Health Care Enforcement and White Collar Defense Alert: SJC Limits Corporate Criminal Liability

On May 19, 2010, Massachusetts’ Supreme Judicial Court (“SJC”) in a unanimous decision ruled that a nursing home could not be convicted of involuntary manslaughter or criminal neglect of a resident based upon a theory of collective knowledge unless one of its employees could be found individually liable for each such crime. This decision is not only significant for corporate defendants facing criminal liability, but it might also be extended to provide similar protection to those same defendants in civil False Claims Act cases. Furthermore, the decision may lead prosecutors to broaden their targets to include individuals who participate in the wrongdoing.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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