Hacker News Reader

Comment by jjeaff | Hacker News Reader

I'm in favor of a corporate death penalty. In cases where a company is found guilty of gross negligence leading to terrible disasters and loss of life, give a jury the option to give the death penalty. All equity holders AND debt holders are washed out and the assets are sold off to pay victims and severance pay for low level employees.

View on HN

For the USA, an easy mechanism for a corporate death penalty (for large enough corporations) without running afoul of takings clause would be to bar the corporation from engaging in interstate commerce, and to bar the equity holders from selling to themselves or relatives.

If you're talking about judicial action, the Takings Clause isn't a problem. If you're talking about Congressional action, your proposed alternative runs into the prohibition on Bills of Attainder.

In my view, the L&E approach of punitive damages calculated to be greater than the profit incentive of the negligent/reckless behavior is the best approach. Additionally, to the extent that an executive's actions were clearly not in the long-term interest of the corporation, they should be made personally liable.

To avoid the bill of attainder issue the companies wouldn't be individually named. All corporations that fit the bill would be subject to the bill. And since Congress is forbidden from passing ex post facto laws, such a law would obviously not be a bill of attainder, as it could not guess who would be subject to it.

IANAL. I believe that there are limits to the penalties a judicial action can impose. A corporate death penalty presumably wouldn't survive appeals without an underlying law. I guess the 8th amendment might still be a barrier to my alternative.

> In my view, the L&E approach of punitive damages calculated to be greater than the profit incentive of the negligent/reckless behavior is the best approach.

I agree. But I also want a corporate death penalty beyond this.

Revoking their charter and seizing their assets seems just for a lot of this stuff.

Their charters are often from other states (such as Delaware). This would complicate the issue by entwining state's rights and federal rights.

Are you willing to lose your job because your CEO did something wrong?

No. But that has never stopped a layoff.

It would be better to do this the way the FDIC treats failed banks: sell off obligations of the company, including buildings, equipment, and employees, to competitors. For a straightforward business such as a train logistics company with direct competitors who do effectively the same business, this seems relatively simple.

Selling to competitors sounds like a great way to create monopolies and perverse incentives.

Your idea is full of holes.

You do know that the FDIC requires spin offs as necessary to eliminate monopolies?

Ok, so going with your idea. We kill a company, then sell to competitors. FDIC says "that's anti-competitive".

Now what?

Part of the merger plans include the spin-off plans. This is typical even in large mergers that aren't government negotiated.

So you're not killing the company? You're justing selling it (bad safety culture and all) to another company?

You'd be selling the pieces of it. There would be no corporate charter, shareholders, board of directors, or other corporate structure left.

And no workers.

The invisible hand of the labor market will solve this issue.

Only if they quit. Otherwise they'd be transferred to the new company or one of the anti-monopoly spin-offs along with their part of the business, just like bank branches and headquarters are today.

Under such a system I wonder if people who quit from unsafe jobs more often because the companies would be perceived as less stable.

Even if a purely free market solution doesn't work the employees could be lumped in with victims as the assets are liquidated. Bankruptcy courts handle more complex but similar situations already.

Reply on news.ycombinator.com