U.S. v. Fokker Services (Opening Brief of Fokker Services)

8/21/2019 U.S. v. Fokker Services (Opening Brief of Fokker Services)

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ORAL ARGUMENT NOT YET SCHEDULED

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

I N THE

United States Court Of AppealsFOR 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.

USCA Case #15-3017 Document #1555867 Filed: 06/04/2015 Page 1 of 74


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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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8. 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 theUnited States .............................................................................................3

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

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

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

3. The United States Investigates FSBV's Voluntary Self-Disclosureand Confirms its Voluntary Nature ................................................. 9

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

5. On February 5, 2015, the District Court Denied the Motion forExclusion of Time for the 18-month Deferral Period andRefused 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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2. The Order Below will have irreparable consequencesthat are unreviewable on final appeal ............................................24

B. Appellate Jurisdiction is Also Proper Under the Collateral OrderDoctrine. ................................................................................................26

C. In the Alternative, this Court may Exercise Pendent Jurisdiction overFSBV's Appeal. ......................................................................................30

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

A. The District Court Disregarded the Plain Language of the Speedy TrialAct. ......................................................................................................... 32

B.

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

III. The District Court Violated Constitutional Separation of Powers When ItFailed to Accord Due Deference to the United States' Exercise of ProsecutorialDiscretion. ........................................................................................................44

IV. Reassignment to Another District Judge on Remand is Necessary Because theProceedings Below Raise Reasonable Questions about the District Judge'sAbility 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 theSpeedy 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 andSecurity

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 AssetsControl



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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 computingthe time within which an information or an indictment must be filed,or in computing the time within which the trial of any such offensemust commence:

. . . . . .

(2) Any period of delay during which prosecution is deferred by the

attorney for the Government pursuant to written agreement with thedefendant, with the approval of the court, for the purpose of allowingthe 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 self-

disclosure 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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A. 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 self-

disclosure 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 data-

analysis 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-a-

half 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

1 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 Statesconfirmed on the record that "Neither the management of Stork nor themanagement of Fokker Technologies[, each of which served as FSBV's parententity 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 Self-

Disclosure 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 occasionto reject a deferred prosecution agreement. It is not something thathappens every day in this courthouse. Indeed, I could not, off the topof my head, tell you of a case in the last 13 years or any of mycolleagues if they did it, I'm not aware of it. That's the kind of thingthat gets out. The other judges in the judge's dining room share thosekinds 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 self-

disclosure, 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 industry-

leading 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 directreview may be had in the Supreme Court.

2

Should this Court determine that this appeal is from the district judge's exerciseof discretion to approve the DPA, the underlying legal conclusions, such as the

proper legal standard to apply under Section 3161(h)(2), are nonetheless subjectto de novo review. See, e.g., Marino v. Drug Enforcement Admin., 685 F.3d1076, 1080 (D.C. Cir. 2012) ("Although we review a district court's denial of aRule 60(b) motion for abuse of discretion … we must consider underlying legalissues 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 18-

month 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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II. 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 ongoingcooperation – today approximately five years running, and still continuing to provide investigative leads – in its oral and written submissions to the districtcourt. JA 93, 317.

4 The United States has lauded the extensive remedial and compliance measuresimplemented by FSBV as "a model to be followed by other corporations." JA153.



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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

5 Indeed, recent deferred prosecution agreements have been approved by courts(including since the Order Below was issued) even though the corporatedefendant made no voluntary self-disclosure of its violations. See, e.g., MinuteOrder (paperless), United States v. Commerzbank AG, No. 15 Cr. 31 (BAH)(D.D.C. Apr. 3, 2015) (granting Joint Consent Motion for Exclusion of TimeUnder the Speedy Trial Act "for the purpose of allowing the defendants todemonstrate 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, withinlimits, formulate procedural rules not specifically required by the

Constitution or the Congress. The purposes underlying use of thesupervisory 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 juris

Documents

U.S. v. Fokker Services (Opening Brief of Fokker Services)