A Concrete Standard of Judicial Review for Corporate Deferred Prosecution Agreements

Abstract

The United States Senate Committee on the Judiciary recently held a hearing to consider approaches to promote accountability in corporate criminal enforcement.  Concerns expressed during this hearing arise from the use of deferred prosecution agreements (“DPAs”) to resolve criminal cases against organizational defendants.  Unlike plea agreements, DPAs are not subject to judicial review and approval.  The lack of judicial review means that corporate DPAs do not ensure the voluntariness of the agreements, the validity of the offenses, and the appropriate tailoring of sanctions.  Thus, the Fifth Circuit recently called on Congress to enact articulable standards of judicial review.

This article makes two important contributions.  First, using a novel dataset analyzing recent DPAs across all categories of cases, this article offers empirical support for the conclusion that judicial review of DPAs is necessary.  This dataset demonstrates that DPAs impose sanctions on organizational defendants that are insufficient to achieve the purposes of those sanctions.

Second, this article is the first to offer a standard of judicial review for DPAs that would require courts to make concrete findings.  While other commentators, Congress, and nations abroad have considered or adopted broader, factor‑based standards of review, a standard requiring concrete findings is necessary to protect the adjudicative and sentencing functions of courts and to ensure corporate governance reform requirements in DPAs are narrowly tailored.  This article is also the first to reject a one‑size‑fits‑all approach to judicial review.  While a few concrete findings are appropriate in every case, an optimal standard of judicial review must also require courts to make context‑specific findings depending on the needs of each case.  By embracing the standard of judicial review this article proposes, courts or Congress can better achieve the purposes of corporate criminal enforcement.

Keywords: Sentencing, Criminal Law, Business Law, Corporate Law, Criminal Procedure, White Collar Crime, Corporate Crime, Sentencing Guidelines, Judicial Review, Deferred Prosecution Agreements, Non-Prosecution Agreements, Corporate Criminal Liability, Standard of Review