn in honor of our former dean (and Eastern District Court Judge) David G. Trager.  The Symposium was entitled, "Sharing the Blame: The Law and Morality of Punishing Collective Entities."  We heard from panels of psychologists and moral philosophers in the morning. In the afternoon, I moderated a lively roundtable discussion (with Jim Fanto, Len Orland and Peter Henning) regarding some of the problems that arise in regard to corporate criminal liability. 

The psychologists focused their attention on the concept known as "entitivity." (In some quarters, its called entatitivity; I think I like the shorter version better).

I'll do my best to summarize the findings (some of which admittedly were in conflict):

1.People have little trouble attributing "intention" to groups.  In fact, the attribution of intention to groups seems to be engrained.

2. People tend to view tightly knit groups (ie, groups with higher levels of entitivity) more negatively than less focused groups.

3. Groups organized for an economic purpose (corporations) have high entitivity. 

4. [Tom Tyler's point] We may have trouble distinguishing the character or fairness of the entity from the character of a given person whom we associate with the entity.  This arose from a study of employees who were asked questions about their employer and their supervisor.  If I understood this part right, the negative character inferences about the supervisor seemed to trump the feelings about the organization's overall policies and structural decisions.  I took this to mean that when we ascribe negative "intention" to certain entities (Goldman? Enron?), we are in fact transferring negative character inferences about a given individual we associate with that group (Lloyd Blankfein, Ken Lay, Jeffrey Skilling, etc). 

As I later explained during the third panel, when it comes to corporate criminal liability, the law pretty much removes the messy business of distinguishing "bad" individuals and the groups that employ them.  That is, we do not, as a legal matter, need to distinguish between the inferences we make about a corporate officer's character and intentions, and the corporation's "character" and intentions.  The law pretty much allows us to treat them as equivalent, thereby imposing liability regardless of whether the "group" truly is a reflection of the individual's character or intention. 

Now, I have criticized corporate criminal liability as far too broad, particularly because groups are not nearly as "entitative"(?) as the public would assume them to be.  Nevertheless, what I learned from the psychologists is that this "entity" approach may be more or less engrained.  This got me thinking.  Ordinarily, we might think that a corporation would respond to the "entitivity" problem by trying to debias the public of its "groupness."  In other words, you might try to fight the public's intuition to punish by educating the public on how you're really an aggregation of multiple groups, some of whom may have no control over others.

On the other hand, if the desire to ascribe blame to groups is engrained and intuitive, maybe the better strategy for corporations is to embrace their "entitivity" and cast blame on some other entity - namely the government.  In this vein, consider Steve Bainbridge's claim on how the corporation acts as a buffer between individuals and an all-powerful state (true, he was talking about political participation by entities, but I assume those feelings transfer over to questions on how to assign blame).  If I am right, and corporate defense counsel realize this as well, we may begin to see the coalescing of a strategy whereby corporations deftly cast blame back on government entities that have already had a hand in regulating them.


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