Sometimes I forget how much I like being in Court. On Wednesday, Judge Richard Leon, United States District Court Judge for the District of Columbia, provided a reminder of why life in the courtroom is so much more interesting than life in the office. As readers of this blog know, I have been following the prosecution of Fokker Services, B.V. (“Fokker”) for violations of the International Emergency Economic Powers Act (“IEEPA”), and the Iranian Transactions Regulations. For those of you not following the case that closely, Fokker and the Department of Justice entered into a Deferred Prosecution Agreement (“DPA”) in which Fokker would pay an amount equal to their gross revenue for their prohibited conduct, which equates to approximately $21 million.

However, Judge Leon, the District Court Judge presiding over the matter, doesn’t like that agreement, and has had problems with it from the beginning. First, he required the parties to provide supplemental briefing to the Court on whether or not Fokker actually engaged in a voluntary self-disclosure of the prohibited conduct, and what the appropriate standard of review is when a Court is reviewing a DPA. He then ordered the government to file a pleading demonstrating why the DPA was appropriate and in the interests of justice. This past Wednesday, Judge Leon held a hearing on the latter briefing, and he clearly was not impressed with the explanation provided to the Court.

Although, the Court acknowledged that the Government’s pleading was “voluminous” and that it was clear they had run the issue into the ground, it was still not clear that the terms of the DPA were appropriate. While Judge Leon did not outright say he would reject the DPA–an occurrence that is almost unheard of–he did say there was a chance he would reject it and if he did so he would issue an opinion within the next few weeks. He also informed the parties that they could appeal that denial, and that they could ask around about how long the D.C. Circuit takes to resolve such issues. When Fokker’s counsel stated for the record that time was of the essence to Fokker’s parent company, Judge Leon–who assured the parties that he was not telling them how to handle their case–informed them that they have some time and may want to use such time wisely and go back into negotiations.

What Judge Leon was doing here is calling the Government out for giving a sweetheart deal to Fokker, and sending the parties back to the drawing board so a more appropriate penalty could be imposed. As Fokker’s counsel admitted on the record, Fokker Services, B.V. is in financial distress, and the Fokker parent company needs to make a decision as to what to do with the company. Such decision cannot be made until this issue is resolved. As such, Fokker has a choice: appeal any rejection of the DPA from the Court and deal with the amount of time involved in that process, or go back into negotiations with the Government and be subjected to a harsher penalty which the Court will find more appropriate in furthering the interests of justice.

While Judge Leon didn’t explicitly say he was displeased with the DPA, it was pretty obvious that he was. At one point, he mentioned that he thought the DPA could be viewed as an abuse of prosecutorial discretion(although he didn’t say it was definitely was), and that he and other judges he has spoken with have been very concerned about the DPAs being entered into by DOJ recently. All of this was hinting at the fact that there may be a belief that the Government was being too easy on Fokker, who he stated was dealing aircraft parts to one of the worst enemies of the United States. In addition, Judge Leon asked whether the Department of Justice had taken into account the fact that Fokker provides parts and services to the U.S. military in coming to their decision to offer the DPA. Although, the Assistant United States Attorney denied that, Judge Leon seemed skeptical, though he didn’t express his skepticism verbally. Finally, it should be stated that Judge Leon doesn’t take any potential rejection of the DPA lightly, noting that he has never rejected a DPA in his 13 years on the bench, despite the fact that he has zero doubt in his mind that he has the authority to do so in this case.

The Fokker case, and the position Judge Leon has taken in relation to the DPA, are a stark reminder that the efforts of the United States to bring pressure on sanctions targets is a function of all three branches of Government: tough legislation from Congress, tough implementation and civil enforcement by the Executive, and tough criminal consequences from the Judiciary. In dealing with a sanctions violation, Judge Leon has reaffirmed that nothing is guaranteed, and that having counsel on your side that understands how these issues may someday play out in a Court setting can make all the difference.