Given the prominence of DPAs (and NPAs) in resolving corporate FCPA enforcement actions, for over a year FCPA Professor has been closely following U.S. v. Fokker Services (a case outside the Foreign Corrupt Practices Act context involving criminal charges against Fokker to unlawfully export U.S. origin goods and Services to Iran, Sudan, and Burma).
In resolving the case, the DOJ and Fokker agreed to an 18 month DPA in which the company agreed to forfeit $10.5 million and to pay an additional $10.5 million in a parallel civil settlement.
No so fast, Judge Leon (D.D.C.) said in rejecting the DPA in February 2015 (see here for the prior post). In pertinent part, Judge Leon stated:
“Both of the parties argue, not surprisingly, that the Court’s role is extremely limited in these circumstances. They essentially request the Court to serve as a rubber stamp […]. Unfortunately for the parties, the Court’s role is not quite so restricted. […] “One of the purposes of the Court’s supervisory powers, of course, is to protect the integrity of the judicial process.” When, as here, the mechanism chosen by the parties to resolve charged criminal activity requires Court approval, it is the Court’s duty to consider carefully whether that approval should be given. […] I do not undertake this review lightly. I am well aware, and agree completely, that our supervisory powers are to exercised ‘sparingly, and I fully recognize that this is not a typical case for the use of such powers. The defendant has signed onto the DPA and is not seeking redress for an impropriety it has identified. But the Court must consider the public as well as the defendant. After all, the integrity of judicial proceedings would be compromised by giving the Court’s stamp of approval to either overly-lenient prosecutorial action, or overly-zealous prosecutorial conduct.” […] The Court concludes that this agreement does not constitute an appropriate exercise of prosecutorial discretion and I cannot approve it in its current form.”
Both the DOJ and Fokker Services appealed Judge Leon’s denial of the DPA and the DOJ basically told the court “hands off our DPAs” (see here for the prior post).
During the September 2015 oral argument before the DC Circuit, the court seemed to have some serious concerns regarding the substantive and procedural arguments of the parties.
However, earlier this week in this decision, the DC Circuit (in an opinion authored by Judge Sri Srinivasan) concluded that Judge Leon should have been a potted plant because trial court judges lack authority to reject DOJ DPAs.