Texas Penal Code 7.22 Corporate Criminal Law - Houston Criminal Attorney
Overview:
This Texas law outlines the circumstances under which corporations, associations, limited liability companies, and other business entities can be held criminally responsible for offenses committed by their agents. It specifies the conditions and scenarios under which such entities can be held accountable for criminal actions.
Key Points:
Conduct constituting an offense, performed by an agent on behalf of a business entity and within the scope of the agent's role, leads to criminal responsibility for the entity.
Criminal responsibility applies to offenses defined in this code and involving corporations, associations, limited liability companies, and other business entities.
Legislative intent to impose criminal responsibility on business entities is considered when offenses are defined by other laws (besides this code).
Strict liability offenses defined by other laws can lead to criminal responsibility unless a legislative intent not to impose such responsibility is evident.
Criminal Responsibility for Felony Offenses:
A business entity is criminally responsible for a felony offense only if the offense's commission was:
Authorized, requested, commanded, performed, or recklessly tolerated by a majority of the governing body acting on behalf of the entity.
Carried out by a high managerial agent acting on behalf of the entity and within the scope of the agent's office or employment.
Case Law:
Prior to the 1974 Penal Code and the conforming amendments thereto corporate criminal responsibility was recognized only to a very limited extent in Texas. Searcy and Patterson, Practice Commentary, V.T.C.A., Penal Code, Sec. 7.22. Texas was then apparently the only state that did not provide for general criminal liability. See Hamilton, Corporate Criminal Liability in Texas, 47 Texas Law Rev. 60 (1968).
Vaughan and Sons Inc. v. State, 737 S.W.2d 805, 806 (Tex. Crim. App. 1987).
Given the history of corporate criminal liability in Texas prior to the 1974 Penal Code, the various provisions of the 1974 Penal Code and other statutes enacted to bring about a change, the clear statutory language, and the analogous case authority, we reject the reasoning of the Court of Appeals and conclude that a corporation may be criminally prosecuted for the misdemeanor code offense of criminally negligent homicide under V.T.C.A., Penal Code, Sec. 19.07, for corporations have been made subject thereto. See V.T.C.A., Penal Code, Sec. 7.22(a)(1).
Vaughan and Sons Inc. v. State, 737 S.W.2d 805, 814 (Tex. Crim. App. 1987).
“Today, however, the general rule is that a corporation may be held liable for criminal acts performed by its agents acting on its behalf. See generally 18B Amer.Jur.2d, Corporations, Secs. 2136 and 2137 (1985); 19 C.J.S., Corporations, Sec. 1358, p. 1073.” Vaughan and Sons Inc. v. State, 737 S.W.2d 805, 806 (Tex. Crim. App. 1987).
Statute:
Sec. 7.22. CRIMINAL RESPONSIBILITY OF CORPORATION, ASSOCIATION, LIMITED LIABILITY COMPANY, OR OTHER BUSINESS ENTITY.
(a) If conduct constituting an offense is performed by an agent acting in behalf of a corporation, an association, a limited liability company, or another business entity and within the scope of the agent's office or employment, the corporation, association, limited liability company, or other business entity is criminally responsible for an offense defined:
(1) in this code where corporations, associations, limited liability companies, and other business entities are made subject thereto;
(2) by law other than this code in which a legislative purpose to impose criminal responsibility on corporations, associations, limited liability companies, and other business entities plainly appears; or (3) by law other than this code for which strict liability is imposed, unless a legislative purpose not to impose criminal responsibility on corporations, associations, limited liability companies, or other business entities plainly appears.
(b) A corporation, an association, a limited liability company, or another business entity is criminally responsible for a felony offense only if its commission was authorized, requested, commanded, performed, or recklessly tolerated by:
(1) a majority of the governing body acting in behalf of the corporation, association, limited liability company, or other business entity; or
(2) a high managerial agent acting in behalf of the corporation, association, limited liability company, or other business entity and within the scope of the agent's office or employment.
Acts 1973, 63rd Leg., p. 883, ch. 399, Sec. 1, eff. Jan. 1, 1974. Amended by Acts 1975, 64th Leg., p. 913, ch. 342, Sec. 4, eff. Sept. 1, 1975; Acts 1993, 73rd Leg., ch. 900, Sec. 1.01, eff. Sept. 1, 1994. Amended by: Acts 2019, 86th Leg., R.S., Ch. 112 (S.B. 1258), Sec. 2, eff. September 1, 2019.