16‐308(L)
United States v. HSBC Bank USA, N.A.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
_________________________
August Term, 2016
(Argued: March 1, 2017 Decided: July 12, 2017)
Docket Nos. 16‐308(L), 16‐353, 16‐1068, 16‐1094
_________________________
UNITED STATES OF AMERICA,
Plaintiff‐Appellant,
‐‐ v. ‐‐
HSBC BANK USA, N.A., and HSBC HOLDINGS PLC,
Defendants‐Appellants,
HUBERT DEAN MOORE, JR.,
Appellee.
_________________________
Before:
KATZMANN, Chief Judge, POOLER, and LYNCH, Circuit Judges.
_________________________
In December 2012, the government entered into a five‐year deferred
prosecution agreement (the “DPA”) with HSBC Holdings plc and HSBC Bank,
USA, N.A. (collectively, “HSBC”), deferring prosecution of charges under the
Bank Secrecy Act, the International Emergency Economic Powers Act, and the
Trading with the Enemy Act. The DPA provided for the appointment of an
independent monitor charged with preparing periodic reports on HSBC’s
ongoing compliance with anti‐money laundering laws and with the DPA itself.
When the parties moved to exclude time under the Speedy Trial Act, the district
court concluded that it had supervisory authority to approve or reject the DPA
and conditioned its approval of the DPA on its own continued monitoring of the
DPA’s implementation. In the exercise of that asserted supervisory authority, the
district court later ordered the government to file an annual report prepared by
the monitor (the “Monitor’s Report”) regarding HSBC’s compliance efforts. The
government did so. In November 2015, the district court received a letter from a
member of the public, which it construed as a motion to unseal the Monitor’s
Report. The district court granted the motion, subject to redactions, finding that
the Monitor’s Report was a judicial document to which the public enjoyed a
qualified First Amendment right of access. HSBC and the government appealed
the district court’s unsealing and redaction orders, which the district court stayed
pending appeal.
We hold that the Monitor’s Report is not a judicial document because it is
not now relevant to the performance of the judicial function. First, the district
court misapprehended its supervisory authority. By sua sponte invoking its
supervisory power at the outset of this case to oversee the government’s entry
into and implementation of the DPA, the district court impermissibly encroached
on the Executive’s constitutional mandate to “take Care that the Laws be
faithfully executed.” U.S. Const. art. II, § 3. In the absence of a showing of
impropriety, a district court has no authority to supervise the implementation of
a DPA. To hold otherwise would be to turn the presumption of regularity on its
head. Second, the Monitor’s Report is not relevant to the district court’s role
under the Speedy Trial Act. See 18 U.S.C. § 3161(h)(2). Section 3161(h)(2) excludes
from the speedy trial clock “[a]ny period of delay during which prosecution is
deferred by the attorney for the Government pursuant to written agreement with
the defendant, with the approval of the court, for the purpose of allowing the
defendant to demonstrate his good conduct.” 18 U.S.C. § 3161(h)(2). We hold that
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the statute’s requirement of court approval does not imbue the judiciary with
ongoing authority to oversee a DPA, but rather authorizes courts to determine
that a DPA is genuine and not merely a means of circumventing the speedy trial
clock. Third, though the Monitor’s Report might one day be relevant to the
judicial function, that is not sufficient to render the Monitor’s Report a “judicial
document” today. Accordingly, we reverse.
JUDGE POOLER concurs in a separate opinion.
_________________________
JENNY C. ELLICKSON (Kenneth A. Blanco and Sung‐Hee Suh, Deputy
Assistant Attorneys General; M. Kendall Day, Chief, Asset Forfeiture and
Money Laundering Section; Laura Billings, Trial Attorney, Asset Forfeiture
and Money Laundering Section, on the brief ), U.S. Department of Justice,
Criminal Division, Appellate Section, for Leslie R. Caldwell, Assistant
Attorney General, Washington, DC; Julia Nestor and Alexander A.
Solomon (on the brief ), Assistant United States Attorneys for the Eastern
District of New York, for Robert L. Capers, United States Attorney for the
Eastern District of New York.
PAUL D. CLEMENT (Viet D. Dinh, Jeffrey M. Harris, Megan M. Wold,
Christopher G. Michel, on the brief ), Kirkland & Ellis LLP, Washington, DC;
Samuel W. Seymour and Alexander J. Willscher (on the brief ), Sullivan &
Cromwell LLP, New York, NY; Jeffrey B. Wall (on the brief ), Sullivan &
Cromwell LLP, Washington, DC, for Defendants‐Appellants.
DAVID A. SCHULZ (Thomas B. Sullivan, Maxwell S. Mishkin, on the brief ),
Levine Sullivan Koch & Schulz, LLP, New York, NY, for Appellee.
Kevin W. Goering, Norwick, Schad & Goering, New York, NY, for Amicus
Curiae Brandon L. Garrett, in support of Appellee.
Dennis M. Kelleher, Better Markets, Inc., Washington, DC, for Amicus
Curiae Better Markets, Inc., in support of Appellee.
3
Bruce D. Brown (Gregg P. Leslie, D. Victoria Baranetsky, on the brief ), The
Reporters Committee for Freedom of the Press, Washington, DC, for Amici
Curiae The Reporters Committee for Freedom of the Press, American
Society of News Editors, Association of Alternative Newsmedia, The
Center for Investigative Reporting, CNBC, Daily News, L.P., Dow Jones &
Company, Inc., The E.W. Scripps Company, First Look Media Works, Inc.,
Forbes Media LLC, The Foundation for National Progress, Gannett Co.,
Inc., Hearst Corporation, International Documentary Assn., Investigative
Reporting Workshop at American University, Digital First Media, MPA –
The Association of Magazine Media, National Newspaper Association,
National Press Photographers Association, The New York Times
Company, The Newspaper Guild Communications Workers of America,
Online News Association, Reporters Without Borders, Seattle Times
Company, Tully Center for Free Speech, and National Public Radio, Inc., in
support of Appellee.
_________________________
KATZMANN, Chief Judge:
We are called upon in this case to address the role of a district court in
monitoring the implementation of a deferred prosecution agreement. In
December 2012, plaintiff‐appellant the United States entered into a five‐year
deferred prosecution agreement (the “DPA”) with defendants‐appellants HSBC
Holdings plc and HSBC Bank, USA, N.A. (collectively, “HSBC”), deferring
prosecution of charges under the Bank Secrecy Act, the International Emergency
Economic Powers Act, and the Trading with the Enemy Act. The still‐pending
agreement provides that if HSBC complies with its extensive obligations under
4
the DPA, the government will seek the dismissal of those charges at the
conclusion of the DPA’s term. If, on the other hand, HSBC breaches the DPA, the
government may seek to convict HSBC on the deferred charges. To inform that
determination, the DPA provides for the appointment of an independent
monitor charged with preparing periodic reports on HSBC’s ongoing compliance
with anti‐money laundering laws and with the DPA itself.
When the government and HSBC jointly moved for a speedy trial waiver,
the district court (Gleeson, J.) invoked its supervisory power both to review and
“approve” the DPA on its merits and to condition its approval on the court’s
monitoring of the DPA’s implementation. In the exercise of that asserted
authority, the district court subsequently ordered the government to file a
confidential report prepared by the independent monitor regarding HSBC’s
compliance with the DPA (the “Monitor’s Report”). In November 2015, appellee
Hubert Dean Moore, Jr., a member of the public, moved to unseal the Monitor’s
Report. The district court granted the motion, subject to redactions, finding that
the Monitor’s Report was a “judicial document” to which the public enjoyed a
qualified First Amendment right of access. The government and HSBC appeal
the district court’s unsealing and redaction orders, arguing that the district court
5
ran afoul of separation of powers principles in involving itself in the
implementation of the DPA.
We agree. By sua sponte invoking its supervisory power at the outset of this
case to oversee the government’s entry into and implementation of the DPA, the
district court impermissibly encroached on the Executive’s constitutional
mandate to “take Care that the Laws be faithfully executed.” U.S. Const. art. II,
§ 3. In the absence of evidence to the contrary, the Department of Justice is
entitled to a presumption of regularity—that is, a presumption that it is lawfully
discharging its duties. Though that presumption can of course be rebutted in
such a way that warrants judicial intervention, it cannot be preemptively
discarded based on the mere theoretical possibility of misconduct. Absent
unusual circumstances not present here, a district court’s role vis‐à‐vis a DPA is
limited to arraigning the defendant, granting a speedy trial waiver if the DPA
does not represent an improper attempt to circumvent the speedy trial clock, and
adjudicating motions or disputes as they arise. Because the Monitor’s Report is
not now relevant to the performance of the judicial function, it is not a “judicial
document” and the district court erred in ordering it unsealed. Accordingly, we
reverse.
6
BACKGROUND
A. The DPA
HSBC Holdings plc (“HSBC Holdings”), incorporated and headquartered
in England, is the ultimate parent company of one of the largest banking and
financial services groups in the world. HSBC Bank USA, N.A., headquartered in
the United States, is a federally chartered banking institution and an indirect
subsidiary of HSBC Holdings.
In December 2012, following an investigation that lasted more than four
years, the United States entered into a five‐year deferred prosecution agreement
with HSBC. See Joint App. 30–104. Under a typical DPA with a corporate
defendant, the defendant admits to a statement of facts, submits to the filing of
criminal charges against it on the basis of those facts, and agrees to a forfeiture or
fine and to institute remedial measures. In exchange, the government agrees to
defer prosecution and to ultimately seek dismissal of all charges if the defendant
complies with the DPA. If the government determines that the defendant has
breached the DPA, however, the government may rip up the agreement and
pursue the prosecution.
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The government’s DPA with HSBC followed this framework. As
contemplated by the DPA, the government filed a four‐count criminal
information (the “Information”) charging HSBC Bank, USA, N.A. with willfully
violating the Bank Secrecy Act by failing to develop, implement, and maintain an
effective anti‐money laundering program (Count 1) and by failing to conduct
due diligence on correspondent bank accounts held on behalf of foreign persons
(Count 2). As a result of these failures, some $881 million in drug trafficking
proceeds were laundered through HSBC Bank USA, N.A. The government also
charged HSBC Holdings with violating U.S. sanctions laws by willfully
facilitating financial transactions in the United States for various sanctioned
entities, in violation of the International Emergency Economic Powers Act
(Count 3), and with willfully facilitating financial transactions for sanctioned
entities in Cuba, in violation of the Trading with the Enemy Act (Count 4). In
addition, HSBC admitted to a 30‐page Statement of Facts and agreed to forfeit
$1.256 billion to the United States.
HSBC further agreed to continue to cooperate fully with the government
and to adopt (or continue to adhere to) dozens of measures designed to
remediate the deficiencies in its compliance program. To that end, HSBC
8
Holdings agreed to retain an independent compliance monitor (the “Monitor”) to
be approved by the government. As set forth in an attachment to the DPA, the
Monitor is charged with “evaluat[ing] . . . the effectiveness of the internal
controls, policies and procedures of HSBC Holdings and its subsidiaries . . . as
they relate to [those entities’] ongoing compliance with the Bank Secrecy Act,
International Emergency Economic Powers Act, Trading With The Enemy Act
and other applicable anti‐money laundering laws . . ., as well as [with] the
enumerated remedial measures [in the DPA].” DPA, Attach. B ¶ 1. The DPA
requires the Monitor to submit periodic reports to HSBC and the government
detailing his findings and making recommendations designed to improve
HSBC’s compliance with the DPA and with anti‐money laundering laws
generally. By the terms of the DPA, the Monitor’s reports are intended to remain
non‐public.
Finally, the DPA provides that the government will seek to dismiss the
Information with prejudice at the conclusion of the DPA’s term if the
government determines that HSBC has fully complied with the DPA. If, on the
other hand, the government “determines, in its sole discretion, that [HSBC] ha[s]
(a) committed any crime under U.S. federal law subsequent to the signing of
9
th[e] [DPA], (b) at any time provided in connection with th[e] [DPA] deliberately
false, incomplete, or misleading information, or (c) otherwise breached the
[DPA],” all bets are off and the government may pursue the deferred charges.
DPA ¶ 16.
B. Proceedings Before the District Court
For a DPA to function as intended, the parties must obtain an exemption
from the Speedy Trial Act’s general requirement that a criminal trial “begin
within 70 days after a defendant is charged or makes an initial appearance.”
Zedner v. United States, 547 U.S. 489, 492 (2006) (citing 18 U.S.C. § 3161(c)(1)).
Absent such an exemption, the logic of any DPA would unravel, as the filed
charges would be subject to mandatory dismissal once the 70‐day period had
run. See 18 U.S.C. § 3162(a)(2) (providing that “[i]f a defendant is not brought to
trial within the time limit required by section 3161(c) as extended by section
3161(h), the information or indictment shall be dismissed on motion of the
defendant”). Congress anticipated this problem and excluded from the speedy
trial clock “[a]ny period of delay during which prosecution is deferred by the
attorney for the Government pursuant to written agreement with the defendant,
10
with the approval of the court, for the purpose of allowing the defendant to
demonstrate his good conduct.” 18 U.S.C. § 3161(h)(2).
Accordingly, when the government filed the Information and the DPA
with the district court, the government and HSBC jointly requested that the
district court “place th[e] matter into abeyance for a period of sixty months and
exclude that time” under the Speedy Trial Act. Joint App. 15. At a subsequent
hearing at which the defendants entered pleas of not guilty, the district court
asked counsel “what [they] contemplated of the Court’s participation, if any, in
the proceedings as they go forward.” Id. at 109. The government responded that
it “had not asked the Court to actively take part in overseeing the deferred
prosecution agreement,” but instead “simply asked the Court to accept the
information for filing and [to] exclude time during the period of the deferred
prosecution agreement.” Id. The district court asked the parties to put in
submissions explaining why the court should accept the DPA. At the time it
made this request, the district court was operating under the misconception that
the DPA was “really a plea agreement in the form of an 11C1A charge bargain,”
id., and that the United States Sentencing Guidelines therefore instructed it to
consider whether the “charges adequately reflect[ed] the seriousness of the
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actual offense behavior and [whether] accepting the agreement [would]
undermine the statutory purposes of sentencing or the sentencing guidelines,” id.
at 110. In their resulting submissions, both the government and HSBC took the
position that Rule 11(c)(1)(A) of the Federal Rules of Criminal Procedure did not
apply and that the district court’s authority at this juncture was limited to
determining whether to exclude time under 18 U.S.C. § 3161(h)(2).
1. The July 1, 2013 Approval Order
On July 1, 2013, the district court issued a Memorandum and Order
granting the parties’ request to hold the case in abeyance pursuant to the Speedy
Trial Act and “approv[ing] the DPA pursuant to the Court’s supervisory power.”
United States v. HSBC Bank USA, N.A., No. 12‐CR‐763, 2013 WL 3306161, at *1
(E.D.N.Y. July 1, 2013) (“Approval Order”). After concluding that Rule
11(c)(1)(A) did not apply because the defendants had not entered pleas of guilty
or nolo contendere, the district court turned to the text of the Speedy Trial Act,
noting that the statute is “silent as to the standard the court should employ when
evaluating whether to grant ‘approval’ to a deferred prosecution agreement
under 18 U.S.C. § 3161(h)(2).” Id. at *3. Based on its review of legislative history,
however, the district court surmised that Ҥ 3161(h)(2) appears to instruct courts
12
to consider whether a deferred prosecution agreement is truly about diversion
and not simply a vehicle for fending off a looming trial date.” Id.
The district court harbored no doubt that the DPA was truly about
deferring prosecution. Id. Nevertheless, it concluded that it had the authority to
approve or reject the DPA on the merits pursuant to its inherent supervisory
power. Id. at *4. The exercise of such power was appropriate, the district court
reasoned, because “it is easy to imagine circumstances in which a deferred
prosecution agreement, or the implementation of such an agreement, so
transgresses the bounds of lawfulness or propriety as to warrant judicial
intervention to protect the integrity of the Court.” Id. at *6. Though the district
court “recognize[d] that the exercise of supervisory power in this context [was]
novel” and that any such power must be limited, id., it believed its supervisory
power was plainly implicated by virtue of the government filing criminal
charges in federal court:
[F]or whatever reason or reasons, the contracting parties have
chosen to implicate the Court in their resolution of this matter. There
is nothing wrong with that, but a pending federal criminal case is
not window dressing. Nor is the Court, to borrow a famous phrase,
a potted plant. By placing a criminal matter on the docket of a
federal court, the parties have subjected their DPA to the legitimate
exercise of that court’s authority.
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. . . The inherent supervisory power serves to ensure that the courts
do not lend a judicial imprimatur to any aspect of a criminal
proceeding that smacks of lawlessness or impropriety. . . . The
parties have asked the Court to lend precisely such a judicial
imprimatur to the DPA, by arranging for its implementation within
the confines of a pending case. The Court will therefore exercise its
supervisory authority over the DPA.
Id. at *5–6 (footnote omitted).
Having determined that it had supervisory power over the DPA, the
district court “approve[d] the DPA . . . subject to [the court’s] continued
monitoring of its execution and implementation.” Id. at *7. Pursuant to the
court’s declared supervisory power “to ensure that the implementation of the
DPA remains within the bounds of lawfulness and respects the integrity of this
Court,” the district court directed the parties “to file quarterly reports with the
Court to keep it apprised of all significant developments in the implementation
of the DPA.” Id. at *11.
2. The Monitor’s Report
Beginning in September 2013, in compliance with the district court’s
Approval Order, the government began filing quarterly letters with the district
court apprising the court of the Monitor’s progress and findings. The
government’s April 2015 quarterly report advised the district court that the
14
Monitor had submitted his first annual follow‐up report (which, again, we refer
to here as the “Monitor’s Report”) and described the Monitor’s findings in some
detail. The government noted that though the Monitor believed that HSBC was
acting in good faith and making meaningful progress in developing an effective
compliance program, he also believed that “in certain instances . . . [HSBC’s]
progress ha[d] been too slow” and that HSBC “ha[d] a substantial amount of
work left to do to implement its written policies.” Joint App. 181. The
government also relayed the Monitor’s finding that senior managers at one
HSBC business line had failed to properly cooperate with internal compliance
reviews, and the government outlined the steps HSBC was taking to address the
situation. On April 28, 2015, the district court ordered the government to file the
Monitor’s Report with the court.
The government sought leave to file the Monitor’s Report under seal,
citing confidentiality considerations and concerns that public disclosure of the
Monitor’s Report would undermine the effectiveness of the Monitor and serve as
a road map for criminals who wished to exploit vulnerabilities in HSBC’s
compliance regime. The district court initially accepted the filing of the Monitor’s
Report under seal. In November 2015, however, Hubert Dean Moore, Jr., a
15
member of the public, filed a pro se letter with the district court suggesting that
the Monitor’s Report might be relevant to a complaint he had filed against HSBC
with the Consumer Financial Protection Bureau. The district court entered an
order construing Moore’s letter as a motion to unseal the Monitor’s Report. Both
the government and HSBC filed letters opposing unsealing.
3. The January 28, 2016 Unsealing Order
and the March 9, 2016 Redaction Order
On January 28, 2016, the district court issued a Memorandum and Order
granting Moore’s motion to unseal the Monitor’s Report in part. In this Circuit, a
document filed with the court is a judicial document subject to a presumptive
right of access if it is “relevant to the performance of the judicial function and
useful in the judicial process.” Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110,
119 (2d Cir. 2006) (internal quotation mark omitted). The district court
determined that the Monitor’s Report satisfied this test for two reasons. First, the
Monitor’s Report was relevant to the exercise of its supervisory power, as the
court could not “perform [the] task” of “ensur[ing] that the DPA remains within
the bounds of lawfulness and respects the integrity of th[e] Court . . . without
receiving at least some updates from the parties about HSBC’s compliance with
the DPA.” United States v. HSBC Bank USA, N.A., No. 12‐CR‐763, 2016 WL
16
347670, at *3 (E.D.N.Y. Jan. 28, 2016) (“Unsealing Order”). Second, the Monitor’s
Report would be “be integral to the future resolution of the case.” Id. In
particular, if the government were to determine that HSBC breached the DPA
and that the government would pursue the pending charges, the district court
would oversee those proceedings. If, on the other hand, the government were to
seek to dismiss the charges at the conclusion of the DPA’s term, such a dismissal
could only be effectuated under Federal Rule of Criminal Procedure 48 with
leave of court. The decision whether to grant such leave, the district court
reasoned, could not “properly be made without judicial review of the [Monitor’s]
Report.” Id.
The district court then concluded that a qualified First Amendment right
of public access attached to the Monitor’s Report and that the confidentiality
concerns articulated by the government and HSBC could be addressed with
targeted redactions and by maintaining five of the Monitor’s Report’s six
appendices under seal. To that end, the district court invited the parties to submit
proposed redactions to the Monitor’s Report, which the parties did. On March 9,
2016, the district court issued an order (the “Redaction Order”) describing the
17
redactions it had made to the Monitor’s Report and staying the unsealing of the
Monitor’s Report pending appellate review.
The government and HSBC timely appealed the Unsealing Order and the
Redaction Order. Because the government and HSBC are aligned on this appeal,
this Court granted Moore, who is now represented by pro bono counsel, leave to
intervene as appellee.
DISCUSSION
I.
Before assessing the merits, we must first determine whether we have
jurisdiction over this consolidated appeal of interlocutory orders.1 Ordinarily,
“interlocutory orders are not appealable as a matter of right.” United States v.
Graham, 257 F.3d 143, 147 (2d Cir. 2001) (internal quotation mark omitted). An
exception to this rule is the collateral order doctrine, which provides that
interlocutory orders are appealable if they: (1) “conclusively determine the
disputed question,” (2) “resolve an important issue completely separate from the
merits of the action,” and (3) will “be effectively unreviewable on appeal from a
final judgment.” Id. (internal quotation mark omitted). We find each criterion
1 The parties agree that we have jurisdiction under the collateral order doctrine. That, of
course, does not settle the issue, because “[j]urisdiction cannot be created by the consent
of the parties.” New York v. Shinnecock Indian Nation, 686 F.3d 133, 138 (2d Cir. 2012).
18
met here. First, the challenged orders “conclusively determine the disputed
question[s]” of whether the Monitor’s Report is a judicial document and the
extent to which it must be disclosed. Id. Second, the challenged orders “resolve
an important issue completely separate from the merits of the action,” as
whether the Monitor’s Report is a judicial document that must be unsealed has
nothing to do with the merits of the underlying criminal charges. Id. Third, the
challenged orders will “be effectively unreviewable on appeal from a final
judgment,” id. (internal quotation mark omitted), as “[o]nce the information is
disclosed, the ‘cat is out of the bag’ and appellate review is futile.” Al Odah v.
United States, 559 F.3d 539, 544 (D.C. Cir. 2009) (invoking collateral order doctrine
to exercise jurisdiction over appeal of order compelling government to share
classified information with petitioners’ counsel); see also S.E.C. v. TheStreet.Com,
273 F.3d 222, 228 (2d Cir. 2001) (finding interlocutory unsealing order
“unreviewable on appeal from a final judgment” “because the alleged harm
caused by disclosure . . . will be immediate and irreparable”); Graham, 257 F.3d at
147–48 (exercising jurisdiction pursuant to collateral order doctrine over appeal
of district court’s interlocutory order requiring government to release tapes to
media).2
2 Because we find that we have jurisdiction under the collateral order doctrine, we
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II.
The threshold merits question in this case is whether the Monitor’s Report
is a judicial document, as only judicial documents are subject to a presumptive
right of public access, whether on common law or First Amendment grounds.3
See Lugosch, 435 F.3d at 119–20. Though we review the “ultimate decision to seal
or unseal for abuse of discretion,” we review the determination that the
Monitor’s Report is a judicial document de novo. Bernstein v. Bernstein Litowitz
Berger & Grossmann LLP, 814 F.3d 132, 139 (2d Cir. 2016). In this Circuit, to
qualify as a “judicial document” subject to a presumptive right of public access,
“the item filed must be relevant to the performance of the judicial function and
useful in the judicial process.” United States v. Amodeo, 44 F.3d 141, 145 (2d Cir.
1995) (“Amodeo I”).
The appellants contend that the Monitor’s Report is not a judicial
document, but rather an “executive document” designed to inform the executive
branch’s exercise of its prosecutorial discretion in determining whether to
dismiss HSBC’s petition for a writ of mandamus as moot.
3 HSBC asserts that because the Monitor’s Report is a confidential executive document,
we should not even reach the question of whether the Monitor’s Report is a judicial
document. But HSBC cites no authority for the proposition that we can simply set aside
the test for whether a given document constitutes a judicial document. To do so would
be to assume the answer before undertaking the inquiry.
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dismiss or pursue the deferred charges. That discretion, HSBC notes, flows from
the Executive’s duty under Article II of the Constitution to “take Care that the
Laws be faithfully executed.” U.S. Const. art. II, § 3; see also United States v.
Huerta, 878 F.2d 89, 92 (2d Cir. 1989) (“The Executive . . . has the exclusive
authority to decide whether to prosecute . . . .”); United States v. Fokker Servs. B.V.,
818 F.3d 733, 741 (D.C. Cir. 2016) (“Decisions to initiate charges, or to dismiss
charges once brought, lie at the core of the Executive’s duty to see to the faithful
execution of the laws.” (internal quotation marks and alteration omitted)). The
appellants thus argue that the district court invaded the province of the
Executive in preemptively invoking the court’s supervisory authority to oversee
the implementation of the DPA and the Monitor’s work. Because the district
court lacked the authority it claimed to have, the argument goes, the Monitor’s
Report cannot be a judicial document.
Moore and his amici, by contrast, assert that the Monitor’s Report is
relevant to the performance of the judicial function on four separate grounds.
Specifically, they assert that the Monitor’s Report is relevant to: (1) the district
court’s supervisory authority to approve and supervise the implementation of
the DPA; (2) the district court’s authority to approve the DPA under the Speedy
21
Trial Act; (3) the district court’s assessment of any Rule 48(a) motion for
dismissal that the government might bring at the conclusion of the DPA’s term;
and (4) the district court’s adjudication of the proceedings in the event that the
government alleges that HSBC breached the DPA. We analyze these proffered
bases for treating the Monitor’s Report as a judicial document in turn.
A. The District Court’s Asserted Supervisory Power
The district court ordered the filing of the Monitor’s Report for its review
in the exercise of its stated supervisory power to monitor the implementation of
the DPA and to condition its approval of the DPA on such monitoring. If the
district court’s conception of its supervisory power in this context were correct,
the Monitor’s Report would quite obviously “be relevant to the performance of
the judicial function and useful in the judicial process.” Amodeo I, 44 F.3d at 145.
Thus, even though the appellants did not attempt to appeal the district court’s
Approval Order announcing its supervisory power over the DPA, whether the
district court was correct to assert such a power is squarely at issue on this
appeal. We hold that the district court erred in sua sponte invoking its
supervisory power to monitor the implementation of the DPA in the absence of a
showing of impropriety.
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The supervisory power “permits federal courts to supervise ‘the
administration of criminal justice’ among the parties before the bar.” United
States v. Payner, 447 U.S. 727, 735 n.7 (1980) (quoting McNabb v. United States, 318
U.S. 332, 340 (1943)). “The purposes underlying use of the supervisory powers
are threefold: to implement a remedy for violation of recognized rights; to
preserve judicial integrity by ensuring that a conviction rests on appropriate
considerations validly before the jury; and finally, as a remedy designed to deter
illegal conduct.” United States v. Hasting, 461 U.S. 499, 505 (1983) (citations
omitted); Mesarosh v. United States, 352 U.S. 1, 14 (1956) (“This is a federal
criminal case, and this Court has supervisory jurisdiction over the proceedings of
the federal courts. If it has any duty to perform in this regard, it is to see that the
waters of justice are not polluted.” (footnote omitted)). Courts have also
traditionally exercised their supervisory powers to establish rules of evidence
and procedure to govern the administration of justice in the federal courts. See,
e.g., McNabb, 318 U.S. at 340–45 (holding that confessions obtained in violation of
congressional requirement to promptly present defendant to court must be
excluded, even though Congress had not explicitly forbidden the admission of
such confessions); Bank of Nova Scotia v. United States, 487 U.S. 250, 254 (1988) (“In
23
the exercise of its supervisory authority, a federal court may, within limits,
formulate procedural rules not specifically required by the Constitution or the
Congress.” (internal quotation marks omitted)).
However, “[t]he supervisory power doctrine is an extraordinary one which
should be ‘sparingly exercised.’” United States v. Jones, 433 F.2d 1176, 1181–82
(D.C. Cir. 1970) (quoting Lopez v. United States, 373 U.S. 427, 440 (1963)); see also
Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991) (“Because of their very potency,
inherent powers must be exercised with restraint and discretion.”). As the district
court recognized below, “[i]n the typical supervisory power case, the defendant
raises a purported impropriety in the federal criminal proceeding and seeks the
court’s redress of that impropriety.” HSBC Bank USA, N.A., 2013 WL 3306161, at
*6; see also United States v. Johnson, 221 F.3d 83, 96 (2d Cir. 2000) (“[G]enerally the
exercise of supervisory power arises in the context of requests by defendants to
vacate convictions, dismiss indictments, or invalidate sentences . . . .” (citations
omitted)). Indeed, “the federal judiciary’s supervisory powers over prosecutorial
activities that take place outside the courthouse is extremely limited, if it exists at
all.” United States v. Lau Tung Lam, 714 F.2d 209, 210 (2d Cir. 1983).
24
The district court justified its concededly “novel” exercise of supervisory
power in this context by observing that “it is easy to imagine circumstances in
which a deferred prosecution agreement, or the implementation of such an
agreement, so transgresses the bounds of lawfulness or propriety as to warrant
judicial intervention to protect the integrity of the Court.” HSBC Bank USA, N.A.,
2013 WL 3306161, at *6. We agree that it is not difficult to imagine such
circumstances. But the problem with this reasoning is that it runs headlong into
the presumption of regularity that federal courts are obliged to ascribe to
prosecutorial conduct and decisionmaking. That presumption is rooted in the
principles that undergird our constitutional structure. In particular, “because the
United States Attorneys are charged with taking care that the laws are faithfully
executed, there is a ‘presumption of regularity support[ing] their prosecutorial
decisions and, in the absence of clear evidence to the contrary, courts presume
that they have properly discharged their official duties.’” United States v. Sanchez,
517 F.3d 651, 671 (2d Cir. 2008) (alteration in original) (quoting United States v.
Armstrong, 517 U.S. 456, 464 (1996)). In resting its exercise of supervisory
authority on hypothesized scenarios of egregious misconduct, the district court
turned this presumption on its head. See HSBC Bank USA, N.A., 2013 WL
25
3306161, at *6 (“[C]onsider a situation where the current monitor needs to be
replaced. What if the replacement’s only qualification for the position is that he
or she is an intimate acquaintance of the prosecutor proposing the
appointment?” (citation omitted)). Rather than presume “in the absence of clear
evidence to the contrary” that the prosecutors administering the DPA were
“properly discharg[ing] their official duties,” the district court invoked its
supervisory power—and encroached on the Executive’s prerogative—based on
the mere theoretical possibility that the prosecutors might one day abdicate those
duties. Sanchez, 517 F.3d at 671 (internal quotation mark omitted).
To be sure, in its history, this nation has not been free of executive
misconduct and abuse of power. And if misconduct in the implementation of a
DPA came to a district court’s attention (for example, through a whistleblower
filing a letter with the court), the district court might very well be justified in
invoking its supervisory power sua sponte to monitor the implementation of the
DPA or to take other appropriate action.4 The point is not that the court can or
4 Moore suggested at oral argument that such misconduct had come to the district
court’s attention via the government’s April 2015 quarterly report, the filing of which
precipitated the district court’s order that the government file the Monitor’s Report with
the court. But by “misconduct,” we do not mean revelations of the kind included in the
April 2015 quarterly report regarding the pace of HSBC’s remediation efforts and
26
should disregard governmental misconduct, but rather that a federal court has
no roving commission to monitor prosecutors’ out‐of‐court activities just in case
prosecutors might be engaging in misconduct. See Fokker Servs. B.V., 818 F.3d at
744 (“[A]lthough charges remain pending on the court’s docket under a DPA, the
court plays no role in monitoring the defendant’s compliance with the DPA’s
conditions.”); In re U.S., 503 F.3d 638, 641 (7th Cir. 2007) (“[A] judicial effort to
supervise [a prosecutor’s] process of reaching a decision intrudes impermissibly
into the activities of the Executive Branch of government.”).
In sum, because the district court has no freestanding supervisory power
to monitor the implementation of a DPA, the Monitor’s Report cannot be deemed
“relevant to the performance of the judicial function” on that basis. Lugosch, 435
F.3d at 119.
B. The District Court’s Role under the Speedy Trial Act
Amicus Curiae Professor Brandon Garrett suggests that the Monitor’s
Report is relevant to the district court’s role under the Speedy Trial Act as
specified by 18 U.S.C. § 3161(h)(2). Section 3161(h)(2) excludes from the speedy
trial clock “[a]ny period of delay during which prosecution is deferred by the
deficiencies in HSBC’s corporate culture that HSBC leadership was working to address.
We mean misconduct that smacks of impropriety.
27
attorney for the Government pursuant to written agreement with the defendant,
with the approval of the court, for the purpose of allowing the defendant to
demonstrate his good conduct.” 18 U.S.C. § 3161(h)(2) (emphasis added). But
what is it that courts are to approve and on what basis? On one hand, the text
could be read to limit the court’s inquiry to the issue of whether the parties’
agreement is genuinely “for the purpose of allowing the defendant to
demonstrate his good conduct”—that is, to the issue of whether the parties are
acting in good faith. Id. On the other hand, at least in isolation, the text could
plausibly be read to imbue courts with the authority to “approve” (or reject) a
DPA as a public policy matter and to decline to grant a speedy trial waiver for
virtually any reason.5 Indeed, according to Professor Garrett, “whether to
approve a DPA” pursuant to § 3161(h)(2) “is necessarily combined with
substantive review of [the DPA] and is joined with ongoing supervision of the
case.” Amicus Br. of Prof. Brandon L. Garrett 26.
In United States v. Fokker Services B.V., 818 F.3d 733 (D.C. Cir. 2016), the
D.C. Circuit confronted this interpretive question when the parties in that case
appealed the district court’s refusal to grant a speedy trial waiver based on its
Of course, the district court granted the government and HSBC a speedy trial waiver
5
well before the Monitor’s Report even existed, so the Monitor’s Report could not be
deemed relevant to that initial determination.
28
view that the DPA at issue was too lenient. See id. at 737–38, 742–45. The D.C
Circuit vacated the district court’s order, reasoning that Congress, in enacting
§ 3161(h)(2), “acted against the backdrop of long‐settled understandings about
the independence of the Executive with regard to charging decisions” and that
“[n]othing in the statute’s terms or structure suggests any intention to subvert
those constitutionally rooted principles so as to enable the Judiciary to second‐
guess the Executive’s exercise of discretion over the initiation and dismissal of
criminal charges.” Id. at 738.
We agree. At least in the absence of any clear indication that Congress
intended courts to evaluate the substantive merits of a DPA or to supervise a
DPA’s out‐of‐court implementation, the relative functions and competence of the
executive and judicial branches counsel against Professor Garrett’s
interpretation. Subject to constitutional constraints, “[t]he Executive . . . has the
exclusive authority to decide whether to prosecute and to choose among
alternative charges.” Huerta, 878 F.2d at 92 (citations omitted). There are good
reasons for that delegation of authority: “Few subjects are less adapted to judicial
review than the exercise by the Executive of his discretion in deciding when and
whether to institute criminal proceedings, or what precise charge shall be made,
29
or whether to dismiss a proceeding once brought.” United States v. Ross, 719 F.2d
615, 620 (2d Cir. 1983); Holley v. Lavine, 553 F.2d 845, 850 (2d Cir. 1977). As the
Supreme Court has explained, “[s]uch factors as the strength of the case, the
prosecution’s general deterrence value, the Government’s enforcement priorities,
and the case’s relationship to the Government’s overall enforcement plan are not
readily susceptible to the kind of analysis the courts are competent to
undertake.” Wayte v. United States, 470 U.S. 598, 607 (1985). Put simply, our role is
not to act as “superprosecutors,” second‐guessing the legitimate exercise of core
elements of prosecutorial discretion, but rather as neutral arbiters of the law.
Inmates of Attica Corr. Facility v. Rockefeller, 477 F.2d 375, 380 (2d Cir. 1973)
(internal quotation marks omitted).
If, in the context of DPAs, Congress intended to rejigger the historical
allocation of authority between the courts and the Executive, we would expect it
to do so rather clearly. Congress, at least as a general matter, does not “hide
elephants in mouseholes.” Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 468
(2001). But Congress did not speak clearly in § 3161(h)(2)—far from it—and we
thus decline to interpret that provision’s vague “approval” requirement as
imbuing courts with an ongoing oversight power over the government’s entry
30
into or implementation of a DPA. Rather, we hold that § 3161(h)(2) authorizes
courts to determine that a DPA is bona fide before granting a speedy trial
waiver—that is, that the DPA in question is genuinely intended to “allow[] the
defendant to demonstrate his good conduct,” § 3161(h)(2), and does not
constitute a disguised effort to circumvent the speedy trial clock. See Fokker Servs.
B.V., 818 F.3d at 744–45 (adopting this interpretation). As the D.C. Circuit
reasoned in Fokker, such an interpretation accords with the ordinary distribution
of power between the judiciary and the Executive in the realm of criminal
prosecution.6 See id. at 738, 741–45.
To the extent that Moore and Professor Garrett contend that the district
court’s mandate to assess the bona fides of a DPA survives as long as the DPA is
pending—and that the Monitor’s Report was relevant to this function—we are
6 The D.C. Circuit in Fokker, like the district court here, also pointed to legislative history
in support of its interpretation of § 3161(h)(2). In particular, the court noted that the
Senate Committee Report accompanying the Speedy Trial Act explained that the
purpose of the “approval” requirement was to “assure[] that the court will be involved
in the decision to divert and that the procedure will not be used by prosecutors and
defense counsel to avoid the speedy trial time limits.” Fokker Servs. B.V., 818 F.3d at 745
(quoting S. Rep. No. 93–1021, at 37 (1974)); see also HSBC Bank USA, N.A., 2013 WL
3306161, at *3 (quoting same). While the Senate Committee Report reinforces the notion
that Congress was concerned with potential abuse of DPAs as a means to circumvent
the speedy trial clock, the Report’s reference to a district court’s “involv[ment] in the
decision to divert” is opaque. S. Rep. No. 93–1021, at 37. By our lights, the legislative
history is ambiguous and does not clearly support either the D.C. Circuit’s view or
Professor Garrett’s view.
31
not persuaded. Even assuming arguendo that a district court could revoke a
speedy trial waiver were it to later come to question the bona fides of a DPA, the
presumption of regularity precludes a district court from engaging in the sort of
proactive and preemptive monitoring of the prosecution undertaken here.
C. The District Court’s Role when Considering a Rule 48(a) Motion
or Adjudicating a Claimed Breach of the DPA
Moore next argues that the Monitor’s Report is a judicial document
because it will either be relevant to deciding a motion to dismiss the Information
at the conclusion of the DPA’s term or, alternatively, to adjudicating any claimed
breach of the DPA. These arguments fail.
Even if we assume that the Monitor’s Report might be relevant to the
judicial function at a later point in this case, that would not be sufficient to
render the Monitor’s Report a judicial document now. Critically, as we held
above, the district court erred in ordering the government to file the Monitor’s
Report pursuant to its authority over the implementation of the DPA for the
simple reason that the district court had no such authority. Thus, although the
government complied with the district court’s order, the Monitor’s Report—for
purposes of the public access doctrine—is not unlike a document exchanged by
the parties in the course of litigation that has not yet been brought to the
32
attention of the court. And we have long recognized that documents “passed
between the parties in discovery[] lie entirely beyond the . . . reach” of the
presumption of public access. United States v. Amodeo, 71 F.3d 1044, 1050 (2d Cir.
1995) (“Amodeo II”); cf. Amodeo I, 44 F.3d at 145 (“[T]he mere filing of a paper or
document with the court is insufficient to render that paper a judicial document
. . . .”). If the rule were otherwise, deposition transcripts, interrogatories, and
documents exchanged in discovery would become “judicial documents” to
which the public could demand access before the parties had even contemplated
filing such documents with the court. While “public monitoring is an essential
feature of democratic control,” such an approach would constitute a radical
expansion of the “public access” doctrine. Amodeo II, 71 F.3d at 1048 (“Unlimited
access to every item turned up in the course of litigation would be
unthinkable.”); S.E.C. v. Am. Int’l Grp., 712 F.3d 1, 4 (D.C. Cir. 2013) (“[T]hough
filing a document with the court is not sufficient to render the document a
judicial record, it is very much a prerequisite.”).
Two of our prior cases warrant further discussion in light of their
superficial similarity to this case. In Amodeo I, a “Court Officer” charged with
investigating union‐related corruption pursuant to a consent decree filed a
33
progress report with the district court that included a sealed exhibit. 44 F.3d at
143–44. We held that the progress report and the exhibit were judicial
documents. Id. at 146. We reached that conclusion in part because the court
officer was permitted under the governing consent decree to apply for assistance
from the court and because “the progress report certainly would be germane in
assessing such an application.” Id. We also noted that the consent decree
“provide[d] for any party to seek enforcement of, or relief from, any of the
provisions of the [d]ecree” and that the record to be considered on such an
application “surely would include the matters reported by the Court Officer.” Id.
Moore thus suggests that Amodeo I stands for the proposition that if a filed
document could later become relevant to the judicial function, then it is relevant
to the judicial function. But, to the contrary, the court officer’s reports in Amodeo I
were immediately relevant to the judicial function because they went to the
district court’s authority “to make sure that the court officer [was] doing what
she was appointed to do.” Id. (internal quotation mark omitted). As we
explained, “[i]t certainly was helpful to the court to know that the Court Officer
was fulfilling the duties assigned to her by the Consent Decree in this case.” Id.
Moreover, the consent decree at issue in Amodeo I explicitly contemplated court
34
involvement in enforcing the decree, whereas the DPA entrusts the
implementation of the DPA to the Justice Department. The consent decree thus
“itself ma[de] the reports and exhibits filed by the Court Officer relevant to the
performance of the judicial function and useful in the judicial process.” Id. The
DPA does no such thing.
Similarly, in United States v. Erie County, New York, 763 F.3d 235 (2d Cir.
2014), the United States and Erie County settled constitutional claims arising out
of conditions at two Erie County correctional facilities. Id. at 236–37. The
settlement agreement provided for the appointment of two “compliance
consultants” and required the compliance consultants to file their reports with
the district court. Id. at 237. The settlement agreement also empowered the
district court to order “any relief permitted by law or equity” in the event that
Erie County breached the settlement agreement. Id. (internal quotation marks
omitted). Noting that the “the compliance reports could form the basis for the
District Court reinstating the civil proceedings sua sponte if the Court believe[d]
that the substance of the stipulated order of dismissal [was] not being fulfilled,”
we held that the compliance reports were judicial documents subject to a right of
public access. Id. at 240. Critically, the district court in Erie County was “involved
35
in effectuating [the] settlement agreement,” id. at 241, and had a “role in
overseeing [the] progress” being made thereunder, id. at 242. “The fact that the
District Court ha[d] not yet acted sua sponte or adjudicated an enforcement action
brought by the parties d[id] not alter our analysis” because “even the District
Court’s inaction [was] subject to public accountability.” Id. By contrast, because
the district court here lacked authority to oversee the implementation of the
DPA, the district court’s inaction during the pendency of the DPA would have
been indicative of nothing other than due respect for a coordinate branch of
government.
We also disagree with Moore’s assertion that “the [Monitor’s] Report
necessarily will be useful, one way or the other, when the DPA ends.” Appellee
Br. 30. Rule 48(a) of the Federal Rules of Criminal Procedure provides that “[t]he
government may, with leave of court, dismiss an indictment, information, or
complaint.” Fed. R. Crim. P. 48(a) (emphasis added). In Rinaldi v. United States,
434 U.S. 22 (1977) (per curiam), the Supreme Court explained that though the
“leave of court” requirement “obviously vest[s] some discretion in the court,”
“[t]he principal object of the ‘leave of court’ requirement is apparently to protect
a defendant against prosecutorial harassment, e.g., charging, dismissing, and
36
recharging, when the Government moves to dismiss an indictment over the
defendant’s objection.” Id. at 29 n.15. The Court noted that Rule 48(a) “has also
been held to permit the court to deny a Government dismissal motion to which
the defendant has consented if the motion is prompted by considerations clearly
contrary to the public interest.” Id. But the Court reserved decision on whether
such an approach was permissible. Id.
For our part, we have suggested (in dictum) that any authority a court
might have to deny a Rule 48(a) motion would be limited to cases in which
dismissal is “clearly contrary to manifest public interest.” United States v.
Pimentel, 932 F.2d 1029, 1033 n.5 (2d Cir. 1991) (quoting United States v. Cowan,
524 F.2d 504, 513 (5th Cir. 1975)). Some courts of appeals that have elucidated
this “public interest” test have stressed how “severely cabined” it is, “equat[ing]
a dismissal that is clearly contrary to the public interest with one in which the
prosecutor appears motivated by bribery, animus towards the victim, or a desire
to attend a social event rather than trial”—in other words, bad faith. In re
Richards, 213 F.3d 773, 787–88 (3d Cir. 2000); see also Rice v. Rivera, 617 F.3d 802,
811 (4th Cir. 2010) (“Put succinctly, a Rule 48 motion that is not motivated by bad
faith is not clearly contrary to manifest public interest, and it must be granted.”
37
(internal quotation marks omitted)). Others have emphasized that a court
deciding a Rule 48(a) motion should not “serve merely as a rubber stamp for the
prosecutor’s decision.” United States v. Ammidown, 497 F.2d 615, 622 (D.C. Cir.
1973); see also Cowan, 524 F.2d at 512–13.
Whatever the precise contours of a district court’s authority in resolving a
Rule 48(a) motion, it is certainly not the case that the Monitor’s Report will, as
Moore contends, necessarily be relevant to deciding such a motion. For example,
where a Rule 48(a) motion is uncontested and the parties’ good faith is not in
doubt, a district court is unlikely to have any occasion to demand a monitor’s
reports (or analogous work product) for the court’s inspection before granting
the Rule 48(a) motion. Nor do we accept that the Monitor’s Report will necessarily
be relevant to adjudicating any claimed breach of the DPA, as the claimed breach
could be based, for example, on HSBC’s obligation not to commit a crime under
federal law or its obligation not to contradict the Statement of Facts in a public
statement. Conversely, the Monitor’s Report may indeed be relevant in
determining whether to grant an eventual Rule 48(a) motion or in adjudicating a
claimed breach of the DPA. For example, there may be circumstances that
suggest that the motion is being made in bad faith, thereby raising a question as
38
to whether dismissing the Information would be “clearly contrary to manifest
public interest.” Pimentel, 932 F.2d at 1033 n.5. The salient point is that
attempting to forecast the relevance of the Monitor’s Report at the conclusion of
the DPA’s term is inherently speculative. Such prognostication cannot support
treating the Monitor’s Report as a judicial document now.
To be clear, we do not hold that documents can be deemed “judicial
documents” only once a court has already considered them. Our case law is clear
that pleadings and summary judgment papers, for example, are judicial
documents upon filing—which is eminently sensible given that such documents,
by definition, ask the court to grant (or reject) some relief. See Bernstein, 814 F.3d
at 140; Lugosch, 435 F.3d at 120–23. But that does not mean that any document
that is docketed with a court is a judicial document, regardless of the likelihood
that it will ever be relevant to the judicial function.
Because the Monitor’s Report is not a judicial document, the district court
abused its discretion in ordering it unsealed.7
7 In light of our conclusion that the Monitor’s Report is not a judicial document, we do
not reach whether a First Amendment or common law right of access would have
ultimately required the unsealing of the document (in any form) under the
circumstances of this case. In addition, that the Monitor’s Report is not a judicial
document does not mean that Moore or other members of the public are necessarily
without recourse. “The appropriate device” for obtaining executive records “is a
39
CONCLUSION
Striking the appropriate balance between the prerogatives of the three
branches of government is never easy. We emphasize that while the district court
exceeded its authority in this case, the Take Care Clause of the Constitution is not
a blank check. Where the presumption of regularity has been called into
question, we do not foreclose the possibility that steps of the kind taken by the
district court here could be warranted. But that is not this case.
For the foregoing reasons, the orders of the district court are REVERSED.
Freedom of Information Act request addressed to the relevant agency.” United States v.
El‐Sayegh, 131 F.3d 158, 163 (D.C. Cir. 1997). We offer no view on whether any of FOIA’s
exemptions would apply.
40
POOLER, Circuit Judge:
I concur in the opinion and the judgment, but write separately to suggest
that it is time for Congress to revisit the issue of deferred and nonprosecution
agreements (collectively, “DPAs”).
DPAs exist because Section 3161(h)(2) of the Speedy Trial Act excludes
“[a]ny period of delay during which prosecution is deferred by the attorney for
the Government pursuant to written agreement with the defendant, with the
approval of the court, for the purpose of allowing the defendant to demonstrate
his good conduct.” 18 U.S.C. § 3161(h)(2). Without this exception, the filing of
the criminal information would trigger the running of the speedy trial clock.
The Senate Judiciary Committee explained that this section was included
in the Act:
to encourage the current trend among United States
attorneys to allow for deferral of prosecution on the
condition of good behavior. A number of Federal and
State courts have been experimenting with pretrial
diversion or intervention programs in which
prosecution of a certain category of defendants is held
in abeyance on the condition that the defendant
participate in a social rehabilitation program. If the
defendant succeeds in the program, charges are
dropped. Such diversion programs have been quite
successful with first offenders in Washington, D.C.
(Project Crossroads) and in New York City (Manhattan
Court Employment Project). Some success has also been
noted in programs where the defendantʹs alleged
criminality is related to a specific social problem such as
prostitution or heroin addiction. Of course, in the
absence of a provision allowing the tolling of the speedy
trial time limits, prosecutors would never agree to such
diversion programs. Without such a provision the
defendant could automatically obtain a dismissal of
charges if prosecution were held in abeyance for a
period of time in excess of the time limits set out in
section 3161 (b) and (c). This section of S. 754 differs
from its counterpart in S. 895. It now requires that
exclusion for diversion only be allowed where deferral
of prosecution is conducted “with approval of the
court.”
This assures that the court will be involved in the
decision to divert and that the procedure will not be
used by prosecutors and defense counsel to avoid the
speedy trial time limits.
S. Rep. No. 93–1021, at 36–37 (1974)).
The two programs mentioned in the legislative history, Project Crossroads
and the Manhattan Court Employment Project, were pretrial diversion programs
aimed at helping individual defendants avoid the collateral consequences of a
criminal conviction through programs that included education, job training, and
substance abuse treatment. See, e.g., Note, Pretrial Diversion from the Criminal
Process, 83 Yale L.J. 827 (1974). The programs were viewed as “a functional
equivalent of a sentence to pretrial probation,” id. at 843, and were staffed with
2
paraprofessionals overseeing individuals in what was, “in effect a probationary‐
type of supervision and control,” id. at 845.
In recent years, however, DPAs increasingly are used not to divert
individual defendants but rather to divert corporations from criminal charges.
Unlike individuals, corporations are not diverted into probation‐like programs
supervised by paraprofessionals. Rather, they enter into negotiated agreements
with prosecutors that set forth the facts to which the corporation admits and a
remedy that typically includes both a fine and an agreement for the corporation
to make structural changes. The prosecution retains sole discretion to decide if
the corporation adequately complied with the agreement, allowing the
prosecution to act as prosecutor, jury, and judge. Prosecutors can enforce legal
theories without such theories ever being tested in a court proceeding.
Using DPAs in this manner is neither improper nor undesirable. An
indictment alone can deal a death blow to a corporation, with severe collateral
consequences for blameless employees and shareholders. As the law governing
DPAs stands now, however, the prosecution exercises the core judicial functions
of adjudicating guilt and imposing sentence with no meaningful oversight from
the courts.
3
I respectfully suggest it is time for Congress to consider implementing
legislation providing for such review. See United States v. Saena Tech Corp., 140 F.
Supp. 3d 11, 30 n.9 (D.D.C. 2015) (“This ambiguity, combined with the fact that
Congressʹs original purpose had nothing to do with the broad‐ranging corporate
deferred‐prosecution agreements that have become commonplace, suggests that
congressional action to clarify the standards a court should apply when
confronted with a corporate deferred‐prosecution agreement may be
appropriate.”).
A bill introduced in the House in 2014 would, among other things, require
the development of public, written guidelines for DPAs; require the text of
DPAs to be placed on a Justice Department website; and require DPAs to be
submitted to district courts for review. Accountability in Deferred Prosecution
Act of 2014, H.R. 4540, 113th Cong. (2014). Courts would be charged with
“approv[ing] the [DPA] if the court determines the [DPA] is consistent with the
guidelines for such agreements and is in the interests of justice.” Id. at § 7(a). In
addition, the parties and any monitors would be required to file quarterly
reports regarding the progress toward completions of the DPA with the court. Id.
at § 7(b). Finally, the court would be charged with “review[ing] the
4
implementation or termination of the [DPA], and take any appropriate action, to
assure that the implementation or termination is consistent with the interests of
justice.” Id. at § 7(c). Legislation along the lines of this proposed act would
restore some balance in the DPA process.
Accordingly, I respectfully concur.
5