The Responsible Corporate Officer (RCO) doctrine has long occupied an anomalous but obscure corner of American criminal law.  It allows corporate officers to be charged with a crime for wrongdoing at their companies, without any showing of personal fault – other than a showing that they were in charge at the time the wrongdoing occurred.  Such no-fault crimes are rare in American law, but the U.S. Supreme Court has upheld RCO convictions with the rationalization that penalties in RCO cases “commonly are relatively small, and conviction does no grave danger to the person’s reputation.”

Apparently, FDA and HHS did not get the message.  They have been pursuing RCO convictions against senior executives at pharmaceutical companies whose employees improperly promoted drug sales, then using the convictions to impose draconian penalties on executives.  Such penalties raise serious constitutional concerns.

Earlier this month, a federal district court in Washington, D.C. upheld a 12-year exclusion from the drug industry (effectively a life-time ban) for three senior executives of Purdue Frederick Co. after they pled guilty to RCO charges.  WLF filed an amicus brief urging that the exclusion be overturned.  They were convicted of nothing more than holding senior positions at a time when some Purdue employees improperly promoted the painkiller OxyContin.  But after the misdemeanor convictions (for which they were fined but received no jail sentence), HHS’s Office of Inspector General decided to impose an 20-year exclusion (later reduced to 12 years) under a statute that permits HHS to exclude “untrustworthy” individuals from participation in federal medical programs if they are convicted of a crime “related to” fraud.  Moreover, FDA and HHS, have made clear that this is just the beginning.  They have promised to crack down on what they deem improper drug promotion by obtaining more RCO convictions and imposing lengthy exclusions on other senior executives.

What federal health officials fail to understand is that the RCO doctrine has always teetered on the edge of unconstitutionality and that their efforts to use the doctrine to impose severe punishments will surely push it over the edge.  A well-established rule of criminal law is that society does not impose criminal sanctions on an individual without first determining that the individual acted with some blameworthy mens rea.  In the 1943 case of United States v. Dotterweich, the Supreme Court by a 5-4 vote created the RCO doctrine as a narrow exception to that rule.  Under the RCO doctrine, executives at a drug company can be convicted of a misdemeanor based on evidence that anyone employed by the company engaged in improper promotional practices, unless it would have been “objectively impossible” for the executive to prevent the violation.  Senior executives can never meet the impossibility standard, of course, because it would always have been within their power to prevent wrongdoing by serendipitously discharging an offending employee before he had an opportunity to act.  Four dissenters in Dotterweich objected that the RCO doctrine raised serious due process concerns, but the majority reasoned that allowing prosecutors to impose a relatively minor slap on the wrist of senior executives was an appropriate method of deterring future wrongdoing.

That constitutional calculus changes significantly now that HHS is threatening to inflict lifetime bans from the drug industry on those convicted of RCO crimes.  Such severe sanctions are incompatible with the bedrock principle that the law does not impose criminal sanctions (and certainly not severe ones) on individuals not shown to have acted with a blameworthy intent.  The three Purdue executives are appealing their exclusion orders to the U.S. Court of Appeals for the District of Columbia Circuit.  That court ought to put an end to the HHS witch hunt by making clear that the agency is distorting the RCO doctrine in a manner that is incompatible with the concept of due process of law.