White collar crime is usually something that you associate with securities fraud or tax evasion. But lately, the United States has started holding companies and their executives accountable for their actions which have resulted in harm to others, including environmental damage, personal injury and financial ruin. The latest case dealing with criminal liability in a corporate context is the sad story of the child who was killed in 2016 at Schlitterbahn water park out in Kansas.
The child was decapitated on a water slide designed by Schlitterbahn co-owners Jeffrey Wayne Henry and John Timothy Schooley. They and the park’s director of operations, 29-year-old Tyler Austin Miles, have all been charged with criminal indictments. The owners face 18 felony counts, including second-degree murder. Miles faces 20 felony counts.
According to the indictments and court records, back in 2012, the co-owners decided to build a 17-story waterslide called the Verruckt (a German word for ‘Insane’) in an attempt to get the ‘Travel Channel’s Xtreme Waterparks’ series to document their park. Neither co-owner had any kind of formal training or credentials for designing amusement park rides – which, they originally thought would be part of the rides appeal. Mr. Henry dropped out of high school but spent his entire adult life helping to design rides for his father’s then small water park in Texas.
The indictment further alleged that there were known dangers of the ride, allowing rafts to regularly go airborne – which is ultimately how the child in question died. Thirteen injuries occurred on the ride when it opened, including a few concussions and even one case where a rider went temporarily blind. Kansas state Rep. Scott Schwab’s ten-year-old son, Caleb, was on one of these rafts that went airborne when it flew into the overhead hoops and netting, instantly killing the boy via decapitation.
While Schlitterbahn has unequivocally denied any criminal liability, its corporate directors face serious charges. The allegations include that the powers-that-be knew of the potential for death or serious injury on the ride. Additionally, the state argues that the corporate leadership made an effort to conceal or obstruct the investigation. The co-owners are charged with second-degree murder, which in Kansas, is the unlawful, felonious and reckless killing of a human being under circumstances which manifest an extreme indifference to the value of the human life. The sentence this crime carries is between 9 and 41 years in prison. The charges also include aggravated endangering a child and aggravated battery charges for the several individuals injured throughout the lifetime of the slide.
Miles, the operations manager, is accused of ignoring safety reports and recommendations from various staff. He failed to close the park despite choosing to proceed with an investigation. The state argues that his failure to do so is tied to the summer schedule of Schlitterbahn, implying that profit was more important to the company than the safety of its guests. Miles does not face the most severe charges but has been indicted for involuntary manslaughter. In Kansas, this carries a potential sentence of jail time between 3 and 11 years. He also faces a charge of obstructing law enforcement throughout the investigation of the incidents.
Corporate criminal liability cases are fairly rare, and this case should be an interesting study in the field. In the United States, a defendant is guilty if they had – due to their position – reason to know and prevent or either promptly correct any violations of the law. There is no requirement for corporate officers to be aware of these violations. By virtue of their position, they are deemed to know. Given the hands-on operations of Schlitterbahn and its owners in this particular case, the evidence unfortunately seems compelling against the defendants at this stage.