Law School Case Brief
Standard Oil Co. v. United States - 307 F.2d 120 (5th Cir. 1962)
It is through the doctrine of respondeat superior that corporations and other impersonal entities can be guilty of "knowing" or "willful" violations of regulatory statutes.
The employees of corporate defendants Standard Oil and Pasotex engaged in a scheme involving the moving and reassigning of oil to other wells in violation of the Connally Hot Oil Act (Act), 15 U.S.C.S. § 715 et seq. The employees' scheme benefitted only another company which was paying them for their actions. Standard and Pasotex were convicted in the district court for violating the Act and appealed.
Were corporate defendants Standard Oil and Pasotex liable for their employees' criminal activity prohibited by the Connally Hot Oil Act?
The United States Court of Appeals reversed the judgments of conviction as to the corporate defendants Standard and Pasotex.
The Court held that the Connally Hot Oil Act required that the conduct be knowingly done. The Court stated that Standard and Pasotex could be found guilty only if the evidence showed that the employees deliberately committed the acts, with the corporation knowing that the acts were done for Standard and Pasotex's benefit. The court also noted that because the employees' actions did not benefit Standard and Pasotex, the doctrine of respondeat superior did not apply to their actions. Because there was no evidence of corporate knowledge or benefit from the criminal activity of the employees, the district court ought to have entered a judgment of acquittal on these counts.
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