The Public Interest in Corporate Settlements

Abstract

Corporate settlements are proliferating in form and function. They include consent decrees, corporate integrity agreements, deferred prosecution agreements, non-prosecution agreements, leniency agreements, and plea bargains. Enforcers at the federal and state level now enter an array of administrative, civil, and criminal resolutions of enforcement actions against companies. They may be entered and negotiated in parallel and settled jointly. The reach of these settlements is global. Corporates fines have reached new records, with penalties in the hundreds of billions of dollars affecting entire industries and economies. These settlements have not been studied together as a subject, perhaps because they span very different fields, from antitrust to environmental law, from health law to securities regulation to banking. Private settlements, regulatory settlements, and prosecutions each bring with them varying standards of judicial review and different statutory and court-made procedures for their approval in and out of court. It is understood that judicial review is needed to ensure that the public interest is met. When government actors themselves settle with corporations, often the public interest is too readily presumed. In this Article, I explore how standards in disparate areas have converged raising a common question: what protects the public interest when corporations settle with government? A common field of law, and perhaps more important, equity, governing judicial review of these complex corporate settlements deserves study. In this Article, I will argue that common equitable principles govern in the courts but should be clarified and developed further in judicial rulings, regulations, and in statutes, taking as their lodestar the concept of the public interest.