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Legal Update

US Ninth Circuit Warns: Federal Proffer Protections May Not Extend to Foreign or State Governments

14 May 2009
Mayer Brown Legal Update

Federal immunity agreements may not bar federal prosecutors from sharing incriminating statements with foreign criminal prosecutors, in the absence of an express prohibition in the agreement, according to a recent decision from the US Court of Appeals for the Ninth Circuit,  McKnight v. Torres, No. 08-55459 (9th Cir. Apr. 20, 2009).

In defending federal criminal cases involving a potential for state or foreign proceedings, counsel should negotiate express terms that limit the further use, distribution and sharing of the proffered information. 

The Agreement, Proffer and Prosecution in the US

The petitioner in McKnight v. Torres, Aaron McKnight, was indicted on federal charges of importing illegal drugs from France into the United States.  McKnight executed a written agreement with the US Attorney’s Office for the Central District of California in which he agreed to answer questions in return for use immunity.  Specifically, the immunity agreement provided that any statements made by McKnight could not be used against him in the pending case or in any other prosecution brought by that US Attorney’s Office.  The agreement contained no limitation on the use of the statement by, or the transmission of the statement to, other governments.

On the basis of the immunity agreement, McKnight made incriminating statements to US prosecutors during a proffer session.  Although the case went to trial — a trial in which the government did not use McKnight’s statements — the jury did not reach a verdict.  After the government obtained a superseding indictment, McKnight pleaded guilty and was sentenced.

Sharing the Proffer with the French Government

At the same time the prosecution progressed in the United States, a French investigating magistrate issued an international arrest warrant for McKnight.  US prosecutors had provided McKnight’s proffer statements to the French government, and McKnight’s statements were included in the evidentiary materials used by French authorities to obtain the warrant.

Using these proffer statements in a trial conducted in absentia, the French government convicted McKnight of drug trafficking and sought extradition pursuant to the Extradition Treaty between the United States and France.  The US Attorney’s Office obtained a provisional extradition arrest warrant and, on the same day he was sentenced pursuant to his plea agreement, McKnight was arrested to be extradited to France.

McKnight unsuccessfully challenged the extradition complaint filed by the US Attorney’s Office on behalf of France.  McKnight then filed a habeas petition pursuant to 28 U.S.C. § 2241, seeking to stop the extradition on the basis that the US government breached the immunity agreement by sharing his incriminating statements with the French government.

McKnight conceded that the language of his immunity agreement did not expressly prohibit sharing the proffered statement with foreign governments and that its terms were limited to the pending case and any other prosecution by the US Attorney.  He argued, however, that pursuant to the implied duty of good faith and fair dealing, he had a reasonable expectation that the US Attorney would not share information from his proffer with foreign jurisdictions.

The Ninth Circuit’s Opinion and Its Implications

In a brief opinion, the Ninth Circuit summarily rejected McKnight’s claims, interpreting the proffer agreement as a contract, and held that the “unambiguous words of the agreement are the end of the story.”  The court found that the clear language of the contract offered McKnight protection only from prosecutions by the US Attorney, and that “the US Attorney’s disclosure therefore did not violate the agreement.”

The Ninth Circuit articulated the import of its ruling in McKnight to anyone considering whether to cooperate with the government in cases that could extend to other jurisdictions.  Indeed, the Court announced:

Future government witnesses are on notice that, if they wish to prevent federal prosecutors from sharing incriminating statements with other sovereigns (including, for example, the State governments), they must reduce that expectation to writing.  Conversely, prosecutors should not be surprised when such protection is sought by cooperating witnesses, or when, if such protection is refused, witnesses decline the agreement.

Thus, the McKnight decision warns witnesses in federal cases (and their attorneys) to act with care in negotiating the terms of immunity and proffer agreements.  Any cooperating witness potentially at risk of prosecution by a foreign government, or by a state government, should ensure that the agreement with federal prosecutors expressly prohibits the sharing of information with any other governmental entity. 

For more information about Mayer Brown’s White Collar Defense & Compliance practice, please visit Learn more about our Securities Enforcement & Investigations practice.

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