United States v. HSBC Bank USA, N.A.

863 F.3d 125 *; 2017 U.S. App. LEXIS 12412 **; 2017 WL 2960618

UNITED STATES OF AMERICA, Plaintiff-Appellant, -- v. -- HSBC BANK USA, N.A., and HSBC HOLDINGS PLC, Defendants-Appellants, HUBERT DEAN MOORE, JR., Appellee.

Prior History: In December 2012, the government entered into a five-year deferred prosecution agreement (the "DPA") with HSBC Holdings plc and HSBC Bank, USA, N.A. (collectively, "HSBC"), deferring prosecution of charges under the Bank Secrecy Act, the International Emergency Economic Powers Act, and the Trading with the Enemy Act. The DPA provided for the appointment of an independent monitor charged with preparing periodic reports on HSBC's ongoing compliance with anti-money laundering laws and with the DPA itself. When the parties moved to exclude time under the Speedy Trial Act, the district court concluded that it had supervisory authority to approve or reject the DPA and conditioned its approval of the DPA on its own continued monitoring of the DPA's implementation. In the exercise of that asserted supervisory authority, the district court later ordered the government to file an annual report prepared by the monitor (the "Monitor's Report") regarding HSBC's compliance efforts. The government did so. In November 2015, the district court received a letter from a member of the public, which it construed as a motion to unseal the Monitor's Report. The district court granted the motion, subject to [**2]  redactions, finding that the Monitor's Report was a judicial document to which the public enjoyed a qualified First Amendment [**1]  right of access. HSBC and the government appealed the district court's unsealing and redaction orders, which the district court stayed pending appeal.

We hold that the Monitor's Report is not a judicial document because it is not now relevant to the performance of the judicial function. First, the district court misapprehended its supervisory authority. By sua sponte invoking its supervisory power at the outset of this case to oversee the government's entry into and implementation of the DPA, the district court impermissibly encroached on the Executive's constitutional mandate to "take Care that the Laws be faithfully executed." U.S. Const. art. II, § 3. In the absence of a showing of impropriety, a district court has no authority to supervise the implementation of a DPA. To hold otherwise would be to turn the presumption of regularity on its head. Second, the Monitor's Report is not relevant to the district court's role under the Speedy Trial Act. See 18 U.S.C. § 3161(h)(2). Section 3161(h)(2) excludes from the speedy trial clock "[a]ny period of delay during which prosecution is deferred by the attorney for the Government pursuant to written [**3]  agreement with the defendant, with the approval of the court, for the purpose of allowing the defendant to demonstrate his good conduct." 18 U.S.C. § 3161(h)(2). We hold that the statute's requirement of court approval does not imbue the judiciary with ongoing authority to oversee a DPA, but rather authorizes courts to determine that a DPA is genuine and not merely a means of circumventing the speedy trial clock. Third, though the Monitor's Report might one day be relevant to the judicial function, that is not sufficient to render the Monitor's Report a "judicial document" today. Accordingly, we reverse.

JUDGE POOLER concurs in a separate opinion.

United States v. HSBC Bank USA, N.A., 2016 U.S. Dist. LEXIS 11137 (E.D.N.Y., Jan. 28, 2016)

CORE TERMS

Monitor's, district court, supervisory power, judicial document, speedy trial, deferred, charges, parties, compliance, courts, unseal, judicial function, quotation, orders, programs, federal court, redactions, progress, merits, public access, adjudicating, proceedings, diversion, invoking, approve, oversee, public interest, consent decree, court officer, prosecutorial

Criminal Law & Procedure, Commencement of Criminal Proceedings, Pretrial Diversion, Appellate Review & Judicial Discretion, Speedy Trial, Statutory Right, Excludable Time Periods, Appeals, Appellate Jurisdiction, Collateral Order Doctrine, Interlocutory Appeals, General Overview, Constitutional Law, Bill of Rights, Fundamental Freedoms, Freedom to Petition, Governments, Courts, Court Records, Standards of Review, Abuse of Discretion, De Novo Review, Trials, Judicial Discretion, Authority to Adjudicate, Separation of Powers, Preliminary Proceedings, Accusatory Instruments, Dismissal, Government Dismissal