Senator Proposes ‘Three Strikes and Out of Business’ State Law

A “three strikes” bill that would prohibit companies with multiple convictions from doing business in California was launched in the Senate on Tuesday.

Sen. Gloria Romero (D-Los Angeles) said her plan would provide a new level of safety for the public from corporate crimes in the same way that the state’s three-strikes law makes citizens safer from other types of criminals.

Democrats on the Senate Judiciary Committee agreed. On a 5-2 vote over Republican opposition, they sent the bill (SB 335) to the full Senate, where its passage is expected.

Under the measure, sponsored by the Foundation for Taxpayer and Consumer Rights, a business convicted of three felonies in state or federal courts in California would be prevented from doing business in the state.

Proponents of the bill argued that enforcement of existing laws that can put a corporation out of business is weak and seldom exercised. Romero said current penalties are civil fines or financial settlements whose effects are short-lived and can be chalked up by corporate bad actors as merely the cost of doing business.

Revoking a company’s ability to do business in the nation’s most populous state would be a powerful deterrent against breaking the law. “Most people in California understand the phrase ‘three strikes.’ Why should white-collar crimes be enforced less seriously?” she said.

The bill drew opposition from the California Chamber of Commerce, whose lobbyist, Dominic DiMare, criticized it as unnecessary. He said it was so broadly written that the criminal activity of only one company executive could set off a chain of events that might bring the entire corporation down, including its subsidiaries in other states.

“It takes people to do the crime, not the corporation,” DiMare said.

Under the bill, after the first and second felony “strikes,” the business would be required to do public penance by publishing the details of its crime in full-page newspaper ads. The third felony conviction would require the secretary of state to revoke its ability to conduct business in California.

Under the state’s pioneering three-strikes law, criminals who commit a third serious or violent felony are sent to prison for 25 years to life.

The Romero plan would provide that the first two strikes against the criminal corporation could occur in any state, not just California. But the third felony would have to be committed in California.

The strikes would apply to virtually any type of felony, ranging from violations of the tax and consumer protection codes to offenses involving civil rights, antitrust and environmental protection, among others.

It would apply to any general corporation, nonprofit public benefit corporation, partnership and limited liability company. The bill also would authorize private attorneys to enforce its provisions.