In the 1908 case of New York Central and Hudson River Railroad Company v. United States, the U.S. Supreme Court established a significant precedent in corporate law by ruling that corporations can be held criminally liable for the actions of their employees if those actions were performed within the scope of their employment and for the benefit of the corporation. The case arose when an employee at New York Central Railroad gave illegal rebates to customers; even though this was against company policy, it benefited them financially. The court ruled that since corporations are legal persons under U.S law, they should be subject to criminal laws just like natural persons would be in similar circumstances.

In the dissenting opinion for New York Central and Hudson River Railroad Company v. United States, Justice Moody argued that a corporation cannot be held criminally liable for the actions of its employees unless it can be proven that those at the top of the corporate hierarchy had knowledge or gave consent to such actions. He contended that attributing criminal intent to a corporation based on an employee's misconduct is unjust as corporations act through various agents who may not always represent their employer’s interests accurately. The justice also expressed concern about potential misuse of this ruling by prosecutors in future cases against corporations, which could lead to unfair punishments without proper evidence of corporate complicity or awareness.