Mr. Trump fired Mr. Flynn in early 2017 for lying to Vice President Pence and other colleagues about what he and the Russian ambassador discussed in December 2016. Mr. Flynn also struck a deal with prosecutors working for the special counsel, Robert S. Mueller III, to cooperate and plead guilty to one count of making a false statement when F.B.I. agents had questioned him about the conversations. The deal would resolve his liability for that crime as well as for failing to register as a paid foreign agent of Turkey in 2016 and then signing forms in 2017 lying about the nature of that work.
But after Mr. Flynn twice pleaded guilty, he switched last year to a new defense lawyer — Ms. Powell — who began accusing the F.B.I. and prosecutors of misconduct. After Judge Sullivan rejected her accusations as unfounded late last year, Mr. Flynn sought to withdraw his guilty plea. Mr. Barr then assigned an outside prosecutor to scour Mr. Flynn’s case file, turning over internal documents showing that the F.B.I. was aggressive in decisions related to questioning him.
Ms. Powell used those documents to renew her allegations of misconduct, even as the president indicated that he was considering pardoning Mr. Flynn. But in May, Mr. Barr intervened again, directing a prosecutor to seek to simply dismiss the case with prejudice — meaning it could not be refiled by the Justice Department under any future administration — on the theory that Mr. Flynn’s lies to the F.B.I. were not “material” to any legitimate investigation.
Mr. Barr’s move was widely seen as extraordinary and a break with the Justice Department’s approach in cases not involving a presidential favorite, fueling accusations of politicization. In particular, legal experts broadly disputed his notion that the false statements were not “material,” since they bore on the broader counterintelligence investigation into whether Trump campaign officials had coordinated with Russia in its 2016 election interference.
The outsider whom Judge Sullivan had appointed to critique the Justice Department motion — John Gleeson, a former federal judge — had argued that its arguments for dropping the case were baseless and a “pretext” for an illegitimate political intervention on behalf of a presidential favorite, and urged Judge Sullivan to instead sentence Mr. Flynn.
The Justice Department and Ms. Powell have rejected that critique, arguing that dismissal of the case was both warranted on the facts and that Judge Sullivan had no authority to question the executive branch’s decision not to press forward with a prosecution. Mr. Gleeson was due to file a response to those rebuttals on Wednesday.
The ruling could effectively end the case, if Judge Sullivan acquiesces. But even if he instead asks the full appeals court to vacate the order and rehear the matter — or the full court decides to intervene on its own — the ruling seemed likely at a minimum to disrupt his plan to hold a hearing on July 16 on whether to dismiss the charge.
Katie Benner contributed reporting.