Earlier this year, Judge Reed O’Connor made headlines when he rejected a plea agreement between the Department of Justice (“DOJ”) and Boeing. O’Connor rejected the agreement because it required the DOJ to consider its DEI policies in selecting a corporate monitor, and the judge found that this term infringed on the court’s responsibility to select the monitor solely on merit.

The decision drew public scrutiny, but it was legally permissible because Rule 11 of the Federal Rules of Criminal Procedure requires judicial approval of plea agreements.  But if the DOJ and Boeing had executed a deferred prosecution agreement (“DPA”) – which is the functional equivalent of a guilty plea in the corporate criminal context – then O’Connor would almost certainly have had no authority to reject the deal even if it imposed unwarranted penalties, failed to redress victims, or failed to state a legitimate legal violation.

In a new article, I focus on this incongruent treatment of corporate DPAs,  building on other research to highlight that unlike plea agreements, DPAs are not subject to meaningful judicial review.  This means judges never evaluate whether DPAs may be based on actual guilt, impose sufficient penalties, or require structural reform that is properly tailored.  I argue that the government and organizational defendants should have to seek meaningful approval from courts before their DPAs become effective and that courts should make several concrete findings before approving the DPAs.

My call for concrete judicial findings rests on normative and empirical grounds.  Normatively, the sentencing function is – and must remain – a core judicial function.  When the DOJ and corporate defendants resolve criminal cases with DPAs, they are not just making charging decisions.  They are also effectively imposing sentences with fines, forfeiture, and corporate governance changes.  Plea agreements that result in convictions achieve these same results, but federal law and separation of powers considerations rightfully require courts to approve plea agreements before they are effective.  In short, if the judiciary never reviews DPAs for accuracy and the reasonableness of sanctions, it has ceded its fundamental check on the executive power in the corporate criminal context.

Empirically, I analyzed a dataset of the 39 corporate DPAs that were executed between 2021 and 2024.  Two-thirds of these DPAs imposed financial penalties below the fine ranges recommended by the United States Sentencing Guidelines.  Many of these deviations were substantial, imposing fines that were 25 percent, 40 percent, or even 82 percent below the low end of the applicable guidelines ranges.  More troubling, quintessential corporate recidivists like Deutsche Bank and Credit Suisse received these significant reductions despite having extensive criminal history involving similar misconduct.

Notably, many of the DPAs do not provide sufficient information for researchers to verify the appropriateness of the penalties.  Their guidelines calculations are incomplete if not entirely missing, and the stated justifications for the discounted penalties are so vague that they offer no meaningful explanation.  In short, a review of these DPAs suggests that without judicial intervention, the government and organizational defendants have failed to ensure corporate criminal enforcement is meeting its goals.

The solution I offer is a concrete standard of judicial review of DPAs.  Other scholars have thoughtfully proposed flexible, multi-factor balancing tests.  But similar standards abroad (e.g., in the United Kingdom) and in other contexts (e.g., class action settlement approvals) have resulted in superficial review or rubber-stamping of settlement agreements.  Thus, I believe an optimal standard of judicial review must require courts to make at least three, specific findings before approving DPAs.

First, courts should find that the statements of facts in DPAs could support the charged offenses if proven beyond a reasonable doubt.  This finding would restore the court’s role in verifying probable guilt in the absence of trials.  The review required to make this finding need not be onerous; courts regularly make comparable determinations without juries when resolving sufficiency‑of‑the‑evidence claims and approving guilty pleas.

Second, courts should find that the financial penalties imposed in DPAs are sufficient but not greater than necessary and are consistent with the sentencing guidelines.  Despite criticism, the guidelines reflect policy judgments and extensive research about the penalties necessary to achieve various sentencing goals, and they generally recommend reasonable fines in most cases.  No doubt, downward variances or departures are warranted in many cases.  There is no reason to abandon them when sentences are negotiated through DPAs rather than plea agreements.  But judges should always ensure that DPA sanctions are appropriate because the sanctions are, in effect, criminal sentences.

Third, courts should find that any corporate governance reform required by DPAs is narrowly tailored to prevent future misconduct while not unduly interfering with the defendants’ business.  A company that commits one type of offense may need additional compliance programs but not need to fire its entire board of directors.  Meanwhile, though, neutral arbiters should ensure that any reform is not so narrow as to be meaningless. Prosecutors lack the industry-specific knowledge and structural incentives to strike that balance.  Concededly, judges lack that knowledge as well, but with input from independent experts and the parties, judges may at least impose more informed and tailored reform.

In addition to these three findings, courts must retain flexibility to make additional findings depending on company‑ and industry‑specific context.  A DPA involving a small company may require scrutiny of whether the agreement threatens insolvency or unduly burdens third parties.  A DPA involving a financial institution may require findings about internal controls or reporting systems.  Ultimately, what matters is that courts have a defined framework anchored in concrete findings that may guide their review.

DPAs are increasingly used in high-profile, high-stakes corporate criminal cases.  But their current structure undermines transparency, accountability, and public confidence in the justice system.  My article offers a clear standard of review that is specific enough to prevent abuse but flexible enough to accommodate variation across cases.  Judicial review requiring findings would be a step toward ensuring that DPAs are credible tools of corporate accountability and that courts retain their rightful role in overseeing corporate criminal justice.

This post comes to us from Professor Kaleb Byars at Mercer University School of Law. It is based on his recent article, “A Concrete Standard of Judicial Review for Corporate Deferred Prosecution Agreements,” available here.