On August 12, 2022, in United States v. Hoskins, No. 20-842 —F.4th—, 2022 WL 330357 (2d. Cir. Aug. 12, 2022) (“Hoskins II”), a three-judge panel from the Second Circuit upheld a lower court decision to overturn the foreign bribery conviction of a former Alstom SA executive, Lawrence Hoskins.  The Court concluded that the trial evidence did not support a finding that Defendant Hoskins was an “agent” of a U.S. subsidiary of the French multinational railway manufacturer Alstom (“Alstom U.S.”).  While highly fact-intensive and likely subject to narrow interpretation in the future, the decision is the Second Circuit’s most recent limitation on the extraterritorial reach of the Foreign Corrupt Practices Act (“FCPA”).  This follows a prior Second Circuit decision in this same case limiting the scope of the FCPA’s extraterritorial reach of conspiracy liability for certain foreign individuals acting abroad.

As we’ve written before with respect to this case, circuit court decisions interpreting the FCPA are rare.  This decision follows an August 2018 decision, United States v. Hoksins, 902 F. 3d 69 (2d. Cir. 2018) (“Hoskins I”), in which, as part of an interlocutory appeal, the Second Circuit held that foreign nationals who cannot be convicted as principals under the FCPA also cannot be held liable for conspiring to violate or for aiding and abetting a violation of the statute.  In other words, the Second Circuit held in Hoskins I that a foreign national who does not otherwise fall under the following categories specified by the FCPA cannot be held liable for violations of the statute under secondary (accomplice or co-conspirator) liability theories:

  • issuers of securities registered under the Securities Exchange Act, or any officer, director, employer, or agent thereof, or any stockholder acting on behalf of the issuer,
  • any U.S. “domestic concern” – a U.S. citizen, resident, or company, or any officer, director, employer, or agent thereof, and
  • any foreign person or business that commits an act in furtherance of a corrupt payment while in the United States.[1]

Because Hoskins could not be held liable for violating or conspiring to violate the FCPA without a showing by the Department of Justice (“DOJ”) that he was acting as an employee, officer, director or agent of Alstom U.S. when he engaged in the prohibited conduct, the DOJ reframed its conspiracy charge to allege that Hoskins acted as an agent of a domestic concern—Alstom U.S.  In Hoskins II, the Second Circuit affirmed the District Court’s decision that the DOJ did not provide sufficient evidence to demonstrate that Hoskins was an “agent” of Alstom U.S.

Factual Background

In 2013, Hoskins was charged with violating the FCPA for his involvement in approving and authorizing payments to two consultants retained by Alstom’s Connecticut-based subsidiary, Alstom Power Inc., knowing that a portion of the payments would be used to bribe Indonesian officials.[2]  Hoskins is a British citizen who was living in France at the time of the activity, was employed by Alstom’s U.K. subsidiary, and assigned to work in its French subsidiary.  He was not an employee of Alstom U.S., which was the entity that hired consultants to pay bribes to Indonesian officials to secure a $118 million contract to build power stations for Indonesia’s state-owned electricity company.  Nor did Hoskins ever enter the United States while allegedly working on the bribery scheme.  Still, Hoskins was responsible for approving the selection of consultants and authorizing payments to them, in particular as part of Alstom’s French subsidiary’s “International Network” department, which was an internal-facing “support organization” that provided Alstom’s operational business units with support on an “as-needed basis.”[3]

Procedural History

In November 2019, after a one-week jury trial, Hoskins was convicted of six counts of violating the FCPA, one count of conspiracy to violate the FCPA, three counts of money laundering and one count of conspiracy to commit money laundering.[4]  Alstom had separately settled FCPA violations with the DOJ and SEC earlier, in 2014, based on the same underlying bribery scheme.

On February 26, 2020, Judge Janet Bond Arterton of the United States District Court for the District of Connecticut granted Hoskins’s motion for a judgment of acquittal with respect to six counts of violating the FCPA and one count of conspiracy to violate the FCPA on the basis that there was insufficient evidence to demonstrate that Hoskins acted as an agent of Alstom U.S.  Nonetheless, the Court denied Hoskins’s motion for acquittal with respect to the U.S. money laundering charges.[5]

The DOJ appealed the acquittal on the FCPA counts and argued that Hoskins’s work for Alstom U.S. rendered him an “agent” of a “domestic concern”, a category squarely within the FCPA’s reach.[6]

Decision and Majority Reasoning

The Second Circuit majority decision, written by Judge Pooler[7] and joined by Judge Newman, concluded that the District Court properly granted Hoskins’s motion for judgment of acquittal as to the FCPA counts, because there was no agency or employee relationship between Hoskins and Alstom U.S.  Judge Lohier dissented.

The majority based its decision on a fact-focused review of the particularities of the interactions  between Hoskins and Alstom U.S., relying on common law principles[8] to determine whether a “principal-agent” relationship existed, and balancing a variety of technical facts about Alston’s corporate structure and reporting lines, including:

  • which subsidiary formally employed Hoskins;
  • whether Hoskins had ultimate decision-making authority, including the ability to enter into any agreements on Alstom U.S.’s behalf or exhibiting negotiating power beyond “serv[ing] as anything more than a messenger” for Alstom U.S. in meetings with officials;[9]
  • whether, given parallel employment structures, the Alstom U.S. alleged co-conspirators actually controlled Hoskins’s actions;
  • whether Alstom U.S. had the ability to hire and fire Hoskins, influence Hoskins’s compensation or otherwise terminate its relationship with Hoskins.

Evaluating each of these elements, the Court concluded that Hoskins did not have ultimate decision-making authority over Alstom U.S. contracts under common law principles of agency and was not accountable to Alstom U.S. such that he would be considered an agent of that entity.  Responding to the dissent, the Court noted, “[Hoskins’s support for and working relationship with Alstom U.S.] is not sufficient to establish that [Alstom U.S.] exercised control over the scope and duration of its relationship with Hoskins. Without this control over the relationship, there can be no finding of a principal-agent relationship within the meaning of the FCPA.”[10]


In his dissent, Judge Lohier highlighted that Hoskins was “central” to the bribery scheme and that he followed Alstom U.S.’s instruction “at each critical step” of that scheme.[11]  Rejecting the majority’s reasoning grounded in its focus on Alstom U.S.’s ability to terminate Hoskins generally, Judge Lohier noted, “this appeal boils down to whether the Government presented sufficient evidence of [Alstom U.S.’s] control over Hoskins’s actions “in connection with the specific events related to the [Indonesian power plant project].”[12]

Perhaps making clear the extent to which the recent decision was focused on the facts of this particular case, Judge Lohier commented that Alstom’s organizational charts “mask the reality of the relationship between Hoskins and [Alstom U.S.] on the ground” and highlighted the need for the International Network at Alstom to which Hoskins belonged to service Alstom’s internal business units “as requested,” which could reasonably lead a jury to conclude that Hoskins was Alstom U.S.’s agent.[13]


The recent decision in Hoskins II, alongside the 2018 decision in Hoskins I, provide restrictions on the expansiveness of conspiracy liability and agency theories under the FCPA for a very specific group of individuals, who, like Hoskins, are otherwise outside the reach of the FCPA’s provisions.  Similar fact patterns have led to different conclusions in other circuits.  For example, in United States v. Firtash,[14] a case in the Northern District of Illinois, the court considered the reasoning in Hoskins I and nonetheless concluded that a co-conspirator of a domestic concern may still be held liable under the FCPA even if that co-conspirator would not have independently met the FCPA’s jurisdictional requirements.

Within the Second Circuit, in the specific fact pattern involving foreign resident defendants who do not enter the United States, Hoskins I and II illustrate that the factors relating to corporate separation of affiliates.  These cases also highlight that the formal (or informal) division of duties between U.S. and foreign subsidiaries are relevant for purposes of determining FCPA liability.  The DOJ was nonetheless able to establish that Hoskins violated U.S. money-laundering laws, reinforcing that it has multiple tools at its disposal to enforce and convict individuals for the violations of U.S. criminal laws, including foreign individuals working abroad for foreign multinational companies.

Given the recent focus on compliance programs, it will be interesting to see whether the majority’s reading of principal-agent relationships in multinational corporations will affect decision-making among business entities, if at all, in the ways raised by the dissent.  In particular, the dissent notes, “if Hoskins cannot be held accountable under an agency theory of liability, then he will evade accountability under the FCPA altogether, even though . . . he played a critical role on behalf of the company in hiring consultants to bribe local Indonesian officials . . .Such a result also creates an incentive that Congress could not have wanted:  U.S. companies will be motivated to organize themselves to avoid exercising control over the employees of foreign affiliated companies who engage in bribery overseas.”[15]

Hoskins’s employment through Alstom’s “International Network” and his provision of services to internal U.S. and non-U.S. subsidiaries is one model among many potential structural alternatives available to multinational entities aiming to manage contract negotiation and interactions with third party vendors.  At the corporate entity level, it is unlikely that minor structural differences will allow an entity to reduce its potential liability under the provisions of the FCPA, especially in light of the history of parent-subsidiary and successor liability settlements.  For various reasons, including the efficiency of business line reporting, companies may want to further integrate their U.S. and non-U.S. subsidiaries to facilitate workflows, especially where the U.S. subsidiary is managing a particular contract.

However, at the individual employee level, these facts seem to have been determinative for the Court’s ultimate decision that no principal-agent relationship existed.  Where multinational corporations are weighing the risks to their employees of potential FCPA liability, especially for non-U.S. operations, a centralized foreign-based and autonomous support team seems less likely to have its employees individually exposed to FCPA liability than one more closely integrated with a U.S. subsidiary’s operations.  Of course, Hoskins II indicates that this is a highly fact-specific inquiry.  Still, where the principal-agent relationship can be more clearly identified through formal reporting lines or explicit rules for contract negotiation and management, the majority’s decision seems to suggest that FCPA liability is more likely to attach than in corporate structures and relationships like the one observed in Hoskins II.

[1]              15 U.S.C. § 78dd-1–3.

[2]              Hoskins I at 72-74.

[3]              Hoskins II at 7.

[4]              Despite being indicted in 2013, because of discovery and interlocutory appeals, Hoskins’s trial did not begin until October 2019.

[5]              While not covered in significant detail as part of this update, Hoskins cross-appealed the District Court’s decision, challenging a denial of his motion to dismiss the indictment on Speedy Trial Act and Sixth

Amendment grounds and certain jury instructions regarding the withdrawal from the FCPA conspiracy and venue for money laundering counts.  That cross-appeal was denied and conviction on the money laundering counts was affirmed.

[6]              See 15 U.S.C. § 78dd-2.

[7]              Judge Pooler also wrote the decision in Hoskins I.

[8]              As the Court noted, “agent” is not defined in the FCPA.  Furthermore, the parties agreed that common law principles of agency governed interpretation of the statute, a decision which Judge Lohier questioned in his dissent:  “Although the wisdom of the Government’s concession on this point [applying the common-law definition of agency] is debatable, we are stuck with the common-law definition for purposes of resolving this appeal.”  Hoskins II Dissent at 2 (Lohier, dissenting).

[9]              Hoskins II at 22.

[10]             Id. at 24.

[11]             Hoskins II Dissent at 1 (Lohier, dissenting).

[12]             Id. at 3 (emphasis added).

[13]             Id. at 4.

[14]             United States v. Firtash, 392 F.Supp.3d 872 (N.D.Ill. 2019).  The Court in Firtash did not consider the agency theory presented in Hoskins II.

[15]             Id. at 10.