Justice Deferred is Justice Denied

The following post comes to us from Peter R. Reilly of Texas A&M School of Law.

According to the U.S. Department of Justice (“DOJ”), deferred prosecution agreements are said to occupy an “important middle ground” between declining to prosecute on the one hand, and trials or guilty pleas on the other. A top DOJ official has declared that, over the last decade, the agreements have become a “mainstay” of white collar criminal law enforcement; a prominent criminal law professor calls their increased use part of the “biggest change in corporate law enforcement policy in the last ten years.”

However, despite deferred prosecution’s apparent rise in popularity among law enforcement officials, this article argues that this alternative dispute resolution vehicle makes a mockery of the criminal justice system by serving as a disturbing wellspring of unfairness, double standards, and potential abuse of power. The article concludes by recommending that Congress pass legislation to halt DOJ’s ability to use deferred prosecution agreements in the context of corporate criminal law enforcement. The article suggests that if this goal cannot be realized, these agreements will continue to greatly compromise the pursuit of justice, consistency in the rule of law, and basic notions of fairness. For example:

(1) DPAs make it appear that companies are essentially buying their way out of a prosecution;

(2) Current DOJ policy gives prosecutors too much power and discretion regarding when, why, and how agency attorneys will (or will not) use DPAs, translating directly into increased power and leverage while negotiating the agreements with alleged corporate wrongdoers;

(3) DPAs weaken the deterrence that comes from the threat of criminal prosecution;

(4) DPAs can tempt prosecutors to extract a ‘pound of flesh’ from the alleged wrongdoer, when previously the prosecutors would have had to settle for nothing;

(5) Because the government has the exclusive and non-reviewable right to determine whether a breach of the DPA has occurred, targeted individuals and companies likely feel a strong sense of pressure to adhere to all DOJ requests and demands throughout the agreement’s deferral period, even if such requests and demands become unreasonable, unfair, and unjust;

(6) Because DPAs don’t involve a trial, their use forecloses the most effective means for any criminal justice system to rein in overly-aggressive prosecutors: Without the threat of trial, prosecutors might be less likely to act in a manner that is reasonable, fair, and just;

(7) Because DPAs resolve matters without trials, jury verdicts, appellate court decisions, and without establishing binding judicial precedent, the agreements are not particularly useful in clarifying the boundaries of permissible legal conduct;

(8) DPAs help explain why, in recent years, DOJ seems to be going against its own internal charging guidelines by shifting the focus of enforcement action from individuals to companies;

(9) DPAs allow federal prosecutors to shift their focus toward reforming corrupt corporate cultures and away from indicting, prosecuting, and punishing criminal transgressors.

While top DOJ officials suggest that acknowledging wrongdoing as part of a DPA agreement can, in some measure, be similar to acknowledging wrongdoing through a guilty plea, this article suggests that is not the case whatsoever. Indeed, one is left to wonder how much public shaming and overall accountability are taking place through the use of DPAs when a former federal prosecutor tells us that, “Companies are happy to enter into these deferred prosecution agreements because it’s become so commonplace now. They take a bath in the press for a finite period of time. The stock markets don’t even seem to punish them.” [1] While the theorists tell us that punishment “must match, or be equivalent to the wickedness of the offense,” that does not seem to be what occurs when DPAs are used. [2]

In a speech entitled, “The Importance of Trials to the Law and Public Accountability” (discussed on the Forum here), SEC Chair Mary Jo White extolls the virtues of trials by proclaiming, “How we [Americans] resolve disputes and how we decide the guilt or innocence of an accused are the true measure of our democracy.” [3] Sadly, when the Justice Department uses DPAs to address alleged corporate crimes, it thereby fails to decide the guilt or innocence of the accused, even though carrying out that duty has historically been a core function of criminal law enforcement. Using deferred prosecution agreements is essentially a way of imposing a term of probation before conviction. I believe this makes a mockery of the criminal justice system—something that cannot be fixed through reform ideas such as additional legislative or judicial oversight of the current system.

DPAs provide a useful and productive tool to quickly, cheaply, and efficiently dispose of cases involving low-level, first-time, mostly juvenile offenders of misdemeanor crimes—the category of people and crimes for whom the tool was created in the early 20th century. Clearly, DPAs were neither designed nor intended for the disposition of potentially serious criminal law matters involving sophisticated corporate entities and the white collar professionals engaged in running those entities.

Federal Appeals Court Judge Harry T. Edwards told us nearly thirty years ago that settling matters through alternative dispute resolution is not always “fair and just,” [4] and I believe the judge’s warning certainly applies to the use of DPAs in the corporate criminal context. Given that the primary function of federal prosecutors is to enforce the criminal law, and, furthermore, given DOJ’s admission that DPA-type agreements “are, in essence, agreements not to enforce the law under particular conditions,” [5] it is somewhat astounding that the DOJ leadership has, in the last two decades, permitted DPAs to become such a common and routine manner of addressing corporate wrongdoing. I believe it is time to end this failed experiment in alternative dispute resolution. And in the end, if deferred prosecution agreements are not eradicated as a tool of corporate criminal law enforcement, I hope we can at least change their name to something that more accurately describes the benefit that the vast majority of recipients obtain through their current use: Avoiding Prosecution Agreements (“APAs”). Individuals and companies avoid prosecution, and the rest of America pays a certain and costly price for that avoidance. Justice deferred for a select group of individuals and companies means justice denied for the rest of us.

The full article is available for download here.


[1] Danielle Douglas, Royal Bank of Scotland to Pay $612 Million to Resolve Libor Case, The Washington Post, Feb. 6, 2013, quoting former federal prosecutor Michael Clark (emphasis added).
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[2] Hugo Adam Bedau, Retribution and the Theory of Punishment, 75 J. Philosophy 601, 602 (1878).
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[3] Chair Mary Jo White, 5th Annual Judge Thomas A. Flannery Lecture, Washington, D.C., Nov. 14, 2013. (Emphasis added).
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[4] Harry T. Edwards, Commentary: Alternative Dispute Resolution: Panacea or Anathema?, 99 Harv. L. Rev. 668, 679 (1986) (emphasis original).
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[5] U.S. Department of Justice, U.S. Attorneys’ Manual § 9.27.620 (emphasis added).
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