Court ruling in the case. Here, you are to discuss your opinion regarding the court�s decision. You may
agree or disagree. Whatever your position on the case; be sure that you support your thoughts and ideas
with adequate research as evidenced by in-text citation in accordance with APA standards. As such, you
should have your researched sources cited throughout the body of your discussion in accordance with
APA standards and should also have a corresponding entry in the reference area.
This order need to be 1page plus because 3 months ago they had return my order #114243 late and was
offered one extra page on my next assignment. Chatted with Hayley to which she had confirmed.
United States of America, Plaintiff-appellee, v. Hilton Hotels Corporation et al., Defendants,
Western International Hotels Company, Defendant-appellant
Section I: Summary
A group of restaurants, hotels and supply companies established an association for purposes of
attracting conventions to the city of Portland. Members were required to make a certain amount
of monetary contribution as a way of financing the association. Hilton Hotels Corp. supported
the move to increase hotel purchases by giving preferential treatment to suppliers who made their
contributions and boycotting those who failed to contribute. The hotel policy restricted the
purchasing agent from taking part in the ‘boycott’ but he went ahead and threatened one of the
suppliers with loss of business unless it made its monetary contribution to the association. The
manager of the hotel testified that the purchasing agent had acted contrary to the hotel policy
which prohibited antitrust violations. The issue before the 9 th Circuit Court was whether Hilton
(Defendant) was responsible for the actions of its purchasing agent which contravened Section 1
of the Sherman Act, even though the actions were within the purchasing agent’s scope of
authority but contrary to the corporate policy.
The Court ruled that a corporate was vicariously liable for the actions of its agents to the extent
that the actions contravened the Sherman Act, since it was evident that the actions of the agent
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were aimed at profiting the corporate and not the agent himself. In fact, the agent violated the
Act due to the pressure exerted on him to maximize profits for the defendant hotel, resulting to
the agent’s violation of the general corporate policy. Thus, the hotel was found to be in violation
of antitrust laws under the respondeat superior doctrine, since outsiders would still view the
purchasing agent as acting on behalf of the hotel.
Section II: Summary Critique
This case is an elaborate representation of further development in jurisprudence in regards to
holding a corporation liable for its unlawful actions. The jurisprudential development seeks to
enhance the deterrent effect and to encourage corporations to ensure more diligence in the
supervision of business actions of its agents done in the course of their duties. However, I
disagree with the court ruling to the extent that it found a corporation for offences committed by
an agent contrary to the policy and procedures of the corporation. The court should have
considered the defendant corporation’s due diligence defense (Greenberg & Brotman, 2014).
The court based its ruling on respondeat superior, a common law principle established chiefly by
federal courts and adopted by several state courts. The principle of respondeat superior is drawn
from tort law and agency. It attaches criminal liability on a corporation for the actions of its
agents as long as they are done in the course of employment and for purposes of profiting the
company. The broadness of this doctrine provides for corporation liability for acts of any agent
and even those lowest level employees. Essentially, the doctrine broadened its scope to the
context of criminal law, resulting in a close inter-relationship between criminal and civil forms
of corporate liability. The main difference between civil and criminal liability is that for criminal
liability, the employee should at least have committed the offence with the motive of benefiting
the corporation and not self.
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Over the years, there has been an overwhelming controversy in relation to corporate criminal
liability and most scholars contend that the doctrine of respondeat superior is somewhat
overboard. There is conspicuous discordancy of the doctrine with the criminal justice system.
The doctrine of respondeat superior tends to distort, cheapen, and eventually weaken the
criminal justice system. The applicability of this doctrine in the criminal context has proven
difficult due to the different principles governing criminal law. In the civil context, the burden of
proof is placed on the party with greater knowledge of the facts in issue while under criminal
law, a person is innocent until proven guilty and it’s the role of the prosecution to prove beyond
reasonable doubt that the accused committed the crime. The doctrine of respondeat superior
imposes the burden of proof on the corporation to prove that it did not commit a crime through
the actions of its agents, thus making it difficult for the corporation to defend itself. In fact,
prosecutors enjoy too much discretion due to the vagueness and broadness of the principle of
corporate criminal liability (Greenberg & Brotman, 2014).
Furthermore, courts do not have sufficient guidance as to the application of the doctrine, yet
corporations are not given enough notice as to the manner in which to avoid criminal liability.
The broadness of the principle of corporate criminal liability results to overcriminalization,
leading to American corporations expending resources on costly internal policing strategies. This
leaves American corporations at a disadvantage when it comes to competing in an international
business atmosphere. However, this should not be a ground to completely waive corporations
from criminal responsibility.
In addition to overcriminalization tendencies, there is no clear indication of whether the
imposition of criminal liability on corporations indeed does any good (Oded, 2013).
Corporations may, in fact, be encouraged to cover up illegal activities in order to evade the
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overwhelming penalties and consequences of criminal prosecution. It has also been argued that
narrowing the criminality of a corporation only to acts committed by agents for purposes of
benefiting the corporation is impracticable. The impracticability arises from holding a
corporation criminally liable for offences committed by agents but not with intent to benefit the
corporation. A more effective deterrent requires a regulatory oversight that favors dialogue
between the government and businesses. Furthermore, as in the case of United States v Hilton
Hotels, corporate criminal liability is imposed on shareholders, who are innocent actors and are
not in any able position to watch over each and every conduct of corporation executives,
employees, and other creditors.
As the case of United States v Hilton Hotels clearly establishes, a company must take liability for
the actions of its employees as long as they acted in line with their mandate for purposes of
benefiting the corporation. Corporate criminal liability was first endorsed unanimously by the
Supreme Court in New York Central & Hudson River R. R. v United States (1909). According to
the court, a corporation does not act on its own but by its agents and officers. Accordingly, the
motives, intent, and purposes of agents and officers are a representation of the motives, intent
and purposes of the corporation. While I support the fact that corporations must be take vicarious
liability for offences of their employees committed in their mandate for purposes of benefiting
the corporation, I tend to disagree with the ruling in United States v Hilton Hotels to the extent
that it imposes criminal liability on corporations even where the agents had acted contrary to the
policies and procedures of the corporation.
In line with the Model Penal Code developed by the American Law Institute, corporate criminal
liability should be limited to offences committed by agents within the authority, request,
command, performance or tolerance of the executive management employees or board of
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directors acting for the corporation and in the course of their employment. It is reasonable to
presume that the decisions and actions of the executive management agents and board of
directors reflect that corporation policy (Bradley, 2016). It is also reasonable to presume that
high managerial agents with supervisory authority are liable for employment of due diligence for
purposes of preventing commission of offences. A corporation should be exempted from liability
where it can show that diligence was exercised by high managerial agents.
The Court in United States v Hiltons should have taken a due diligence approach in considering
whether the corporation was criminally liable for the actions of its purchasing agent. It is prudent
to limit the liability of a corporation to circumstances where the corporation hadn’t taken
reasonable measures to prevent the commission of crime by its employees. This approach acts as
a meaningful incentive to corporations to ensure self-regulation. Corporations which seek to
avoid criminal liability will have a strong ground to pursue effective compliance programs for
purposes of deterring criminal activities as well as for use of such programs as a shield in the
event of occurrence of a crime.
The due diligence approach also ensures that the prosecution plays its role in an effective
manner. The court should have obliged the prosecution to demonstrate that the defendant hotel
had not, in fact, taken reasonable steps to prevent the purchasing agent from violating the
Sherman Act. It was reckless for the court to assume that the purchasing agent was acting under
pressure to benefit the corporation. There was sufficient evidence to indicate that the corporation
had taken all reasonable steps to implement policies and procedures aimed at preventing the
commission of crime by its agents (Elias, 2015).
Accordingly, the due diligence approach enhances self-regulation and protects a corporation and
its shareholders from negligent dealings by agents despite the corporation’s best efforts. As the
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court noted in Kolstad v American Dental Association (1999), the standard of respondeat
superior is utterly misplaced in circumstances where a corporation has taken all reasonable steps
to prevent its employees from committing an offence. In addition, it is the chief goal of US
Sentencing Guidelines to promote effective compliance programs. The defense of due diligence
is a great way of rewarding a corporation for its best efforts to ensure compliance. States such as
Pennsylvania, Ohio, New Jersey and Montana have incorporated the defense of due diligence
contained in the Model Penal Code into their legislation.
The court based its ruling on the doctrine of respondeat superior, which attaches criminal
responsibility on a corporate for actions committed by an agent in the course of his/her
employment and for purposes of benefiting the corporation. While it was in the interests of the
court to promote corporate responsibility and compliance, the court should have taken a due
diligence approach in considering the matter.
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References
Bradley, C. (2016). Corporate Intent and Corporate Crime: A Matter of Inference. Jotwell: J.
Things We Like, 56.
Elias, R. A. (2015). Virtues of the Due Diligence Defense for Corporations in Criminal Cases:
Solving the Problems of a Corporation’s Vicarious Liability for the Crimes of Its Agents and
Employees, The. Geo. JL & Pub. Pol’y, 13, 423.
Kolstad v American Dental Association, 527 U.S. 526 (1999)
New York Central & Hudson River R. Co., 212 U.S. 509 (1909).
Oded, S. (2013). Corporate Compliance. Edward Elgar Publishing.
United States v. Hilton Hotels Corporation, 467 F.2d 1000 (9th Cir. 1972)
Greenberg, J. D., & Brotman, E. C. (2014). Strict Vicarious Criminal Liability for Corporations
and Corporate Executives: Stretching the Boundaries of Criminalization. Am. Crim. L. Rev., 51,
79.
