Source: https://www.skadden.com/insights/publications/2016/04/dc-circuit-affirms-primacy-of-prosecutorial-discre
Timestamp: 2019-04-18 21:04:44+00:00

Document:
On April 5, 2016, the U.S. Court of Appeals for the District of Columbia Circuit (the D.C. Circuit) overturned the decision of the U.S. District Court for the District of Columbia (the District Court) in United States v. Fokker Services B.V., finding that the requirement of court approval to exclude time under the Speedy Trial Act does not grant judges the authority “to second-guess the Executive’s exercise of discretion over the initiation and dismissal of criminal charges.”1 The District Court opinion had provoked considerable interest from both prosecutors and the defense bar, raising questions over the interplay between prosecutorial discretion and judicial review of criminal settlements. In finding the District Court had overstepped its authority, the D.C. Circuit confirmed that charging decisions (as opposed to sentencing) are firmly within the purview of the executive branch, and that deferred prosecution agreements concern the core prosecutorial decisions about what charges to bring and, if brought, whether to dismiss them.
Fokker Services B.V. (Fokker Services), a Dutch aerospace company, was charged by the U.S. Department of Justice (DOJ) with violating U.S. export laws in connection with the export of aircraft parts, technology and services to customers in Iran, Myanmar and Sudan during 2005-10.
In June 2014, DOJ and Fokker Services agreed to an 18-month deferred prosecution agreement (DPA). Under the terms of the proposed DPA, Fokker Services agreed to accept responsibility for its conduct and the conduct of its employees, to forfeit $10.5 million, to continue to cooperate with U.S. authorities and agencies regarding the conduct at issue, to implement its new compliance program and policies, and to comply with U.S. export laws. DOJ, for its part, agreed to dismiss without prejudice the charges against Fokker Services at the end of the 18-month term, provided that the company fully complied with the terms of the DPA during that period.
Fokker Services also reached parallel civil settlements with the Office of Foreign Assets Control and the Bureau of Industry and Security of the U.S. Department of Commerce.2 The company agreed to pay another $10.5 million in those proceedings, for a total of $21 million to be paid in the various settlements. This total was equivalent to the amount of revenues that allegedly resulted from the improper conduct.
In pleadings filed at the request of the court, the parties argued that the District Court’s role was “limited to reviewing the proposed exclusion of time pursuant to the Speedy Trial Act.”5 The parties also argued that the Speedy Trial Act requires a court to approve a proposed DPA unless there is an indication that the defendant did not enter into the agreement willingly and knowingly, or if the agreement was designed solely to circumvent the limits of the Speedy Trial Act.
In February 2015, the District Court denied the Motion and declined to approve the proposed DPA.
Citing the Eastern District of New York’s 2013 opinion in United States v. HSBC Bank USA, N.A.,12 the District Court drew a distinction between the decision whether to bring charges, and if brought, the decision to dismiss them: “Indeed, this Court would have no role here if the Government had chosen not to charge Fokker Services with any criminal conduct — even if such a decision was the result of a non-prosecution agreement.”13 Once a DPA was filed, however, the District Court reasoned that the case would remain on the court’s docket during the entirety of the DPA period, thereby bringing it under the supervisory authority of the court.
The District Court further noted various perceived deficiencies in the terms of the DPA in light of this conduct, including that: (1) the total forfeiture amount was “not ... a penny more”14 than the revenue from the improper transactions; (2) an independent monitor was not imposed, and Fokker Services was not required to file periodic compliance reports; and (3) no individuals were being prosecuted, and involved employees were allowed to remain at the company.
Both DOJ and Fokker Services promptly appealed the decision to the D.C. Circuit,18 arguing that the District Court had erred by refusing to exclude time under the Speedy Trial Act based on its judgment that the DPA between the government and the defendant was not an appropriate exercise of prosecutorial discretion because it was too lenient, and had erred by failing to determine whether the DPA was in accordance with the Speedy Trial Act for the purpose of allowing Fokker Services to demonstrate its good conduct.
Oral argument was held on September 11, 2015. During that argument, DOJ conceded that a judge can reject a DPA under certain limited circumstances, but argued that the District Court had gone “well beyond” those circumstances in the instant case.
The court-appointed amicus curiae argued that the court’s authority over DPAs was similar to its authority over pleas.
Instead, the D.C. Circuit drew a parallel between the Speedy Trial Act’s requirement of court approval and the requirement under Rule 48(a) of the Federal Rules of Criminal Procedure that a prosecutor must obtain leave of court before dismissing criminal charges. The D.C. Circuit reasoned that in the context of either a DPA or dismissal under Rule 48(a), withholding of approval by the court would be a “substantial and unwarranted intrusion on the Executive Branch’s fundamental prerogatives,”25 and concluded that there was no basis for finding that courts had greater power to second-guess charging decisions in the context of a DPA than in any other exercise of criminal charging authority. The D.C. Circuit expressly rejected the District Court’s reasoning that the filing of the DPA conferred such supervisory power. The D.C. Circuit opinion thus also rejects the reasoning of the Eastern District of New York HSBC decision.
For corporations and defense lawyers seeking the certainty of being able to negotiate a binding agreement with executive branch prosecutors, the D.C. Circuit decision provides clarity and forward-looking comfort. For those who have criticized DPAs as excessively collusive and unreviewable, the opinion is a significant setback.
2 These settlements were announced on June 5, 2014, and remain in effect regardless of the status of the DOJ DPA.
3 18 U.S.C. § 3161.
4 Id. § 3161(c)(1), (h).
5 DOJ Supplemental Memorandum at 2, United States v. Fokker Servs. B.V., No. 14-CR-121 (RJL) (D.D.C. July 18, 2014), ECF No. 11.
10 In so doing, the District Court cited to a 2013 opinion of the Eastern District of New York in which Judge John Gleeson questioned, but ultimately approved, the DPA between DOJ and HSBC (resolving sanctions-related and anti-money laundering violations by that bank) and those parties’ application for abeyance under the Speedy Trial Act. United States v. HSBC Bank USA, N.A., No. 12-CR-763, 2013 WL 3306161 (E.D.N.Y. July 1, 2013).
11 United States v. Fokker Servs. B.V., 79 F. Supp. 3d 160, 166 (D.D.C. 2015).
12 HSBC, 2013 WL 3306161.
13 Fokker Servs., 79 F. Supp. 3d at 165.
18 DOJ filed its notice of appeal with the District Court on March 10, 2015 (United States v. Fokker Services B.V., No. 14-CR-121 (RJL) (D.D.C. filed March 9, 2015), ECF No. 29) and the D.C. Circuit assigned to the case the docket number 15-3017. Fokker Services filed its notice of appeal with the District Court on February 18, 2015 (United States v. Fokker Services B.V., No. 14-CR-121 (RJL) (D.D.C. filed Feb. 18, 2015), ECF No. 24) and the D.C. Circuit assigned to the case the docket number 15-3016. On March 10, 2015, the D.C. Circuit ordered the consolidation of these appeals as docket number 15-3016.
19 United States v. Fokker Services B.V., No. 15-3016, 2016 WL 1319266, at *1 (D.C. Cir. Apr. 5, 2016).
22 See id. at *10-11.
26 Id. (citing Wayte v. United States, 470 U.S. 598, 607 (1985)).
27 Id. In laying out the background of the case, the D.C. Circuit also had described the interplay between DPAs generally and the Speedy Trial Act’s requirement that trial commence within 70 days of filing, noting that the exclusion of time provided for under the Speedy Trial Act is “essential” to the effective operation of a DPA. The D.C. Circuit explained that, without the exclusion of time, the government would lose its ability to prosecute the defendant for any violation of the agreement after 70 days, which would “largely eliminate the leverage that engenders the defendant’s compliance with a DPA’s conditions.” Id. at 6.

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