The White Collar Appeal: Fifth Circuit Rejects Victim Opposition to the Government’s Dismissal of Charges Following a Corporate Criminal Resolution

• Victims of crime have the right under the Crime Victims’ Rights Act to confer with the government and to be treated with fairness, but according to the Fifth Circuit, those rights cannot stop the government from dismissing a criminal case.
• In Ryan, the Fifth Circuit denied the petitions of surviving relatives of victims of two airplane crashes who sought to prevent the government from dismissing criminal charges as part of a non-prosecution agreement with the plane manufacturer.  The court held that the government’s brief meetings with the families satisfied the CVRA and that the families lacked standing to challenge the dismissal.
• Ryan confirms the durability of a negotiated resolution.  A single conference in which the government “compares views” with, and does not mislead, victims should be sufficient to inoculate a corporate resolution against opposition from victims.

Background

The case arose from two fatal crashes of the same manufacturer’s aircraft that resulted in numerous fatalities.  After a lengthy investigation, the government and the manufacturer entered into a deferred prosecution agreement in which the company was charged with conspiracy to defraud the United States based on two employees’ having misled the Federal Aviation Administration. 

A few years later, the government determined that the company breached the deferred prosecution agreement by “failing to design, implement, and enforce a compliance and ethics program.”  The government subsequently held a videoconference with the families to explain that it was considering resolving the renewed case through a non-prosecution agreement and a motion to dismiss.  The prosecutors explained that the families’ attorneys could discuss a judge’s authority to deny the motion, that the agreement would let the government refile “notwithstanding the passage of time” if the company breached again, and that the government would support the families’ right to be heard.  

Two weeks after the videoconference, the government and the company signed the contemplated non-prosecution agreement and the government moved to dismiss.  The families asked the district court to deny the motion, arguing that the government failed to meet and confer with them about the NPA and that the NPA was against the public interest.  The district court overruled the families' objections, finding the government had not “acted with bad faith” and had “given more than mere conclusory reasons for its dismissal,” and granted the government's motion to dismiss the charges.  The families then petitioned for mandamus in the Court of Appeals.

Holding

The Fifth Circuit denied the petition for mandamus.  The CVRA provides victims with a number of rights, including rights to “confer with the attorney for the Government,” to “be treated with fairness,” and to “be informed in a timely manner of any plea bargain or deferred prosecution agreement.”  These rights include the right not to be misled by the government.

The families argued that the government deceived them in two ways: (1) by suggesting that the government would follow the supposedly “normal sequence” of entering an NPA only after the court ruled on its motion to dismiss, and (2) by claiming that the government could refile charges against the company if the company breached the NPA, when, according to the families, the NPA actually failed to extend the statute of limitations. 

The court held that the government satisfied its obligation to confer with the families in the videoconference two weeks before the government moved to dismiss.  It did so by “comparing views” with the families, and even if the government could have been clearer about the sequence of the signing of the NPA and motion to dismiss, that did not deprive the families of an opportunity to confer.  Nor, the court held, did the government mislead the families about the statute of limitations.

The families also argued that the court should reverse the dismissal because it was contrary to the public interest, but the court held it had no jurisdiction to consider that argument.  The CVRA permits mandamus petitions only in the context of protecting the rights of crime victims—not to review the underlying merits of a dismissal under Rule 48(a) of the Federal Rules of Criminal Procedure.  The families tried to shoehorn this argument into the right under the CVRA to be treated with fairness, but the Fifth Circuit held this would create an unlimited right for victims to appeal the dismissal of criminal prosecutions, which is contrary to the fundamental principle that nonparties lack a judicially cognizable interest in the prosecution of others.

Key Takeaways

Negotiated corporate resolutions are largely immune to challenge from victims.  The government can satisfy its obligations under the CVRA by notifying victims, “comparing views” with them, and not misleading them.  At that point, victims have little recourse to upend a criminal resolution.  The principal means to do so would be to persuade the district judge that a dismissal of charges is against the public interest, but even that vehicle is narrow.  Although the government's ability to dismiss charges under Rule 48(a) requires leave of court, the circumstances in which district courts may decline to give such leave are limited.  Defense counsel thus should consider reminding prosecutors to tick the boxes under the CVRA to avoid any foot faults on the path to a successful resolution.

The CVRA does not require much.  Nor does the CVRA impose a heavy burden on the government.  In Ryan, a single videoconference in which the government “compared views” discharged its statutory obligation, and the court declined to fault the government for being less than fully clear about when it would enter the agreement.  That may be disappointing for victims, but it should be welcome news for prosecutors and defense counsel seeking to remove obstacles to closing a criminal resolution.

The power of district courts to set aside DPAs and NPAs remains unsettled.  Because the Fifth Circuit found no violations of the CVRA in Ryan, it did not reach the families’ request that the court set aside the NPA.  Although rare, some courts have refused to accept negotiated corporate resolutions or portions of them.  For example, in United States v. Fokker Services BV, 79 F. Supp. 3d 160 (D.D.C. 2015), the court refused to accept a deferred prosecution agreement because “it would undermine the public's confidence in the administration of justice and promote disrespect for the law.”  The D.C. Circuit vacated that decision.  Other appellate decisions have reined in the power of district courts to insert themselves into the process of resolving corporate criminal cases.  See, e.g., United States v. HSBC Bank USA, 863 F.3d 125 (2d Cir. 2017).  Because Ryan did not reach the issue, it will remain unclear whether opposition from victims may be a relevant factor in determining whether a district court should grant leave under Rule 48(a).

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