Focus on "responsible corporate officer" doctrine in appeals court

Corporate executives and other employees of companies who exercise strong leadership roles might want to remind themselves to add an additional item on their “to-do” lists sometime soon: review the “responsible corporate officer” doctrine.

Alternatively, they might need an experienced federal criminal appeals attorney to explain it to them or defend them in an appellate action against a conviction for violating the doctrine.

In 1975, in a case called United States v. Park, the U.S. Supreme Court upheld the concept of a responsible corporate officer. Essentially, that denotes an executive or other highly placed employee who has sufficient power and prerogative to centrally guide the business acts and decisions of a corporation or business.

The importance of the decision and its fundamental meaning to prosecutors: If the company engages in wrongdoing or illegality, it is both logical and legal to criminally prosecute the corporate officials who steered its behavior.

The doctrine has been seldom applied in recent years, but a recent case is seen as a test and an indication that the federal government seeks its increased application in a number of cases.

Late last month, the U.S. Court of Appeals for the District of Columbia ruled that executives of Purdue Frederick Co. could be punished under the doctrine for their company’s violation of a federal law. The company officials — three executives — were charged with a misdemeanor for Perdue’s alleged misbranding of Oxycontin, a powerful pain medication.

In upholding the conviction, the appellate court nonetheless vacated the punishment, finding no clear basis or rationale underlying the decision of the U.S. Department of Health and Human Services to ban the executives from involvement in federal health care programs for 12 years.

The department is now tasked with better articulating its reasoning and reissuing a punishment.

An experienced appellate attorney can answer questions and provide diligent representation concerning any federal criminal appeal.

Source: Thomson Reuters, “Appeals court upholds punishment of corporate officers,” July 27, 2012