Gordon v. United States case brief

 

Gordon v. United States:
Defendants were convicted of violating the Defense Production Act by selling sewing machines on credit terms prohibited by that act and regulations issued thereunder.
Section 601: any person who "willfully" violated its provisions or any regulation or order issued thereunder should, upon conviction, be punished as therein specified.
The case was not submitted to a jury. It was tried and submitted on the theory that knowledge of one partner was "imputable, attributable and chargeable" to the other and that the knowledge and acts of the sales people were imputable and chargeable to the employing partners.

• Willfulness was an element of the crime but the court still found guilt through “constructive knowledge” because the employer should have known what was going on.
• Reversed by the supreme court: The individual partners did not willfully fail to comply with the statute. 
  -In U.S. v. A&P Trucking Co. the court held an ENTIRE partnership liable for a "knowing and willful" violation. This case is distinguishable because in Gordon the court did not want to impute liability on individual partners but in A&P Trucking it held the entire partnership liable.

CORPORATION V. CORPORATE OFFICERS - Strict Liability:

• Corporation: Ex: Corp. doesn’t file a tax return as required by law. Should Corp. be liable?
  • Corporation should have mechanisms in place to make sure this gets done. If it doesn’t, whose fault is it? – probably everyone’s. If no one does it, who but the corporation can you hold liable.
    • Impossible to find out which individual employee did it thus better to hold corp. liable b/c it gives them the incentive to find out who did it, fix the system, etc. 
• Officers: Ex: What about the president of corporation – if no tax return is filed. Is corporate president liable?
  • Probably not – he’s not responsible for daily activity. But if he received a letter informing him of the missing tax returns and he forwards it on to the compliance/accounting department – is he still liable:
  • Probably – he could have fixed the problem.
    • see United states V. Park: Just because you’re the president of the company, doesn’t mean you’re not liable – you could have fixed the problem. May also be liable for negligent supervision.
    • In Park, this is a public welfare issue. These are regulatory crimes which are pretty anemic. Very low punishments. In the Gates case, he is just paying a fine for his SL crime.