Seeking Attorney’s Fees in Criminal Cases

By James J. Belanger, Frederick R. Petti and James Berchtold

On Oct. 3, 2000, United States District Court Judge Roger G. Strand awarded a victorious defendant in a criminal case $150,000 in attorney’s fees and $50,480.58 in litigation costs.[1]  The ruling marks the first time that the Hyde Amendment,[2] a 1997 law designed to allow defendants to seek financial redress when they have been subjected to vexatious, frivolous or bad faith federal criminal prosecutions, has been applied in the District of Arizona.  The payment of the award ordered by Judge Strand must come out of the budget of either the United States Attorney for the District of Arizona or the United States Department of Justice.

To date, no Nevada state court or federal court sitting in Nevada has addressed an award of attorney’s fees and costs under the Hyde Amendment.  However, in the last two years alone, the Ninth Circuit Court of Appeals has addressed appeals relating to the Hyde Amendment from the federal courts for the District of Montana, Northern District of California, Central District of California, and the District of Hawaii.[3]  The Hyde Amendment will likely be used with increasing frequency as a mechanism to recover attorney’s fees and costs in criminal cases.

This Article is divided into four sections.  First, it examines the Hyde Amendment.  It next reviews the facts of the case that gave rise to Judge Strand’s order.  It then discusses the order itself.  Finally, it suggests why and how states, including Nevada, should enact their own version of the Hyde Amendment.

The Hyde Amendment

During the 1997 legislative session, Congressman John Murtha (D-PA) introduced an amendment to an appropriations bill that allowed members of Congress and their staffs to seek reimbursement for legal expenses associated with the successful defenses to a federal criminal prosecution.[4]  Murtha’s proposal was in response to the legal costs incurred by another member of Congress, Representative Joseph McDade (R-PA), who was acquitted in 1996 after an eight-year defense of bribery and racketeering charges.  Because it was limited to members of Congress and their staff, Representative Henry Hyde (R-IL), Chairman of the House Judiciary Committee, thought that Murtha’s proposal was too narrow.  Hyde offered his own appropriations bill amendment, which was not limited in its coverage to members of Congress and their staff, but instead extended to all federal criminal defendants.

The Hyde Amendment, which was attached as a rider to the appropriations bill for the Department of Commerce, Justice, and State, provides, in pertinent part, that in certain limited circumstances, vindicated criminal defendants can recover attorney’s fees against the government:

The court, in any criminal case (other than a case in which the defendant is represented by . . . [appointed] counsel . . .) 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 [government’s] position . . . was vexatious, frivolous, or in bad faith, unless . . . [it] 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 18, United States Code [EAJA].

18 U.S.C.§ 3006(A)

Making a Case under the Hyde Amendment

The purpose of the Hyde Amendment is to protect innocent individuals from the risk of financial ruin when forced to defend against frivolous or bad faith prosecutions as well as to deter the government from prosecuting such cases.  To prevail on an application for attorney’s fees and costs under the Hyde Amendment, an applicant must prove that:  (1) the applicant’s case was pending on or after Nov. 26, 1997 (the enactment date of the Hyde Amendment); (2) the case was a criminal case; (3) the applicant was not represented by appointed counsel; (4) the applicant was the prevailing party; (5) the prosecution was vexatious, frivolous, or in bad faith; (6) the attorney’s fees were reasonable; and (7) there are no special circumstances that would make such an award unjust.[5]

Under the Hyde Amendment’s civil counterpart, the Equal Access to Justice Act (the “EAJA”), the burden of proof is on the government to show its pursuit of the suit was substantially justified.[6]  The Hyde Amendment, however, rejects the EAJA’s approach to the burden of proof and places the burden on the applicant.[7]  Moreover, by using the terms “vexatious,” “frivolous,” and “in bad faith,” the Hyde Amendment specifically requires that applicants show more than that the government’s position was not substantially justified.[8]

Vexatious, Frivolous, or in Bad Faith

The Hyde Amendment does not define the terms “vexatious,” “frivolous,” or “in bad faith.”  As a starting point, therefore, courts have turned to Black’s Law Dictionary to define these terms.[9]  According to Black’s, “vexatious” means “without reasonable or probable cause or excuse.”[10]  A “frivolous action” is one that is “groundless . . . with little prospect of success; often brought to embarrass or annoy the defendant.”[11]  And “bad faith” is “not simply bad judgment or negligence, but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity; . . . it contemplates a state of mind affirmatively operating with furtive design or ill will.”[12]  this standard is not easily met, nor is it intended to be.

It is not enough, for example, for an applicant merely to show that he has prevailed at the pre-trial, trial, or appellate stages of the prosecution.  Otherwise, almost every reversal would result in an award of attorney’s fees.[13]  Rather, an applicant “must show that the government’s position underlying the prosecution amounts to prosecutorial misconduct – a prosecution brought vexatiously, in bad faith, or so utterly without foundation in law or fact to be frivolous.”[14]  Needless to say, such a standard places “a daunting obstacle before defendants who seek attorney’s fees and costs from the government.”[15]  Once such an award is made, however, it is likely to stick.

Because the district court hears the evidence from the beginning and is in a better position than the court of appeals to distinguish between a good faith prosecution and one that is vexatious, frivolous, or in bad faith, the district court’s findings will not be reversed unless there is clear evidence that the court committed a clear error of judgment.[16]

The Facts of United States v. Thomas De Jong

Thomas De Jong was a dairy farmer who owned a large farm known as Rainbow Valley Dairy.[17]  Beginning in 1989, De Jong participated in a United States Department of Agriculture, Soil Conservation Services program allowing cost sharing for the construction of a wastewater facility for the dairy farm.  The program designed a wastewater treatment facility for De Jong.  The facility, which was completed in 1992, consisted of a series of waste storage ponds.  The design of the ponds, however, soon proved to be inadequate, and De Jong spent over $600,000 to correct the problems.

Embodying the adage that no good deed goes unpunished, De Jong was indicted by a federal Grand Jury for violations of the Clean Water Act [33 U.S.C. § 1251 et seq.].  In essence, the indictment alleged that on three separate occasions De Jong improperly discharged wastewater from his storage ponds into an unnamed wash on the northeast portion of his property.  The source of the discharges was a pipe located within the berm of one of the storage ponds.  The Government argued that the pipe was never part of the recommended design and was unnecessary.  De Jong maintained that the pipe was necessary and was integral to the storage pond’s safe operation.

Trial in the De Jong matter began on July 14, 1999, and lasted six days.  The jury found De Jong not guilty on all charges.

Judge Strand’s Order

After his acquittal, De Jong moved for his attorney’s fees and costs pursuant to the Hyde Amendment.  He argued that the Government failed to properly investigate the case and that the prosecution was vexatious and in bad faith.  De Jong claimed that prior to the prosecution the Government had in its possession information that indicated there were pre-existing design flaws in the wastewater treatment facility not attributable to De Jong, and that his remediation, including the addition of an overflow pipe, were not only in compliance with established engineering principles, but also with published Government standards.  De Jong also claimed that the prosecution was actually the result of some ill will between De Jong and an employee with the Bureau of Land Management.

In ruling for De Jong, the Court noted that an applicant seeking Hyde Amendment fees and costs must establish that binding precedent foreclosed the Government’s position or was so obviously wrong as to be frivolous.  The Court found that De Jong had met this standard and that the Government’s case was frivolous and was not substantially justified.  The Court concluded that the Government knew that the design of the wastewater treatment ponds was inadequate through no fault of De Jong’s and that De Jong had spent in excess of $600,000 of his own money to correct the design flaws.  Additionally, the Court concluded that, contrary to the Government’s position at trial, the overflow pipe that was the source of the discharge appeared to be mandated by proper engineering design and was certainly not evidence of criminal intent to illegally discharge wastewater.

The Court next turned to the question of whether the Government’s prosecution was vexatious or in bad faith.  The Court noted that under the Hyde Amendment, an applicant must offer specific, concrete allegations that lead to the conclusion that a prosecution is vexatious or in bad faith.  Finding the De Jong had met this burden, the Court again noted that the Government knew (1) that the design of the wastewater treatment ponds was seriously flawed, (2) that De Jong had spent a large amount of personal funds to correct the design, and (3) that the Government had unreasonably interpreted relevant case law regarding the legality of certain limited discharges.

Adding insult to injury, the Court also found that De Jong had established that the BLM employee in question did have a personal motive for seeing a criminal penalty imposed on De Jong.

Finally, the Court remarked that De Jong had not only informed the Government of the merits of his legal position before trial, he had also expressed a willingness to come to some “reasonable” resolution of the dispute.  With all this in mind, the Court concluded that Government’s position in the case was in bad faith and that prosecutorial zeal had overridden prosecutorial common sense.  Hence, the award of attorney’s fees and costs under the Hyde Amendment.[18]

The Government appealed from the district court’s award of attorney’s fees and costs.  The Ninth Circuit affirmed, finding that the district court did not abuse its discretion in granting De Jong attorney fees.[19]  The Court of Appeals stated that the Government’s case was weak and that De Jong had established that the prosecution was in bad faith.  In particular, the Court noted that the BLM agent in the case was motivated by personal animus, and that the Government knew that there were serious design flaws in its wastewater treatment facility before prosecuting De Jong.  Nevertheless, the Court found that the Government improperly proceeded with the prosecution.

Although De Jong was a rare case, it highlights the need for a remedy when government prosecutors grossly overreach, in both federal and state court.

Attorney’s Fees in State Criminal Matters

Some states provide for a defendant’s recovery of fees and costs, in limited circumstances, in the civil context.  In Nevada, for example, a vindicated civil defendant can recover attorney’s fees and costs under the Nevada False Claims Act, which prohibits the presentation of a false claim for money, property, or services to the State of Nevada or any of its political subdivisions.[20]  Under the False Claims Act, a court may award reasonable expenses and attorney’s fees to a prevailing defendant if it finds that “the action was clearly frivolous or vexatious or brought solely for harassment.”[21]

In most state courts, however, there is typically no ability for a vindicated criminal defendant to seek attorney’s fees and costs after a malicious prosecution.  Perhaps this is because legislators believe such a provision would impair the prosecutorial function.  This fear, however, as the federal experience has shown, is misguided.

During the debate on his amendment, Chairman Hyde stated that the legislation was aimed at those rare situations in which the prosecution was “not just wrong,”[22] but “willfully wrong.”  Accordingly, defendants like De Jong, who successfully defend against maliciously conceived prosecutions and who suffer serious damage to their wallets and, frequently, to their reputations, have some redress.  In such situations, Chairman Hyde wanted to return some measure of justice to defendants, and he concluded that this could be accomplished by extending to defendants in federal criminal cases the same right to seek recovery of attorney’s fees and costs that civil litigants have under the EAJA, albeit with heightened legal standards and more demanding burdens of proof.[23]

Defendants in Nevada Criminal cases ought to be afforded this same protection.  Nevada currently has no mechanism for compensating a criminal defendant who has been forced to defend him or herself in a groundless action.  The Nevada Legislature should enact a similar provision to allow vindicated criminal defendants the opportunity to recover attorney’s fees in those rare cases when the state has subjected an individual to vexatious, frivolous, or bad faith prosecutions.  It is fundamentally unfair to force a wrongfully accused individual to bear the sometimes staggering costs of a maliciously conceived prosecution.

James J. Belanger, partner, and Frederick R. Petti, Of Counsel, practice White Collar Criminal Defense and Response to Government Civil and Regulatory Investigations at Lewis and Roca, LLP.  James E. Berchtold, associate, practices primarily in the areas of Employment, Civil Rights, and Commercial Litigation at Lewis and Roca.