united-states corporate-law washington
Can a company officially decide to break the law since the penalty for breaking it is cheaper than following it?
<p>For example imagine a company in Washington that needs a temporary building for its workers to live in during the summer. Instead of bothering with permits, they rapidly construct a dormitory for their employees which is a violation <a href="https://www.seattle.gov/sdci/codes/common-code-questions/construction-without-a-permit" rel="noreferrer">punishable for up to $500/day</a>. They keep the building up for 3 months and then pay a $45k penalty to the state government. For their purposes this is cheaper than getting those employees hotel rooms or waiting for the permits to arrive.</p>
<p>Is there any issue with the company’s management officially deciding to ignore the permit system and just pay the fine? Or in other words, can they be charged with anything besides the known $45k penalty for openly deciding to break the law?</p>
<p>In more general terms, I’m trying to understand if the concept of “treat fines as a convenience fee” applies to businesses as well. I.e. it is commonly said that smoking in hotels is allowed, you just have to pay a $250 fee to do it.</p>

<h2>Yes, but there is a risk</h2>
<p>If a company persistently violates the law, the regulator can go to court to get an injunction for them and their agents to stop. If they don’t they are now in contempt of court and the fines for that are much steeper. Also, the people in contempt can be jailed until the contempt stops.</p>

<p>There are often additional legal measures that the authorities can take to make it more expensive and troublesome for a company that acts in the way described in the question, treating a fine as merely a cost of doing business, or as a &quot;convenience fee&quot;.</p>
<p>For example, consider the Seattle Building code linked in the question. While section 103.5 authorizes a penalty of up to $500 per day, it is on a <em>per-violation</em> basis. It is likely that a structure constructed with no permits at all would involved many code violations, at $500/day for each.</p>
<p>Under section 103.3 and subsections the building official may issue a <em>stop work order</em>, halting work and the building, and requiring all persons to refrain from continuing such work until the violations are corrected. Under section 103.4 and subsections the building official may issue a notice of occupancy violation if a structure is occupied contrary to the provisions of the code. Under 103.4.2 this imposes a requirement on &quot;Any person occupying the building or structure&quot; to &quot;discontinue occupancy&quot; of the building until the violation is cured. This would impose an obligation with potential fines, on the individual employees housed in the building.</p>
<p>Under section 103.8 Any person who &quot;violates or fails to comply with any notice of violation&quot; can be charged with a criminal offense. On conviction, such a person can be fined up to $5,000 or imprisoned for up to 365 days, or both, for each violation. Each day that a violation continues constitutes a separate offense, and separate fines and imprisonment could be imposed for each such day. This could place individual corporate officials and responsible employees in line for significant criminal penalties.</p>
<p>Further under section 103.9 the court may issue an injunction to deal with any violations as needed.</p>
<p>In short, the law often has a variety of tools to use, when there is blatant defiance of a requirement, which may make such defiance more expensive and onerous than it would first seem. The details will vary, and the above is merely an example.</p>

<p><strong>Can they be charged with anything besides the known $100k penalty for openly deciding to break the law?</strong></p>
<p>The answer may depend on US state-specific legislation but
In <a href="/questions/tagged/england-and-wales" class="post-tag" title="show questions tagged &#39;england-and-wales&#39;" rel="tag">england-and-wales</a> - which is also a Common Law jurisdiction - the demolition of a <a href="https://historicengland.org.uk/advice/hpg/uwandhc/offences/#Section1Text" rel="nofollow noreferrer">listed building</a> without proper authorisation is an offence <a href="https://www.legislation.gov.uk/ukpga/1990/9/section/9?timeline=false" rel="nofollow noreferrer">under s.9 of the Planning (Listed Buildings and Conservation Areas) Act 1990</a></p>
<blockquote>
<p>(1) If a person contravenes section 7 [<em>ie demolish, alter etc without
authorisation</em>] he shall be guilty of an offence.</p>
<p>...</p>
<p>(4) A person who is guilty of an offence under this section shall be
liable—</p>
<p>(a) on summary conviction, to imprisonment for a term not exceeding
six months or a fine, or both; or</p>
<p>(b) on conviction on indictment, to <strong>imprisonment for a term not
exceeding two years</strong> or a fine, or both.</p>
<p>(5) In determining the amount of any fine to be imposed on a person
convicted of an offence under this section, <strong>the court shall in
particular have regard to any financial benefit which has accrued</strong> or
appears likely to accrue to him in consequence of the offence.</p>
</blockquote>
<p>It will depend on the circumstances and the evidence, but one potential scenario is for both the company officials and the company itself (as a separate legal entity) to be prosecuted - obviously a company cannot be sentenced to imprisonment.</p>

<p>You want to construct the building without the necessary <strong>entitlements</strong>... planning approval, zoning compliance or variance, concessions such as roadbuilding or traffic lights, building plan, work permits etc.</p>
<h2>You're overlooking some costs there.</h2>
<p>Right off the bat is the cost of constructing the structure.</p>
<p>Mind you, when the dust settles, the municipality will force it to tear the building down <em>after obtaining a permit to tear it down</em>, so there'll be that cost too.</p>
<p>Forcing a scofflaw to tear down an unauthorized structure/improvement is a standard weapon in municipalities' arsenal.</p>
<p>So the construction cost of the structure will be a total loss, as well as the demolition costs.</p>
<h2>And some occupancy issues</h2>
<p>Regardless, the government is not going to issue the building an <em>occupancy permit</em>.  No occupancy permit means they can prohibit, well, occupancy.  And they can use the government jackboot (police) to physically evict any refuseniks (not that too many employees will want to be <em>arrested</em> for the company's cost-cutting measure.)</p>
<h2>And some construction issues</h2>
<p>The next problem is, who's going to build it?  A company can't just smite the ground and a building pops up.* Somebody has to build it. Unless the company has an internal core competency at that, they'll be going to a contractor.   Licensed contractors won't want to touch the job because it hasn't been permitted.</p>
<p><strong>Most likely, the contractor will simply <em>quote the job</em> inclusive of the entitlement costs</strong>... and the contractor will hand over keys to a building for which <em>they</em> (the contractor) pulled the permits.</p>
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<p>*  Okay, yeah, companies <em>do</em> have the ability to 'smite the ground and make a building pop up' in the sense that the Board can allocate a budget and assign a project manager in <em>literally a minute</em> who just hands it off to a <em>General Contractor</em>... but a ton of stuff happens behind the curtain, <em>including</em> design, entitlements (establishing right-to-build, which your premise excludes), contracting, and the contractors look to those entitlements.</p>
