USCA Case #15-3017

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ORAL Document
ARGUMENT
NOT YET SCHEDULED

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No. 15-3016 (consolidated with No. 15-3017)

IN THE

United States Court Of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
FOKKER SERVICES B.V.,
Defendant-Appellant.
On Appeal from the United States District Court
for the District of Columbia
No. 1:14-cr-00121-RJL-1

DEFENDANT-APPELLANT'S OPENING BRIEF

Edward C. O'Callaghan
David D. DiBari
Rijie Ernie Gao
CLIFFORD CHANCE US LLP
2001 K Street, NW
Washington, DC 20006
Telephone: (202) 912-5000
31 West 52nd Street
New York, NY 10019
Telephone: (212) 878-8000
Counsel for Defendant-Appellant
Fokker Services B.V.

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CERTIFICATE AS TO PARTIES, RULINGS UNDER

REVIEW AND RELATED CASES
Pursuant to Circuit Rule 28(a)(1) of the United States Court of Appeals for
the District of Columbia Circuit, counsel for Appellant Fokker Services B.V.
("FSBV") hereby submits the following certificate as to parties, rulings under
review, and related cases.
A.

Parties and Amici

The parties in this case that have appeared in this Court and before the
United States District Court for the District of Columbia are: the United States of
America, and FSBV, a corporation headquartered and incorporated under the laws
of the Netherlands.
No amici or intervenors appeared before the district court below. This
Court has appointed David W. DeBruin, Esq., of Jenner & Block LLP, as amicus
curiae to present arguments to this Court in favor of the ruling under review in this
consolidated appeal. At this time, undersigned counsel is not otherwise aware of
any other amici or intervenors that have made an appearance in this consolidated
appeal.
B.

Rulings Under Review

The ruling under review is the Order and Accompanying Memorandum

Opinion issued on February 5, 2015, by the Honorable Richard J. Leon of the
United States District Court for the District of Columbia (the "Order Below").

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The Order Below denied the parties' joint consent motion to exclude time under the
Speedy Trial Act, which was made pursuant to a deferred prosecution agreement
validly entered into between the United States and FSBV (the "DPA"). The Order
was entered as Docket Number 23 in the district court, and the accompanying
Memorandum Opinion was entered as Docket Number 22 in the district court.
Joint Appendix ("JA") 321-34. The Order Below has not yet been published in the
Federal Supplement but is available electronically at 2015 WL 729291 (D.D.C.
Feb. 5, 2015).
C.

Related Cases

This case has not been before this or any other court previously. With the
exception of the appeal from the Order Below filed by the United States on March
9, 2015 (docketed in this Court as No. 15-3017, which was consolidated with
FSBV's appeal on March 10, 2015), undersigned counsel is not otherwise aware at
this time of "any other related cases," as that term is defined in Circuit Rule
28(a)(1)(C).

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CORPORATE DISCLOSURE STATEMENT

The following corporate disclosure statement supplements and supersedes
the preliminary corporate disclosure statement that FSBV filed in this Court on
March 24, 2015. Pursuant to Federal Rule of Appellate Procedure 26.1 and Circuit
Rule 26.1, counsel for FSBV certifies that:
1.

FSBV is a wholly owned subsidiary of Fokker Aerospace B.V.;

2.

Fokker Aerospace B.V. is in turn a wholly owned subsidiary of

Fokker Technologies Holding B.V.;

3.

Fokker Technologies Holding B.V. is in turn a wholly owned

subsidiary of Fokker Technologies Group B.V.;

4.

Fokker Technologies Group B.V. is in turn a majority owned

subsidiary of Stork B.V.;

5.

Stork B.V. is in turn a wholly owned subsidiary of Stork Holding

B.V.;

6.

Stork Holding B.V. is in turn a wholly owned subsidiary of Stork

Topco B.V.;

7.

Stork Topco B.V. is in turn a wholly owned subsidiary of London

Acquisition Luxco S.a.r.l., a company incorporated in Luxembourg;

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The Candover 2005 Fund, a U.K. private equity fund, owns a

majority of the outstanding shares of London Acquisition Luxco
S.a.r.l.;

9.

The Candover 2005 Fund is managed by Arle Capital Partners

Limited, a U.K. private equity asset manager;

10.

Arle Capital Partners Limited is controlled by Smithfield Investment

Holdings Limited, a U.K. private limited firm, which is in turn
controlled by Arle Heritage LLP, a U.K. limited liability partnership;

11.

No publicly-held company owns a 10% or greater ownership interest

in FSBV's stock.

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TABLE OF CONTENTS
STATEMENT OF JURISDICTION..........................................................................1
ISSUES PRESENTED...............................................................................................1
PERTINENT STATUTORY PROVISIONS ............................................................2
STATEMENT OF THE CASE ..................................................................................2
A.

Background on FSBV and its Business ...................................................3

B.

FSBV's Voluntary Self-Disclosure, Cooperation and Settlement with the

United States.............................................................................................3

C.

The Proceedings Below ............................................................................5

1.

The June 25, 2014 Status Conference and the July 7, 2014
Submission by the United States .....................................................6

2.

The July 9, 2014 Status Conference ................................................8

3.

The United States Investigates FSBV's Voluntary Self-Disclosure

and Confirms its Voluntary Nature .................................................9

4.

The October 29, 2014 Status Conference ......................................10

5.

On February 5, 2015, the District Court Denied the Motion for

Exclusion of Time for the 18-month Deferral Period and
Refused to Approve the DPA ........................................................14

SUMMARY OF ARGUMENT ...............................................................................17

STANDARD OF REVIEW .....................................................................................19
ARGUMENT ...........................................................................................................20
I.

This Court has Jurisdiction over this Appeal ...................................................20

A.

Appellate Jurisdiction is Proper Under 28 U.S.C. 1292(a)(1). ...........20

1.

The Order Below effectively denied injunctive relief ...................21

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The Order Below will have irreparable consequences

that are unreviewable on final appeal ............................................24

B.

Appellate Jurisdiction is Also Proper Under the Collateral Order

Doctrine. ................................................................................................26

C.

In the Alternative, this Court may Exercise Pendent Jurisdiction over

FSBV's Appeal. ......................................................................................30

II. The District Court Applied the Wrong Legal Standard in Refusing to Approve
the DPA and Exceeded the Scope of its Limited Authority .............................32
A.

The District Court Disregarded the Plain Language of the Speedy Trial
Act. .........................................................................................................32

B.

The District Court Did Not and Cannot Justify its Invocation of the
Supervisory Power to Refuse Approval of the DPA..............................38

III. The District Court Violated Constitutional Separation of Powers When It

Failed to Accord Due Deference to the United States' Exercise of Prosecutorial
Discretion. ........................................................................................................44
IV. Reassignment to Another District Judge on Remand is Necessary Because the
Proceedings Below Raise Reasonable Questions about the District Judge's
Ability to Render Impartial Judgment in this Case ..........................................49
CONCLUSION ........................................................................................................59

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TABLE OF AUTHORITIES
Pages
Cases
Bank of Nova Scotia v. United States,
487 U.S. 250 (1988) .............................................................................................41
Berger v. United States,
255 U.S. 22 (1921) ...............................................................................................55
Carlisle v. United States,
517 U.S. 416 (1996),
superseded by statute on other grounds ...............................................................41
*Carson v. Am. Brands,
450 U.S. 79 (1981) ....................................................................... 21, 23-24, 26, 28
Cmty. for Creative Non-Violence v. Pierce,
786 F.2d 1199 (D.C. Cir. 1986)............................................................................46
Cobell v. Kempthorne,
455 F.3d 333 (D.C. Cir. 2006) ........................................................... 50-51, 56, 58
Cohen v. Beneficial Indus. Loan Corp.,
337 U.S. 541 (1949) .............................................................................................26
Flanagan v. United States,
465 U.S. 259 (1984) .............................................................................................27
Haines v. Liggett Group, Inc.,
975 F.2d 81 (3d Cir. 1992) ............................................................................. 54-55
ICC v. Brotherhood of Locomotive Engineers,
482 U.S. 270 (1987) .............................................................................................46
In re Sealed Case,
131 F.3d 208 (D.C. Cir. 1997)..............................................................................46
________________

* Authorities upon which we chiefly rely are marked with asterisks.

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Inmates of Attica Corr. Facility v. Rockefeller,

477 F.2d 375 (2d Cir. 1973) ........................................................................... 46-47
Liljeberg v. Health Servs. Acquisition Corp.,
486 U.S. 847 (1988) .............................................................................................50
Liteky v. United States,
510 U.S. 540 (1994) .............................................................................................55
Marino v. Drug Enforcement Admin.,
685 F.3d 1076 (D.C. Cir. 2012) ............................................................................20
Midland Asphalt Corp. v. United States,
489 U.S. 794 (1989) ....................................................................................... 26-27
Naples v. United States,
307 F.2d 618 (D.C. Cir. 1962) .............................................................................50
National R.R. Passenger Corp. v. ExpressTrak, L.L.C.,
330 F.3d 523 (D.C. Cir. 2003) .............................................................................31
Newman v. United States,
382 F.2d 479 (D.C. Cir. 1967) ........................................................................ 47-48
Schlagenhauf v. Holder,
379 U.S. 104 (1964) .............................................................................................31
Selkridge v. United of Omaha Life Ins. Co.,
360 F.3d 155 (3d Cir. 2004) .................................................................................50
Sell v. United States,
539 U.S. 166 (2003) .............................................................................................27
Swift v. United States,
318 F.3d 250 (D.C. Cir. 2003)..............................................................................46
Twelve John Does v. District of Columbia,
117 F.3d 571 (D.C. Cir. 1997)....................................................................... 24, 31

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United States v. Armstrong,

517 U.S. 456 (1996) .............................................................................................45
United States v. Byers,
740 F.2d 1104 (D.C. Cir. 1984)...................................................................... 41-42
United States v. Cisneros,
169 F.3d 763 (D.C. Cir. 1999)..............................................................................27
United States v. Cox,
342 F.2d 167 (5th Cir.),
cert. denied, 381 U.S. 935 (1965) ................................................................... 45-46
*United States v. E-Gold, Ltd.,
521 F.3d 411 (D.C. Cir. 2008),
abrogated on other grounds sub nom, 134 S. Ct. 1090 (2014) ...................... 21-22
United States v. Hasting,
461 U.S. 499 (1983) ....................................................................................... 38-39
*United States v. HSBC Bank USA, N.A.,
No. 12 Cr. 763 (JG),
2013 WL 3306161 (E.D.N.Y. July 1, 2013) ...................... 20, 34-35, 38, 42-43, 48
United States v. Jones,
433 F.2d 1176 (D.C. Cir. 1970),
cert. denied, 402 U.S. 950 (1971) ............................................................ 39-40, 43
United States v. KPMG LLP,
No. 05 Cr. 903 (LAP),
2007 WL 541956 (S.D.N.Y. Feb. 15, 2007) ........................................................45
United States v. MacDonald,
435 U.S. 850 (1978) .............................................................................................27
*United States v. Microsoft Corp.,
56 F.3d 1448 (D.C. Cir. 1995).........................21, 23, 24-25, 26, 43, 49-50, 52, 58

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United States v. Moore,

703 F.3d 562 (D.C. Cir. 2012),
cert. denied, 134 S. Ct. 223 (2013) ......................................................................19
United States v. Opportunity Fund (In re Any & All Funds Or Other Assets,
in Brown Bros. Harriman & Co.),
613 F.3d 1122 (D.C. Cir. 2010),
superseded by statute on other grounds ...............................................................22
*United States v. Payner,
447 U.S. 727 (1980) ................................................................................ 39, 40, 42
United States v. Rice,
746 F.3d 1074 (D.C. Cir.),
cert. denied, 135 S. Ct. 493 (2014) .....................................................................20
United States v. Tinklenberg,
131 S. Ct. 2007 (2011) ................................................................................... 33-34
United States SEC v. Citigroup Global Mkts., Inc.,
673 F.3d 158 (2d Cir. 2012) .................................................................................48
*United States SEC v. Citigroup Global Mkts., Inc.,
752 F.3d 285 (2d Cir. 2014) ................................................... 21, 24, 26, 33, 43-44
Wayte v. United States,
470 U.S. 598 (1985) ..................................................................................... 46, 48
Statutes
18 US.C. 371 .........................................................................................................6
18 U.S.C. 981 ........................................................................................................22
18 U.S.C. 982 ........................................................................................................22
18 U.S.C. 3161(h)(2)............... 1, 2, 6, 19, 20, 28, 32-35, 38, 40, 41, 43, 44, 45, 59
18 U.S.C. 3231 .......................................................................................................1

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28 U.S.C. 455(a) ...................................................................................................49

28 U.S.C. 1291 ........................................................................................... 1, 18, 26
28 U.S.C. 1292(a)(1) ...................................................................... 1, 17, 20-24, 26
28 U.S.C. 2106 ....................................................................................................49
Other Authorities
Minute Order (paperless), United States v. Commerzbank AG,
No. 15 Cr. 31 (BAH),
(D.D.C. Apr. 3, 2015) .................................................................................... 37-38
Order, United States v. Barclays Bank PLC,
No. 10 Cr. 218 (EGS),
D.E. 7, (D.D.C. Aug. 18, 2010) ...........................................................................45
Order, United States v. Credit Suisse AG,
No. 09 Cr. 352 (RCL),
D.E. 3, 2009 WL 4894467 (D.D.C. Dec. 16, 2009) .............................................20
Report of the Committee on the Judiciary for the United States Senate on the
Speedy Trial Act of 1974,
S. Rep. No. 93-1021 (1974)..................................................................................34
Transcript of Conference, United States v. The Royal Bank of Scotland, plc,
No. 13 Cr. 74 (MPS),
D.E. 22, (D. Conn. Feb. 15, 2013)........................................................................44
Transcript of Plea Hearing, United States v. The Royal Bank of Scotland, plc,
No. 13 Cr. 74 (MPS),
D.E. 4, 28, (D. Conn. Apr. 12, 2013) ............................................................. 44-45

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GLOSSARY OF ABBREVIATIONS
AUSA

Assistant United States Attorney

BIS

United States Department of Commerce Bureau of Industry and

Security

DOJ

United States Department of Justice

DPA

Deferred Prosecution Agreement

FSBV

Fokker Services B.V.

IEEPA

International Emergency Economic Powers Act

JA

Joint Appendix

OFAC

United States Department of Treasury Office of Foreign Assets

Control

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STATEMENT OF JURISDICTION
The district court had subject matter jurisdiction over the underlying action
pursuant to 18 U.S.C. 3231.
This Court has jurisdiction over FSBV's appeal from the Order Below under
28 U.S.C. 1292(a)(1) or 28 U.S.C. 1291. Alternatively, this Court has
jurisdiction over the issues presented by FSBV's appeal based on the doctrine of
pendent jurisdiction, as the United States has also filed an appeal from the Order
Below.
FSBV filed a timely Notice of Appeal from the Order Below on February 18,
2015.
ISSUES PRESENTED
1.

Whether the district court erred as a matter of law in rejecting the DPA
without making the requisite determination of whether the DPA is for the
purpose of allowing FSBV to demonstrate its good conduct, in accordance
with Section 3161(h)(2) of the Speedy Trial Act.

2.

Whether the district court erred as a matter of law and thereby abused its
discretion in rejecting the DPA "pursuant to its supervisory power," on the
grounds that the penalties imposed against FSBV in the DPA were not
sufficiently severe and were not an appropriate exercise of prosecutorial
discretion by the United States.

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PERTINENT STATUTORY PROVISIONS

The relevant statute in this appeal is the Speedy Trial Act, the pertinent
portion of which provides:
(h) The following periods of delay shall be excluded in computing
the time within which an information or an indictment must be filed,
or in computing the time within which the trial of any such offense
must commence:
......
(2) Any 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).
STATEMENT OF THE CASE
This case began on June 23, 2010, after FSBV made a voluntary selfdisclosure to the United States Department of Treasury Office of Foreign Assets
Control ("OFAC") and the United States Department of Commerce Bureau of
Industry and Security ("BIS") that notified these agencies that FSBV had
potentially violated U.S. sanctions and export control laws. The ensuing
investigations by U.S. authorities into FSBV's historical conduct that were
triggered by its voluntary self-disclosure culminated in a global settlement between
FSBV and all the investigating agencies, of which the DPA is one component.

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Background on FSBV and its Business

FSBV is a non-public Dutch aerospace services provider headquartered in

the Netherlands. JA 81. FSBV was formed in 1996 after its predecessor and the
former manufacturer of Fokker aircraft, Fokker Aircraft N.V., went bankrupt. JA
81. FSBV is charged with safeguarding the airworthiness of Fokker aircraft still
flying around the world. JA 81. In this capacity, FSBV provides logistical
support, component maintenance, repair and overhaul, technical services, and
aircraft maintenance and modification, to aircraft operators and owners worldwide.
JA 56. To fulfill these responsibilities, FSBV uses individual aircraft parts
manufactured in various countries, including the United States. JA 56.
FSBV is undergoing corporate restructuring in the Netherlands. JA 83. As
of July 2014, FSBV employed approximately 910 employees worldwide, 105 of
which were employed in its limited operations in the United States. JA 83.
B.

FSBV's Voluntary Self-Disclosure, Cooperation and Settlement

with the United States

On June 23, 2010, FSBV notified OFAC and BIS in its voluntary selfdisclosure that some of its prior transactions had potentially violated U.S. sanctions
against Iran, Sudan and Burma, and also acknowledged and accepted responsibility
for this historical conduct. JA 50. Over the next few years, FSBV supplemented
its initial voluntary self-disclosure with multiple submissions to BIS and OFAC

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disclosing additional FSBV transactions that had violated U.S. export control laws.
JA 50-51.
FSBV identified these violations through a multi-jurisdictional internal
investigation led by outside counsel that included review of 584,046 documents,
interviews of 51 current and 4 former FSBV employees, collection of data on
20,614 transactions potentially involving U.S.-sanctioned countries, and dataanalysis associated with approximately 200,000 parts. JA 50. This internal
investigation concluded that FSBV had violated U.S. export control laws in 1,147
transactions from 2005 to 2010, which earned it $21 million in gross revenue, $5.9
million of which was gross pretax profit. JA 83.
Since 2010, FSBV also voluntarily developed and fully implemented, at
significant cost, numerous remedial measures to enhance and optimize its sanctions
compliance programs. JA 51-52. The United States has described these remedial
efforts by FSBV and the quality of its current compliance program "as a model to
be followed by other corporations." JA 153.
Following four years of extensive cooperation with the joint investigations
of BIS, OFAC and the United States Attorney's Office for the District of Columbia,
and many months of negotiation and deliberation over the specific terms of the
DPA, FSBV agreed to a global settlement with all investigating agencies
approximately one year ago, in early June 2014. JA 80. The settlement between

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the United States and FSBV included a DPA with an 18-month deferral of
prosecution for FSBV to demonstrate its continuing good conduct and diligent
enforcement of the export compliance program, which it had adopted and
effectuated over the prior three years as part of its cooperation with the United
States. JA 22 (DPA 4(i)). The global settlement also imposed on FSBV a
forfeiture payment of $10.5 million to the United States (under the terms of the
DPA), JA 21 (DPA 3), and a $10.5 million civil penalty payable to OFAC and
BIS, JA 113. The total $21 million penalty represents an amount over three-and-ahalf times the actual gross profit that FSBV earned from the violative transactions.
JA 316.
Under the DPA, FSBV waived important rights by consenting to being
charged with an Information, JA 20 (DPA 1); agreeing to exclusions of time
under the Speedy Trial Act at the discretion of the United States, JA 22 (DPA
4(i)); and accepting responsibility for the conduct specifically alleged in the
Factual Statement attached to the publicly-filed DPA, JA 20-21 (DPA 2).
C.

The Proceedings Below

Pursuant to the binding terms of the DPA, on June 5, 2014, the United States
filed with the district court a one-count Information and the DPA, which
incorporated the Factual Statement as an exhibit. JA 19-65. The Information

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charged FSBV with a violation of 18 United States Code 371, for conspiring to
violate IEEPA during the relevant period. JA 61-64.
Also pursuant to the DPA, the United States and FSBV filed on the same
day a Joint Consent Motion for Exclusion of Time Under the Speedy Trial Act.
JA 15-18. The Motion for Exclusion of Time stated that "[t]he purpose of [the
DPA] is to allow [FSBV] to demonstrate its good conduct and implement certain
remedial measures," JA 15, and requested that the district court "enter an Order
approving the [DPA] and continuing all criminal proceedings for a period of 18
months . . . . [and] that the Court find it to be in the interest of justice to exclude a
period of 18 months from the computation of speedy trial calculations under Title
18, United States Code, Section 3161(h)(2), the Speedy Trial Act," JA 16-17. The
case was assigned to District Judge Richard J. Leon.
1.

The June 25, 2014 Status Conference and the July 7, 2014
Submission by the United States.

The district judge expressed concerns with the DPA at the very first status
conference on June 25, 2014. Highlighting FSBV's historical transactions with
Iran, the district judge asserted that the Information alleged "extremely serious
conduct," and noted, "[Iran] is, of course, well-known as one of the major enemies
of this country, well-established." JA 70. Without hearing from the parties, he
then assessed the proposed arrangement to be "extraordinarily disproportionate to

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the conduct that's alleged in this Information" and described the DPA as a
"sweetheart deal for this company." JA 70-71.
The district judge instructed the United States to submit papers explaining
"why it is in the interests of justice for this Court to approve this deal, to explain in
detail why the arrangements that's [sic] contained in here is an appropriate
arrangement." JA 70-71. The United States made an oral request for an exclusion
of time under the Speedy Trial Act (consented to by FSBV, pursuant to its
obligations under the DPA), which he granted "in the interest of justice until July
9th." JA 73.
In its written submission on July 7, 2014, the United States stated that the
"proposed resolution with Fokker Services is fair and is an appropriate exercise of
the government's discretion." JA 80. Among other things, the United States
explained that the 18-month period of deferred prosecution in this case should be
viewed as an extension of FSBV's prior four years of cooperation with U.S.
authorities, and that the circumstances here did not support the imposition of an
independent monitor. JA 94-95. In light of FSBV's voluntary self-disclosure, its
remedial actions including adoption and enforcement of an effective global export
compliance program, and its agreement to pay a $21 million penalty under the
global settlement the entire revenue earned from its violative conduct, and a
substantial sum for a company facing demonstrated financial stress the United

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States concluded that "the DPA . . . is appropriate and serves the ends of justice."
JA 94.
Further, the United States observed that "[n]othing about this agreement is
extraordinary. The length of the DPA, the [combined $21 million penalty], and the
decision not to include an independent monitor are all in line with the [DOJ's]
goals, policies and objectives." JA 98.
2.

The July 9, 2014 Status Conference.

On July 9, 2014, the United States and FSBV appeared before the district
court. Rather than address the United States' written submission, the district judge
revealed that "a member of the press forwarded to this Court to its law clerks an
article that it published today [in] Bloomberg." JA 131. Despite questioning how
the article came to his attention and declaring he would not be influenced by a
news story citing anonymous sources, the district judge nonetheless concluded that
the article "raise[d] some questions about the accuracy of the Government's
representations to the Court . . . with regard to whether or not the Government's
knowledge of what was going on at Fokker Technologies [sic]1 was something that

The district judge's statement about FSBV's corporate parent, that something
"was going on at Fokker Technologies," is incorrect and misstates the record.
In multiple submissions and at multiple court appearances, the United States
confirmed on the record that "Neither the management of Stork nor the
management of Fokker Technologies[, each of which served as FSBV's parent
entity during different relevant periods,] was involved in the illegal activities,
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they really disclosed themselves in the first instance [or] was disclosed in other
ways at an earlier time." JA 131-32.
With that, the district judge ordered briefing on whether "this was truly a
voluntary disclosure situation at all" and directed the parties to appear again to
address this issue and the "standard of review" for a district court's authority to
review a DPA. JA 133-34.
3.

The United States Investigates FSBV's Voluntary SelfDisclosure and Confirms its Voluntary Nature.

In its next submission, the United States confirmed that "[c]ontrary to any
suggestions in the press, the criminal conduct underlying the Information filed
against [FSBV] was revealed to the government by [FSBV] following its own
extensive internal investigation." JA 139. Subsequently, the United States learned
new information that prompted it to continue investigating the accuracy of its prior
representations on the matter. JA 277. To complete its investigation over the
following two months, the United States requested and obtained a series of
adjournments that were accompanied by requests for additional exclusions of time
from the speedy trial clock (which the DPA required FSBV to consent to). JA 262.
On September 30, 2014, the United States filed a Status Report of its
investigation that fully confirmed its prior written and oral submissions concerning
and the government has no criminal recourse against the current or former
parent." JA 84, 155.

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FSBV's voluntary self-disclosure: "[] there is nothing in the record to support the
conclusion that Fokker Services was under investigation when it submitted its June
2010 disclosure. In fact, the record evidence is directly to the contrary. And
there is nothing that even suggests that Fokker Services was motivated to make its
disclosures out of fear about a nonexistent U.S. government investigation." JA
285.
4.

The October 29, 2014 Status Conference.

The district court subsequently scheduled a conference, directing the parties

to appear for "oral argument" on October 29, 2014. JA 10 (Minute Entry, Oct. 15,
2014). During that conference, the district judge agreed with the United States that
FSBV had made a voluntary self-disclosure. JA 298. But the district judge
suggested he might still reject the DPA:
I've been on the court 13 years in March. I've never had an occasion
to reject a deferred prosecution agreement. It is not something that
happens every day in this courthouse. Indeed, I could not, off the top
of my head, tell you of a case in the last 13 years or any of my
colleagues if they did it, I'm not aware of it. That's the kind of thing
that gets out. The other judges in the judge's dining room share those
kinds of experiences with one another.
JA 299.
The district judge then told the United States that he considered the DPA
"too good a deal for the defendant, way too good, and to the point where there is a
question as to whether your prosecutorial discretion has been abused." JA 300.

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Despite the language of the scheduling order, the district judge stated: "I'm not here
for [oral] argument." JA 311. Without making any specific ruling, he noted, "[]
if I end up deciding to reject it then I'll write an opinion. I have every, absolutely
every expectation you will appeal it if I reject it." JA 299 (emphasis added).
After counsel for FSBV pointed out that the combined monetary penalty
imposed by the global multi-agency settlement represented not just profit but
FSBV's entire revenue from the illegal transactions, the district judge conceded
that the penalty is significant, but objected: "You would not only have to give up
your ill-gotten gains, but there would be a penalty over and above it to not only
deter your company but other companies from engaging in this kind of conduct and
I might add, with one of the most 'feared' might not be the right word, but
certainly one of the most, one of the worst enemies of the United States. We'll just
leave it at that." JA 302.
The district judge observed that "deferred prosecution agreements . . . have
in recent times become a matter of great concern to many district judges around the
country. . . ." JA 306. Although the district judge acknowledged he had never
rejected a DPA before, he asserted that "this case is different in my judgment, in
terms of the facts and the circumstances and the way it has been structured." JA
306. He further counseled the parties "to have some discussions as to, if [the court]
rejects it, is there an alternative resolution we can come up with that might be

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acceptable to the [c]ourt. At least have those discussions so that you are not
starting anew in the event I do reject it a few weeks from now. Food for thought."
JA 307. The district judge then emphasized that he considered there to be "zero
question that a district judge has the authority to reject a deferred prosecution
agreement." JA 309.
The AUSA attempted to explain that, in addition to FSBV's voluntary selfdisclosure, the United States had weighed other "very salient, mitigating factors"
that favored the DPA as an appropriate resolution in the interests of justice. JA
313. In response to a query from the district judge, the AUSA acknowledged that
FSBV's financial condition had been relevant in setting the DPA's forfeiture
amount. JA 314. The district judge then interjected, "[w]as it a factor from the
government's point of view in favor of resolving it [with the DPA] that [FSBV's]
parent company was a company that on a regular basis does government contracts
with the U.S. military?" JA 314. Before this, none of the court filings or oral
representations by either party referenced the parent company's government
contracts.
After the AUSA affirmed that the United States had not considered the
parent company's government contracts, the district judge continued, "[s]o I don't
have to have any concerns that the parent company wanted it resolved this way and
the U.S. Government, because of government contracts that are engaged in

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between the parent company and the U.S. Government, that may be classified or
something like that, was a factor. I don't have to worry about that." JA 314-15.
The AUSA confirmed that it had not been a factor and emphasized that there
should be no concern about "any external influence during the negotiations or
during the analysis of the principles of corporate liability here." JA 315. The
district judge replied, "I'm happy to hear that. I assumed it but now you've
confirmed it." JA 315.
Returning to the facts of this case, the AUSA specifically highlighted the
quality of FSBV's ongoing cooperation under the DPA as further support for the
United States' exercise of prosecutorial discretion here. She noted that "[FSBV]
has not only been cooperating historically since the matter has been pending before
Your Honor, but even as recent as in the last three weeks, [FSBV] has been
providing the government with disclosures detailing possible suspicious activity
which the government could pursue investigatory leads." JA 317.
In response, however, the district judge turned the discussion to whether the
United States had entered into other deferred prosecution agreements with
companies that traded with Iran, which he again described as "one of [the United
States'] most serious enemies." JA 317. The AUSA noted that there have been
other "deferred prosecution agreement[s] where the defendant company
violat[ed] the sanctions with Iran." JA 318. The district judge further probed

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whether those companies had also traded with the Iranian military, but the AUSA
stated she was "not as familiar with the details of those other cases." JA 318.
The district judge next turned to whether there were cases involving "North
Korean military end users." JA 318. The AUSA was unfamiliar with such cases,
but reminded the court that "[FSBV] is not before Your Honor for engaging in
conduct with North Korea." JA 318. The district judge explained, "I'm looking for
analogies in other cases where there are deferred prosecution agreements where the
company in question was engaged in providing parts to one of the most serious
enemies of the United States' military. Now North Korea would qualify for that
characterization just like Iran would. Right?" JA 318-19.
Following the hearing, the court ordered that the time between October 29,
2014, and "either the next Court Hearing, or the issuance of an opinion by the
Court regarding the [DPA]," be excluded from the speedy trial clock. JA 10
(Minute Entry, Oct. 29, 2014).
5.

On February 5, 2015, the District Court Denied the Motion

for Exclusion of Time for the 18-month Deferral Period and
Refused to Approve the DPA.

In the Order Below issued on February 5, 2015, the district judge decided
that the court's supervisory powers authorized him "to approve or reject" the terms
of a DPA, JA 328, and that his review "must consider the public as well as the
defendant," JA 330. He also highlighted the fact that FSBV's charged conduct

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benefited Iranian entities and that this conduct occurred "during the post-9/11
world when we were engaged in a two-front War against terror in the Middle
East." JA 331.
The district judge took specific issue with the terms of the DPA that "the
Government is not requiring [FSBV] to pay as its fine a penny more than the $21
million in revenue it collected from its illegal transactions"; that "no individuals are
being prosecuted for their conduct"; that "a number of the employees who were
directly involved in the transactions are being allowed to remain with the
company"; and that "the DPA does not call for an independent monitor, or for any
periodic reports . . . verifying the company's compliance with U.S. law over this
very brief 18-month period." JA 331-32. He objected that "the Court is being left
to rely solely on the self-reporting of [FSBV]" and wondered, "[o]ne can only
imagine how a company with such a long track record of deceit and illegal
behavior ever convinced the Department of Justice to agree to that!" JA 332.
The district judge further asserted that the terms of the DPA would
"undermine the public's confidence in the administration of justice and promote
disrespect for the law for it to see a defendant prosecuted so anemically for
engaging in such egregious conduct for such a sustained period of time and for the
benefit of one of our country's worst enemies." JA 333. The district judge
therefore concluded that entering into this DPA was not "an appropriate exercise of

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prosecutorial discretion" by the United States and ventured: "Surely one would
expect, at a minimum, a fine that exceeded the amount of revenue generated, a
probationary period longer than 18 months, and a monitor trusted by the Court to
verify for it and the Government both that this rogue company truly is on the path
to complete compliance." JA 333 (emphasis added). Therefore, the district judge
stated that "I cannot approve [the DPA] in its current form. . . . [but] remain open
to considering a modified version in the future should the parties agree to different
terms and present such an agreement for [his] approval." JA 333.
FSBV filed a timely notice of appeal of the district court's order on February
18, 2015, and the United States followed with its own timely notice of appeal on
March 9, 2015. FSBV's Notice of Appeal, D.E. 24; United States' Notice of
Appeal, D.E. 29.

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SUMMARY OF ARGUMENT
The Order Below raises important issues of statutory interpretation and
constitutional dimension that are subject to plenary review by this Court. Both the
denial of the requested exclusion of time and the rejection of the DPA in the Order
Below were erroneous as a matter of law and constitute an unprecedented
arrogation of judicial power. By issuing the Order Below, the district judge has
effectively struck down, without justification, a DPA representing years of
cooperation between FSBV and the United States' multi-agency investigation, as
well as months of good faith negotiations between FSBV, the United States
Attorney's Office for the District of Columbia, OFAC and BIS a process that
ultimately began with FSBV's voluntary self-disclosure of its violative conduct to
U.S. authorities.
This Court may properly exercise jurisdiction over FSBV's appeal. By
refusing to approve the DPA and denying the exclusion of time sought by the
parties to implement their agreement, the Order Below has effectively rejected the
DPA, including its provisions for injunctive relief such as a forfeiture payment of
$10.5 million by FSBV, and other forms of prospective relief designed to mandate
FSBV's conduct going forward. Therefore, appellate jurisdiction is available under
28 U.S.C. 1292(a)(1), for the Order Below has the practical effect of denying an
injunction and will have serious consequences that will be unreviewable on final

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appeal. Alternatively, this Court may exercise jurisdiction over FSBV's appeal
under (i) 28 U.S.C. 1291, which allows interlocutory appeals pursuant to the
collateral order doctrine, or (ii) the doctrine of pendent jurisdiction, as FSBV's
appeal raises the same issues as the United States' appeal and petition for
mandamus, over which this Court has jurisdiction.
Reaching the merits of this consolidated appeal, this Court should reverse
the Order Below for the following reasons. First, the Order Below applied the
wrong legal standard in reviewing the DPA. The district judge disregarded the
plain language of the Speedy Trial Act and failed to determine whether the
exclusion of time was for the purpose of allowing FSBV to demonstrate its good
conduct. Instead, the district judge conducted an intrusive probe into the
substantive terms of the DPA, essentially ignoring the United States' discretionary
assessment to credit FSBV's voluntary self-disclosure and its adoption of industryleading compliance measures. In doing so, he not only ignored the express
directive of the Speedy Trial Act and undermined its statutory goals, but also
wrongfully invoked the district court's supervisory powers without making the
requisite findings to warrant his extraordinary use of such powers.
Second, the refusal to approve the DPA or to enter the requested exclusion
of time in the Order Below violates constitutional separation of powers. The Order
Below substitutes the district judge's assessment regarding the merits of the DPA,

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thus usurping the United States' constitutional prerogative to exercise its

prosecutorial discretion to resolve a criminal case on terms it considers to be fair
and just.
Accordingly, this Court should reverse the Order Below, with instructions to
reassign this case to another district judge to enter the requested exclusion of time.
There is abundant evidence in the record below to lead a reasonable observer to
question whether the district judge can decide this case fairly. This Court should
therefore exercise its authority to reassign this case on remand to safeguard the
appearance of impartiality and preserve judicial integrity.
STANDARD OF REVIEW
This appeal concerns the proper scope of the district court's authority to
review a DPA and to decide whether to exclude time under the Speedy Trial Act,
which raises significant questions of law and statutory interpretation that this Court
reviews de novo. See, e.g., United States v. Moore, 703 F.3d 562, 572-573 (D.C.
Cir. 2012), cert. denied, 134 S. Ct. 223 (2013) (holding in a criminal case that
issues of statutory interpretation are reviewed de novo).
Section 3161(h)(2) of the Speedy Trial Act is the lone statutory authority for
judicial review of the DPA, and the determination of whether to grant (or deny) a
speedy trial exclusion under this provision turns on whether the purpose of the
agreement is to allow the defendant to demonstrate its good conduct. See, e.g.,

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Order, United States v. Credit Suisse AG, No. 09 Cr. 352 (RCL), D.E. 3, 2009 WL
4894467, at *1 (D.D.C. Dec. 16, 2009); United States v. HSBC Bank USA,
N.A., No. 12 Cr. 763 (JG), 2013 WL 3306161, at *3 (E.D.N.Y. July 1, 2013).
Challenges under the Speedy Trial Act are generally reviewed de novo on matters
of law, and for clear error as to findings of fact.2 See, e.g., United States v. Rice,
746 F.3d 1074, 1077 (D.C. Cir.), cert. denied, 135 S. Ct. 493 (2014). Accordingly,
the Order Below is subject to this Court's de novo review.
ARGUMENT
I.

THIS COURT HAS JURISDICTION OVER THIS APPEAL

A.

Appellate Jurisdiction is Proper Under 28 U.S.C. 1292(a)(1).

This Court may exercise jurisdiction over this interlocutory appeal pursuant
to 28 U.S.C. 1292(a)(1), which, in relevant part, provides for appellate
jurisdiction over:
Interlocutory orders of the district courts of the United States . . .
granting, continuing, modifying, refusing or dissolving injunctions,
or refusing to dissolve or modify injunctions, except where a direct
review may be had in the Supreme Court.

Should this Court determine that this appeal is from the district judge's exercise
of discretion to approve the DPA, the underlying legal conclusions, such as the
proper legal standard to apply under Section 3161(h)(2), are nonetheless subject
to de novo review. See, e.g., Marino v. Drug Enforcement Admin., 685 F.3d
1076, 1080 (D.C. Cir. 2012) ("Although we review a district court's denial of a
Rule 60(b) motion for abuse of discretion we must consider underlying legal
issues de novo.").

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By refusing to approve the DPA, the Order Below effectively denied the
parties "their opportunity to settle their case on the negotiated terms." Carson v.
Am. Brands, Inc., 450 U.S. 79, 86 (1981). To bring an interlocutory appeal under
such circumstances, a party must demonstrate that: (1) the district court's order
"had the practical effect of denying an injunction," and (2) the order would have a
"serious, perhaps irreparable, consequence" that could only be "effectually
challenged" by immediate appeal. United States v. Microsoft Corp., 56 F.3d 1448,
1456 (D.C. Cir. 1995) (citing Carson, 450 U.S. at 84); accord United States SEC v.
Citigroup Global Mkts., Inc., 752 F.3d 285, 293 (2d Cir. 2014); see also United
States v. E-Gold, Ltd., 521 F.3d 411, 415 (D.C. Cir. 2008), abrogated on other
grounds by Kaley v. United States, 134 S. Ct. 1090 (2014). These requirements are
met here.
1.

The Order Below effectively denied injunctive relief.

Although the district judge styled his ruling as "merely declining to approve
the [DPA] before me," JA 333, the Order Below is a substantive rejection of the
DPA, with the practical effect of denying injunctive relief. As this Court has
stated, "the formal denomination of the court's order, either in the rules or in the
order itself, is not dispositive. 'The definition of an injunction under
1292(a)(1) is broad: it is any order directed to a party, enforceable by contempt,
and designed to accord or protect some or all of the substantive relief sought by a

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complaint in more than preliminary fashion.'" E-Gold, 521 F.3d at 414-15

(internal citation omitted).
In E-Gold, this Court adopted a flexible construction of Section 1292(a)(1)
to exercise jurisdiction over an appeal taken by criminal defendants from a pretrial
seizure warrant and restraining order that was entered against them in
contemplation of forfeiture, because "[t]hat which we call an injunction by any
other name is reviewable on interlocutory appeal." Id. at 415; accord United States
v. Opportunity Fund (In re Any & All Funds Or Other Assets, in Brown Bros.
Harriman & Co.), 613 F.3d 1122, 1125-26 (D.C. Cir. 2010), superseded by statute
on other grounds (exercising jurisdiction under Section 1292(a)(1) to review
district court's denial of government's request for a restraining order).
The DPA here directs FSBV to make payment of the $10.5 million forfeiture
amount within five business days of the DPA's approval by the district court, as
part of FSBV's demonstration of good conduct, and further provides that FSBV
agrees this forfeiture amount would be forfeitable under 18 U.S.C. 981 and 982.
JA 21-22 (DPA 3). And should FSBV breach its terms, the DPA is enforceable
by the United States reinitiating its criminal prosecution of the charges already
filed against FSBV, including but not limited to the conduct alleged in the Factual
Statement attached to the DPA (which FSBV has accepted responsibility for, and
agreed not to contest the admissibility of, in the event of such prosecution). JA 28-

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29 (DPA 9). The DPA therefore safeguards the United States' interest in holding
FSBV accountable for its behavior on a going-forward basis and ensures that
FSBV will continue to demonstrate good conduct.
Moreover, by refusing to approve the DPA, the Order Below effectively
denies not only the forfeiture payment sought by the United States but other forms
of forward-looking relief provided for in the DPA as well. In analogous
circumstances, this Court exercised jurisdiction under Section 1292(a)(1) over an
interlocutory appeal from a district court's order refusing to enter a proposed
consent decree between DOJ's Antitrust Division and Microsoft, reasoning that
appellate jurisdiction was proper because "prospective relief [was] at the very core
of the disapproved settlement." Microsoft Corp., 56 F.3d at 1456 (quoting Carson,
450 U.S. at 84). The prospective relief at issue there would have enjoined
Microsoft from engaging in certain anticompetitive licensing practices for its
operating systems; therefore, the district court's "refusal to enter a consent decree
had the practical effect of denying an injunction." Id.
Here too, the DPA provides for forward-looking relief: among other things,
it enjoins FSBV from committing further violations of U.S. sanctions and export
control laws, JA 26 (DPA 5(ix)); imposes a reporting requirement on FSBV to
inform the United States of any violations of its export control programs, JA 23
(DPA 5(ii)); requires FSBV to maintain its enhanced export compliance program,

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JA 25 (DPA 5(vi)); and obligates FSBV to make a $10.5 million forfeiture

payment to the United States within five business days of the DPA's approval, JA
21-22 (DPA 3). As with the proposed consent decree in Microsoft, the DPA here
satisfies the first prong of the Carson test. See Microsoft, 56 F.3d at 1456; see also
Twelve John Does v. District of Columbia, 117 F.3d 571, 574 (D.C. Cir. 1997)
(exercising jurisdiction under Section 1292(a)(1) because the order under appeal,
"whether or not final," affected a consent decree that "mandates certain primary
conduct (i.e., conduct in the real world, outside the litigation itself) . . . .");
Citigroup, 752 F.3d at 293 (district court's refusal to approve consent decree
between the SEC and Citigroup was appealable under 28 U.S.C. 1292(a)(1)
because consent decree "enjoin[ed] Citigroup from violating provisions of the Act
in the future" and "require[d] Citigroup to undertake steps aimed at preventing
future occurrences of securities fraud, and periodically demonstrate compliance to
the S.E.C.").
2.

The Order Below will have irreparable consequences that

are unreviewable on final appeal.

The second prong of the Carson test is also met here by effectively
rejecting the DPA, the Order Below will cause irreparable harm by denying the
parties "their right to compromise their dispute on mutually agreeable terms."
Carson, 450 U.S. at 88. In Microsoft, this Court recognized that "[the district court
in Carson] indicated its disapproval of the relief sought by a civil rights plaintiff

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because it was arguably too extensive; whereas here, the district judge is objecting
because the relief does not appear to him to go far enough." 56 F.3d at 1456. This
Court then explained that "[i]t matters not whether a district judge objects to the
injunctive relief as too strong or not strong enough: in either case, the judge is
refusing to grant the injunction except under conditions that the parties will not
accept." Id. (emphasis added). Therefore, this Court concluded that "serious
consequences" existed to justify interlocutory appeal, as "[a] district judge's refusal
to accept the decree particularly upon the grounds advanced cannot but have
enormous practical consequences for the government's ability to negotiate future
settlements." Id. (emphasis added).
Likewise, the Order Below will cause irreparable harm if allowed to stand.
It infringes on FSBV's right to negotiate and reach a compromise with the United
States, strips FSBV of the benefit of its bargain with the United States to have this
case fully resolved within the 18-month deferral period under the DPA, and
interferes with the United States' prerogative to settle this criminal investigation by
a prudent exercise of its prosecutorial discretion. Although the district judge
expressly reserved the possibility of revisiting his ruling, the record makes clear
that he has no intention of reconsidering unless the parties present him with a
harsher DPA, thus depriving FSBV and the United States of the right to settle this

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case on terms both parties consider fair, and which were the culmination of years
of cooperation and months of negotiation.
Appellate jurisdiction under Section 1292(a)(1) is therefore proper under
these circumstances. See, e.g., Carson, 450 U.S. at 87 & n.12 (appellate
jurisdiction proper under Section 1292(a)(1) where district court made clear it
would not approve settlement between parties without "a complete restructuring"
of the relief obtained, and noting that "a party to a pending settlement might be
legally justified in withdrawing its consent to the agreement once trial is held and
final judgment entered"); Microsoft, 56 F.3d at 1456 (finding jurisdiction under
Section 1292(a)(1) where "the judge [refused] to grant the injunction except under
conditions that the parties will not accept"(emphasis added)); Citigroup, 752 F.3d
at 293 (irreparable harm was shown where "the district court expressed no
willingness to revisit the settlement agreement with the parties").
B.

Appellate Jurisdiction is Also Proper Under the Collateral Order

Doctrine.

In the alternative, this Court has jurisdiction over FSBV's appeal under 28
U.S.C. 1291, which allows interlocutory appeals pursuant to the collateral order
doctrine established in Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541
(1949). Under Cohen and its progeny, an appealable collateral order must (1)
"conclusively determine the disputed question," (2) "resolve an important issue
completely separate from the merits of the action," and (3) "be effectively

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unreviewable on appeal from a final judgment." Midland Asphalt Corp. v. United

States, 489 U.S. 794, 799 (1989) (internal citation omitted).
Although the collateral order doctrine has been interpreted to apply "with
utmost strictness" in criminal cases, United States v. Cisneros, 169 F.3d 763, 767
(D.C. Cir. 1999) (quoting Flanagan v. United States, 465 U.S. 259, 265 (1984)),
the extraordinary nature of the Order Below justifies its application here. The
general rule is that a criminal defendant must show that the order at issue involves
"an asserted right the legal and practical value of which would be destroyed if it
were not vindicated before trial." Midland Asphalt, 489 U.S. at 799 (quoting
United States v. MacDonald, 435 U.S. 850, 860 (1978)); see also Sell v. United
States, 539 U.S. 166, 177 (2003) (holding that pretrial order compelling criminal
defendant to undergo medication to render him competent to stand trial was
appealable collateral order).
Here, FSBV bargained for, and obtained from the United States, the promise
of a final resolution of its criminal liability within the 18-month deferral period
under the DPA, in consideration for which FSBV relinquished significant rights.
The temporal limitation is a key facet of FSBV's bargained-for resolution; the DPA
specifically provides that it "is effective for a period beginning on the date on
which the Information is filed, [June 5, 2014,] and ending 18 months from that
date," which falls on December 5, 2015. JA 22 (DPA 4(i)). Consistent with the

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requirements of the DPA, the parties filed the Joint Consent Motion for exclusion
of the 18-month term under Section 3161(h)(2) of the Speedy Trial Act. JA 15-18.
By denying the Joint Consent Motion and refusing to approve the DPA, the Order
Below effectively eviscerates FSBV's right, grounded in due process, to have
enforced and concluded within the 18-month deferral period the bargain it struck
with the United States as embodied in the terms of the DPA.
Simply put, FSBV's right to have the DPA enforced and to obtain the benefit
of finality and certainty in the settlement of this matter within the defined 18month deferral period cannot be effectively vindicated on final appeal. Cf. Carson,
450 U.S. at 89-90 (holding that district court's denial of petitioners' "opportunity to
compromise their claim and to obtain the injunctive benefits of the settlement
agreement they negotiated" could only be "effectually challenged" by interlocutory
appeal). Specifically, the Order Below:
(1)

Conclusively Determined the Disputed Question. The Order

Below forecloses resolution of the DPA, the terms of which are
the product of years of cooperation and investigation by FSBV and
months of negotiations between the parties. The record in this case
demonstrates that the district judge will not reconsider his Order
Below unless the parties modify the DPA to impose significantly
harsher terms on FSBV. The Order Below creates an impasse that

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goes to the heart of the dispute: whether the scope of the district
court's authority to approve the DPA encompasses the authority to
seek or impose terms other than the ones the parties have agreed
upon.
(2)

Resolves an important issue completely separate from the merits

of the underlying action. The Order Below rejects the DPA
without meaningful oral argument and undermines larger policy
and law enforcement concerns in the process. By issuing the
Order Below, the district judge has essentially thrown sand into
the vital workings of a device designed to incentivize corporate
defendants to provide pre- and post-Indictment cooperation with
government investigations. This rejection also implicates
important issues of due process, as it infringes on FSBV's right to
have honored the terms of its contractual bargain with the United
States. Both of these important issues are completely separate
from the merits of the underlying action namely, whether or not
FSBV committed the offenses charged in the Information.

(3)

Is unreviewable on appeal from any final judgment. By refusing

to approve the DPA, the Order Below has violated FSBV's right
grounded in due process to have its negotiated resolution with

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the United States completed within the agreed upon 18-month

deferral period. Pursuant to the DPA, FSBV surrendered
significant rights, such as agreeing to waive indictment, JA 20
(DPA 1), waiving statute of limitations preclusions, JA 28 (DPA
8), consenting to government requests for exclusion of time
under the STA, JA 22 (DPA 4(i)), and acknowledging and
accepting responsibility for the conduct alleged against it in the
Factual Statement, JA 20-21 (DPA 2). FSBV detrimentally
relied, in good faith, on the United States' promises in the DPA to
defer prosecution and ultimately dismiss the Information within
the contemplated timeframe. Without interlocutory appeal, there
is no reasonable prospect that a final appeal can resolve this issue
before it is rendered moot by the expiration of the 18-month
deferral period, which began running the day the Information was
filed. FSBV's bargained-for settlement within the contemplated
time will then be irretrievably lost as a result of the district court's
error; an error that would be unreviewable if left for final appeal.
C.

In the Alternative, this Court may Exercise Pendent Jurisdiction

over FSBV's Appeal.

Independent and apart from the foregoing grounds for appellate jurisdiction,
this Court may also exercise pendent jurisdiction over FSBV's appeal if it exercises

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appellate jurisdiction over the United States' interlocutory appeal. The factual and
legal issues raised by the United States' interlocutory appeal are, if not identical,
inextricably intertwined with those raised by FSBV's interlocutory appeal. Indeed,
the Order Below is the same order being appealed from by the United States and
FSBV.
Thus, this Court may properly exercise pendent jurisdiction over FSBV's
appeal if it takes jurisdiction over the United States' appeal from the Order Below.
See, e.g., National R.R. Passenger Corp. v. ExpressTrak, L.L.C., 330 F.3d 523, 528
(D.C. Cir. 2003) (exercising pendent jurisdiction to review interlocutory order that
was "not just legally, but also factually intertwined" with order enjoining parties
under review); Twelve John Does, 117 F.3d at 574-575 ("[O]ur pendent appellant
jurisdiction encompasses at least determinations that are inextricably intertwined
with ones over which we have direct jurisdiction."); see also Schlagenhauf
v. Holder, 379 U.S. 104, 110-111 (1964) (Court of Appeals exercising mandamus
power to review district court's authority to order mental and physical
examinations of defendant should also have reviewed issue of whether good cause
existed for the examinations, "so as to avoid piecemeal litigation and to settle new
and important problems.")

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THE DISTRICT COURT APPLIED THE WRONG LEGAL

STANDARD IN REFUSING TO APPROVE THE DPA AND
EXCEEDED THE SCOPE OF ITS LIMITED AUTHORITY
The legal error in the Order Below is at least two-fold. First, the district

judge applied the wrong legal standard when he did not follow Section 3161(h)(2)
of the Speedy Trial Act, which grants courts narrow authority to consider only
whether the DPA serves the purpose of allowing FSBV to demonstrate its good
conduct. Instead, he erroneously asked whether the DPA's substantive terms were
sufficiently stringent to inspire public confidence in the administration of
justice. Second, the district judge compounded that error by resorting to the court's
general supervisory power to reject the DPA, when no justification existed for the
exercise of such powers.
A.

The District Court Disregarded the Plain Language of the Speedy

Trial Act.

The Speedy Trial Act provides that a district court shall exclude from the
seventy-day period in which a charged defendant must be tried, "[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) (emphasis added). As the statute evidences, the only
prerequisite for the court to approve the written agreement is that the agreement
serves the goal of diversion and rehabilitation for the defendant.
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The district judge disregarded this statutory directive and neglected to

determine whether the DPA is to allow FSBV to demonstrate its good conduct.
Instead, he decided in the Order Below that he had authority "to approve or reject
the DPA pursuant to its supervisory power." JA 328. Compounding this error, the
district judge cited no authority to support his assertion that in exercising this
supervisory power to review the DPA, "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 . . .
or overly-zealous prosecutorial conduct." JA 330. In doing so, the district judge
adopted an overbroad view of his authority that ignored the express letter of the
Speedy Trial Act and had no grounding in legal precedent. This was legal error.
See Citigroup, 752 F.3d at 297 (District court committed legal error by failing to
make proper inquiry into whether "the consent decree would disserve the public
interest," in part because it adopted an overbroad definition of the public interest.)
While the Speedy Trial Act does not elaborate on the scope of a district
court's authority to exclude the period of delay for deferral of prosecution pursuant
to a written agreement between the parties and case law on this point is sparse, the
exclusion of time under Section 3161(h)(2) has been described as one of six
mandatory exclusions. United States v. Tinklenberg, 131 S. Ct. 2007, 2019 (2011)
(Scalia, J., concurring) (observing that under Supreme Court precedent, the first six

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exclusions under 18 U.S.C. 3161(h) are "automatic, apply regardless of the

specifics of the case, and require no district-court findings") (internal quotation
marks and citation omitted).
Moreover, the Speedy Trial Act's legislative history supports the view that
the district court's reviewing authority is extremely limited in this context. The
Senate Judiciary Committee Report accompanying the Act explains that Section
3161(h)(2) was designed to support a trend among prosecutors in the early 1970s
of holding criminal charges in abeyance for purposes of pretrial diversion or
intervention programs and to allow defendants to participate in social rehabilitation
efforts. S. Rep. No. 93-1021, at 36-37 (1974). Court approval was required 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." Id. at 37; accord HSBC Bank, 2013 WL 3306161, at *3 ("[S]uch
approval is grounded in a concern . . . that parties will collude to circumvent the
speedy trial clock . . . .") The district judge made no finding here that the DPA
should be rejected because the parties had entered into it for the purpose of
circumventing speedy trial requirements.
Importantly, the Act's legislative history does not suggest that a district court
can look beyond whether the agreement serves a rehabilitative purpose for the
defendant in deciding whether to exclude time. The closest authority cited by the

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district judge for his exercise of the supervisory power over the DPA is actually in
accord with this point: the court in HSBC Bank found that the standard of review
under Section 3161(h)(2) only "appears to instruct courts to consider whether a
deferred prosecution agreement is truly about diversion and not simply a vehicle
for fending off a looming trial date." 2013 WL 3306161, at *3. Although the
HSBC Bank court acknowledged "heavy public criticism" urging it to reject the
agreement in question because the government should have sought to hold the
bank criminally liable, the court ultimately did not allow such public opinion to
sway its decision to approve that deferred prosecution agreement. Id. at*7.
Accordingly, no support exists for the proposition that a court should consider "the
public" in reviewing the DPA, JA 330 a standard left undefined in the Order
Below and certainly not for the notion that district courts may test the adequacy
of its terms against a vague conception of the public interest.
Had the district judge performed the requisite analysis in accordance with
Section 3161(h)(2), he would have approved the DPA. The DPA meets the
purposes of diversion and rehabilitation as its terms are designed to allow FSBV to
demonstrate good conduct and to continue its extensive cooperation with the
United States. Among other things, the DPA:
requires FSBV to continue to cooperate, during the 18-month deferral
period, with the United States or with any other governmental

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department or agency regarding any matters related to the DPA,

JA 23 (DPA 5(i));3
imposes a reporting requirement on FSBV to provide the United
States with relevant information regarding possible violations of the
laws, regulations and programs listed in the DPA, JA 23 (DPA
5(ii));
requires FSBV to continue to apply and implement its enhanced
export compliance program designed to comply with all U.S.
sanctions on embargoed countries, JA 25 (DPA 5(vi));4
enjoins FSBV from committing further knowing violations of the
U.S. sanctions and export control laws, JA 26 (DPA 5(ix)); and
preserves the ability of the United States to prosecute FSBV for the
charged offenses in the event the DPA terms are breached during the
18-month deferral period, thus providing for accountability and
guaranteeing that the DPA is to allow FSBV to demonstrate good
conduct, JA 28-29 (DPA 9-10).
3

Indeed, the United States specifically highlighted the quality of FSBV's ongoing
cooperation today approximately five years running, and still continuing to
provide investigative leads in its oral and written submissions to the district
court. JA 93, 317.

The United States has lauded the extensive remedial and compliance measures
implemented by FSBV as "a model to be followed by other corporations." JA
153.

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Finally, the Order Below could disincentivize other corporate defendants

from self-reporting violations of U.S. law. The United States' supplemental
investigation here unequivocally confirmed, to the satisfaction of the district court,
that FSBV made a voluntary self-disclosure. JA 309. Ultimately, there would
have been no investigation, no global settlement, no DPA, no monetary penalty, no
Information, no publicly-filed and admitted to Factual Statement, no case, and no
judicial review by the district court had FSBV not taken seriously the DOJ's stated
policy of not prosecuting companies, especially foreign companies, that make a
full and complete voluntary self-disclosure. Moreover, the United States'
submissions to the district court proffered ample evidence to show that the DPA
balances the need for punishment and deterrence against the equally important
policy goals of encouraging voluntary self-disclosures, cooperation and
remediation among corporate defendants. But the district judge apparently gave
short shrift to the United States' exercise of prosecutorial discretion in recognizing
the critical value of FSBV's voluntary self-disclosure as an important mitigating
factor justifying the DPA here.5 As indicated by its language and legislative

Indeed, recent deferred prosecution agreements have been approved by courts

(including since the Order Below was issued) even though the corporate
defendant made no voluntary self-disclosure of its violations. See, e.g., Minute
Order (paperless), United States v. Commerzbank AG, No. 15 Cr. 31 (BAH)
(D.D.C. Apr. 3, 2015) (granting Joint Consent Motion for Exclusion of Time
Under the Speedy Trial Act "for the purpose of allowing the defendants to
demonstrate their good conduct and implement fully the remedial measures set
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history, Section 3161(h)(2) was intended to promote efforts to allow defendants to

participate in their own rehabilitation and engage in self-remedial measures. The
district judge refusal to approve the DPA in the Order Below is inimical to that
statutory goal.
There can be no reasonable dispute that the DPA meets the requisite purpose
under Section 3161(h)(2) of the STA, and that the district judge had no cause to
reject it. This error alone justifies reversal of the Order Below. But not only did
the district judge apply the wrong legal standard, he also worked an unwarranted
expansion of the district court's inherent supervisory power that this Court should
not countenance.
B.

The District Court Did Not and Cannot Justify its Invocation of
the Supervisory Power to Refuse Approval of the DPA.

Even if the district court could refuse to approve the DPA under its inherent
supervisory powers over proceedings before it, the district judge failed to provide
any justification for his invocation of those powers in this case. As the Supreme
Court has emphasized:
[I]n the exercise of supervisory powers, federal courts may, within
limits, formulate procedural rules not specifically required by the
Constitution or the Congress. The purposes underlying use of the
supervisory powers are threefold: to implement a remedy for

out in the deferred prosecution agreement"); HSBC Bank, 2013 WL 3306161, at

**9-11.

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violation of recognized rights . . . to preserve judicial integrity . . .

and finally, as a remedy designed to deter illegal conduct."
United States v. Hasting, 461 U.S. 499, 505 (1983) (emphasis added, internal
citations omitted). None of these purposes are applicable here.
Despite professing to observe these stringent limits that the supervisory
powers "are to be exercised 'sparingly'" JA 330 (quoting United States v. Jones,
433 F.2d 1176, 1181-82 (D.C. Cir. 1970), cert. denied, 402 U.S. 950 (1971)) the
district judge nonetheless conducted a free-ranging examination of the adequacy of
the DPA that far exceeded the proper boundaries of the supervisory powers.
Permitting the Order Below to stand would endorse an unwarranted and unlawful
expansion of the supervisory power, with serious ramifications for the principle of
judicial restraint. See United States v. Payner, 447 U.S. 727, 737 (1980) (reversing
district court's use of supervisory power to exclude evidence seized unlawfully
from third-parties; because evidence was lawfully admissible under Fourth
Amendment jurisprudence, permitting such exercise of supervisory power "would
confer on the judiciary discretionary power to disregard the considered limitations
of the law it is charged with enforcing").
This Court held in Jones the very precedent quoted in the Order Below
that "[t]he supervisory power doctrine is an extraordinary one" reserved for the
most limited circumstances: "application of the doctrine requires a finding that the
Government's conduct is outrageous in light of the surrounding circumstances of

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an individual case." 433 F.2d at 1181-82 (emphasis added). Jones considered

whether the suppression of transcripts of monitored conversations obtained through
the use of an informer and other deceptive tactics was proper under the district
court's supervisory power. Id. at 1181. While acknowledging that "[i]t may be
that the dignity of our Government and its judicial system suffers when the United
States employs an informer and uses what may be characterized as deceit in
conducting a criminal investigation," this Court nonetheless held that where "the
actions complained of are neither unconstitutional nor beyond the bounds of what
has been thought legally tolerable at this stage of our civilization, we deem it
unnecessary to exercise the federal supervisory power to protect either the
defendant or the processes of the trial court in the circumstances shown by this
record." Id. at 1182 (emphasis added).
Thus, should the supervisory power encompass judicial review of the DPA,
it would only apply when there is evidence of impropriety that exceeds the bounds
of constitutionality or what is "legally tolerable." Id.; cf. Payner, 447 U.S. at 736
("The values assigned to the competing interests do not change because a court has
elected to analyze the question under the supervisory power instead of the Fourth
Amendment.") With the exception of the Order Below, no court has interpreted its
supervisory power as a license to disregard the language of Section 3161(h)(2) and
to test the adequacy of the Executive Branch's prosecutorial decisions as

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embodied in an otherwise valid and unremarkable deferred prosecution agreement

against some vague notion of the public interest. The parties here jointly
consented to the DPA, and the United States has fully articulated its bases for the
fairness of the chosen resolution as a prudent exercise of its prosecutorial
discretion. No cause exists to invoke the supervisory power.
Rather than examine whether the purpose of the DPA is to allow FSBV to
demonstrate its good conduct, as is expressly required under Section 3161(h)(2),
the Order Below resorted to criticizing the supposed leniency of the DPA under the
supervisory power, purporting to link judicial integrity with an abstract notion of
the public interest: "it would undermine the public's confidence in the
administration of justice and promote disrespect for the law for it to see a
defendant prosecuted so anemically for engaging in such egregious conduct . . . ."
JA 332-33. By doing so, the Order Below contravenes the Supreme Court's
teaching that federal courts may not invoke the supervisory power to "'disregard
constitutional or statutory provisions.'" Carlisle v. United States, 517 U.S. 416,
426 (1996), superseded by statute on other grounds (quoting Bank of Nova
Scotia v. United States, 487 U.S. 250, 254-255 (1988)); see also United States v.
Byers, 740 F.2d 1104, 1122-23 (D.C. Cir. 1984) (en banc) (Scalia, J., plurality
opinion) (rejecting defendant-appellant's constitutional challenges to admission of
psychiatric evidence and rejecting dissent's efforts to "shift[] the context of the

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discussion to the supervisory power" where "no unlawful activity has occurred"
because "Payner holds that cannot be done" (citing 447 U.S. at 735)).
Even the closest precedent relied on by the district judge to support his
exercise of supervisory power HSBC Bank does not find that the supervisory
power authorizes courts to test the substantive merits of a deferred prosecution
agreement or to consider the public interest at large. Rather, "mindful of the limits
of the supervisory power," the court in HSBC Bank confined its review to whether
the deferred prosecution agreement would involve any "impropriety that implicates
the integrity of the Court." 2013 WL 3306161, at *7. The HSBC Bank court also
listed examples of impropriety that might implicate the supervisory power:
governmental conduct that might undermine the attorney-client privilege or work
product protections, infringe constitutional rights, or raise the specter of official
corruption in the implementation of the deferred prosecution agreement. See id. at
*6. Finding none, the HSBC Bank court approved the agreement at issue under its
supervisory power, which it acknowledged was a "novel" approach. Id. at **6-7.
The Order Below did not follow this cautious approach.
Thus, while HSBC Bank is not controlling on this appeal, the limited and
conservative exercise of the supervisory power by the HSBC court to approve the
agreement highlights how the district judge's invocation of the supervisory power
in the Order Below was inappropriate: the record in this case reveals no such

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"lawlessness or impropriety" that would justify use of the supervisory power to

reject the DPA. Id. at *6. The district judge certainly did not identify any
governmental conduct that would be "unconstitutional [or] beyond the bounds of
what has been thought legally tolerable" to warrant his exercise of supervisory
power here. Jones, 433 F.2d at 1182. Whatever personal misgivings a judge may
have regarding the wisdom of resolving criminal cases against corporate
defendants with DPAs should have no proper bearing on his review of the
agreement and the decision to exclude time under Section 3161(h)(2).
Indeed, the district judge here seemingly had no objection to the propriety of
resolving this matter with a deferral of prosecution; rather, his expressed
disagreement was with the sufficiency of the punishment meted out to FSBV under
the DPA. JA 332-33. But as this Court has instructed before, judges may not
object to the adequacy of the settlement relief that the United States, in the exercise
of its prosecutorial discretion, obtains from a corporate defendant. See Microsoft,
56 F.3d at 1459-60 (reversing refusal to enter proposed antitrust consent decree
because district judge was not to explore what remedies would "'best serve society,'
but only to confirm the resulting settlement is 'within the reaches of the public
interest'" (emphasis in original, internal citations omitted)); see also Citigroup, 752
F.3d at 297 (holding it was abuse of discretion when "district court withheld

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approval of the consent decree on the ground that it believed the S.E.C. failed to
bring the proper charges against Citigroup").
In light of the considerations above, no principled reason exists to deny the
exclusion of time that the parties sought under Section 3161(h)(2) of the Speedy
Trial Act pursuant to the DPA. The district judge committed legal error when he
neglected to make the required findings under Section 3161(h)(2), and then
compounded that error by resorting to an unwarranted use of the court's
supervisory power. The Order Below should be reversed.
III.

THE DISTRICT COURT VIOLATED CONSTITUTIONAL

SEPARATION OF POWERS WHEN IT FAILED TO ACCORD DUE
DEFERENCE TO THE UNITED STATES' EXERCISE OF
PROSECUTORIAL DISCRETION.
Aside from the legal errors discussed above, the Order Below also violates

the constitutional separation of powers between the Executive Branch and the
Judiciary. The Order Below is the first time that a district court has refused to
approve a deferred prosecution agreement proposed by the United States. District
courts will enter the requested exclusion of time pursuant to deferred prosecution
agreements without ruling on the adequacy of the substantive terms of the
agreement before them.6
6

For example, the district court in United States v. The Royal Bank of Scotland,
plc, No. 13 Cr. 74 (MPS) (D. Conn.), recently acknowledged, "it's not within
[the court's] purview to approve the substantive provisions of the DPA," JA 188
(D.E. 22, Feb. 15, 2013), and subsequently excluded time under Section
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This uniformly deferential stance by district courts is not only consistent

with the purpose of Section 3161(h)(2) of the STA, but promotes the constitutional
separation of powers. As the Supreme Court has explained,
The Attorney General and United States Attorneys retain "'broad
discretion'" to enforce the Nation's criminal laws. . . . They have this
latitude because they are designated by statute as the President's
delegates to help him discharge his constitutional responsibility to
"take Care that the Laws be faithfully executed." . . . As a result, "[t]he
presumption of regularity supports" 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. Armstrong, 517 U.S. 456, 464 (1996) (internal citations omitted);
see also United States v. Cox, 342 F.2d 167, 171 (5th Cir.), cert. denied, 381 U.S.
935 (1965) (en banc) ("It follows, as an incident of the constitutional separation of
powers, that the courts are not to interfere with the free exercise of the

3161(h)(2) to allow the defendant to demonstrate its good conduct without

evaluating the merits of the agreement, JA 244 (D.E. 4, Apr. 12, 2013).
This approach reflects the appropriate exercise of limited judicial authority over
deferred prosecution agreements, and accords with established practice in
federal courts. See, e.g., Order, United States v. Barclays Bank PLC, No. 10 Cr.
218 (EGS), D.E. 7, (D.D.C. Aug. 18, 2010) (order approving deferred
prosecution agreement for IEEPA violation and exclusion of time because the
period of delay "is for the purpose of allowing Defendant . . . to demonstrate its
good conduct and implement certain remedial measures"); United States v.
KPMG LLP, No. 05 Cr. 903 (LAP), 2007 WL 541956, at *7 (S.D.N.Y. Feb. 15,
2007) (noting that "courts have routinely approved or entered deferred
prosecution agreements containing restitution components and/or other remedial
measures or sanctions voluntarily agreed to by the parties").

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discretionary powers of the attorneys of the United States in their control over
criminal prosecutions.")
A long line of precedent holds that "[t]his broad discretion rests largely on
the recognition that the decision to prosecute is particularly ill-suited to judicial
review." Wayte v. United States, 470 U.S. 598, 607 (1985); see also ICC v.
Brotherhood of Locomotive Engineers, 482 U.S. 270, 283 (1987) ("[T]he refusal to
prosecute cannot be the subject of judicial review."); Swift v. United States, 318
F.3d 250, 252 (D.C. Cir. 2003) (noting "the presumption that decisions not to
prosecute . . . are unreviewable"); In re Sealed Case, 131 F.3d 208, 214 (D.C. Cir.
1997) ("In the ordinary case, the exercise of prosecutorial discretion, at the very
core of the executive function, has long been held presumptively unreviewable.");
Cmty. for Creative Non-Violence v. Pierce, 786 F.2d 1199, 1201 (D.C. Cir. 1986)
("The power to decide when to investigate, and when to prosecute, lies at the core
of the Executive's duty to see to the faithful execution of the laws; when reviewing
the exercise of that power, the judicial authority is, therefore, at its most limited"
(emphasis added)).
The Order Below disregards these constitutional principles and presumes to
inherit "the undesirable and injudicious posture of . . . 'superprosecutor[]'."
Inmates of Attica Corr. Facility v. Rockefeller, 477 F.2d 375, 380 (2d Cir. 1973)
(noting "serious doubts" about the judiciary's capacity to review prosecutorial

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decisions). In contrast to the "voluminous, voluminous" submissions by the United

States explaining the fairness of the DPA and justifying its exercise of
prosecutorial discretion, JA 319-20, the district judge's dismissal of these
considerations was conclusory, asserting, "I disagree," JA 332. While ostensibly
acknowledging "[FSBV]'s cooperation and voluntary disclosure" and the
precarious financial condition of the company, the district judge nonetheless
doubted whether the DPA was proportionate to "the gravity of [FSBV]'s conduct in
a post-9/11 world." JA 332. Describing the terms of the DPA as "anemic[]", the
district judge complained that "one would expect, at a minimum, a fine that
exceeded the amount of revenue generated, a probationary period longer than 18
months, and a monitor trusted by the Court . . . ." JA 333.
Notably, not once does the word "defer" appear in the Order Below. Nor is
there any indication in the Order Below that any deference was given, much less
the extreme deference properly accorded to the United States' exercise of
prosecutorial decisions in criminal cases, a setting in which the Executive Branch
operates at the apex of its discretion. See, e.g., Newman v. United States, 382 F.2d
479, 480 (D.C. Cir. 1967) (declining to review federal prosecutor's decision
regarding plea agreement because "[f]ew 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

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whether to dismiss a proceeding once brought"). Rather than defer, "[t]he court
simply disagreed." United States SEC v. Citigroup Global Mkts., Inc., 673 F.3d
158, 164-165 (2d Cir. 2012) (staying district court proceedings because movant
had shown likelihood of success on appeal as district court failed to give due
deference to "the agency's discretionary assessment of its prospects of doing better
or worse, or of the optimal allocation of its limited resources. Instead, the district
court imposed what it considered to be the best policy to enforce the securities
laws.")
By refusing to approve the DPA on the basis of an objection with whether it
imposes sufficiently punitive terms on FSBV, the Order Below usurps the United
States' judgment on "[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"; factors that "are not
readily susceptible to the kind of analysis the courts are competent to undertake."
Wayte, 470 U.S. at 607; see also HSBC Bank, 2013 WL 3306161, at **7-8
("Significant deference is owed the Executive Branch in matters pertaining to
prosecutorial discretion" because the judiciary is "not equipped" to properly
balance the competing interests underpinning prosecutorial decisions).
Allowing the Order Below to stand would condone judicial interference into
the Executive Branch's judgment about what cases not to pursue and upend the

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great deference that courts traditionally accord to prosecutorial decisions. In the

words of this Court, the district judge's refusal to approve the DPA in the Order
Below "impermissibly arrogated to himself the President's role 'to take care that the
laws be faithfully executed.'" Microsoft, 56 F.3d at 1457. The Order Below
should be reversed and the case remanded to the district court with instructions to
enter the exclusion of time pursuant to the DPA.
IV.

REASSIGNMENT TO ANOTHER DISTRICT JUDGE ON REMAND

IS NECESSARY BECAUSE THE PROCEEDINGS BELOW RAISE
REASONABLE QUESTIONS ABOUT THE DISTRICT JUDGE'S
ABILITY TO RENDER IMPARTIAL JUDGMENT IN THIS CASE
Reassignment is necessary because the record raises reasonable questions

about whether the district judge can fairly decide this case. Indeed, the
proceedings below could leave a reasonable observer with the impression that the
district judge's denial of the parties' joint motion for exclusion of time pursuant to
the DPA and corresponding refusal to approve the DPA were not the product of
impartial judgment, but were motivated by a personal animus towards Iran and to
those "rogue" companies that have traded with "one of our country's worst
enemies." JA 333.
This Court has the authority to order that this case be reassigned to another
district court judge under "both the recusal statute, 28 U.S.C. 455(a)," and as a
proper exercise of its "general supervisory power to require such further
proceedings to be had as may be just under the circumstances, 28 U.S.C. 2106."

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Microsoft, 56 F.3d at 1463 (internal quotation marks and citation omitted). "To do
so, [this Court] need not find actual bias or prejudice, but only that the facts 'might
reasonably cause an objective observer to question [the judge's] impartiality.'" Id.
(quoting Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847, 865 (1988));
see also Selkridge v. United of Omaha Life Ins. Co., 360 F.3d 155, 167 (3d Cir.
2004) (holding that because "'the touchstone of recusal is the integrity of the
judiciary . . . prejudice is presumed' once 'the appearance of partiality is shown'"
(internal citation omitted)).
This Court has held that a case should be reassigned on remand when a
judge has interjected his or her personal views into a judicial proceeding such that
it appears the case was not decided on an impartial assessments of the facts and the
law. See, e.g., Naples v. United States, 307 F.2d 618, 629 (D.C. Cir. 1962) (en
banc) (reassigning case when district court's opinion reflected "the personal views
of the author" rather than proper application of judicial precedent). In Cobell v.
Kempthorne, this Court reassigned a case on remand because the district judge's
assertions that the defendant, the United States Department of Interior ("DOI"),
had a "horrible, bigoted government-past" and that current DOI officials were
racist, coupled with the judge's history of ruling against the DOI, would leave an
"objective observer with the overall impression that the district court's
professed hostility to Interior has become so extreme as to display clear inability to

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render fair judgment." 455 F.3d 317, 335 (D.C. Cir. 2006) (internal quotation
marks and citation omitted).
A reasonable observer reading the transcript of this case could well conclude
that the district judge here harbored views about Iran and companies that have
done business with Iran which rendered impossible an impartial decision on
whether to grant the exclusion of time pursuant to the DPA. The record suggests
that he was searching for a reason to reject the DPA from the very outset of this
case. At the initial court conference, and without permitting any substantive
discussion about relevant facts, the district judge was adamant about challenging
the DPA due to the "extremely serious conduct" of FSBV's prior business activities
with Iran, which he deemed "one of the major enemies of this country." JA 70. He
described the DPA as a "sweetheart deal for the company," JA 71, that was
"extraordinarily disproportionate to the conduct that's alleged in this Information,"
JA 70.
The district judge's reliance on anonymous allegations in a news article to
order the United States to conduct a collateral investigation into FSBV's voluntary
self-disclosure furthers the appearance that he was predisposed towards rejecting
the DPA. JA 131-32. Despite apparently recognizing the impropriety of relying

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on this extrajudicial source,7 the district judge nonetheless used this opportunity to
challenge the United States' representations and attack one of the core justifications
for the DPA. Relying on allegations made by unnamed sources in the article, he
questioned "whether or not [FSBV's voluntary self-disclosure] was truly a
voluntary disclosure situation at all." JA 133. Independent of the fact that the
district judge apparently was swayed by anonymous accusations, his reliance on an
unsolicited, ex parte communication to open a collateral inquiry is inherently
troubling. See Microsoft, 56 F.3d at 1464 (expressing concern about district
judge's acceptance of ex parte submissions, even though "district judge stated that
he did not consider the ex parte submissions . . . he suggested that the government
should consider [the submissions] . . . . We think the appropriate course would
have been simply to refuse to accept any ex parte communications.")
Even after the United States conducted an exhaustive investigation that
confirmed the validity of its prior representations about FSBV's voluntary selfdisclosure, JA 274-75, the district judge maintained an apparent effort to
distinguish this DPA from other deferred prosecution agreements he had accepted,
and to color it as an improper exercise of prosecutorial discretion. During the final
conference on October 29, 2014, the district judge stated that "this case is different
7

The district judge stated that he had received this article from "a member of the
press" and that he would "deal with that [issue] at another time in a different
way." JA 131. The record is bereft of any indication that he ever followed up
on this issue.

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in my judgment," JA 306, and decided to probe outside the record for "any other
cases involving deferred prosecution agreements where the company in
question was engaged in transactions of a similar kind as this, with an enemy of the
United States, that is considered one of its most serious enemies," JA 317.
In one of the few extended colloquies with either party in any of the court
conferences, the district judge challenged the AUSA as to whether other
companies that traded with the Iranian military or with North Korea had been
given deferred prosecution agreements. JA 318. When the AUSA attempted to
bring the discussion back to the facts here, the district judge explained that he was
"looking for analogies in other cases . . . where the company in question was
engaged in providing parts to one of the most serious enemies of the United States'
military. Now North Korea would qualify for that characterization just like Iran
would." JA 318-19.
This colloquy creates the appearance that the district judge was so
preoccupied with FSBV's past business dealing with "one of our most serious
enemies" that his ability to render impartial judgment and to consider all the
relevant circumstances (rather than just FSBV's historical conduct) has been
impaired. The district judge's unsolicited reference to North Korea is revealing,
suggesting that his fair judgment was apparently dominated by a conviction that
the DPA was "different in [his] judgment," JA 306, because it was a settlement

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with a company that had traded with "one of [the United States'] most serious
enemies," JA 317. These comments could lead a reasonable observer to conclude
that the DPA had no fair chance before this district judge.
The Order Below reinforces this appearance when the district judge invoked
memories of the worst terrorist attack on U.S. soil to describe FSBV as having
violated and evaded "United States export laws for the benefit, largely, of Iran and
its military during the post-9/11 world when we were engaged in a two-front War
against terror in the Middle East." JA 331. Neither party introduced these
provocative (and irrelevant) descriptions about "the post-9/11 world" or the "twofront War against terror" into the record. These gratuitous remarks exacerbate the
appearance that the Order Below was not an exercise of fair judgment, but was
rather motivated by subjective views about how the United States should conduct
its investigations, prosecutions and settlements with foreign companies that trade
with Iran and other so-called "enem[ies]" of the United States.
Reassignment to a different judge on remand is warranted here, for it is the
appearance of bias, rather than actual bias, that is dispositive. See Haines v.
Liggett Grp., Inc., 975 F.2d 81, 98 (3d Cir. 1992) (granting request for
reassignment on remand because the test "is not our subjective impressions of [the
district judge's] impartiality gleaned after reviewing his decisions these many
years; rather, the polestar is impartiality and the appearance of impartiality"

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(internal quotation marks and formatting omitted)). And regardless of whether

these apparent prejudices against Iran were preexisting, or formed on the basis of
facts introduced during the course of this case, the district judge's remarks on the
record already evidence an "antagonism that would make fair judgment
impossible." Liteky v. United States, 510 U.S. 540, 555 (1994).
The Supreme Court explained in Liteky that "judicial remarks during the
course of a trial that are critical or disapproving of, or even hostile to, counsel, the
parties, or their cases, ordinarily do not support a bias or partiality challenge,"
unless "they reveal such a high degree of favoritism or antagonism as to make fair
judgment impossible." Id. As an example of such a prohibited judicial remark, the
Liteky Court cited the statement allegedly made by a district judge in "a World War
I espionage case against German-American defendants: 'One must have a
very judicial mind, indeed, not [to be] prejudiced against the German Americans'
because their 'hearts are reeking with disloyalty.'" Id. (quoting Berger v. United
States, 255 U.S. 22, 28 (1921)).
The district judge's remarks throughout this case evidence a similar degree
of animus or distrust, not just towards FSBV, but towards the United States as
well. While ostensibly acknowledging the United States' oral and written
submissions that FSBV had made a voluntary disclosure, that FSBV had left
behind its illicit dealings with Iran, and that it is now operating in strict compliance

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with the law, JA 325-26, 332, the district judge nonetheless seemed to indulge the
spurious notion that FSBV still is a "rogue company," even actively doubting
without articulating any basis for that doubt whether FSBV "truly is on the path
to complete compliance," JA 333.
This apparent inability or unwillingness on the part of the district judge to
distinguish between FSBV's prior conduct and its now nearly five-year track record
of good behavior (which has been unequivocally supported by the United States)
exacerbates the appearance of bias, which coupled with his repeated skeptical
treatment of representations made by the United States, require reassignment to a
different district judge on remand. See Cobell, 455 F.3d at 333-34 (finding that
district court's apparent belief that racism at DOI is "not just a thing of the past"
could "contribute to a reasonable observer's belief that Interior stands no chance of
prevailing whatever the merits of its position").
Similarly, the appearance of bias was magnified when the district judge
questioned the AUSA, sua sponte, whether it was "a factor from the government's
point of view in favor of resolving it [with a DPA] that [FSBV's] parent company
. . . on a regular basis does government contracts with the U.S. military."8 JA 314.
The AUSA confirmed in open court that there had been no "external influence
8

While the parties disclosed that FSBV was reliant on financial support from its
corporate parent, the fact that its corporate parent had contracts with the U.S.
military was not part of the record until the district judge raised it sua sponte.

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during the negotiations [for the DPA]," a representation that the district judge
ostensibly accepted on the record. JA 315. Despite the district judge having
apparently accepted this representation, the Order Below nonetheless insinuated,
without basis, that the United States had improperly exercised its prosecutorial
discretion here: "[o]ne can only imagine how a company with such a long track
record of deceit and illegal behavior ever convinced the Department of Justice to
agree to that!" JA 332.
Given these statements made in both judicial remarks and a judicial opinion,
a reasonable observer would conclude that the district judge below did not
impartially consider the full circumstances of this case. Instead, the record raises
ample concern that he was so fixated with FSBV's alleged past business dealings
with Iranian entities, and suspicious of the United States' motives in settling this
case with the DPA, that he did not give proper weight to the facts that FSBV made
a voluntary disclosure, cooperated with the United States' investigation, and is now
functioning as a model of corporate compliance. In other words, given this
appearance of bias against both parties, a reasonable observer could conclude that
the DPA here was doomed from the start. The combined effect of the district
judge's remarks on the record, his reliance on anonymous allegations in a news
article to order further inquiry into FSBV's voluntary self-disclosure, and the
inflammatory language in the Order Below, leads a reasonable observer to question

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whether he "would have difficulty putting his previous views and findings aside on
remand." Microsoft, 56 F.3d at 1465 (internal quotation marks and citation
omitted).
Because "justice must satisfy the appearance of justice . . . that is, reasonable
observers must have confidence that judicial decisions flow from the impartial
application of law to fact, not from a judge's animosity toward a party," Cobell,
455 F.3d at 335 (internal quotation marks and citation omitted), we respectfully
ask the Court to assign a different judge on remand to the district court.

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CONCLUSION
For the foregoing reasons, the Court should reverse the Order Below, and
remand with instructions for the district court to exclude time under 18 U.S.C.
3161(h)(2) in accordance with the terms of the DPA, and to reassign the case to a
different district judge.
Dated:

June 4, 2015
Respectfully Submitted,
CLIFFORD CHANCE US LLP
/s/ Edward C. O'Callaghan
Edward C. O'Callaghan
David D. DiBari (D.C. Bar No. 426152)
Rijie Ernie Gao
2001 K Street, NW
Washington, DC 20006-1001
Telephone: (202) 912-5000
31 West 52nd Street
New York, NY 10019
Telephone: (212) 878-8000
Counsel for Defendant-Appellant Fokker
Services B.V.

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CERTIFICATE OF COMPLIANCE
This brief complies with the type-volume limitation of Fed. R. App. P.
32(a)(7)(B) because it contains 13,688 words, excluding the parts of the brief
exempted by Fed. R. App. P. 32(a)(7)(B)(iii), according to the count of Microsoft
Word 2010.
This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because it has
been prepared in a proportionally spaced typeface using Microsoft Word 2010 in
14-point Times New Roman type.
Dated:

June 4, 2015
/s/ Edward C. O'Callaghan
Edward C. O'Callaghan
Counsel for Defendant-Appellant Fokker
Services B.V.

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CERTIFICATE OF SERVICE
I hereby certify that on this 4th day of June, 2015, I electronically filed the
foregoing brief with the Clerk of the Court for the United States Court of Appeals
for the District of Columbia Circuit by using the appellate CM/ECF system. I
further certify that I will cause 8 paper copies of this brief to be filed with the
Court on the same day.
The participants in this case are registered CM/ECF users and service will be
accomplished by the appellate CM/ECF system.
/s/ Edward C. O'Callaghan
Edward C. O'Callaghan
Counsel for Defendant-Appellant Fokker
Services B.V.