I take a break from my series on the new standard for revenue recognition to honor George Romero who passed away this weekend. If you have watched any monster/zombie picture over the past 50 years, you have witnessed the influence of Romero. According to his obituary in the New York Times (NYT), Romero basically “created the modern zombie genre with his 1968 cult film, Night of the Living Dead, which has influenced generations of horror enthusiasts.” Romero went on to add installments to the “Dead” series, including Dawn of the Dead in 1979 (my personal Romero favorite) and Day of the Dead, released in 1985. The NYT reported that “film critic Roger Ebert called “Dawn of the Dead” “one of the best horror films ever made.’’”

Romero himself said in an interview with NPR, “I have a soft spot in my heart for the zombies. They are multipurpose, you can’t really get angry at them, they have no hidden agendas, they are what they are. I sympathize with them.” He felt vampires were more villainous so generally shied away from them, stating “I grew up on the famous monsters of film land, so to me they’ve just been the villains all along. There are a few sort of ‘O.K.’ vampires in the story, but most of them are the oppressors.” My suggestion is you sit down with the original Night, then move sequentially to Dawn and Day. It will be a rollicking good film fest.

Romero and his zombies seems like a good way to introduce todays topic of the recent Second Circuit Court of Appeals decision in HSBC v. Moore. In this case a federal district court had ordered the release of redacted monitor’s report in the HSBC money-laundering Deferred Prosecution Agreement (DPA), based upon the request of an interested citizen. Both the Department of Justice (DOJ) and HSBC appealed the order and the Court of Appeals supported their position in overturning the trial court’s decision.

As a part of its approval of the underlying DPA, the court had ordered “the parties “to file quarterly reports with the Court to keep it apprised of all significant developments in the implementation of the DPA”. The DOJ filed quarterly reports with the court apprising it of “the Monitor’s progress and findings.” The DOJ asked for these reports to be filed under seal and the court agreed to this request. A member of the public, Moore, then asked for the reports to be made public which the district court agreed to in redacted form.

The court of appeals made short shrift of the district court’s entire basis for its handling of the case and the release of the Monitor’s report, finding it did not have the power to even supervise the “implementation of the DPA in the absence of a showing of impropriety.” Since the trial court had no legal basis to exercise supervision over the implementation of the DPA, the trial court could have no role in the Monitor’s report. The Court of Appeals stated, “At least in the absence of any clear indication that Congress intended courts to evaluate the substantive merits of a DPA or to supervise a DPA’s out‐of‐court implementation, the relative functions and competence of the executive and judicial branches counsel against” any role for the trial court. The Court of Appeals concluded, “In sum, because the district court has no freestanding supervisory power to monitor the implementation of a DPA, the Monitor’s Report cannot be deemed “relevant to the performance of the judicial function” on that basis.”

That is about a hook, line and sinker overturning of any trial court jurisdiction as one can have. The district court tried to claim it did not have the same role as a “potted plant” but the Court of Appeals left no doubt that is the only role it sees for any district court where a DPA is filed. Indeed the Court of Appeals held the trial court did not have the authority to order the government to even file the Monitor’s report with the trial court.

One Court of Appeals judge concurred with some interesting comments. Judge Pooler, adding his comments to those trial court judges who have bemoaned not only their non-existent roles in DPAs (i.e. potted plants) but also the complete lack of transparency and oversight by the court in their implementation, stated “The prosecution retains sole discretion to decide if the corporation adequately complied with the agreement, allowing the prosecution to act as prosecutor, jury, and judge”. He went on to state “I respectfully suggest it is time for Congress to consider implementing legislation providing for such review.” He cites to a 2014 bill introduced in the House of Representative which would “among other things, require the development of public, written guidelines for DPAs; require the text of DPAs to be placed on a Justice Department website; and require DPAs to be submitted to district courts for review.”

For any of those readers who might think this Congress would be able to pass such legislation, I would suggest you sit down with Romero’s trio of zombie movies Night of the Living Dead, Dawn of the Dead and Day of the Dead. You will have a much better chance of living through all three movies than Congress actually doing something.


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© Thomas R. Fox, 2017