In Banks v. International Rental & Leasing Corp., the Virgin Islands Supreme Court departed from a provision in the Virgin Islands Code that had adopted the American Law Institute’s restatements as the common law of the Virgin Islands. Before Banks, the common law of the Virgin Islands was entirely imported, was implemented all at once instead of over time, and possessed no inherently local or homegrown properties. Accordingly, Virgin Islands courts were essentially applying the common law of other jurisdictions. However, Banks caused a paradigm shift that has allowed Virgin Islands courts to begin cultivating a common law tailored to the specific needs of the people it governs without automatically deferring to the restatements. This Article begins by analyzing the historical nature of the common law process. Notably, the Author argues that because the common law of a particular locality is founded on its ever-evolving customs, it is necessary for judges to consider the expectations and objectives of those affected when shaping the contours of existing precedent. Next, the Article focuses on Banks, explaining in detail the analysis it mandates when a Virgin Islands court is deciding whether to ratify a restatement rule or adopt a better alternative. Then, the Author examines how Virgin Islands superior courts have applied the Banks analysis. This comprehensive review reveals that while some superior courts misapprehended their duty to reexamine the merits of a challenged restatement rule, others considered local needs and circumstances in determining the soundest rule for the Virgin Islands. Ultimately, the Author concludes that if Virgin Islands courts rely on the demonstrated preferences of Virgin Islanders when determining the soundest rule for the jurisdiction, they will be able to successfully develop an organic common law of and for the Virgin Islands.
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In the 2011 seminal case of Banks v. International Rental & Leasing Corp., the Virgin Islands Supreme Court significantly altered the analytical framework that Virgin Islands courts must follow when deciding issues of first impression. Prior to Banks, Virgin Islands courts were statutorily obligated to follow the American Law Institute’s Restatements of the Law when adjudicating novel legal issues. However, Banks implicitly abolished that statutory obligation and replaced it with a three-pronged test, commonly referred to as a Banks analysis. Since Banks was decided, at least 120 cases have referenced the decision when analyzing issues of first impression in the Virgin Islands. This Article examines that body of caselaw and identifies some trends and best practices that have developed after Banks was decided.
The Author begins by examining the continuing influence of the Restatements after Banks and argues that, although Banks has become the controlling doctrinal test, the Restatements still provide influence in the Virgin Islands. However, despite this influence, the Author emphasizes that litigants should not confuse the current persuasive power of the Restatements with the legal force they had prior to Banks. In addition, the Author reasons that courts applying Banks have provided guidance in which litigants should take note. For example, Virgin Islands courts have suggested that litigants are now required to take an active role in matters of first impression by including a Banks analysis in their legal briefs. The Author also provides examples of when a court may refuse to conduct a Banks analysis. Further, the Author evaluates which factor of the Banks analysis, if any, is controlling when a court conducts such an analysis. Ultimately, the Author concludes that Banks has unquestionably improved the jurisprudence of the Virgin Islands. Now that the decision has reached maturity, it should provide even more clarity and consistency to Virgin Islands caselaw for years to come.
This Article analyzes the complex and intriguing interplay among the several courts governing the United States Virgin Islands. The Authors begin by discussing the early history of the Virgin Islands, including the Virgin Islands’ transition from a civil law system to a common law system. The Authors then examine the more recent history, beginning with the establishment of the Virgin Islands Supreme Court in 2004 and continuing to the present, which has led to various jurisdictional and precedential issues.
Specifically, the Authors discuss the relationships between the United States Court of Appeals for the Third Circuit and the Virgin Islands Supreme Court; the Virgin Islands Supreme Court and the Superior Court of the Virgin Islands; and the Superior Court of the Virgin Islands and the District Court of the Virgin Islands. The Authors focus on the Virgin Islands’ unique status as a territory but not a state—a status that leads to conflict among these courts, such as the debate regarding the interpretation and application of the Territorial Clause. The Article concludes by identifying and analyzing trends in recent Virgin Islands caselaw while recommending solutions for dealing with persistent issues within the Virgin Islands’ judicial relationships.
In 2015, the Yates Memorandum was distributed to senior officials at the United States Department of Justice. This Memorandum aims to increase the prosecution of individuals who are responsible for corporate wrongdoing by providing cooperation credit to corporations that provide evidence of the individual’s wrongdoing to assist the government in resolving the criminal investigations against the corporation itself. The Author begins by explaining the history of corporate criminal liability, and describes how the law has progressed to hold a corporation responsible for the actions of its employees. The Author then examines how the Justice Department’s approach to investigating corporate crime has evolved over the years—this includes encouraging corporations to waive attorney‐ client privilege for the benefits of cooperation. The Yates Memorandum continues this trend by requiring that a corporation turn over all relevant information in order to receive credit for its cooperation.
The Author argues that the Yates Memorandum is problematic because it promotes a culture of distrust between the employees and the directors of corporations, while also eroding the benefits of attorney‐client relationships. The Author further argues that the Yates Memorandum essentially requires defendants to prosecute themselves, which is in direct opposition to the principle that the prosecution has the burden of proving the defendant is guilty. Instead of continuing to delegate investigations to corporations, the Author suggests that the Justice Department ask Congress for the additional resources needed to investigate the allegations of corporate wrongdoing on its own. The Author concludes by asking the Justice Department to reconsider the Yates Memorandum to avoid the risk of the unintended consequences that it poses.
In the United States, corporate criminal liability has developed and evolved over time as a response to growth of corporate economic power and the resulting public policy concerns. Most recently, the Department of Justice announced a new development that was articulated in Deputy Attorney General Sally Yates’ Memo, Individual Accountability for Corporate Wrongdoing. The new policy implements pragmatic procedures for investigating and prosecuting both individuals and corporations for corporate wrongdoing, and reflects the public’s desire for individual accountability, corporate culpability, and the need for equal justice.
This Article discusses the importance of the Yates Memo in the historic framework of corporate criminal liability, and argues that it employs utilitarian and pragmatic approaches to the development of corporate criminal liability, while also acknowledging the need for individual accountability. The Author explains that the acknowledgment for individual accountability is a new element of corporate criminal liability and that it serves two important functions: deterrence and reform of corporate practices under the utilitarian approach, and public demand for prosecutorial policies that give no preferential treatment to white‐ collar offenders. However, the Author suggests that two problems arise with this policy development: it is difficult to successfully prosecute individuals for criminal conduct in the corporate setting, and it is questionable how much of the conduct is even criminal, rather than civil. Finally, the Author explores the relationship between prosecutorial policies and public opinion, concluding that it is difficult to determine how much prosecutorial policy should reflect public opinion when it is continuously shifting and distorted by the media.
This Article analyzes the extent of corporate criminal liability in the Anglo‐American legal system and provides a brief comparison of how this topic has developed in Israel, the United States, and the United Kingdom. The Author explains the American theory of respondeat superior and the factors that are taken into consideration when determining liability, examines the more cautious British approach and the development of the theory of the organs of the corporation, and discusses how these theories have influenced the Israeli approach to corporate criminal liability. The Author also discusses the trend to expand criminal liability, which he calls the second generation of corporate criminal liability by referring to recent laws in the United Kingdom, caselaw in the United States, and internal committee recommendations of the Ministry of Justice in Israel. For example, some lawmakers are attempting to impose a legal duty on entities as an affirmative measure to prevent the commission of certain white‐collar crimes. This and other forms of expansion of corporate criminal liability now impose liability on entities in situations in which such liability would not be imposed on humans. The Author further considers the expansion of criminal liability and the societal reasons for doing so, and then concludes by asking whether the expansion of criminal justice exceeds the cost of deviating from the basic rules of criminal liability.
For over two decades, widespread corporate corruption and oligarchy have plagued Ukraine’s sociopolitical framework. In light of this systemic corruption, Ukrainian lawmakers recently amended the Criminal Code of Ukraine by introducing quasi‐criminal liability for organizations. As a result, artificial legal entities in Ukraine may now be held criminally liable for economic misconduct. However, due to their novelty and lack of doctrinal explanation, these statutory reforms have not been widely accepted among the Ukrainian legal community. Nonetheless, it is the Author’s position that Ukraine’s attempt to impose quasi‐ criminal liability measures is a just and crucial step in its endeavor to eradicate widespread corruption and to join the European Union.
This Article evaluates the positive and negative characteristics of Ukraine’s new corporate quasi‐criminal liability regime. It highlights the extensive corruption that has overwhelmed Ukraine since the early 1990s and argues that stricter corporate criminal liability measures will instill confidence in the Ukrainian government’s regulation of its market economy. After exploring the development of white‐collar criminal jurisprudence in the United States, the Author analyzes Ukraine’s new corporate quasi‐criminal regime. Through this analysis the Author emphasizes that some Ukrainian scholars disagree with the idea that corporations can be held criminally liable for having a “guilty mind,” as it undermines the principle of personal liability—a doctrine deeply rooted in Ukrainian criminal law. In addition, the Author explores the Ukrainian Judiciary’s first attempts at interpreting the new corporate quasi‐criminal liability code. Since few cases involving the new statutory code have been brought before Ukrainian courts, the Author argues that comprehensive guidelines for prosecutors and judges need to be provided to ensure that they are used responsibly and effectively.
Owing to the tort law origins of corporate liability that the respondeat superior standard provides, corporations may be held criminally liable with relative ease. Criminal liability thus attaches to corporations without any requirement that the corporation to be charged is morally culpable for harm or deserving of punishment. The Author argues that when a criminal liability standard is both easily met and imprecisely defined, it results in inconsistent, unpredictable, and unjust discretionary prosecution of corporations. While efforts have been made to temper the inconsistent application of corporate criminal liability law as it exists— notably, the Department of Justice has introduced a moral culpability standard analysis—the Author argues that the true deficiencies lie with the respondeat superior standard, which have not as of yet been effectively remedied.
The Author proposes several changes to, and expansions of, the DOJ Principles of Prosecution that would serve to address the inadequacies of the existing respondeat superior standard in corporate criminal liability prosecutions. The Author draws comparisons to legal standards applied in other jurisdictions and areas of law in order to substantiate the changes proposed. The changes to the legal standard, taken together, would serve to clarify, codify, and simplify the criminal prosecution of corporations by carefully limiting liability to those circumstances in which it is most justified. The Author argues that in addition to increasing the consistency of prosecution and outcome, imposing a moral culpability standard before the attachment of criminal liability is consistent policy as outlined in the 2015 Yates Memo and serves public policy goals of incentivizing corporate compliance.
This Article discusses corporate criminal liability for insider trading violations under Sections 10(b) of the Securities Exchange Act of 1934 and Rule 10b–5 of the United States Securities and Exchange Commission. The Author begins by reviewing the basis for insider trading liability and tracking its development since the early 1930s. The Author discusses the required level of mens rea for insider trading—observing that while recklessness is presumed to be sufficient, there is no clear legal standard in this unsettled area of law. Further complicating matters is Congress’ adoption of a “willfulness” element for the criminal enforcement of insider trading. The Author analyzes the effects of this adoption on the existing mens rea requirement, noting the apparent conflict between “recklessness” required at common law and the new “willfulness” requirement for criminal liability. This analysis leads the Author to question whether reckless insider trading, which is likely sufficient for civil liability, might be construed as willful and therefore punished as criminal conduct.
Given the potential for corporate criminal liability of reckless insider trading, the Author argues that it should be eliminated entirely. In other words, corporate criminal liability for insider trading should be limited to knowing violations of the law. The Author offers a number of means to affect such a change, such as the clarification that reckless conduct is not willful conduct, the issuance of prosecutorial guidelines, or a change of penalties through sentencing guidelines. To assuage potential criticisms that the elimination of corporate criminal liability for reckless insider trading disincentivizes corporations from monitoring and guiding employee compliance, the Author argues that existing tort and statutory civil liability is a sufficient basis to deter potential wrongdoing.