The Corporation or “The Prosecution”? Upholding Brady in the Wake of Outsourced Internal Investigations
Posted on Mar 4, 2020Last May, Chief Judge Colleen McMahon of the U.S. District Court for the Southern District of New York harshly condemned the Department of Justice’s (DOJ) “routin[e] outsourcing [of]…investigations into complex financial matters” to the corporations targeted by those investigations.[1] The order containing this language, which addressed a post-conviction motion for relief under United States v. Kastigar,[2] was notable for its broader message that the DOJ’s reliance on the labor of a corporate target to identify and prosecute culpable individuals can render that target “de facto the government”[3] for the purposes of enforcing constitutional safeguards. This conclusion could have far-reaching consequences—including on the component of due process articulated in Brady v. Maryland.[4]
Under Brady, the prosecution’s failure to disclose material, exculpatory information to a defendant violates due process.[5] The Supreme Court elaborated on this standard in Kyles v. Whitley, finding that “the individual prosecutor has a duty to learn of any favorable evidence known to the others acting on the government's behalf, including the police.”[6]Combining this holding with Judge McMahon’s logic in Connolly, one might argue that where the DOJ delegates investigative responsibilities to a corporate target and those efforts provide the basis for the prosecution of individual employees, “the prosecution” should include the cooperating company. Under this revised definition, any exculpatory material collected by the company during the investigation would be Brady material owed to the defendant during discovery. If federal courts were to accept this proposition, a prosecutor’s duty to disclose exculpatory information would increase significantly because he or she would be presumed to have constructive knowledge of all materials in the company’s file. While courts have yet to address this argument directly, analogous bodies of law indicate how the issue may be resolved in the future.
Common Law Lens: The Corporation as a Member of the Prosecution TeamThe Supreme Court’s reasoning in Kyles[7] laid the groundwork for lower courts to conceive of “the prosecution” as a team of non DOJ entities “whose activities so closely support a specific prosecution that justice requires them to be subject to the discovery obligations.”[8] Cases involving parallel investigations by federal agencies illustrate the factors that signal cognizable “teamwork.” Courts have, for example, recognized a federal agency’s participation in witness interviews, involvement in presenting the case to the grand jury, contribution to document review, development of prosecutorial strategy, and presence, along with the prosecution at court proceedings, as indicative of constitutionally significant collaboration.[9] A similar framework has generally applied in cases involving concurrent DOJ and state agency investigations.[10] In each instance, courts have focused more on the degree of control and extent of cooperation between the relevant entities than on “rigid” cross-jurisdictional distinctions.[11]
These “prosecution team” cases lend support to a definition of “the prosecution” that includes corporate cooperators. By sponsoring internal investigations that scrutinize past employee conduct, a corporation can play a vital role in the fact gathering process that provides the factual basis for individual charges.[12] Moreover, it would not be unusual for its contributions to include witness interviews and document collection—actions that have been explicitly recognized as characteristic of a “team” effort.[13] In the same way that cross-jurisdictional distinctions have been deemed irrelevant to the prosecution team analysis in state agency cases,[14] so too might the distinction between the DOJ and a corporation working in tandem.
Constitutional Lens: The Corporation as “The State”An alternative path to broadening the scope of “the prosecution” to include corporate cooperators would be to frame the corporation as a substitute for—rather than a teammate of—the state. This approach is not without precedent; under the prevailing enforcement regime[15] that “effectively bind[s] corporations to the needs of prosecutors,”[16]individual defendants’ attempts to ascribe corporate conduct to the government and enforce constitutional entitlements against private employers have prevailed in the past. For example, in a case where a corporate policy linking the provision of attorney’s fees to individual cooperation with investigators could be traced to coercive DOJ guidance, the court accepted the defendant’s argument that the arrangement ran afoul of the Sixth Amendment’s protection of a defendant’s right to an attorney.[17] Courts have recognized a relationship between corporate cooperation incentives and constitutional protections against self-incrimination on similar grounds.[18]
By conceiving of the process of gathering and holding information as the “action” associated with the government’s obligations under Brady, one can imagine a world in which the government’s efforts to transform a corporation from adversary to valuable information repository via threat of indictment would make the corporation’s ownership of information attributable to the state. Assuming significant government involvement in dictating the exact information to be collected and the use of the threat of indictment to deprive the corporation of its ability to adopt an alternative strategy for collecting and holding information, a state action argument could justify the expansion of a prosecutor’s due process obligations under Brady.
Looking Forward
The argument that a cooperating company should be considered “the prosecution” for Brady purposes has yet to take center-stage in a federal case. However, courts have hinted that this move could be warranted on the right set of facts.[19] This makes sense given the stakes of the issue: if prosecutors can categorically ignore the contents of a cooperating company’s file, regardless of its exculpatory value or their own role in driving the information-gathering effort, the wholesale delegation of the investigative process to entities unencumbered by Constitutional constraints becomes more and more likely. For defendants, this means facing an adversary that might be more concerned with winning or protecting certain constituents than ensuring that justice is done.[20]
This reality—combined with the defendant-friendly nature of a more expansive discovery rule—makes it reasonable to assume that this analytical move will continue to appear in post-trial motions. And if it does, courts should be prepared to deploy a framework that balances the interests of corporate entities seeking to avoid criminal indictment via cooperation, criminal defendants seeking a thorough understanding of the case against them, and prosecutors seeking to maintain the integrity of valid convictions. The analogous doctrinal lenses laid out above could inform such a framework.
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[1] See United States v. Connolly, No. 16 CR. 0370 (CM), 2019 WL 2120523, at *10 (S.D.N.Y. May 2, 2019).
[2] 406 U.S. 441 (1972) (holding that the government’s use of compelled statements is unconstitutional under the Fifth Amendment’s self-incrimination clause).
[3] Connolly, 2019 WL 2120523, at *1.
[4] 373 U.S. 83 (1963).
[5] See id. at 87; see also Giglio v. United States, 405 U.S. 150, 154 (internal citations and quotations omitted) (extending the Brady rule to scenarios where “the reliability of a given witness may well be determinative of guilt or innocence.”).
[6] 514 U.S. 419, 437–38 (1995).
[7] 514 U.S. 419.
[8] Jonathan M. Fredman, Intelligence Agencies, Law Enforcement, and the Prosecution Team, 16 Yale L. & Pol'y Rev. 331, 347 (1998).
[9] See Alexander J. Willscher, Evolving Brady Obligations And The Potential Impact On Prosecutors, Company
Counsel, And Counsel For Individual Defendants, 20181004P NYCBAR 58.
[10] See United States v. Antone, 603 F.2d 566, 570 (5th Cir. 1979).
[11] See id.
[12] See United States v. Gupta, 848 F. Supp. 2d 491 (S.D.N.Y. 2012).
[13] See United States v. Martoma, 990 F. Supp. 2d 458 (S.D.N.Y. 2014).
[14] See generally Antone, 603 F.2d 566; United States v. Risha, 445 F.3d 298, 299 (3d Cir. 2006).
[15] See Jennifer Arlen & Samuel W. Buell, The Law of Corporate Investigations and the Global Expansion of Corporate Criminal Enforcement, 93 U.S.C. L. Rev. 8 (forthcoming 2020).
[16] See Barry A. Bohrer & Barbara L. Trencher, Prosecution Deferred: Exploring the Unintended Consequences and Future of Corporate Cooperation, 44 Am. Crim. L. Rev. 1481, 1489 (2007).
[17] See United States v. Stein, 435 F. Supp. 2d 330 (S.D.N.Y. 2006). The Second Circuit affirmed the trial court’s state action analysis. See United States v. Stein, 541 F.3d 130, 152 (2d Cir. 2008).
[18] See, e.g., United States v. Stein, 440 F. Supp. 2d 315 (S.D.N.Y. 2006); Connolly, 2019 WL 2120523 at *10.
[19] See, e.g., United States v. Josleyn, 206 F.3d 144 (1st Cir. 2000) (rejecting the defendant’s argument that the prosecution should include American Honda’s counsel because the company was not fully aligned with the DOJ in the investigative process); United States v. Duronio, 2006 WL 1457936, at *2-3 (D.N.J. May 23, 2006) (applying the prosecution team factors set out in United States v. Risha, 445 F.3d 298, 304 (3d Cir. 2006) to determine whether the Government had constructive possession over the files of two companies, and concluding that expanding the prosecution team to include the company and/or its agent would be inappropriate); United States v. Blumberg, 2:14-cr-00458 (D.N.J.) (finding that an evidentiary hearing on the terms of the DPA between corporation and prosecutors, correspondence between the corporation and the government, and statements by prosecutors regarding their relationship with the company in the prosecution of individual employees would be necessary to evaluate the merits of the defendants’ request that the government search their former employer’s files for Brady information).
[20] See Kyles, 514 U.S. at 439.