Guilt By Position: Re-Emergence Of The Responsible Corporate Officer Doctrine

In recent years, the federal government has made no secret of its intent to pursue individuals in addition to companies in its efforts to enforce healthcare-related statutes, rules and regulations. One of the primary weapons in the government's arsenal is its revitalization of the responsible corporate officer (RCO) doctrine. Under this doctrine, an individual in a position of authority is susceptible to criminal prosecution and/or exclusion from federal healthcare programs for the misconduct of others in the organization, even in the absence of evidence that the individual knew or should have known of the misconduct.

History of the RCO Doctrine

The RCO doctrine was first recognized in United States v. Dotterwich, 320 U.S. 277 (1943). In Dotterwich, the company's president was charged with a misdemeanor violation of Section 301 of the federal Food, Drug and Cosmetic Act (FDCA), 21 U.S.C. Section 331, for the company's shipment of adulterated drugs. The statute did not require proof that the president had knowledge of the shipment, and the evidence did not establish it. The company's president was convicted and the Supreme Court upheld his conviction.

In its decision, the Court described the statute as a "... now familiar type of legislation whereby penalties serve as effective means of regulation. Such legislation dispenses with the conventional requirements for criminal conduct — awareness of some wrongdoing. In the interest of the larger good it puts the burden of acting at hazard upon a person otherwise innocent but standing in a responsible relation to public danger." (320 U.S. at 280-281.) In dissent, Justice Roberts crystallized the theory and characterized the conviction as guilt "imputed to the respondent solely on the basis of his authority and responsibility as president and general manager of the corporation." (320 U.S. at 286.)

Application of the RCO was reaffirmed by the Supreme Court about 30 years later in U.S. v. Park, 421 U.S. 658 (1975). In Park, the Supreme Court upheld the conviction of a food chain president for a misdemeanor violation of Section 301(k) of the FDCA, 21 U.S.C. Section 331(k), in connection with the rat-infested condition of a company warehouse. There was no evidence that the defendant knew of the infestation. Nonetheless, the Court applied the principles of Dotterwich, stating in part that "[t]he requirements of foresight and vigilance imposed on responsible corporate agents are ... no more stringent...