When Corporate Misconduct Leads to Death, Deferred Prosecution Should Not Be Permitted

Department of Justice (DOJ) prosecutors are empowered to resolve serious corporate criminal allegations through deferred prosecution agreements (DPA). In a new paper, I argue that DPAs should not be permitted when corporate misconduct causes people to lose their lives.

To create a DPA,  prosecutors and a defendant agree upon and write up the facts of what took place, who is to blame for the misconduct, and what penalties or consequences will result (which usually includes the defendant admitting wrongdoing, cooperating fully with the government, paying a monetary fine, and implementing internal reforms within the company to prevent future misconduct). All of this is memorialized in the DPA, a contractual agreement signed by the parties.

The agreement is subject to court approval, but judicial precedent has eliminated a court’s ability to consider the terms of the DPA .[1] Instead, the court must limit its inquiry “to examining whether the DPA served the purpose of allowing [the defendant] to demonstrate its good conduct.”[2] The practical impact is to eliminate judicial review: Even if the court believes the agreement is unjust or goes against public interest, it must nevertheless approve the deal. One judge, despite serious misgivings about a proposed DPA, ultimately approved it, stating, “I have absolutely no choice in this matter, no discretion whatsoever…I’m obliged to swallow the pill, whether I like it or not.”[3]

The implementation period for DPA agreements is usually three years. If the defendant meets all the deal terms within the allotted time, DOJ will then move to set aside the charges. DPAs can be used to address a wide range of crimes, from fraud and trade offenses, to violations of the Controlled Substances Act, the False Claims Act, and the Foreign Corrupt Practices Act.[4] Thus, DPAs are being used to address cases in many different U.S. Attorney and DOJ offices—including the National Security Division, the Fraud Section, the Antitrust Division, and others.[5]

DPAs were created by Congress in 1974 through passage of the Speedy Trial Act.[6] The record makes clear that senators envisioned a federal-level program that would benefit vulnerable people. Then, in 1994, the United States Attorney for the Southern District of New York decided to use a DPA to resolve corporate misconduct allegations involving Prudential Securities, Inc.[7] DPAs were thereby transmogrified from a tool assisting society’s most vulnerable individuals, to one assisting society’s wealthiest and most powerful people and companies. Over time, courts have concluded that there are seemingly no limits to using DPAs, and DOJ can turn to them “even in response to the most heinous crimes.”[8]

Thus, in the years since the first corporate DPA was awarded to Prudential, some of the most consequential and deadly corporate misconduct cases have been disposed of through DPA deals. In one case, involving General Motors (GM), 174 people died due to a faulty ignition switch in GM cars. The company was charged with wire fraud and concealing material facts from the National Highway Traffic Safety Administration (NHTSA).[9] Although the company knew about the dangerous defect, they waited nearly twenty months before notifying NHTSA, and thus, according to DOJ, “egregiously disregarded NHTSA’s five-day regulatory reporting requirement for safety defects.”[10]In the DPA agreement, GM admitted that it failed to disclose a “potentially lethal safety defect” and that it “affirmatively mislead consumers about the safety of GM cars afflicted by the defect,” resulting in many fatalities.[11]

A second case involved the Boeing Company. In that case, two Boeing 737 MAX airplanes crashed, just months apart, resulting in 346 deaths – possibly the deadliest corporate crime in U.S. history. The DOJ used a DPA to resolve the criminal charges against Boeing and to immunize the company’s senior-level managers from prosecution. Only one person from Boeing was tried in the case – a mid-level employee whose job title was “chief technical pilot,” but who was neither a test pilot nor an engineer. The employee was quickly acquitted by a jury, and commentators suggested the prosecution was an exercise in scapegoating.[12]

Scholars have persuasively detailed why DPAs fail to adhere to the rule of law or separation of powers.[13]Professor Richard Epstein notes that DPAs strip away “the most elementary protections of the criminal law, by turning the prosecutor into judge and jury, thus undermining our principles of separation of powers.”[14] Moreover, in addition to mounting evidence that DPAs fail to deter corporate misconduct or the recidivism that can follow,[15] there are indications that corporate leaders actually welcome DPAs for their ability to ward off trials and plea deals (and the guilty pleas and jailtime that could potentially result).[16] The troubling picture that has emerged with respect to DPAs has led to numerous condemnatory articles and commentaries,[17] yet so far nothing seems to have dampened the government’s enthusiasm for using the agreements – especially in the corporate context.[18]

At this point, it appears that only congressional action will lead to necessary change. In the past 15 years, members of Congress have put forth two bills calling for DPA reform.[19] Both bills were extensive in their proposed changes, and neither gained significant traction. Perhaps a very short legislative bill drawing a single bright line of DPA prohibition leading toward reform would prove more politically palatable, making it possible to achieve passage by the House and Senate, and then approval by the president. The text of the legislation could read as follows: “The federal government is not permitted to offer a company or its employees (including full-time, part-time, and contract workers) a Deferred Prosecution Agreement (DPA) to resolve a legal case if it appears any of the employees were involved in corporate criminal misconduct leading to the loss of human life as it relates to the case.”

While DOJ’s use of a DPA to address the 2012 HSBC Bank case (in which the London-based bank engaged in vast money laundering activities) made a “mockery of the criminal justice system,”[20] it could be argued that the government’s use of DPAs to resolve the GM and Boeing cases was immoral and resulted in a significantly diminished form of justice. While the HSBC case centers around money, the GM and Boeing cases center around the death of hundreds of innocent people. Judge Jed Rakoff once praised courtroom trials as “nearly the only place where the entire criminal justice system is put to the test of truth,” adding that, “A system of justice that chiefly operates behind closed doors will sooner or later be a system that leads to abuse.”[21] Unfortunately, DPAs chiefly operate behind closed doors – and without judicial review – and this has indeed created the potential for abuse. According to Professor John Coffee, the Boeing matter and its resolution represents “a case that on all levels seems dysfunctional.”[22] And according to a federal court, the GM matter and its resolution represents “a shocking example of potentially culpable individuals not being criminally charged.”[23]

DPA agreements – an alternative dispute resolution tool designed by Congress to assist vulnerable people like sex workers and drug addicts – should not be used to resolve cases where innocent people have died as a result of serious corporate misconduct. Families who have lost loved ones, as well as the general public, deserve real justice and real answers regarding what occurred in these tragic cases. The families and wider public deserve to have prosecutors advocating vigorously and exclusively on their behalf, including choosing the judicial tools and processes most likely to bring about a full and independent accounting of the facts involved, most likely to hold wrongdoers fully accountable with meaningful punishment, and most likely to ensure the prevention of harm to innocent people down the road. DPAs fail to achieve those important goals and outcomes, and Congress must therefore ban their use in any federal case where corporate malfeasance has led to one or more human fatalities.


[1] United States of America v. Fokker Services B.V., 818 F.3d 733 (D.C. Cir. 2016).

[2] Id. at 747.

[3] Transcript of Arraignment at 8, United States v. U.S. Bancorp, No. 18-CR-150 (S.D.N.Y. Feb. 22, 2018), ECF No. 9, p. 10.

[4] Gibson Dunn, Mid-Year Update on Corporate Deferred Prosecution Agreements (DPAs) and Non-Prosecution Agreements (NPAs), July 9, 2013, pp. 19–21.

[5] Gibson Dunn, Mid-Year Update on Corporate Non-Prosecution Agreements and Deferred Prosecution Agreements, July 22, 2021, p.1.

[6] 18 U.S.C. §§ 3161-3174.

[7] Benjamin M. Greenblum, Note, What Happens to a Prosecution Deferred? Judicial Oversight of Corporate Deferred Prosecution Agreements, 105 Colum. L. Rev. 1863, 1873 & n.66 (2005).

[8] The United States of America v. The Boeing Company, Criminal Action No. 4:21-cr-5-O, February 9, 2023.

[9] Press Release, U.S. Attorneys Office, S. Dist. of N.Y., U.S. Dep’t of Justice, Manhattan U.S. Attorney Announces Criminal Charges Against General Motors and Deferred Prosecution Agreement with $900 Million Forfeiture (Sept. 17, 2015).

[10] Id. (emphasis added).

[11] General Motors DPA, filed Sept. 16, 2015.

[12] Dominic Gates, Why Boeing pilot Forkner was acquitted in the 737 MAX prosecution, Seattle Times, March 25, 2022.

[13] Jennifer Arlen, Prosecuting Beyond the Rule of Law: Corporate Mandates Imposed Through Deferred Prosecution Agreements, 8 J. Legal Analysis 191 (2016); and see Criminal Law–Separation of Powers–D.C. Circuit Holds That Courts May Not Reject Deferred Prosecution Agreements Based on the Inadequacy of Charging Decisions or Agreement Conditions.–United States v. Fokker Services B.V., 818 F.3d 733 (D.C. Cir. 2016), 130 Harv. L. Rev. 1048 (2017).

[14] Richard A. Epstein, Commentary, The Deferred Prosecution Racket, Wall St. J., Nov. 28, 2006, at A14.

[15 ] Sydney P. Freedberg et al., As U.S-style corporate lenience deals for bribery and corruption go global, repeat offenders are on the rise, International Consortium of Investigative Journalists, Dec. 13, 2022 (noting that Deutsche Bank “escaped prosecution four times—on bribery, tax fraud and antitrust charges….). See also Public Citizen, Soft on Corporate Crime: DOJ Refuses to Prosecute Corporate Lawbreakers, Fails to Deter Repeat Offenders, Sept. 26, 2019, p.4 (“Contrary to the DOJ’s theory of corporate rehabilitation, DPAs…do not prevent corporate recidivism.”).

[16] Danielle Douglas, Royal Bank of Scotland to Pay $612 Million to Resolve Libor Case, The Wash. Post, Feb. 6, 2013.

[17] See, e.g., Richard A. Epstein, Commentary, The Deferred Prosecution Racket, Wall St. J., Nov. 28, 2006, at A14; Editorial, Too Big to Indict, New York Times, Dec. 12, 2012, at A38.

[18] Jesse Eisinger, The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives 197 (Simon & Schuster, 2017) (discussing how DOJ prosecutors “fell in love” with settlements and how the agency “embraced deferred prosecution agreements with a fever.”).

[19] See the “Accountability in Deferred Prosecution Act” and the “Ending Too Big to Jail Act.”

[20] Ashley Post, HSBC Might Pay $1.8 Billion Fine in Money-Laundering Settlement, Inside Counsel, (Dec. 6, 2012).

[21] Jesse Eisinger, The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives 226 (Simon & Schuster, 2017) (citation omitted).

[22] John C. Coffee, Jr., Nosedive: Boeing and the Corruption of the Deferred Prosecution Agreement, May 6, 2022, page 23.

[23] United States v. Saena Tech Corp., 140 F. Supp. 3d 11, 41 (D.D.C. 2015).

This post comes to us from Professor Peter R. Reilly at Texas A&M University School of Law. It is based on his new paper, “Outlawing Corporate Prosecution Deals When People Have Died,” forthcoming in the Arizona State Law Journal and available here.