More Than Just a Potted Plant: A Court's Authority to Review Deferred Prosecution Agreements Under the Speedy Trial Act and Under Its Inherent Supervisory Power

IntroductionIn resolving allegations of corporate wrongdoing, the Department of Justice ("DOJ") has a variety of tools at its disposal. These tools include indictment, negotiated plea agreements, non-prosecution agreements ("NPAs"), deferred prosecution agreements ("DPAs"), reliance on separate civil resolution, and declining to prosecute altogether.1 In the past decade, federal prosecutors have increasingly relied on NPAs and DPAs,2 employing them as a way of exacting punishment in the form of monetary penalties or the institution of mandatory compliance measures for corporate wrongdoing, while avoiding the collateral consequences of conviction for innocent third parties such as shareholders and employees.3 In a deferred prosecution, the prosecutor files charges with the relevant court, where they remain on the court's docket until the end of the contemplated term of the agreement, at which point the Government dismisses the charges.4 In a non-prosecution, the Government and the corporation agree that the Government will not file charges against the corporation if the corporation complies with the specified terms of the agreement.5The use of NPAs and DPAs has exploded in recent years.6 From 2000 to 2004, the DOJ entered into an average of approximately four NPA or DPA agreements per year.7 Since 2006, it averaged twenty agreements per year.8 In the first half of 2015, the DOJ entered into twenty-eight agreements, exceeding the total number of DOJ agreements reached in 2013.9 The significant increase of agreements has also led to a significant increase in monetary penalties collected by the DOJ from corporate defendants because such agreements often also require that the corporation pay a specific fine to the DOJ. In 2001, the DOJ recovered $0.9 billion in NPA and DPA fines; in the first half of 2015, it recovered $4.2 billion.10Federal prosecutors have relied upon the Speedy Trial Act and its "good conduct" exclusion when entering into DPAs with corporate defendants. The Speedy Trial Act requires that after a defendant has been charged with committing an offense, trial "commence within seventy days from the filing date . . . of the . . . indictment."11 The Act allows for court-approved delays in computing the time within which the trial must commence, including any period of delay during which the Government defers prosecution, "for the purpose of allowing the defendant to demonstrate his good conduct."12 The exclusion was originally intended to provide a more lenient alternative to prosecution for nonviolent, low-level offenses.13 With DPAs, the Government sets a period of delay during which a corporate defendant must demonstrate good conduct by complying with the terms of the DPA.14 These terms often include the payment of fines, monitoring, and the creating or improving of existing compliance programs.15 At the end of this time period, the Government dismisses the charges, so long as the defendant has complied with the terms.16Until recently there was no case law interpreting the "good conduct" provision and little judicial scrutiny of the resulting agreements, despite the Government's widespread reliance on this exclusion.17 In July 2013, however, a district court concluded it had the power to exercise its supervisory authority in accepting or rejecting a DPA.18 It eventually approved the DPA at issue but challenged the notion that courts were no more than "potted plant[s]" in DPA implementation.19 For the first time, a court offered an explanation of its role in considering such agreements, thereby raising important questions about the source and scope of courts' authority and the implications of courts' involvement in what many consider to be prosecutorial charging decisions.20Two years later, another district court not only asserted its review authority over DPAs but also rejected the agreement before it, concluding that courts can reject DPAs when the terms are "grossly disproportionate" to the alleged illegal conduct. …