Issue 7

Commercial Speech, Commercial Use, and the Intellectual Property Quagmire

The commercial speech doctrine in First Amendment jurisprudence has frequently been criticized and is recognized as a contested, problematic, and shifting landscape. Despite the critique within constitutional law scholarship more broadly, intellectual property (“IP”) law has not only embraced the differential treatment of commercial speech, but also has done so in ways that disfavor a much broader swath of speech than traditional commercial speech doctrine allows. The different bodies of IP law each define what is meant by “commercial” differently, and even within the same area of IP law there is confusion as to what role commerciality should play. Such disparities not only create doctrinal confusion and incoherence, but also demonstrate that distinctions between commercial and noncommercial speech are challenging to make and often difficult to justify, especially when broadened to distinctions between commercial and noncommercial uses—a distinction that usually turns on whether uses are made for financial gain. Thus far, IP laws and IP scholarship have provided no developed framework to answer the most basic questions of when commerciality matters for establishing rights or liability, nor any normative basis for distinguishing uses on those grounds. This project is the first step in addressing this troubled state of affairs.

Several recent disputes highlight the challenging questions of whether we should treat commercial uses differently, and, if so, under what circumstances. Consider the magazine Sports Illustrated’s publication of a commemorative issue devoted entirely to celebrating the basketball star Michael Jordan and his induction into the NBA Hall of Fame. Sports Illustrated offered two supermarkets free one-page spreads in exchange for selling and prominently featuring the magazine in their stores. Each of the supermarkets created congratulatory messages and images to celebrate Jordan’s induction. Jordan sued the supermarkets for false endorsement (under the Lanham Act) and for violating his right of publicity (under Illinois law). The case against one of the supermarkets, Jewel-Osco, was appealed to the U.S. Court of Appeals for the Seventh Circuit. The supermarket’s congratulatory spread included the market’s slogan—“Good things are just around the corner”—but did not otherwise refer to its stores or encourage any particular transaction. Jordan’s name appeared once in a sentence referring to his “elevation in the Basketball Hall of Fame,” and the page included a picture of sneakers with Jordan’s number (23) on each shoe’s tongue.

The availability of a First Amendment defense to the Lanham Act claims turned on whether the supermarket’s communication was classified as “commercial speech.” The Seventh Circuit held that it was, because the spread was encouraging consumers to frequent its markets. As a result, the court concluded that there was no First Amendment defense to the use of Jordan’s identity. Is such a conclusion justified either doctrinally or normatively? If Jordan had sued Sports Illustrated, the magazine would have had a First Amendment defense because it is not commercial speech. Should Sports Illustrated be exempted from liability solely because of this, even though its magazine is unquestionably sold for profit? What if the congratulatory advertisements were placed by a nonprofit (such as the free health clinic Chicago Community Health) to promote its services—should the analysis change? Is there something unique about the supermarkets’ speech (other than qualifying doctrinally as “commercial speech”) that justifies altering the analysis of false endorsement or right of publicity laws among these scenarios? If so, why?

Next consider throwing your child a birthday party with a Harry Potter theme. Can you make your own Harry Potter cake with characters and images from the movie? If you’re too busy or can’t bake and decide to buy one from a bakery, does the bakery have to get a license to depict Harry Potter and related images? Should it matter whether the bakery advertises or lists Harry Potter cakes as one of its options? What about a store that caters to fans of wizardry, from Lord of the Rings to Harry Potter, and provides a party space for those who want a wizardry-themed party? Can the store’s employees dress like Harry Potter characters and operate a pretend wizardry school without getting permission to do so from the movie studio or book publisher? The movie studio Warner Brothers recently filed suit against such a store. The cake and the wizardry parties raise potential copyright, trademark, and right of publicity claims. Should liability attach in any of these instances? Should we differentiate between the scenarios on the basis of whether the uses constitute commercial speech, or are for financial gain, or instead are not driven by profit motives?

Finally, consider a recent advertisement distributed online by the children’s toy company Goldie Blox that allegedly infringed the copyright to the Beastie Boys’ popular song from the 1980s, “Girls.” The advertisement shows three girls building amazing contraptions. A musical parody of the song plays over the ad. The original lyrics called for, “Girls—to do the dishes, / Girls—to clean up my room, / Girls—to do the laundry”; and to be available to the singer for sex. The Goldie Blox advertisement retains the tune from the Beastie Boys’ song, but changes almost all of the lyrics. The new lyrics include the following:

You like to buy us pink toys

And everything else is for boys. 

It’s time to change

We deserve to see a range

‘Cause all our toys look just the same

And we would like to use our brains. 

Girls—To build a spaceship

Girls—To code a new app

Girls—To grow up knowing that they can engineer that . . . .

The advertisement provides valuable social and political commentary on both the song and the world of gendered toys. Should Goldie Blox be disfavored in a fair use defense to a copyright infringement claim because the use is in an advertisement for a product and constitutes commercial speech? What if an identical video were posted by the Guerrilla Girls, an activist group whose members make various artworks (and appear in public in gorilla masks) to expose sexism and racism? Should these two uses be treated differently?

If the law distinguishes these various scenarios for purposes of IP law, there should be a developed basis for doing so, but thus far there has not been one. To date, no convincing basis has been articulated for distinguishing commercial and noncommercial speech and uses in IP laws. Consideration of these unexplored issues in IP law is particularly timely given recent decisions by the Supreme Court that call into question the future and scope of the commercial speech doctrine; the differential treatment of for-profit corporations; and the First Amendment limits on laws that restrict false or misleading statements, even when they are not commercial. Considering commerciality in IP law is also particularly important at this juncture because Congress has announced that it is embarking on a major review of copyright law. As we consider revising copyright laws, the role of commercial speech and commerciality more broadly must be part of the discussion.

Revisions to our trademark laws may also be on the horizon. The degree of confusion and inter- and intracircuit splits on the issue of commercial speech and commercial uses in trademark and false advertising laws under the governing Federal Lanham Act is untenable and should be part of any legislative reform project. In right of publicity law there are continued calls for federal legislation, calls that may gain traction because of the increasing recognition that state laws cannot be limited to state borders, especially with the dominance of the Internet, making the most expansive, speech-limiting state laws the ones that govern. If such a federal approach to the right of publicity moves forward, it must consider whether, and how, the right should be limited by the commercial nature of the persona at issue and whether it should matter if uses of that person’s identity are for financial gain or in advertising for commercial products or services (that is, in commercial speech). Current law on these questions is highly varied between states, and even within the same state it is often unresolved.

One of the challenges for courts, litigants, and scholars alike is that the term “commercial” is used to mean multiple things, even within the same body of law. In this Article, I not only identify the breadth of the confusion surrounding issues of commerciality in IP law, but also develop a taxonomy of what is meant by “commercial” in the context of IP. Greater precision of what we mean by “commercial” is required not only for clarity’s sake, but also to facilitate the deeper normative analysis that I engage in as I consider whether commercial speech and commerciality more broadly—particularly in the sense of seeking financial gain—are worthwhile determinants of liability in the IP context.

IP claims often overlap and complaints frequently include claims arising under trademark, right of publicity, and copyright laws. Although harmonizing the meanings of “commercial” is not required across these areas, to the extent that similar issues or defenses are raised it makes sense for the treatment of commerciality to be coordinated. To the extent that disparities of treatment are justified by constitutional law and a reliance on the commercial speech doctrine, the meaning of “commercial” must track commercial speech jurisprudence and be consistent across statutes and bodies of law. Thus far it has not. Moreover, if IP law truly relies on commercial speech for its discrimination against commercial uses, it cannot ignore the controversies that surround the doctrine nor ignore its arguably narrowing scope. Nor does the First Amendment require the disfavoring of commercial speech in the context of IP law, even if it permits it, making its importation a contested choice, rather than a fait accompli. Commercial speech can be valuable and worthy of robust speech protection; it can provide useful information and contribute to our cultural and expressive storehouse.

Other justifications for disfavoring commercial uses—in the broader sense of for-profit uses—also do not stand up to scrutiny. For example, commerciality is sometimes used as a proxy for market harm; but this is a weak proxy because not-for-profit uses can cause significant harms and for-profit uses can cause none. Moreover, evaluations of market harm can be directly analyzed and need not rely on such an inaccurate proxy. Nor is commerciality a good proxy for the value of the underlying use or its relative fairness or unfairness. For-profit uses can be fair, and not-for-profit ones unfair.

In Part I of the Article, I identify the different aspects of trademark, copyright, and right of publicity laws that raise the issue of commerciality and point out the many areas of confusion on questions as basic as the elements of these causes of action and defenses to them. I focus on these laws because issues of commerciality and free speech are the most prominent, but the analysis here applies more broadly to other areas of IP law, such as trade secrets and patent law.

In Part II, I develop a taxonomy of what is meant by “commercial” in IP law. I identify five primary meanings of “commercial”: First, “commercial” is used to indicate a use in commerce that falls within Congressional powers to regulate under the Commerce Clause. Second, “commercial” is used to identify commercial speech (as that term has been defined by the Supreme Court in its First Amendment jurisprudence). Commercial speech encompasses advertising for products and services, but also includes speech beyond the limited context of advertising. Courts often refer to commercial speech as speech that does “no more than propose a commercial transaction.” Nevertheless, as I will discuss, the exact contours of commercial speech have not been clearly delineated and the category sweeps more broadly than this definition suggests. A third definition of “commercial” is a broader reference to any for-profit use. The determination of what is meant by a “for-profit” use is itself contested. At times, “for-profit” is limited to instances in which there is an active interest in seeking financial gain (usually through sales), while at others it is meant more broadly as seeking any benefit (whether monetary or not). Fourth, and sometimes related to a for-profit use in a more general sense than mere financial profits, is the use of “commercial” to indicate a use that might cause an IP-owner market harm. Finally, “commercial” has been used as a pejorative term to indicate uses that are of lesser value—ones that are considered base or of limited expressive value. Uses can be commercial in all these ways or only in some, and “commercial” is sometimes used to indicate more than one of these definitions.

In Part III, I consider the justifications for using these various meanings of “commercial” as a basis for making determinations of rights, liability, and defenses to IP claims. The primary justifications for distinguishing commercial from noncommercial speech, and commercial from noncommercial uses (in the “for-profit” sense), are rooted in concerns over free speech and constitutionality, value, harm, and broader principles of fairness. I consider each of these justifications in turn and ultimately conclude that they fail to provide a convincing normative basis for distinctions rooted in commerciality and that none adequately explains the current contours of IP laws.

Finally, in Part IV, I provide some preliminary observations about the implications of this analysis and the importance of creating a more coherent IP law that better identifies when commerciality should and should not matter.

 

Constructing Issue Classes

Class actions are no longer functional. In 1966, the Advisory Committee on Civil Rules embarked on a guarded experiment by anticipating how class actions might help enforce substantive laws. But in the years since, both Congress and the courts have twisted and curtailed that experiment through increasingly strict certification standards. Now plaintiffs’ attorneys forgo a bevy of claims to buttress their certification argument, bootstrap state law claims into federal causes of action, or bill class-certification questions at such high levels of generality that judges are confronted with an all-or-nothing proposition: to certify, or not. But these strict standards and corresponding tactics have evolved from a misguided focus on class members’ cohesiveness vis-à-vis one another and a failure by parties and courts alike to frame and adjudicate collectively what actually unites plaintiffs—a defendant’s conduct.

This black-or-white thinking is not without consequence. Without certification, some litigation—like small-stakes consumer claims—will evaporate, which undermines enforcement goals. While economically viable claims will not wholly disappear, most injured people will not sue, which raises questions about realizing compensation and deterrence aims. And plaintiffs’ attorneys’ strategy of presenting only potentially certifiable causes of action can simultaneously risk disabling viable personal-injury claims and saddling subsequent proceedings with unpredictable preclusion. Plaintiffs who do sue individually are likely to be corralled into multidistrict litigation, where judges face similar agency problems but lack clear policing authority absent class certification.

Certifying fewer classes also seemingly correlates with increased public regulation through state attorneys’ parens patriae power. While faithful attorneys general can fill a much maligned regulatory void, as the New York Times recently reported, they can also be purchased with timely campaign contributions. Moreover, when state attorneys proceed exclusively in state court, parens patriae actions incite further concerns about inconsistent outcomes, precluding private claims, and inadequately representing constituents.

Issue classes, where courts certify only certain claims or elements within those claims, can shed conventional black-or-white thinking about certification, equip private regulators with a procedural means to stymie these concerns, and advance substantive values. But issue classes palliate these pitfalls only insofar as judges abandon their misguided search for internal class unity and recognize that the defendant’s conduct, when uniform, is what bonds plaintiffs—not race, gender, identical injuries, or consistent damages.

Reorienting traditional philosophies about class cohesion frees judges to think pragmatically about how to situate, sort, and adjudicate the components of claims and defenses by classifying them into their constituent parts. Most legal elements can be cataloged according to whether they address a defendant’s alleged conduct or a plaintiff’s eligibility for relief. When a defendant’s conduct is nonindividuated toward plaintiffs or when substantive law permits plaintiffs to satisfy their eligibility for relief with aggregate proof, those components are ripe for aggregate treatment. Adjudicating those issues collectively may substantially advance all the claims, increase efficiency by reducing replicated proof, and minimize inconsistent verdicts.

The promise of issue classes has not gone unnoticed. After a rocky debut in the 1990s with appellate decisions in Castano v. American Tobacco Co. and In re Rhone-Poulenc Rorer, Inc., issue classes are now experiencing a renaissance: They top the Rule 23 subcommittee’s agenda for potential rule changes and have been embraced by most circuit courts. To date, however, scholars have done little beyond debating whether issue classes should exist.

This Article changes the status quo with two principal contributions. First, after identifying how our existing procedural landscape fails to effectively redress nationwide misconduct, it constructs a unifying doctrinal theory as to when collectively resolving a single issue will be worthwhile. By reconsidering disjointed notions of class cohesion and recasting claims and defenses into defendant’s conduct or plaintiff’s eligibility components, it demystifies the certification calculus and sets the stage for courts to certify classes that resolve key issues like a defendant’s uniform conduct. This resists the all-or-nothing approach to certification and coordinates the judicial response to jurisdictionally disaggregated regulators. Second, it offers solutions to a medley of sticky legal and logistical quandaries such as how to compensate issue-class counsel when no common fund exists, ensure appropriate error-correction mechanisms through interlocutory appeals, coordinate fragmented public and private regulators, remand multidistrict litigation cases post-issue-classes, and confront Seventh Amendment Reexamination Clause concerns.

Part I begins by identifying and defining the central problem of today’s regulatory terrain: When a national corporation behaves egregiously, that single act or series of acts gets distorted through several legal prisms—jurisdictional restrictions, state law intricacies, and limited regulatory authority. Unless there is parity between the regulator’s authority, the governing law, the court’s jurisdiction, and the corporation’s nationwide conduct, the net effect is to thwart coordinated enforcement. Defendants successfully capitalize on these imbalances to avoid class certification, at least until they want the umbrella of closure that settlement classes provide. But this prompts settlement-oriented litigation. Plaintiffs’ attorneys sacrifice valuable claims to satisfy strict certification standards, have little bargaining leverage with defendants, and rarely test the claims’ merits. This risks undervaluing claims, undermining deterrence, and encouraging splintered enforcement, which escalates inadequate-representation concerns and prompts erratic preclusion decisions.

Class certification, adequate representation, and preclusion all boil down to whether a class is cohesive—a term that appears nowhere in Rule 23, but has emerged at the heart of Supreme Court jurisprudence. Part II irons out doctrinal difficulties with class cohesion and situates defendant’s conduct as what unifies plaintiffs. When misconduct toward plaintiffs is uniform, adjudicating conduct components collectively promotes consistency. But this also reveals a fundamental flaw when plaintiffs’ attorneys try to transform decentralized conduct toward different individuals into a group wrong by deploying “aggregate proof” through statistical or economic experts. Without a change in substantive law, the magic of mathematical models is just smoke and mirrors—models cannot make disparate conduct uniform.

Part III recognizes that, as usual, the devil is in the details. It thus breaks new ground by carefully parsing interrelated doctrinal, political, logistical, and constitutional concerns about issue classes. While issue classes can promote resource parity between parties and reduce inconsistent decisions as to the same conduct, certifying inconsequential issues can generate undue settlement pressure. Yet, certifying only components that resolve core questions and instituting appeals on the merits can alleviate this pressure. Conversely, without appropriate incentives, issue classes could lie stillborn in the hands of plaintiffs’ attorneys: Because issue classes do not produce a final judgment, there may be no common fund from which to collect fees. Adapting charging liens and the common-benefit doctrine, however, ensures compensation for class counsel if plaintiffs subsequently benefit from the issue class’s preclusive effect.

To be sure, issue classes can do only so much. Multiple regulators persist and procedural mechanisms cannot alter regulatory and jurisdictional overlap. But, because issue classes work by precluding re-litigation in follow-on proceedings, they can facilitate cross-pollination between (and consistency among) public and private enforcers in dispersed fora. Likewise, they offer a means for transferee judges to resolve common conduct questions in multidistrict litigation when plenary classes are nonviable.

The Corporate Criminal as Scapegoat

A corporate criminal is no scapegoat, assures the Department of Justice (“DOJ”), because it is always a priority to target all culpable individuals at a company. DOJ policy emphasizes that “[o]nly rarely should provable individual culpability not be pursued, particularly if it relates to high-level corporate officers,” even if the company settles its case with prosecutors.  After all, under the respondeat superior standard that applies in federal criminal cases, a corporation can be prosecuted if and only if an employee committed a crime.  As the Supreme Court has put it, “[T]he only way in which a corporation can act is through the individuals who act on its behalf.”  Yet, as is increasingly the subject of high-profile criticism, more often than not, when the largest corporations are prosecuted federally, individuals are not charged.  In this Article, I develop data describing these individual prosecutions—which tend to result in light sentences when convictions are obtained.  These data illustrate the special challenges of bringing corporate prosecutions, and they suggest why, in contrast to what prominent critics have argued, bringing more individual cases is no adequate substitute for prosecuting companies. I conclude by proposing how corporate prosecutions could be brought to enhance individual criminal accountability.

The corporation appears to be a kind of a scapegoat: perhaps not entirely blameless, as in the traditional concept, but literally impossible to actually jail—yet capable of receiving the brunt of blame and punishment, while the individual culprits go free.  Data presented in this Article suggest that the problem of individual and corporate prosecution requires far more careful consideration. In about two-thirds of deferred and non-prosecution agreements (“DPAs” and “NPAs”) with companies, no individual officers or employees were prosecuted for related crimes.  Many were quite high-profile prosecutions; well over half were public corporations, and many were Fortune 500 and Global 500 companies.  The companies are required to admit their crimes and accept responsibility for them, and yet the individual culprits faced no criminal consequences.

The problem becomes far more complex, however, when one asks what occurs when individual officers and employees are charged. In this Article, I study the outcomes in those cases in some detail. Prosecutors typically obtained light sentences and experienced quite high numbers of outright losses in the form of acquittals and dismissals. As will be described in Part I, from 2001 to 2014, prosecutors entered 306 deferred and non-prosecution agreements with companies.  Among those, 34%, or 104 companies, had officers or employees prosecuted, with 414 total individuals prosecuted.  Most prosecuted individuals were not high-up officers of the companies, but rather middle manag-rs of one kind or another. Of the individuals prosecuted in these cases, thirteen were presidents, twenty-six were CEOs, twenty-eight were CFOs, and fifty-nine were vice-presidents.  What happened in these cases? Of the 414 individuals, 266, or 65%, pleaded guilty.  And for-ty-two were convicted at a trial, an elevated trial rate of 10%.  How were convicts sentenced for these corporate crimes? The average sentence, including those who received probation but no jail time, was eighteen months. As I will describe, that is somewhat lower than aver-age sentences for many of the relevant federal crimes. The average sentence among those who did receive jail time was higher—forty months.  But it was only 42% or 128 of the 308 individuals convicted (266 who pleaded guilty and 42 who were convicted at trial) who received any jail time.  This is a low imprisonment rate.  To be sure, many convicts paid large fines. Of the individuals prosecuted, 144 individuals were fined, with an average fine of $382,000. 

Of still greater concern was the large number of prosecution losses: 15% of the cases were unsuccessful, which, as I will develop in Part I, is far higher than what is typical in federal white-collar prosecutions.  Fifty-two individuals had charges dismissed pretrial. Eleven were ac-quitted at trial.  Still other cases were not ultimately successful; nine had convictions reversed on appeal.  In addition, forty individuals were charged but have not been convicted, either because the cases are still pending, or individuals are fugitives or have not been successfully extradited. 

“There is no such thing as too big to jail,” Attorney General Eric Holder announced in a stern video message in May 2014, underscoring that no financial institution “should be considered immune from prosecution.”  Yet it is increasingly common to hear complaints, including from prominent politicians, judges, journalists, and academic commentators, that the government “has prosecuted only a handful of individuals in the Wall Street meltdown of 2008.”  Presidential candidate Hillary Clinton has said, “Even though some institutions have paid fines and even admitted guilt, too often it seems like the people responsible get off with limited consequences (or none at all).”  The concerns have also been raised in areas of federal criminal practice unrelated to banks or to the causes of the financial crisis. For example, then-Senator Arlen Specter asked in 2010 hearings why no employees of Siemens were prosecuted for foreign bribery violations after the company paid record fines to settle a Foreign Corrupt Practices Act (“FCPA”) prosecution. Senator Spector asked, “[W]ho’s going to jail?”  (Subsequently eight employees were indicted, but none have to date been extradited to the United States.)  In environmental prosecutions, critics have also asked why executives have not been targeted following deadly spills, mine explosions, and other disasters.

Federal Judge Jed Rakoff has offered a prominent critique of this problem, arguing that prosecutors are too quick to settle corporate cases on lenient terms after hasty investigations; he concludes that prosecuting individuals would be more effective than “imposing internal compliance measures that are often little more than window-dressing.”  Professor Dan Richman has added that “simplistic clamoring for more heads” will not address an underlying need for “more systemic regulatory reforms.”  Still others have long argued that corporate criminal li-ability standards should be altered, sharply limited, or even abolished as inconsistent with the purposes of criminal law.  Whether the allure of individual prosecutions substitutes for efforts to provide sound regulation of corporations, much less prosecution of noncompliant corporations remains an important subject.

The relative lack of individual prosecutions raises a puzzle: One might expect it to be far easier for prosecutors to bring white-collar cases when they benefit from the company’s cooperation. Companies typically agree to fully cooperate with investigations that may continue long after the firm settles its case. Companies conduct detailed internal investigations, turn over documents, records, and emails, and they agree to produce employees for interviews.  DOJ officials began to respond to critics with remarks in 2014 that highlighted the importance of “true” corporate cooperation that provides “evidence against” the “culpable individuals.”  In September 2015, the DOJ released a new memorandum, amending its guidelines to reflect a focus on individual accountability for corporate crimes, stating, among other changes, that no longer will corporations receive any credit for cooperation without providing all relevant facts regarding individual misconduct.  The DOJ also acknowledged “many substantial challenges unique to pursuing individuals for corporate misdeeds.”  Despite the remarkable access prosecutors can obtain from companies, prosecutors still often do not succeed in holding individuals accountable. Moreover, there is a separate scapegoating concern that, when employees or individuals are charged, they may be identified based on the information the company offered to prosecutors. The higher-ups, who may control negotiations with prosecutors, may themselves remain above the fray while lower-level employees are “thrown under the bus.”

After detailing these empirical findings, this Article turns in Part II to explaining why it is that corporate prosecutions are not associated with many successful individual prosecutions. Critics are right to suggest that prosecuting individuals has been a priority for some corporate crimes but not others—with, for example, antitrust being an exception. The “corporate scapegoat” problem goes to the heart of a central rationale for settling corporate prosecutions. However, there are other important rationales that I will detail in Part II of this Article. Although such cases have largely escaped criticism, it may be just as problematic or more so when only individuals are prosecuted and not the corporation. Justice is not fully served by individual prosecutions if only the company can pay adequate fines, restitution to victims, or change practices and policies to prevent future crimes. In my view, justice is served by prosecuting corporations.  But neither individual nor corporate prosecutions are necessarily a ready substitute for each other. While corporate cooperation can help overcome practical obstacles, corporate complexity raises still others, particularly regarding showing intent. Establishing culpability of individuals acting within complex organizations can be difficult. For strict liability offenses, the conduct may be easy to prove, but less worthy of prosecution due to low culpability. Prosecuting thousands of traffic tickets may make little sense—particularly if the company can pay one massive ticket to cover the social cost. Or if the conduct was very serious but committed by low-level employees, focusing on the corporation may be the best way to address the problem. Regulatory crimes may be best resolved by settling with the regulated entity. In such areas, treating the corporation as the scapegoat makes eminent sense.

In Part III, I will explore three types of reforms. First, I will examine proposals to enact new substantive crimes to reach complex corporate malfeasance or even financial negligence, which I view as ill advised. Instead, I will propose a series of legislative changes that may do far more good. Statutes of limitations could be extended for categories of complex corporate cases. The Speedy Trial Act could be revised to permit deferred prosecutions for corporations only if the firm cooperates to identify culpable individuals.  Sentencing statutes and guide-lines could be revised to similarly tighten requirements for corporate cooperation. Second, I will explore changes to DOJ policy and practice. In some areas, prosecutors may have rested secure having obtained a corporate settlement with eye-catching fines. Using corporate prosecutions to charge individuals—securing “more heads”—would require stricter policies and added resources for investigations and enforcement.  A third approach, emerging in a few recent cases, uses corporate settlements to change the incentives for employees and officers at the firm, using what I have termed “structural reforms” to prevent future criminality.

Despite DOJ policy that “only rarely” should “culpable individuals” not be prosecuted, far too many corporate cases lack individual prosecutions.  The uneven results in individual prosecutions that are brought illustrate why the pattern persists. However, I will conclude in this Article that, contrary to what some critics have argued, corporate prosecutions need not come at the cost of individual accountability—corporate prosecutions can and should be used to enhance individual accountability and deter corporate crime.

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