Can a Defendant Get Attorney’s Fees If He’s Acquitted and There’s Prosecutorial Misconduct?

unfair to fair on white paperIn a civil case, a defendant cannot recover attorney’s fees from a plaintiff, even if the defendant wins. There are a few exceptions to the “American rule,” such as a when there’s a statute governing the case or the contract between the parties allows it. But for the most part, the defendant is out of luck.

But what about in a criminal case? What if you are indicted and win? What if the prosecutors committed misconduct along the way, such as a Brady violation? Can you get back all the attorney’s fees you paid to defend yourself?

Short answer: It’s possible but extremely unlikely.

Just the fact that it’s a possibility may come as a surprise to some people. The Hyde Amendment to the Equal Access to Justice Act, 18 U.S.C. § 3006A note, permits criminal defendants to recover reasonable attorney’s fees (a) if they are acquitted, and (2) “if the position of the United States was vexatious, frivolous or in bad faith.”

Good luck proving that last part.

Hyde Amendment 101

Congress enacted the Hyde Amendment in 1997. It acts as a limited waiver of sovereign immunity to allow the recovery of attorney’s fees in certain circumstances.

Here’s the amendment, in full:

During fiscal year 1998 and in any fiscal year thereafter, the court, in any criminal case (other than a case in which the defendant is represented by assigned counsel paid for by the public) pending on or after the date of the enactment of this Act, may award to a prevailing party, other than the United States, a reasonable attorney’s fee and other litigation expenses, where the court finds that the position of the United States was vexatious, frivolous, or in bad faith, unless the court finds that special circumstances make such an award unjust. Such awards shall be granted pursuant to the procedures and limitations (but not the burden of proof) provided for an award under section 2412 of Title 28, United States Code. To determine whether or not to award fees and costs under this section, the court, for good cause shown, may receive evidence ex parte and in camera (which shall include the submission of classified evidence or evidence that reveals or might reveal the identity of an informant or undercover agent or matters occurring before a grand jury) and evidence or testimony so received shall be kept under seal. Fees and other expenses awarded under this provision to a party shall be paid by the agency over which the party prevails from any funds made available to the agency by appropriation. No new appropriations shall be made as a result of this provision.

Let’s break down the key parts of the amendment.

  1. The amendment applies only if you have retained counsel. CJA lawyers need not apply.
  2. The defendant must be the prevailing party. This likely means you are acquitted of everything.
  3. The defendant can recover attorney’s fees and costs. In a lengthy, complex white-collar case, the costs alone could be extensive.
  4. The “position of the United States” must be “vexatious, frivolous or in bad faith.” More on this below. The “position of the United States” is defined in 28 U.S.C. 2412(d)(2)(D) as “the action or failure to act by the agency upon which the civil action is based.” (This obviously refers to a civil rather than criminal action, so it’s not entirely clear this is the right definition.)
  5. Even if the defendant proves #4, the court can refuse to award fees if “special circumstances make such an award unjust.” The amendment does not define “special circumstances.”
  6. The procedures for such an award request are the same as 28 U.S.C. § 2412. This includes a definition of what is included in the recovered attorney’s fees.
  7. To oppose such an award, the government can submit ex parte information, such as evidence presented to a grand jury.
  8. If the defendant wins, then the agency must pay the award out of its budget.

In sum, the Hyde Amendment gives federal district court judges the ability to award attorney’s fees to a defendant who wins at trial.

The Proof is in the Pudding

As with so many things in criminal law, the text of the statute itself is actually quite helpful, but the case law interpreting it is brutal.

The main problem is proving that the government’s “position was vexatious, frivolous or in bad faith.” In 2012, the Eleventh Circuit held that even prosecutorial misconduct is not enough to win under the Hyde Amendment.

In United States v. Shaygan, the defendant was acquitted and the trial judge awarded $600,000 in attorney’s fees based on the misconduct of the prosecutors. On appeal, though, the award was vacated.

The majority opinion held that “[t]he Hyde Amendment is concerned with wrongful prosecutions, not wrongs that occur during objectively reasonable prosecutions.” The word “position” in the provision refers to the entire prosecution and not to isolated misconduct (even if proven) during the prosecution. So, if it was “objectively reasonable” to bring the charges in in the first place, then a defendant cannot be awarded fees.

There was a strong dissent from the denial of rehearing en banc in Shaygan, noting that

The government violated Dr. Shaygan’s rights, and now, contrary to what Congress has provided, he is left alone to pay the costs he suffered at the hands of these rule breakers.

Other courts have similarly imposed a high standard for recovery under the Hyde Amendment. For example, in United States v. Manzo, 712 F.3d 805, 810 (3d Cir. 2013), the Third Circuit explained:

With respect to the three grounds for relief under the statute, courts have held that a “vexatious” position is one that is “without reasonable or probable cause or excuse.” Id. at 1298–99 (internal quotation marks omitted); see also United States v. Lain, 640 F.3d 1134, 1137 (10th Cir.2011) (same); United States v. Monson, 636 F.3d 435, 439 (8th Cir.2011) (same). To establish that the government’s prosecution was “vexatious,” a petitioner must show “both … that the criminal case was objectively deficient, in that it lacked either legal merit or factual foundation, and … that the government’s conduct, when viewed objectively, manifests maliciousness or an intent to harass or annoy.” United States v. Knott, 256 F.3d 20, 29 (1st Cir. 2001).

Recently, in United States v. Terzakis, 854 F.3d 951, 955-56 (2d Cir. 2017), the Second Circuit held:

We conclude that, for purposes of the Hyde Amendment, the terms “vexatious” and “frivolous” both require a prevailing party to demonstrate that the government’s position was objectively deficient—in other words, that the government lacked a sufficient factual or legal basis on which to initiate or proceed with the case.

What’s the Problem?

There are a lot of problems with the holding in Shaygan and other courts that prosecutorial misconduct does not trigger Hyde Amendment awards.

First, it makes obtaining an award under the Hyde Amendment nearly impossible. After a grand jury indicts you, it’s hard to argue that there was no reasonable basis for the charges. You would have to prove that there was zero objective basis for the grand jury’s decision to indict, or that the whole grand jury process was tainted–and the government knew about it. Or that the government knowingly brought completely bogus charges.

Without full discovery into what happens at the grand jury level, or into the government’s work product, which is plainly not contemplated by the provision, defendants are handcuffed from meeting this standard. And, for all of my criticisms of the government, it’s a very rare indictment that has no basis at all. There’s always some document that sounds bad or some witness who will offer believable, damaging testimony.

Second, this interpretation excuses gross and even intentional prosecutorial misconduct. Judges who adopt this standard ignore the opportunity Congress provided to penalize prosecutorial misconduct. The individual USAOs have no incentive to implement a process to double-check indictments or reconsider cases in which the prosecutor is plainly advocating a novel interpretation of the law. They have less incentive to ensure that line attorneys are not committing discovery violations.

Imagine the incentive against misconduct that could be created if a USAO took a hit to its budget when its line attorneys acted improperly or if a United States Attorney had to justify to DOJ during the budget process why it had to pay an award.

Third, this reading ignores the financial realities of defending against a white-collar (or any kind of) criminal case for most people. The richest clients can afford to defend the charges and still have money left over. But for most people, defending white-collar charges means liquidating retirement plans or college savings plans for kids, taking out a second mortgage or borrowing from family members. Winning the case at trial means that you may not go to jail but you are still in financial ruin—losing your home and declaring bankruptcy.

These costs are particularly burdensome for government employees under indictment. Even after years of faithful service and regular contributions to a TSP, it may all be gone in a flash.

If the government is going to send you into financial ruin by prosecuting you using unethical or improper methods, you should have a chance to regain your financial footing if you win at trial.

A Modest Proposal

Nothing in the language of the Hyde Amendment prevents a judge from concluding that the government’s “position” in the case is either “vexatious” or in “bad faith” when the government uses unethical or improper means to try to win the case. The provision does not define “position.” It seems reasonable that a court could conclude that if the government’s “position” that it will win at all costs–and commits serious prosecutorial misconduct–then this is vexatious or bad faith.

Keep in mind that interpreting the provision this way doesn’t change the extremely high barriers to winning an award in the first place. The defendant still has to “prevail,” which almost certainly means acquittal on all charges. The defendant still has to convince a federal judge to conclude that the prosecutor committed serious misconduct, which is a stunningly difficult task.

Why Not Try?

Defendants who win at trial should consider filing a motion under the Hyde Amendment to recoup attorney’s fees and costs if there is prosecutorial misconduct. Apart from the attorney’s fees to do so, there is no apparent downside. Losing such a motion simply places the defendant in the same spot as before.

We should be pushing judges to consider whether the government actually had a “reasonable basis” when it loses at trial, particularly after a white-collar investigation lasting many years. We should be pushing judges to consider whether the government’s conduct in the case rises to the level of “vexatious” or “bad faith.” We should be doing our best to make sure that our clients don’t win at trial and lose their life savings along the way.

 

This entry was posted in DOJ policy and practice, Prosecutorial misconduct. Bookmark the permalink.

One Response to Can a Defendant Get Attorney’s Fees If He’s Acquitted and There’s Prosecutorial Misconduct?

  1. Adriaen Morse says:

    Totally agree. I seem to remember an SEC case awhile back in the late 90s or early 2000s where the defendant was able to get his costs back under the Hyde Amendment.

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