Source: https://law.justia.com/cases/federal/appellate-courts/F3/256/20/526533/
Timestamp: 2019-08-23 13:02:02
Document Index: 492907369

Matched Legal Cases: ['§ 3006', '§ 1317', '§ 403', '§ 1319', 'arty3', '§ 2412', '§ 2412', '§ 2412', '§ 2412', '§ 2412', '§ 2412', '§ 2412', '§ 2412', '§ 924']

United States of America, Appellant and Cross-appellee, v. James M. Knott, Sr.; Riverdale Mills Corp., Defendants, Appellees and Cross-appellants, 256 F.3d 20 (1st Cir. 2001) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › First Circuit › 2001 › United States of America, Appellant and Cross-appellee, v. James M. Knott, Sr.; Riverdale Mills Corp...
United States of America, Appellant and Cross-appellee, v. James M. Knott, Sr.; Riverdale Mills Corp., Defendants, Appellees and Cross-appellants, 256 F.3d 20 (1st Cir. 2001)
US Court of Appeals for the First Circuit - 256 F.3d 20 (1st Cir. 2001)
Heard June 6, 2001Decided July 12, 2001
APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Nathaniel M. Gorton, U.S. District Judge][Copyrighted Material Omitted]
This is a case of first impression for this court as to the standards for awarding attorneys' fees against the United States for its initiation of criminal proceedings, as provided for under the Hyde Amendment, Pub. L. No. 105-119, 111 Stat. 2440, 2519 (1997), reprinted in 18 U.S.C. §§ 3006A (statutory note). The district court awarded $68,726.00 in fees to Riverdale Mills, which had been one defendant in a criminal prosecution for violation of the Clean Water Act, and denied fees to James Knott, the other defendant. The government voluntarily dismissed the action after the district court suppressed some of the prosecution's evidence. The district court awarded fees on the grounds that the government's prosecution was "vexatious." We reverse the award of fees to Riverdale Mills and affirm the denial of fees to Knott.
The Clean Water Act prohibits the indirect discharge of pollutants into the waters of the United States through publicly owned treatment works. 33 U.S.C. §§ 1317(b) (1). The implementing regulations for the Act prohibit the discharge of wastewater with a pH below 5.0 standard units ("s.u.")1 into publicly owned sewer systems. 40 C.F.R. §§ 403.5(b) (2). Any person who "knowingly" violates these standards is subject to felony prosecution. 33 U.S.C. §§ 1319(c) (2) (A).
Following the dismissal of the indictment, Knott and Riverdale Mills filed a motion to recover reasonable attorneys' fees under the Hyde Amendment. The district court awarded attorneys' fees to Riverdale Mills as a prevailing party3 because, in the view of the court, while the prosecution was neither frivolous nor in bad faith, it was "clearly vexatious" within the meaning of the Hyde Amendment. United States v. Knott, 106 F. Supp. 2d 174, 180 (D. Mass. 2000). The district court, relying in part on the Eleventh Circuit's decision in United States v. Gilbert, 198 F.3d 1293 (11th Cir. 1999), held that a defendant seeking fees under the Hyde Amendment must show that the government's legal position was asserted "in bad faith or without any foundation or basis for belief that it might prevail" and thus amounted to "prosecutorial misconduct."4 See 106 F. Supp. 2d at 179 (quoting Gilbert, 198 F.3d at 1303-04). The district court rested its conclusion that the prosecution here was "vexatious" on the court's belief that the government did not have "any credible evidence" to support the accusation that the defendants discharged waste with a pH below 5.0 s.u. into the public sewer. Id. To the contrary, the court concluded, the samples taken at the second manhole, "the point of discharge into the public sewer," showed that Riverdale Mills "was not in violation of the Clean Water Act." Id. The district court did not, however, find that the agents or prosecutors in this case acted maliciously, or with any particular personal motive to vex the defendants. The court rested instead simply on the purported absence of credible evidence, though it also discussed some alleged misconduct in the collection of samples and the conduct of searches. Accordingly, the court awarded fees in the sum of $68,726.00 to the company against the United States under the Hyde Amendment. Id. at 181. The court denied fees to Knott because his net worth exceeded $2 million, reasoning that the limitations of 28 U.S.C. §§ 2412(d) apply to the Hyde Amendment. Id. at 178.
EAJA Subsection 2412(d) supplies an additional substantive basis for a civil party to recover fees against the United States. It provides that "a court shall award [fees and expenses] to a prevailing party . . . unless the court finds that the position of the United States was substantially justified." 28 U.S.C. §§ 2412(d) (1) (A). Unlike §§ 2412(b), §§ 2412(d) itself subjects fee awards to certain procedures and limitations. An individual may not recover fees under subsection (d) if his individual net worth exceeds $2 million (nor can a corporation, if its net worth exceeds $7 million and it has more than 500 employees). See 28 U.S.C. §§ 2412(d) (2) (B). In addition, subsection (d) caps the hourly rate at which an award may be granted at $125. 28 U.S.C. §§ 2412(d) (2) (A). Knott concedes that he would be ineligible under the $2 million net worth limitation, but contests its applicability.
The Hyde Amendment was patterned after the Equal Access to Justice Act, 28 U.S.C. §§ 2412, which provides for an award of attorney's fees against the United States in civil cases. The Hyde Amendment differs in at least two important respects. First, it raises the standard for awarding fees. The Hyde Amendment allows recovery by prevailing criminal defendants only where the position of the United States was "vexatious, frivolous, or in bad faith," in contrast to the EAJA, which authorizes an award to a prevailing civil party in any case where the position of the United States was not "substantially justified," see 28 U.S.C. §§ 2412(d) (1) (A). Indeed, the legislative history of the Hyde Amendment shows that in drafting the provision, Congress considered and rejected as too easily met both the "not substantially justified" standard of the EAJA and a standard (modeled after the Firearms Owners' Protection Act of 1986, see 18 U.S.C. §§ 924(d) (2) (B)) which would have awarded fees, inter alia, where the United States' position was "without foundation." See Gilbert, 198 F.3d at 1301-02. Second, unlike the EAJA, the Hyde Amendment places the burden of proof on the defendant to demonstrate that the government's position was "vexatious," "frivolous," or "in bad faith." See id.