Sally Yates secured her place in American history this week when, as Acting Attorney General, she refused to enforce President Trump’s executive order on immigration and refugees, after which President Trump fired her.
Yates thus eclipsed her now second biggest, though much narrower, claim to fame—at least among lawyers—as author of “The Yates Memo.”
As Deputy Attorney General, Yates issued a memorandum that outlined Department of Justice (DOJ) policy on “Individual Accountability for Corporate Wrongdoing” (Sep. 9, 2015). The Memo was seen at least partially as a reaction to the lack of individual liability cases following the 2008 financial crisis.
The Yates Memo states that “[o]ne of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.” Accordingly, the memo prescribes that the DOJ will “focus on the responsible individuals” in pursuing both civil and criminal cases. To do so, according to the Memo, the DOJ will implement six key steps:
- For the DOJ to afford a corporation any credit for “cooperation” in an investigation, the corporation “must provide to the Department all relevant facts about the individuals involved in corporate misconduct.”
- “Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation.”
- DOJ criminal and civil attorneys handling overlapping corporate investigations “should be in routine communication with one another.”
- “Absent extraordinary circumstances,” no resolution of a case against a corporation “will provide protection from criminal or civil liability for any individuals.”
- “Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires and declinations as to individuals in such cases must be memorialized.”
- “Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.”
In the year-and-a-half since publication of the Yates Memo, lawyers have debated the extent to which, either in theory or practice, it represents a truly new course in the DOJ’s handling of alleged corporate wrongdoing. Either way, the Memo has underscored that corporations in health care and other industries cannot expect to resolve government allegations of impropriety without significant attention to the potential liability of individual officers, managers, or employees.
Moreover, Attorney General-nominee Jeff Sessions has indicated the DOJ would, under his leadership, maintain its focus on individual liability. The Yates Memo thus, apparently, will continue to define federal policy in health care and other corporate cases—even though the incoming administration probably now wants to give it a new shorthand name.