United States v. George F. Fish, Inc.
154 F.2d 798 (1946)
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Rule of Law:
A corporation is criminally liable for the willful acts of its agents, including subordinate employees, when those agents are acting within the scope of their employment.
Facts:
- George F. Fish, Inc. was a wholesale dealer in fruits and vegetables, and Michael Simon was its salesman.
- During a time of wartime price controls, Simon engaged in a practice known as a 'tying-agreement.'
- On November 17, 1943, Simon forced a customer, J. M. Fierro, to purchase 10 boxes of honeydew melons as a condition of buying 4 crates of lettuce, a rationed item.
- On November 19, 1943, Simon compelled Fierro to purchase 5 boxes of broccoli to be able to buy 5 crates of lettuce.
- On November 27, 1943, Simon required another customer, William Zwerdling, to buy 5 crates of celery as a condition for purchasing 5 crates of lettuce.
- While the price charged for the lettuce itself was the legal maximum, the forced purchase of undesired goods effectively increased the total price paid for the lettuce, thereby evading price regulations.
Procedural Posture:
- The government filed an information in the U.S. District Court against George F. Fish, Inc. and its salesman, Michael Simon.
- The defendants were charged with evading the provisions of the Revised Maximum Price Regulation No. 426.
- A jury returned a verdict of guilty against both defendants.
- The District Court entered a judgment, imposing a fine on the corporation and a sentence of imprisonment on Simon.
- Both George F. Fish, Inc. and Michael Simon (appellants) appealed their convictions to the U.S. Court of Appeals for the Second Circuit.
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Issue:
Is a corporation criminally liable for the unlawful acts of its salesman when the salesman acts knowingly and deliberately within the scope of his employment?
Opinions:
Majority - Clark, Circuit Judge
Yes. A corporation is criminally liable for the acts of its agent committed within the scope of his employment. The court reasoned that there is no legal distinction between high-level officers and subordinate agents, like salesmen, when determining corporate criminal liability. The purpose of regulatory statutes like the Emergency Price Control Act is deterrence, and this purpose would be defeated if corporations could escape liability for the illegal acts of low-level employees who carry out the sales. To deny corporate responsibility would be to 'immunize the offender who really benefits' and 'open wide the door for evasion.' Therefore, the salesman's willful, criminal act is legally considered the act of the corporation.
Analysis:
This decision reinforces the broad scope of corporate criminal liability under the doctrine of respondeat superior, extending it explicitly to the acts of subordinate employees. The court's policy-driven reasoning emphasizes that for regulatory schemes to be effective, the corporate entity that profits from the illegal conduct must be held accountable. This precedent makes it difficult for a corporation to use the 'rogue low-level employee' defense, solidifying that a company is responsible for the actions of its agents acting within their employment authority, regardless of their position in the corporate hierarchy.
