Deferred Prosecution Agreements Cannot Be Incorporated into Plea Agreements under Montana Law

Commentary on State v. Pein, 2025 MT 258 (Mont. Nov. 12, 2025)

Introduction

In State v. Pein, the Supreme Court of Montana issued a significant opinion clarifying the structural limits of plea bargaining under Montana criminal procedure. The Court held that a deferred prosecution agreement (pretrial diversion) under § 46-16-130, MCA, may not be incorporated into a plea agreement under § 46-12-211, MCA. As a result, convictions obtained after reinstatement of charges that had been handled through an incorporated deferred prosecution clause were vacated. The Court also rejected an argument that marijuana cannot lawfully be classified as a Schedule I substance under Montana law, affirming the defendant’s earlier conviction relating to marijuana distribution.

Parties: The State of Montana (Appellee) and David Allen Pein (Appellant).

Issues:

• Whether a deferred prosecution agreement under § 46-16-130, MCA, can be incorporated into a plea agreement under § 46-12-211, MCA.
• Whether marijuana remains a Schedule I drug under Montana’s statutory scheme.

Disposition: The Court vacated Pein’s convictions on two counts (Counts IV and VIII) because the deferred prosecution terms were impermissibly incorporated into the plea, and it remanded for further proceedings consistent with the opinion. It affirmed the separate conviction on Count VI and rejected the challenge to marijuana’s Schedule I status.

Background

In 2016, Lewistown police used a confidential informant to conduct three controlled buys from Pein, ultimately seizing 15.48 ounces of marijuana, cash (including marked bills), and paraphernalia. Pein was charged with nine counts. On June 30, 2017, the State and Pein executed a deferred prosecution agreement (DPA) under § 46-16-130, MCA, for Counts IV and VIII. On July 6, 2017, Pein pleaded guilty to Count VI (possession with intent to distribute) under a plea agreement pursuant to § 46-12-211, MCA; that plea agreement incorporated the DPA “by reference.” In 2018, the district court deferred imposition of sentence on Count VI for five years.

After subsequent violations and revocation, the State reinstated prosecution on Counts IV and VIII, leading to a 2024 jury conviction and a seven-year concurrent prison sentence on those counts; the court also ordered forfeiture of Pein’s home (execution stayed). On appeal, Pein challenged, among other things, the legal viability of combining a DPA within a plea and marijuana’s Schedule I classification.

Summary of the Opinion

• Plea/Diversion Structure: The Montana Supreme Court held that § 46-12-211, MCA, exhaustively lists permissible plea bargain terms—(a) dismissal of other charges, (b) a specific sentence, or (c) a nonbinding sentencing recommendation. Because those options do not include a deferred prosecution term, a DPA under § 46-16-130, MCA, cannot be incorporated into a plea agreement. The Court emphasized the divergent nature of the two statutes: plea agreements involve judicial oversight and final dispositions; pretrial diversion is primarily executive, operates outside the court’s approval, and is not a “sentence.”
• Remedy: The unlawfully incorporated DPA provisions were excised from the plea agreement. The Court vacated the convictions for Counts IV and VIII obtained after the State “reinstated” prosecution under the incorporated DPA. The State may, however, pursue those counts anew in independent proceedings consistent with § 46-16-130, MCA, or by refiling under ordinary criminal procedures. The Court expressly did not decide the continued validity of any standalone DPA between the parties.
• Marijuana Scheduling: The Court rejected the argument that marijuana’s Schedule I classification is untenable in light of the MMRTA’s regulated system for medical and recreational marijuana. The statutory scheme still criminalizes distribution outside regulated channels. The Court declined to “reschedule” marijuana judicially and affirmed Pein’s conviction on Count VI.
• Other Issues: Because the incorporation issue was dispositive regarding Counts IV and VIII, the Court did not reach subject matter jurisdiction, double jeopardy, or the constitutionality of Montana’s forfeiture statute. It left speedy-trial and limitations arguments for remand if the State proceeds.

Detailed Analysis

1) Precedents and Authorities Cited

• Statutory interpretation framework:
  • State v. Denny, 2025 MT 62, ¶ 11 (review of statutory interpretation is de novo).
  • Medical Marijuana Growers Ass’n, Inc. v. Corrigan, 2012 MT 146, ¶ 20 (apply the law in effect when the crime was committed).
  • Musselshell Ranch Co. v. Seidel-Joukova, 2011 MT 217, ¶ 14; Swanson v. Hartford Ins. Co., 2002 MT 88, ¶ 22 (legislature presumed to know existing law; related statutes read to coexist when later enactments do not amend earlier ones).
• Plea agreements as contracts:
  • State v. Arellano, 2024 MT 108, ¶ 12 (plea agreements are governed by contract principles; object must be lawful at the time of contract, § 28-2-602, MCA).
  • State v. Cleveland, 2014 MT 305, ¶¶ 10, 18, 23 (sentences reviewed for legality; severance of unlawful provisions under § 28-2-604, MCA).
• Statutory provisions:
  • § 46-12-211, MCA (plea agreements: the prosecutor may agree to one of three options).
  • § 46-16-130, MCA (pretrial diversion: prosecutor/defendant may agree to defer prosecution; notice to court; no court approval required).
  • § 46-1-202(25), MCA (definition of “sentence”).
  • § 50-32-221, -222(4)(x), MCA (scheduling and controlled substances; marijuana in Schedule I).
  • § 16-12-101(2)(c), MCA (MMRTA: legalization is limited and regulated; distribution outside channels remains criminalized).

2) The Court’s Legal Reasoning

The Court’s reasoning proceeds on textual, structural, and remedial grounds.

Textual exclusivity. Section 46-12-211(1), MCA, states the prosecutor “will do any of the following,” then lists three options. The Court reads this enumerated list as exclusive—an application of the expressio unius canon—and refuses to add a fourth category (deferred prosecution terms) by judicial creativity (citing § 1-2-101, MCA). Because a DPA is not one of the three statutorily permitted plea terms, it cannot be part of a plea agreement.

Nature of the mechanisms: judicial versus executive. The plea statute envisions a judicially supervised final disposition. The court must be informed, may accept or reject certain agreements, and, depending on the subsection, must advise the defendant regarding the right to withdraw. By contrast, pretrial diversion operates outside judicial approval and is an executive function: before filing, the court is not involved; after filing, the prosecutor only gives notice (§ 46-16-130(3), MCA). Moreover, a DPA is not a “sentence” under § 46-1-202(25), MCA, because no judicial disposition has occurred. This functional distinction reinforced the Court’s conclusion that the two mechanisms are legally incompatible when merged into a single plea contract.

Separate statutory tracks. The plea statute originated in 1979; pretrial diversion followed in 1985. The Legislature did not amend the earlier plea statute to authorize DPAs within pleas. Under Musselshell Ranch and Swanson, the Court presumes the Legislature intended separate, independent tracks. The verbs also diverge: “move for dismissal” (final, judicial) versus “defer prosecution” (temporary, executive).

Contract validity and severability. Plea agreements are governed by contract principles, but only lawful objects may be enforced (§ 28-2-602, MCA). When a contract has both lawful and unlawful objects, the latter can be severed (§ 28-2-604, MCA). Here, the plea as to Count VI was valid, but the incorporated DPA provisions for Counts IV and VIII were unlawful. The Court therefore excised the unlawful portion and vacated the resulting convictions as tainted by the impermissible incorporation (Arellano; Cleveland).

3) The Dissent’s Counterpoint

Chief Justice Swanson concurred on the marijuana issue but dissented on the plea/DPA holding. The dissent viewed pretrial diversion as a “conditional dismissal” that fits within § 46-12-211(1)(a), MCA (“move for dismissal of other charges”), because diversion culminates in a mandatory dismissal with prejudice upon successful completion (§ 46-16-130(1)(d), MCA). The dissent underscored:

• Nothing in either statute demands that all counts be resolved in the same way; parties can dispose of different counts by different mechanisms within one global resolution.
• The majority’s proposed workaround—dismiss without prejudice under the plea statute and then use an independent diversion—elevates form over function and risks creating murkier records and parol-evidence disputes about how the two documents relate. Better to allow parties to say plainly that the resolutions are linked.
• DPAs are common, flexible tools that can be reasonably conditioned on performance of plea obligations; forbidding explicit linkage adds unnecessary complexity and uncertainty.

4) Marijuana’s Schedule I Status

On the second issue, the Court reaffirmed that marijuana remains a Schedule I controlled substance under § 50-32-222(4)(x), MCA, and declined to “reschedule” it judicially notwithstanding the MMRTA’s legalization framework. While the MMRTA authorizes regulated cultivation and distribution, actions outside those regulated channels remain criminal (see § 16-12-101(2)(c), MCA; § 45-9-103, MCA). The Court therefore affirmed Pein’s conviction on Count VI, consistent with its previous refusal to expunge his conviction in Pein II due to the quantity involved.

Impact and Prospective Significance

Immediate Consequences

• Prosecutors and defense counsel in Montana can no longer place deferred prosecution terms inside plea agreements under § 46-12-211, MCA. Such terms are ultra vires and unenforceable if included.
• Convictions that were obtained following reinstatement of charges under an incorporated DPA are vulnerable to vacatur, as occurred with Counts IV and VIII here.
• The State retains the ability to proceed on remand via an independent DPA consistent with § 46-16-130, MCA, or by refiling, subject to ordinary procedural defenses (statute of limitations, speedy trial), which the Supreme Court signaled may be raised and resolved below.

Best Practices for Structuring Resolutions Post-Pein

• Keep plea agreements and pretrial diversion agreements entirely separate. Do not incorporate a DPA “by reference” into a plea agreement or condition the plea on DPA terms within the four corners of the plea document.
• If the parties intend a “global” resolution:
  • Use two discrete documents, each compliant with its governing statute: a § 46-12-211, MCA, plea for certain counts, and a § 46-16-130, MCA, diversion for others.
  • Provide the § 46-16-130(3), MCA, notice to the court for diversion, but do not seek court approval of the DPA or ask the court to merge it into the judgment.
  • Ensure plea colloquies and written terms reflect only the three permitted plea options; avoid embedding DPA conditions in the plea.
• Consider sequencing options the Court acknowledged:
  • Dismiss certain charges without prejudice as part of the plea (if the court grants such dismissal) and then enter a separate prefiling DPA covering future conduct; or
  • Leave the charges pending and enter a DPA with notice to the court, but keep it entirely outside the plea agreement’s text.
• Draft severability clauses in plea agreements, mindful that any unlawful term will be excised. Do not assume the court will “save” a global deal if an unlawful term is central.
• Preserve clear records to avoid parol-evidence disputes, even though the dissent warns this opinion could unintentionally create them.

Longer-Term Legal Effects

• Clarified doctrine: The opinion creates a clear demarcation between executive diversion and judicial pleas, precluding hybrid agreements. This will likely standardize charging and resolution practices across Montana’s district courts.
• Negotiation dynamics: Parties may need to accept more segmented resolutions. Prosecutors will need to choose between dismissing charges as part of a plea or handling them via a separate diversion—recognizing that diversion cannot be embedded in a plea’s judicial disposition.
• Remedial template: The Court’s severance-and-vacatur approach furnishes a model for future cases where plea agreements contain unlawful objects, reducing the risk of invalidating entire plea bargains when only part is unlawful.
• Policy discussion: The dissent may spur legislative review. If the Legislature prefers to authorize explicit “global” linkage of pleas and diversion, it can amend § 46-12-211 to add a fourth option or cross-reference § 46-16-130.
• Marijuana prosecutions: The reaffirmation that marijuana remains Schedule I, coupled with the MMRTA’s regulated framework, preserves the State’s ability to prosecute distribution outside licensed channels and forecloses judicial rescheduling arguments.

Complex Concepts, Simplified

• Deferred Prosecution Agreement (Pretrial Diversion): A voluntary agreement between the prosecutor and defendant to pause prosecution for a set period, subject to conditions. If completed successfully, the charge is dismissed with prejudice; if not, the prosecutor can proceed. Court approval is not required; only notice is required if charges are already filed.
• Plea Agreement: A negotiated resolution in which the defendant pleads guilty (or nolo contendere) in exchange for permitted prosecutorial concessions. The court must be informed and may accept or reject certain terms.
• Deferred Imposition of Sentence: A judicial disposition after a guilty plea or finding in which sentencing is postponed and later may be dismissed or imposed, depending on compliance. Unlike a DPA, this is a “sentence” overseen by the court.
• “With Prejudice” vs. “Without Prejudice”: A dismissal with prejudice is final; the charge cannot be refiled. A dismissal without prejudice allows the State to bring the charge again, subject to statutes of limitation and other defenses.
• Expressio Unius est Exclusio Alterius: A canon of statutory interpretation meaning that listing specific items implies the exclusion of unlisted items. Applied here, listing three plea options implies DPAs are excluded.
• Severability of Unlawful Contract Terms: If part of an agreement is unlawful, courts may excise the offending piece and enforce the rest, provided the lawful part stands independently.
• Schedule I Classification: Under Montana law, a substance is Schedule I if it has a high potential for abuse and no accepted medical use under the relevant statutory scheme. Marijuana remains listed in Schedule I, even though certain uses are legalized within a regulated system; conduct outside that system remains criminal.

Conclusion

State v. Pein establishes an important procedural boundary in Montana criminal practice: pretrial diversion agreements under § 46-16-130, MCA, cannot be incorporated into plea agreements under § 46-12-211, MCA. Plea bargains are limited to dismissal of other charges, a specific sentence, or a nonbinding sentencing recommendation. Because diversion is executive in nature and not a “sentence,” it must remain a separate instrument, outside the plea’s judicially supervised framework. The Court’s remedy—severing the unlawful incorporation and vacating convictions obtained through it—both enforces statutory limits and preserves valid portions of plea agreements.

On substance regulation, the Court reaffirmed that marijuana remains a Schedule I substance under Montana law and declined to alter that classification judicially, emphasizing that the MMRTA’s regulated legalization does not decriminalize distribution outside its channels.

Practically, prosecutors and defense counsel must now structure global resolutions through clearly segregated instruments: an on-the-record plea that follows § 46-12-211, MCA, and any DPA that follows § 46-16-130, MCA, with notice to the court but without embedding diversion terms into the plea. While the dissent urges a more flexible reading that treats diversion as a conditional dismissal within the plea statute, the majority’s rule governs unless and until the Legislature revisits the statutes. Pein thus offers a definitive roadmap for lawful negotiation architecture in Montana and preserves the integrity of both plea bargaining and pretrial diversion as distinct procedural tracks.