Amicus Curiae Brief — Stolt-Nielsen v. United States (No. 06-97)

Sep 5 2006

‘sr

No. 06-97

IN THE

Supreme Court of the United States

STOLT-NIELSEN S.A..,

STOLT-NIELSEN TRANSPORTATION GROUP LTD.,

AND RICHARD B. WINGFIELD,

Petitioners,

Vv.

UNITED STATES OF AMERICA,

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Third Circuit

BRIEF OF THE NEY YORK COUNCIL OF DEFENSE

LAWYERS AS AMICUS CURIAE IN SUPPORT OF THE

PETITION FOR A WRIT OF CERTIORARI

JACQUELINE C. WOLFF CAROLINE M. BROWN

COVINGTON & BURLING LLP Counsel of Record

1330 Avenue of the Americas COVINGTON & BURLING LLP

New York, N.Y. 10019 1201 Pennsylvania Ave., N.W.

(212) 841-1110 Washington, D.C. 20044

(202) 662-6000

SEPTEMBER 5, 2006 Counsel for Amicus

QUESTION PRESENTED

Do the federal courts lack authority, under the Separation of

Powers, to enjoin federal prosecutors from breaching a

binding contractual obligation “not to bring any criminal

prosecution” against a company and its executives?

TABLE OF CONTENTS

Page

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INTEREST OF AMICUS CURIA .......ccsscscccsscossessoscsssseees 1

REASONS FOR GRANTING THE PETITION .................. 2

THE DECISION BELOW RAISES AN IMPORTANT

QUESTION OF FEDERAL LAW THAT

SHOULD BE ADDRESSED BY THIS COURT ........... 3

A. The Agreement At Issue is Similar to Many Other

Arrangements Routinely Negotiated by Prosecutors

EE CE os vinsiinsinithtatisibacencinnkisiobgiscvetavabiinice 3

B. If the Criminal Justice System Is to Function

Smoothly and Fairly, Putative Defendants

Need to Know Whether Such Agreements

Can Be Meaningfully Enforced .............:cccsscccccssseceeeeeeees 5

CTA RIOT tnssinvevinnatidinnisndtcpianniiesieleninmbanielguienabuanieniats 9

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TABLE OF AUTHORITIES

FEDERAL CASES

Santobeilo v. New York, 404 U.S. 257 (1971)..........ccceeeees 6,8

United States v. Alegria, 192 F.3d 179

RSE area eres ene ene oe Oe REN meat e eT 6,

United States v. Brown, 801 F.2d 352 (8th Cir. 1986)......... 7

United States v. Calabrese, 645 F.2d 1379 (10th Cir.),

cert. denied, 454 U.S. 831, 102 S.Ct. 127, 70

i I a casa sta cchideanasbbadntvenasipieliad 7

United States v. Carter, 454 F.2d 426 (4th Cir. 1972)......... 8

United States v. McFarlane, 309 F.3d 510

cl MINE deciicsistcebcistnesicutinlasamscinninedecdiiiconndadseceddioees 3

United States v. Minn. Mining & Manufacturing Co.,

FFE Fe COE FTF D veerceseesctapenspncvesnspeinntionss 7

United States v. Nixon, 418 U.S. 683 (1974) ......cccccceccceeeeeee 5

United States v. Paiva, 294 F. Supp. 742

Sg Ae ac teisiccphasshne held ea cantadaibiniatebuaeshugdmicabonans 7

United States v. Watson, 988 F.2d 544 (Sth Cir. 1992)........ 6

U.S. v. LaBonte, S20-'U.S. 751 (1997) ..ccccccccsesssovseress:.-cocsess 5

FEDERAL STATUTES AND

REGULATIONS

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G3 FOG.RCE, SESFF (Oect. SO, VIGE) ovcseseccrsocsscesescevecceseesvsveess 3

-iv-

The New York Council of Defense Lawyers

(“NYCDL”) respectfully submits this brief amicus curiae in

support of petitioner Stolt-Nielsen S.A. Letters from

petitioner and respondent indicating consent to file have

been filed with the Clerk. '

INTEREST OF AMICUS CURIAE

The New York Council of Defense Lawyers is a not-

for-profit professional association of approximately 200

lawyers {many of whom are former federal prosecutors)

whose principal area of practice is criminal defense in the

federal courts of New York. The NYCDL’s mission is to

support and advance the criminal defense function by

enhancing the quality of defense representation, taking

positions on important defense issues, fostering

understanding and consensus in areas of mutual concern to

defense lawyers and prosecutors, and promoting collegiality

among lawyers on both sides and the bench. In this brief

supporting the petition for certiorari, the NYCDL seeks to

offer the Court the perspective of practitioners who regularly

handle some of the most complex and significant criminal

cases in the federal courts.

As lawyers who regularly must counsel their clients

with respect to nonprosecution agreements and other

arrangements in which the government agrees not to take

certain action in exchange for information, NYCDL’s

members have a direct and immediate interest in the question

presented. Avoiding indictment is frequently the principal

motivation for entering into these arrangements, and the

decision below casts considerable doubt on the value of

entering into such agreements if they cannot be enforced

1

Pursuant to Rule 37.6, amicus states that no counsel for any

petitioner or respondent authored this brief in whole or in part. No

person or entity made a monetary contribution to the preparation

or submission of this brief.

prior to indictment. The question presented is thus an

important one that affects the functioning of the criminal

justice system and the professional and ethical obligations of

the criminal defense bar.

REASONS FOR GRANTING THE PETITION

In the decision for which review is sought, the Third

Circuit held that federal courts are prohibited, by virtue of

the constitutional Separation of Powers, from enjoining a

prosecutor’s imminent breach of a nonprosecution agreement

with a putative criminal defendant. The holding, causing a

Circuit split, raises important issues that impact both a

critical component of our criminal justice system and

defense counsels’ ability to represent clients zealously

pursuant to their ethical obligations under the law.

Cooperation and nonprosecution agreements--in which

putative defendants provide potentially incriminating

information in exchange for certain prosecutorial promises

that the information will not be used against them--are a

comerstone of the fair and efficient operation of the criminal

justice system. In order to advise their clients as to whether

to enter into such agreements, defense counsel need to know

whether, and at what point, such agreements are enforceable.

The Third Circuit’s holding that the government’s actions

are only reviewable post-indictment deprives a putative

defendant of one of the principal reasons for cooperating--to

avoid indictment--and undermines confidence in the fair

administration of justice. Accordingly, there is an essential

and pressing need for guidance from this Court as to whether

the government can be held to its part of these bargains.

THE DECISION BELOW RAISES AN IMPORTANT

QUESTION OF FEDERAL LAW THAT SHOULD BE

‘DDRESSED BY THIS COURT.

A. The Agreement At Issue is Similar to Many Other

Arrangements Routinely Negotiated by

Prosecutors and Defense Counsel.

In the agreement that the petitioner entered into with

the Antitrust Division of the Department of Justice, the

government promised “not to bring any _ criminal

prosecution” against the petitioner. Pet. App. 78a-79a. The

agreement was executed in conjunction with the Antitrust

Division’s Amnesty Program, whereby in exchange for a

company’s early disclosure of incriminating information and

promise of future cooperation, the government agrees to

refrain from bringing a prosecution. The antitrust Amnesty

Program is just one of a number of cooperation/

nonprosecution programs offered by the Department of

Justice and other federal agencies. See, e.g., HHS OIG Self

Disclosure Protocol, 63 Fed. Reg. 58399 (October 30, 1998).

Outside of formal agency programs, there are also a variety

of situations in which an individual or company provides

potentially incriminating information in exchange for what

has heretofore been assumed to be an enforceable promise

from the prosecutor. These arrangements are advantageous

to the government, the putative defendants, and the public in

that they can advance an investigation immeasurably with

significantly fewer federal monies being spent.

Prosecutors make promises to forgo prosecution or

grant informal witness immunity in all areas of criminal

enforcement. See, e.g., United States v. McFarlane, 309

F.3d 510, 513 (8th Cir. 2002). For instance, if a target of an

investigation can potentially benefit the government’s case

and the public interest by offering cooperation, government

prosecutors may mect with the target in the initial stages of

an investigation in what is known as a “proffer” session.

io

The purpose of a proffer session is to preview a potential

witness’s testimony and allow the prosecutor to assess that

witness’s credibility. To protect the target’s interests, the

government agrees under specific circumstances spelled out

in the proffer agreement not to use the target’s statements

against him in a subsequent prosecution. Without the

protection of such a promise, criminal targets would not

agree to participate in proffers.

If the government determines that a witness is

credible and his or her cooperation in prosecuting another

target outweighs the need to punish the witness for their own

conduct, the govérnment will offer that witness an agreement

under which the individual agrees to testify, providing

incriminating information under oath, in exchange for the

government’s promise to obtain court-ordered use immunity

pursuant to 18 U.S.C. §§ 6001-6005.

In other cases, similar to that of the petitioner, the

government promises transactional immunity in exchange

for on-going cooperation with a government investigation or

prosecution. Under these agreements, referred to as

nonprosecution agreements, the government agrees to

forswear any prosecution of an individual or entity for

crimes that may have arisen from certain facts.

Nonprosecution agreements and the other examples

discussed above share a common purpose: they are all a

means by which putative defendants, in exchange for

providing incriminating information which might otherwise

provide the prosecutor with a basis to bring an indictment,

obtain a prosecutor’s promise to exercise his or her

discretion not to do so. And all provide significant and

important benefits to both the government and putative

defendants. The Department of Justice’s policies recognize

these agreements permit access to testimony or other

information when “timely cooperation appears to be

necessary to the public interest and other means of obtaining

ae

the desired cooperation are unavailable or would not be

effective.” U.S. Attorneys’ Manual § 9-27.600 (2002).

The individuals and corporations who agree to

cooperate are seeking not only to avoid a tral and possible

conviction, but also are motivated by a very real need to

minimize the significant consequences of a criminal

investigation or indictment. As a district court judge (and

former prosecutor) aptly describes it: “The service of a

single grand jury subpoena can ruin a person’s livelihood

and, on occasion, even jeopardize a person’s life. A lengthy

-investigation is likely to change the target’s life irrevocably,

even if there is no indictment; an indictment almost certainly

will change the target’s life, even if there is no conviction.”

John Gleeson, Supervising Criminal Investigations: The

Proper Scope of the Supervisory Power of Federal Judges, 5

J.L. & PoL’y 423, 425-26 (1997). If federal courts are

precluded from taking action to enforce these agreements -

prior to indictment, as the Third Circuit held, the calculus of

these arrangements changes considerably, because putative

defendants have no assurance they will get what they

bargained for.

B. If the Criminal Justice System Is to Function

Smoothly and Fairly, Putative Defendants Need to

Know Whether Such Agreements Can Be

Meaningfully Enforced.

It is axiomatic that broad prosecutorial discretion is

an “integral feature of the criminal justice system.” U.S. v.

LaBonte, 520 U.S. 751, 762 (1997). The court below, citing

this Court’s precedents, noted that the executive branch “has

exclusive authority and absolute discretion to decide whether

to prosecute a case.” Stolt-Nielsen, S.A. v. United States, Pet.

App. 12a (quoting United States v. Nixon, 418 U.S. 683, 693

(1974)). But inherent in that authority is the discretion to

choose not to prosecute and, therefore, the ability to

negotiate how that discretion shall be exercised. In

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nonprosecution agreements such as the one at issue, defense

counsel have long considered these agreements to be a self-

imposed and enforceable limitation on the prosecutor’s

discretion, as long as the putative defendant also abides by

the terms of the agreement.

In Santobello v. New York, 404 U.S. 257 (1971), this_

Court recognized that the “interests of justice” and

“appropriate recognition of the duties of the prosecution in

relation to promises made” gave the courts the authority both

to order specific performance of a plea bargain or to permit a

defendant to withdraw his guilty plea. 404 U.S. at 262-63.

As the court noted, “when a plea rests in any significant

degree on a promise or agreement of the prosecutor, so that it

can be said to be part of the inducement or consideration,

such promise must be fulfilled.” /d. at 262. The courts have

recognized that “[ijmplicit in [Santobello’s| holding is the

fact that the government may bargain away its discretion.”

United States v. Watson, 988 F.2d 544, 552 (Sth Cir. 1993);

see also United States v. Alegria, 192 F.3d 179, 182 (1st Cir.

1999) (“As a general rule, nothing precludes a prosecutor

from bargaining away something over which he has

discretion in return for promises extracted from a criminal

defendant.”). Santobello’s “logic” that the federal courts

have the authority to hold prosecutors to their agreements

“has been extended to immunity agreements and to

cooperation agreements.” See Jn re Extradition of Drayer,

190 F.3d 410, 412 (6th Cir. 1999) (citations omitted).

The holding below that the principles underlying the

separation of powers deprive the federal courts of

jurisdiction to enforce a nonprosecution agreement prior to

indictment substantially undermines the logic of the Court’s

decision in Santobello and the safeguards that flow from it.

It means that the prosecution unilaterally decides if the

putative defendant has lived up to its obligations under the

agreement, even though that is fundamentally a legal

question ideally suited for disposition by the courts. See, e.g.

-

i

United States v. Brown, 801 F.2d 352 (8th Cir. 1986)

(holding that defendant’s cooperation agreement did not

preclude indictment if defendant had breached agreement,

and remanding for evidentiary hearing); United States °.

Calabrese, 645 F.2d 1379, 1390 (10th Cir.) (“The question

of a defendant’s breach [of a plea agreement] is not an issue

to be finally determined unilaterally by the government.”),

cert. denied, 454 U.S. 831, 102 S.Ct. 127, 70 L.Ed.2d 108

(1981); see also United States v. Minn. Mining & Mfg. Co.,

551 F.2d 1106, 1112 (8th Cir. 1977) (holding that

government breached its promise to “forego future criminal

prosecution” in exchange for voluntary disclosure of

criminal activity “by returning [an] indictment against

defendants”); United States v. Paiva, 294 F. Supp. 742

(D.D.C. 1969) (“if, after having utilized its discretion to

strike bargains with potential defendants, the Government

seeks to avoid those arrangements by using the courts, its

decision so to do will come under scrutiny’).

The decision below has caused considerable

uncertainty and consternation among corporate counsel and

defense counsel such as amici, who are no longer certain as

to the value or meaning of these agreements for their clients.

See, e.g., L. Stuart Ditzen, Questions of Credibility After

U.S. Reneges On Deal, PHILA. INQUIRER BOL (March 7,

2005); Richard M. Cooper, Nonprosecution Issues, THE

NATIONAL LAW JOURNAL, at 15 (Apr. 10, 2006); Pamela A.

_ MacLean, 3d Cir. to Hear Hot Antitrust Issue, Judge

Enjoined DOJ from Indicting Based on Breach of Immunity

Deal, May 16, 2005 NAT’L L. J. S1, col. 1; Sue Reisinger,

Promise Breakers, CORPORATE COUNSEL at 21 (September

2006). Because these agreements nearly always require

putative defendants to disclose potentially incriminating

information, the uncertainty can pose acute professional and

ethical concerns for defense counsel obliged to zealously

represent their clients, if there is a possibility that the

government may use that information to bring a criminal

prosecution.

Like the plea bargains at issue in Santobello,

nonprosecution and other types of cooperation agreements

are “essential component(s] of the administration of justice”

with many positive consequences that should be encouraged.

404 U.S. at 260. These arrangements are a means by which

prosecutors can obtain the critical information that they need

in conducting an investigation or securing a conviction, and

they can provide an incentive to disclose potentially criminal

conduct. But, also as in Santobello, “all of these

considerations presuppose fairness in securing agreement

between an accused and a prosecutor,” id., and they demand

“appropriate recognition of the duties of the prosecution in

relation to promises made.” Jd. at 262.

Over thirty years ago, the Fourth Circuit considered

whether the entire executive branch was bound by a

nonprosecution promise offered by a single government

agent. United States v. Carter, 454 F.2d 426, 427-28 (4th

Cir. 1972). The court dismissed potential “fear[s] that an

United States Attorney may unreasonably bargain away the

government’s right and duty to prosecute” as sufficiently

provided for in the administrative controls over

nonprosecution agreements. /d. at 428. It also explained:

There is more at stake than just the liberty of

this defendant. At stake is the honor of the

government, public confidence in the fair

administration of justice, and the efficient

administration of justice in a federal scheme

of government. /d.

All of those factors are equally implicated by the

decision below, which raises an important question of federal

law meriting this Court’s plenary consideration.

CONCLUSION ~

The petition for certiorari should be granted.

Respectfully submitted.

CAROLINE M. BROWN

Counsel of Record

COVINGTON & BURLING LLP

1201 PENNSYLVANIA AVE.,

N.W.

WASHINGTON, D.C. 20044

(202) 662-6000

JACQUELINE C. WOLFF

COVINGTON & BURLING LLP

1330 Avenue of the Americas

New York, N.Y. 10019

September 5, 2006 Counsel for Amicus