The Collective Knowledge Doctrine Generally

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The Collective Knowledge Doctrine Generally

In white-collar criminal cases, the government often uses the collective knowledge doctrine to impose criminal liability against a corporation based upon the so-called collective knowledge of its agents.  The collective knowledge doctrine provides that the individual knowledge of a corporation’s agents can be aggregated—to provide the “collective” knowledge of those agents—for purposes of criminal liability.  The doctrine’s origins stem from an attempt to prevent a corporation from avoiding criminal liability by merely compartmentalizing the duties of its agents.

A corporation, of course, is incapable of actually forming the mens rea necessary to commit a criminal act.  Its knowledge and intent—in other words, its mens rea—must be imputed from that of its agents.  But as noted below, the law has drawn a distinction between utilizing the collective knowledge doctrine as a foundation for inferring “knowledge” and “intent,” respectively.

Because corporations are “legal persons” under the law, they are capable of suing, being sued and—most importantly, for purposes of this post at least—committing crimes.  As the Supreme Court has held, “[t]he acts of a corporation are . . . the acts of all of its employees operating within the scope of their employment.”  As a result, the law governing corporate criminal liability reflects this.

Historical Treatment

Traditionally, the doctrine of respondeat superior held corporations liable for the illegal actions of employees acting within the scope of their employment for the benefit of the company.

In 1987, the Supreme Court, in United States v. Bank of New England, sanctioned the use of another mechanism to hold companies criminally liable – the collective knowledge doctrine. Under this doctrine, a company is charged with having the sum of the knowledge of its employees, allowing prosecutors to combine pieces of knowledge held by individual employees and to attribute the totality of that knowledge to the corporation as a basis for criminal liability for the company.

The court in Bank of New England justified the collective knowledge doctrine because a corporation subdivides duties and operations, and therefore—under the doctrine—is responsible for the sum of the knowledge of all its employees.

How Does the Collective Knowledge Doctrine Compare to the Doctrine of Respondeat Superior?

The collective knowledge doctrine differs from the doctrine of respondeat superior in that it allows the knowledge from multiple individuals to be combined to form the basis for criminal liability even though individual employees may not, themselves, actually possess the requisite information to establish criminal liability.  Respondeat superior, on the other hand, requires that a single individual maintain all the knowledge necessary to hold the company liable.

The doctrine is also distinct from the willful blindness doctrine, a separate doctrine impacting corporate liability.

Limits of the Doctrine

The collective knowledge doctrine does not extend to intent, and therefore may not be used to establish a corporation’s intent.  If no single employee possesses the requisite culpable state of mind required for the crime, intent may not be combined from that of multiple employees to establish the requisite intent to hold the corporation criminally liable.

Some Courts Remain Reluctant

Although the collective knowledge doctrine has existed for decades, many courts remain reluctant to apply it because it allows a corporation to be punished for knowledge-based crimes when they actually only possess only negligence—the knowledge is, in effect, constructive. Courts have dealt with the scienter issue differently, some requiring that there be a single officer of the corporation engaging in the prohibited act with the requisite mental state, while others allow for the knowledge of any employee to be considered collectively.

One circuit court recently attempted to carve out a middle ground, specifying certain types of individuals that can be used to determine whether the corporation had the requisite scienter. Such inconsistencies allow the collective knowledge doctrine to be applied in different ways, leading to  the possibility of different outcomes for corporate defendants depending on the prosecuting jurisdiction. The doctrine, by its very nature, allows for a level of judicial discretion with respect to the pattern of inferences and aggregations that will sufficiently establish knowledge.