UNITED STATES OF AMERICA, Plaintiff-Appellant, v. HSBC BANK USA, N.A., and HSBC HOLDINGS PLC, Defendants-Appellants, HUBERT DEAN MOORE, JR., Appellee.
Docket Nos. 16-308(L), 16-353, 16-1068, 16-1094
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
Decided: July 12, 2017
August Term, 2016 (Argued: March 1, 2017)
Before:
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.”
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,
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.
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 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.
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.”
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.
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
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 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 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
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 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
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
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
[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.
. . . 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 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 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.
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 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
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 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
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
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.
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.”
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 Trial Act; (3) the district court’s assessment of any
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.
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
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).
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 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
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
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 view that the DPA at issue was too lenient.
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, 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
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 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
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 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.
For our part, we have suggested (in dictum) that any authority a court might have to deny a
Whatever the precise contours of a district court’s authority in resolving a
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,
Because the Monitor’s Report is not a judicial document, the district court abused its discretion in ordering it unsealed.7
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.
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
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 defendant’s 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 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.
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 Congress’s 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
Accordingly, I respectfully concur.