103 Iowa L. Rev. Online 88 (2018)

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Abstract

In his Article, Clockwork Corporations: A Character Theory of Corporate Punishment, 103 Iowa. L. Rev. 507 (2018), Mihailis Diamantis champions character theory as a justification for corporate punishment. According to Diamantis, character theory more usefully guides corporate punishment than either deterrence or retribution. The idea is to identify the supposed character flaw that caused a given corporate violation, and then to rehabilitate the corporation by addressing that flaw.

At first glance, Diamantis’s rehabilitative approach appears relatively straightforward. For a corporate crime that is “out of character,” the judicial response might be rather measured; for one that evidences an “errant disposition,” however, the response might escalate into a searching review of corporate policies or an overhaul of the corporation’s internal functions. As Diamantis’s argument makes clear, “character” in this context refers to more than just culture; it also encompasses the corporation’s internal structure, policies and rules.

Diamantis’s account is at once engaging and attractive. There remain, however, good reasons for skepticism. First, in many cases, a fact-finder will establish–at best–only a murky connection between a corporation’s character flaws and a specific instance of wrongdoing. As such, the cure may often be less helpful than we anticipate. Moreover, character theory is, in many respects, incomplete. It tells us how to sentence the corporation for its crime, but it declines to say why a corporation is criminally liable in the first place.