Over the last decade, deferred prosecution agreements (“DPAs”) have been increasingly employed to resolve allegations of corporate criminal misconduct. When a DPA is reached between the government and a corporate defendant, the general practice has been for the government to file the DPA with the court, together with a charging document and a tolling agreement. But once the power of the judiciary has been invoked by these simultaneous filings, what then becomes the role of the court?
While the narrow holding in United States v. Fokker Services B.V. (PDF: 114 KB) correctly pointed out what the court’s role is not, the Federal Circuit missed an opportunity to provide clear guidance on the scope of judicial authority to the district courts that increasingly find deferred prosecutions pending on their dockets.
The Federal Circuit’s Narrow Decision in Fokker
In Fokker, the Federal Circuit found that the district court exceed its authority under the Speedy Trial Act, section 3161(h)(2), when it rejected the parties’ deferred prosecution agreement (the “Fokker DPA”) as too lenient and declined to toll the speedy trial clock. Vacating Judge Leon’s opinion, the Fokker Court held that “the [Speedy Trial] Act confers no authority in a court to withhold exclusion of time pursuant to a DPA based on concerns that the government should bring different charges or should charge different defendants.”
Speaking narrowly to the Executive’s power regarding charging decisions, the Circuit Court found that the language in section 3161(h)(2) requiring “approval of the court” when tolling the speedy trial clock “did not empower the district court to disapprove the DPA based on the court’s view that the prosecution had been too lenient.”
The Filing of a DPA Implicates Matters within the Purview of the Court
What the Fokker holding glossed over is that in cases involving a DPA, the Executive’s charging decision does not stand alone. It is accompanied by a request to invoke the court’s authority. Specifically, the simultaneous filing of a charging document, DPA and tolling agreement brings the case before the district court and requests that the court hold the case in abeyance, but stand ready to try the case later in time.
Moreover, the terms of a DPA itself go well beyond the Executive’s decision to initiate or dismiss charges, implicating matters in which the court is ordinarily involved. Review of the Fokker DPA reveals that the statute of limitations is tolled and extended; the right to indictment is waived; the Sixth Amendment right to speedy trial is waived; and the government’s exercise of discretion on finding breach of contract is not reviewable by any court. Ordinarily, the court plays a role in determining whether these waivers are knowing and voluntary.
Consider also that DPAs by their nature effectively extend Executive authority – at least in so far as they toll the statute of limitations and preserve the Executive’s law enforcement authority to be exercised later in time than would otherwise be allowable by statute. What if the term of a DPA was not 18-months or five years, but ten years? A judicial rubber stamp of the terms of the Executive’s DPA could potentially circumvent the legislature’s exercise of its authority.
As Judge Gleeson aptly put it in HSBC: “The contracting parties have chosen to implicate the court in their resolution of the matter. . . .[b]y placing a criminal matter on the docket of a federal court, the parties have subjected their DPA to the legitimate exercise of the court’s authority.”
The District Court’s Authority to Review the Terms of a DPA
District courts that have addressed the issue agree that the court has the authority to review and approve the terms of a DPA itself. Judge Gleeson in HSBC, Judge Sullivan in Saena Tech Corp, and, of course, Judge Leon in Fokker below (now vacated) each rested his decision on the district court’s supervisory authority to protect the integrity of the Court.
Fokker is not to the contrary. The Circuit Court’s dicta leaves room for, indeed presupposes, judicial review of the terms of the deferred prosecution agreement. First, Fokker states that the district court should have confined its inquiry to whether the DPA served the purpose of allowing the defendant to demonstrate his good conduct. That requires that the court examine the terms of the DPA itself. Second, the Fokker Court cites to HSBC and Saena Tech Corp. suggesting, without contradiction, that courts have the authority to reject a DPA if it contains illegal or unethical provisions. This is where Fokker falls short, teeing up this critical issue but falling back on its more narrow holding.
District Court Authority While the Case is Pending
And what of the court’s role while the case is pending? Here is where Fokker and HSBC diverge, and where Fokker misses the mark. In HSBC, Judge Gleeson found that the district court retains authority to monitor the implementation of the DPA, maintaining an active role in the case while it remains pending before the court. Fokker, on the other hand, assumes that a district court sleeps during the 18-month (or 5 year) term of the DPA and awakens when the DPA is satisfied and criminal charges are dismissed.
The Circuit Court’s conclusion that “the [district] court never exercises its coercive power by entering a judgment of conviction or imposing a sentence” but simply approves the prosecution’s judgement presupposes that the defendant successfully carries out its obligations under the DPA. However, if the defendant breaches the DPA, the clear terms of the agreement dictate that the case proceeds on the information filed with the court. Unless and until the government dismisses the charges pursuant to the DPA, the district court is burdened with a potentially huge matter that would need a trial date 70 days post breach. Fokker doesn’t consider this, missing the chance to meaningfully speak to the scope of judicial authority while a DPA remains pending.
A Meaningful and Deferential Judicial Role in DPA Cases
By filing a DPA in federal court, the parties invite the court to exercise its judicial authority for as long as the case remains pending. In order to protect the integrity of the court there must be a meaningful, yet deferential, judicial role in the process of reviewing, approving, and even in carrying out the terms of DPA. What that role is remains unclear and Fokker missed a prime opportunity to clarify the law.
Serina M. Vash is the Executive Director of the Program on Corporate Compliance and Enforcement and is a former Deputy of the Criminal Division in the United States Attorney’s Office for the District of New Jersey.
Disclaimer
The views, opinions and positions expressed within all posts are those of the author alone and do not represent those of the Program on Corporate Compliance and Enforcement or of New York University School of Law. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.