Opinion ID: 771934
Heading Depth: 3
Heading Rank: 3

Heading: The Government's Allegedly Unethical Conduct

Text: 37 Appellants argue (1) that the government learned of the applicability of Section 7(a)(4) through its investigation of the Greek case, (2) that the government intentionally violated its ethical duties by withholding this exculpatory information from both Appellants and the district court, and (3) that the district court erred by failing to find that such intentional unethical behavior was vexatious, frivolous, or in bad faith. We are unpersuaded by Appellants' argument. 38 The district court found in Tucor I and reaffirmed in this case that the government honestly believed at the plea hearing that the conduct in the Indictment was prohibited by law and did not fall within the immunity clauses of the Ship-ping Act. (citing Tucor I). In Tucor I, the district court based this finding of fact on the declaration of a Department of Justice attorney who was involved in both the Greek case and the Tucor prosecution. See Tucor I, 35 F. Supp. 2d at 1187--88. The district court was fully aware of the circumstances of the Greek case. See id. at 1187. The court was under no obligation to conclude that the government's reason for not prosecuting the Greek carriers was that the government believed that Section 7 barred such prosecution, and the court explicitly declined to draw any such inference. Id. at 1188 (Any number of factors could have been involved in the government's decision not to prosecute the Greek companies that were under investigation.). In effect, Appellants' argument merely repeats the facts of the Greek case and asks this court to make factual findings contrary to those made by the district court. Appellants have given us no reason to conclude that the district court's findings were clearly erroneous. 39 Because the government honestly believed that the Section 7 immunities did not apply in the Tucor prosecution, the decision to prosecute was not in bad faith. In addition, Appellants have failed to explain how the government's failure to disclose legal authority that the government believed to be irrelevant could make the decision to prosecute vexatious or frivolous. 2 Appellants have not shown that the government's interpretation of the Shipping Act was so unreasonable as to deprive the government of probable cause to prosecute. Nor could a finding of vexatiousness or frivolousness be based on the claim that this court had already ruled against the government's position, because the result and the reasoning of Transpacific were in fact consistent with, and at least partially supportive of, the government's position in the Tucor prosecution. 40 Nonetheless, there remains the district court's suggestion in Tucor I that the government's failure to inform the court about the Section 7 immunities might constitute an ethical violation. See Tucor I, 35 F. Supp. 2d at 1188 (noting that the government's failure to inform the court about the immunities represents a far too restrictive view of prosecutorial obligations). But in ruling on the Hyde Amendment motion, the district court explained that its remarks in Tucor I were meant only as an assessment of faulty judgment by the government, not as an indication that the government's conduct was intended to defraud the Court. On any plausible interpretation of the Hyde Amendment standard, mere faulty judgment is not vexatious, frivolous, or in bad faith. Appellants have not shown that the district court's finding of faulty judgment, as opposed to intentional fraud, was an abuse of discretion. 41