In the Courts

In Stolt-Nielsen, S.A. v. United States, 2006 WL 722160 (3rd Cir. Mar. 23, 2006), the Third Circuit held, in a case of first impression in the Circuit, that the district court lacked authority to enjoin the executive branch from filing an indictment, despite the existence of a leniency agreement.

In the course of an investigation by the Antitrust Division of the Department of Justice into possible antitrust violations, the defendant, a supplier of shipping services, entered into a Conditional Leniency Agreement with the DOJ. Under the terms of the agreement, the government promised not to prosecute the defendant, its officers or directors for anticompetitive activity, subject to the company's strict compliance with certain conditions. The government later concluded that the company had not been sufficiently forthcoming, withdrew its grant of leniency, and announced its intention to indict the company and one of its officers under the Sherman Act. The company brought suit to enforce the agreement and obtained an injunction barring the government from filing the indictment. On appeal, the Third Circuit reversed. The Court held, on separation of powers grounds, that the district court lacked the authority to enjoin the executive branch from filing the indictments. The court did note, however, that, once indicted, the company may attempt to enforce the Leniency Agreement as a defense to conviction.