## Facts

- Stolt-Nielsen entities operated a major parcel tanker shipping business; the DOJ Antitrust Division investigated alleged collusion in that industry.
- After internal review, Stolt-Nielsen approached the Antitrust Division seeking protection under the Corporate Leniency Program.
- In early 2003, Stolt-Nielsen and the government executed a conditional leniency agreement under which the government agreed not to prosecute in exchange for cooperation and a representation that Stolt-Nielsen had ceased the illegal conduct upon discovery.
- The government later concluded Stolt-Nielsen had not actually ceased the conduct when it claimed and asserted Stolt-Nielsen was ineligible for leniency (i.e., the condition failed).
- Before any indictment, Stolt-Nielsen and an executive filed civil actions seeking an injunction barring the government from indicting them for the conduct covered by the agreement.
- The district court granted a pre-indictment injunction, reasoning it could enforce the agreement and prevent prosecution.
- The United States appealed the injunction.

## Issues

1. Whether Article III courts, consistent with separation of powers, may enjoin the Executive Branch from seeking an indictment based on an alleged breach of a conditional leniency agreement.
2. Whether enforcement of a conditional leniency agreement must be pursued in post-indictment criminal proceedings rather than through a pre-indictment civil injunction action.

## Decision

- The Third Circuit reversed and remanded.
- The court held that pre-indictment injunctions restraining the Executive from pursuing an indictment are available only in narrow, extraordinary circumstances not shown here.
- The court concluded that, even assuming the leniency agreement is enforceable, the proper time and forum to litigate enforcement is after indictment, through criminal-case procedures (e.g., a motion to dismiss or to enforce the agreement).
- The court found asserted harms such as reputational damage, disruption, and defense costs were typical consequences of prosecution and did not justify equitable relief barring an indictment.

## Legal Principles

- Charging decisions are core executive functions; judicial interference with the decision to seek an indictment is tightly limited by separation-of-powers concerns.
- A claim that the government promised not to prosecute under a leniency-type agreement, without more, ordinarily does not justify pre-indictment injunctive relief.
- Where a defendant has an adequate post-indictment remedy (such as seeking dismissal or specific enforcement in the criminal case), equitable pre-indictment relief is generally inappropriate.
- Conditional leniency agreements may be treated similarly to immunity or plea agreements for purposes of post-indictment enforcement mechanisms, without requiring pre-indictment civil injunctions.

## Conclusion

The Third Circuit held that the district court lacked a proper basis to bar the government from seeking an indictment to enforce a conditional corporate leniency agreement; any dispute over the agreement’s effect and alleged breach must ordinarily be addressed, if an indictment issues, in post-indictment criminal proceedings.


Stolt-Nielsen, S.A. v. United States, 442 F.3d 177 (3d Cir. 2006)