Court Opinion

ID: 9493009
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:55:34.377754+00
Date Added: 2024-06-11T17:55:35.889618
License: Public Domain

SILER, J., delivered the opinion of the court, in which NORRIS, J., joined. JONES, J. (pp. 634-38), delivered a separate concurring opinion.
OPINION
SILER, Circuit Judge.
The government appeals from an award of attorneys’ fees and costs to Ranger Electronic Communications, Inc. (“Ranger”) under the Hyde Amendment. Ranger was indicted for violating 18 U.S.C. §§ 545 and 1956(a), importing illegal radio equipment and related money laundering charges. The prosecution ended in a dismissal with prejudice of the illegal importation charges against Ranger and its primary officer, Jim Peng, but an associated corporation, Ranger USA, also owned by Peng, pled guilty to money laundering in violation of 18 U.S.C. § 1956(a)(2) and agreed to a criminal forfeiture of $990,-000.000. Another sister corporation, Ranger Shanghai, pled no contest to one count of importing merchandise in violation of 18 U.S.C. § 545.
On appeal, the government argues that Ranger did not file a timely request for attorneys’ fees and costs under the Hyde Amendment,1 and that, even if timely filed, as a matter of law, there was no “vexatious, frivolous, or bad faith” prosecution as required under the Act. We hold the Hyde Amendment incorporates the Equal Access to Justice Act’s2 (“EAJA”) thirty-day time limit for filing claims. As set forth below, we REVERSE for lack of jurisdiction.
I. BACKGROUND
On December 19, 1996, Ranger, Ranger USA, and Peng were indicted for illegal importation of radio equipment in violation of 18 U.S.C. § 545. In addition, Ranger, *629Ranger USA, Peng and John Gouvion, the president of Ranger USA, were indicted for conspiracy to import and sell electronic devices in violation of 18 U.S.C. § 545. On March 27, 1997, a superseding indictment charged that Ranger, Ranger USA and Peng conspired to violate the customs laws in violation of 18 U.S.C. §§ 371 and 545; conspired to commit money laundering in violation of 18 U.S.C. § 1956(h); brought merchandise into the United States contrary to law in violation of 18 U.S.C. § 545; and committed money laundering in violation of 18 U.S.C. § 1956(a)(1) and (a)(2)(A).
At the time of the indictments, Federal Communications Commission (“FCC”) regulations required that Citizens Band (“CB”) radios be “type accepted”3 by the FCC before they could be distributed in this country. See 47 C.F.R. §§ 2.803 and 95.603. The government argued the radios that were specified in the indictments were “open” radios, which operate illegally in that they are not restricted to the forty CB bands, but operate on additional channels as well. Defendants argued the radios were “amateur” radios and thus imported under an exemption. The district court found that “[t]he radios in question were not type accepted by the FCC and would not have been type accepted because they broadcast on frequencies other than those approved by the FCC.” United States v. Ranger Electronic Communications, Inc., 22 F.Supp.2d 667, 670 (W.D.Mich.1998).
Ranger attempted to obtain exculpatory material from the government pursuant to Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). In March 1997, defense counsel sought production of “all evidence known to the government which may be favorable to the defendant and material either to guilt or punishment.” In April 1997, the government agreed “to provide all Brady, Giglio, and Jencks material on January 9, 1998 — three days before trial.”
Defense counsel also tried to obtain evidence from the FCC to help prove that the regulations in question were vague. In June 1997, they made requests under the Freedom of Information Act4 (“FOIA”) for documents that related to CB and amateur radios. On June 20 and August 8, 1997, the FCC declined to produce several of the requested documents on the grounds that they would “interfere with an ongoing criminal investigation.”5 The FCC arrived at this conclusion based at least in part on the recommendation of AUSA Daniel Mek-aru, who, along with AUSA Mark Cour-tade, handled the Ranger prosecution.
In August 1997, the district court ruled that the FCC regulations regarding “open” radios were clear and unambiguous. On January 9, 1998, the court ruled the defendants could not attack the FCC regulations for being confusing, but they could present evidence that they were confused about the regulations and that they reasonably believed the radios were legal “amateur” radios and not illegal, non-type-accepted CB radios.
In early January 1998, the FCC advised the prosecutors it had discovered approximate 400 more documents responsive to the FOIA request. The prosecutors asked the FCC to immediately fax those documents that the FCC thought were important for the prosecutors to review. The prosecutors received the facsimiles on or about January 12, 1998. Among these selected documents were some of the e-mails attached to Ranger’s Hyde motion. The prosecutors examined the facsimiles and concluded that they, like the FCC documents they had reviewed in July 1997, concerned only “modifiable” radios and *630contained no reference to “open” radios. In addition, they were created outside the time frame charged in the indictment. Thus, the prosecutors determined not to produce them. On the date the trial began, January 13, 1998, AUSA Courtade told the defendants that he had received additional FCC documents which he had yet to review. The trial ended before the prosecutors completed their review of the FCC FOIA documents.
Ranger also attempted to defend the charges by pointing to suspicious bank records of Gouvion.6 The defendants claimed that Gouvion, the former president of Ranger USA and a government witness, was embezzling money from Ranger USA. Defendants based this assumption on a wire transfer confirmation showing that Gouvion had a joint bank account with a customer of Ranger USA. In December 1997, the defendants subpoenaed the bank records of Gouvion from 1992 to January 15, 1998. The government’s motion to quash the subpoena was denied by the court on January 16.
On January 14, one day after trial began, AUSA Mekaru asked Gouvion about the wire transfer. Gouvion stated the wire transfer was for the sale of a Rolex watch to the owner of Santa Fe, a company that did business with Ranger USA. AUSA Mekaru asked Gouvion if the loans were a pay-off or if Gouvion was skimming money from Ranger USA. Gouvion replied that the loans were legitimate.
On January 19, 1998, AUSA Mekaru met with Gouvion to prepare him for his testimony the following day. At this meeting, Gouvion admitted he lied about the sale of the Rolex watch. Instead, Gouvion declared he had borrowed money from Ranger USA and used the joint bank account with the customer to hide the money. Thus, the government learned of Gou-vion’s lie three days after the hearing on the motion to quash the subpoena for Gou-vion’s bank records and one day prior to Gouvion’s testimony in court.
Gouvion testified for the government on January 20-21, 1998. On the second day of examination, he testified that the money in the joint bank account was for the unauthorized sale of refurbished radios owned by Ranger USA. On re-cross examination, defense counsel elicited testimony from Gouvion that he had lied and that the claimed personal loans were undocumented, carried no interest rate and had never been repaid in whole or in part.
On January 22, 1998, defense counsel argued the prosecutors had committed a Brady violation and the defense was entitled to a dismissal of the indictment. The district court found that the prosecutor intentionally failed to inform defense counsel prior to Gouvion’s testimony that the story about the Rolex watch was a lie. The court concluded this was a Brady violation, but specifically found that the defense had not suffered any prejudice because they confronted Gouvion about the lie on re-cross examination. Additionally, defense counsel admitted he was not prejudiced. The court offered the defense a mistrial which the defense declined.
A plea agreement was reached shortly thereafter, so the case ended without a jury verdict. Under the plea agreement, charges against Peng and Ranger were dismissed while Ranger USA pleaded guilty and Ranger Shanghai, which had not been charged up to that time, pleaded no contest, with a $990,000.00 forfeiture.
The judgment terminating the criminal case against Ranger was entered on February 3, 1998. Ranger refused to withdraw its motion to obtain FCC documents under the FOIA, so it received on March 30, 1998, the documents pursuant to the request. However, it was not until June 9, 1998, that Ranger filed its motion for attorneys’ fees and costs under the Hyde *631Amendment. The district court recognized that the application for attorneys’ fees and costs was not timely under 28 U.S.C. § 2412(d)(1)(B), which requires that the application for fees and other expenses be filed within thirty days of the final judgment. Therefore, the court tolled the thirty-day limitation until June 9, 1998, because the government had concealed Brady materials in the FCC documents which were not produced until March 30.
The district court found the prosecution acted in bad faith in withholding Brady material from the defendant by failing to reveal to the defense the fact that Gouvion had lied to the prosecution about the sale of the Rolex watch, which he used as an excuse for the receipt of a wire money transfer that the defendants claim was a pay-off from a competitor. The court also found that the withholding of the FCC documents which were requested under the FOIA was a violation of Brady.
The court awarded Ranger $40,106.74 in attorneys’ fees and expenses. In awarding attorneys’ fees, the court concluded that Ranger was only entitled to recover fees incurred after January 9, 1998, “the date on which the United States promised disclosure of Brady materials but failed to make those disclosures.”
II. DISCUSSION
A. Standard of Review
The Hyde Amendment provides that an award of attorneys’ fees “shall be granted pursuant to the procedures and limitations (but not the burden of proof) provided for an award under Title 28, U.S.C. § 2412,” the EAJA, to prevailing parties in criminal cases. Pub.L. No. 105-119, 111 Stat. 2440, 2519 (1997) (reprinted in 18 U.S.C. § 3006A, historical and statutory notes). Under the EAJA, an award or denial of attorneys’ fees is reviewed for an abuse of discretion. See Pierce v. Underwood, 487 U.S. 552, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988); Damron v. Commissioner of Social Security, 104 F.3d 853, 854 (6th Cir.1997). The district court appeared to rely on sections 2412(b) and 2412(d) of the EAJA in determining whether Ranger had timely filed its application for fees. However, this court has ruled that the thirty-day EAJA time limit found in section 2412(d)(1)(B) is jurisdictional and cannot be waived. See Peters v. Secretary of Health and Human Serv., 934 F.2d 693 (6th Cir.1991). In addition, this court reasoned:
The thirty day time limitation contained in the EAJA is not áimply a statute of limitations. It is a jurisdictional prerequisite to governmental liability.... The Equal Access to Justice Act significantly abridged the government’s immunity from suits for attorneys’ fees. As a waiver of sovereign immunity, the act must be strictly construed. Once the government agrees to allow such suits, “the terms of its consent to be sued in any court define that court’s jurisdiction to entertain that suit.” Courts have consistently held that a statutory time limit is an integral condition of the sovereign’s consent. Compliance with that condition is a prerequisite to jurisdiction.
Allen v. Secretary of Health & Human Services, 781 F.2d 92, 94 (6th Cir.1986) (internal quotation cite omitted). Thus, the EAJA time limit in section 2412(d) is jurisdictional, and rulings applying such limit are reviewed de novo by this court. See United States v. Lindert, 1998 WL 180519, at *3 (6th Cir. April 8, 1998) (unpublished opinion); Brown v. Sullivan, 916 F.2d 492, 494 (9th Cir.1990) (issues concerning the proper interpretation of the EAJA are reviewed de novo).
B. The Hyde Amendment
The Hyde Amendment provides that attorneys’ fees may be awarded to a prevailing criminal defendant 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.” *632Pub.L. No. 105-109, 111 Stat. 2440, 2519 (1997) (reprinted in 18 U.S.C. § 3006A, historical and statutory notes).7 Thus, a successful criminal defendant must show that the government’s position was “vexatious, frivolous, or in bad faith” and even then may not recover if there are special circumstances which make the award of fees unjust. As a threshold matter, a successful criminal defendant must comply with the “procedures and limitations” of the EAJA to ensure that his application is timely and properly filed.
One of the limiting provisions of the EAJA provides that claims for attorneys’ fees must be filed within thirty days of a final judgment from which there is no appeal. See 28 U.S.C. §§ 2412(d)(1)(B) and (d)(2)(G) (1994). The defendants failed to file within this period of time. They argue this delay was due to the government’s underlying failure to disclose materials, and they further argue that the Hyde Amendment permits a party to seek attorneys’ fees and costs under section 2412(b) of the EAJA without satisfying the requirements of section 2412(d).
No circuit has yet determined the Hyde Amendment’s incorporation of the procedures and limitations of the EAJA.8 The district courts that have addressed this issue are split. Some conclude that the procedures and limitations of the EAJA are contained in 28 U.S.C. § 2412(d). See United States v. Peterson, 71 F.Supp.2d 695, 698 (S.D.Tex.1999); United States v. Gardner, 23 F.Supp.2d 1283, 1289 (N.D.Okla.1998). Section 2412(d) requires a party seeking an award to file a detailed application within thirty days of “final judgment.” “Final judgment” is defined as a judgment that is “final and appeal-able, and includes an order of settlement.” 28 U.S.C. §§ 2412(d)(1)(B) and (d)(2)(G). In its application, the party must show that it is the “prevailing party” and state the actual time expended and the rates at which fees and other expenses were calculated. § 2412(d)(1)(B). No award of attorneys’ fees can be made in excess of $125 per hour unless the court finds that special factors are present. See § 2412(d)(2)(A). Finally, section 2412(d) defines a “party” as a corporation that, at the time the civil action was filed, had a net worth which did not exceed $7,000,000 and no more than 500 employees. See § 2412(d)(2)(B).
Another district court, however, has held that the procedural limitations set forth in section 2412(d) of the EAJA are not applicable if the prevailing party chooses to seek attorneys’ fees under section (b) in applying for fees under the Hyde Amendment. See United States v. Holland, 34 F.Supp.2d 346, 358-59 (E.D.Va.1999). Section 2412(b) of the EAJA provides for recovery of attorneys’ fees and expenses by a prevailing party in any civil action brought by or against the United States “to the same extent that any other party would be liable under the common law or under the terms of any statute which spe*633cifically provides for such an award." Section 2412(b) does not require a statutory filing deadline, specify requiremer~ts as to the contents of the fee application, limit the hourly rate permitted an attorney, nor provide a net worth ceiling that, if exceeded, disqualifies a prevailing party from eligibility for a fee award.
In this case, Ranger moved for an award under the Hyde Amendment without reference to the BAJA. The district court determined that "[the] jurisdictional limitation is especially fatal to claims for attorney fees in criminal actions because the BAJA waiver of sovereign immunity as to other fee statutes and under the common law applies only to civil and not criminal actions. See 28 U.S.C. § 2412(b)." Ranger Electronic Communications, Inc., 22 F.Supp.2d at 674. The court dismissed with prejudice the charges against Peng and Ranger on February 3, 1998; Ranger received the FCC e-mails on or about March 30, 1998; and Ranger filed its motion for attorneys' fees on June 9, 1998. It decided:
In order to give effect to Congress's purpose and words in awarding attorneys' fees in criminal cases involving "bad faith" where the United States conceals its bad faith until more than 30 days after entry of judgment, a further reasonable time period should be permitted for the filing of an application for attorney fees.... [T]he defendant was permitted under the statute a reasonable period of time to discover the Brady violation from the documents and to file its application for attorney fees under the BAJA. The Court determines that, as such, the application was timely filed.
Id. at 675. In the opinion granting the Hyde award to Ranger, the district court found that Ranger was a "prevailing party" within the meaning of section 2412(d)(2)(B). See id. at 676. In its second opinion specifically granting $40,106.74 to Ranger, the district court cited section 2412(b) as the applicable section for bad faith conduct and the section under which it was awarding fees.
We believe the correct interpretation of the procedures and limitations of the EAJA as incorporated in the Hyde Amendment includes the limitations of section 2412(d). Section 2412(b) directs the applicant to look for an independent statute which gives a remedy of attorneys' fees and expenses independent of the EAJA. As the Hyde Amendment incorporates the EAJA, it would be circular to go back to the Hyde Amendment to treat it as an independent statute giving the right to attorneys' fees without the thirty-day limitation. In addition, as this is a waiver of sovereign immunity, some limitations must be applicable to the fifing of a claim.
Although one court reached the opposite conclusion, see Holland, 34 F.Supp.2d at 357-58 ("[h]ad Congress intended to limit an applicant's rights to those granted by section 2412(d), it could have said so [t]here is no reason to believe the Hyde Amendment intended to confer lesser rights upon criminal defendants than the EAJA conferred upon civil litigants"), this construction does not give effect to the plain meaning of the Hyde Amendment nor the policy considerations behind it. Moreover, the Holland court admits that "the only procedural requirement in the EAJA is found in section 2412(d), which requires that parties must submit their application for fees within 30 days of final judgment in the predicate action." Id. at 358. There is no reason to believe that Congress did not intend this procedural requirement to apply to criminal cases via the Hyde Amendment.
Thus, Ranger did not timely file its application for attorneys' fees with the district court, as its June 9, 1998, application was more than thirty days after the final judgment in the case (the dismissal of Ranger on February 3, 1998) and more than thirty days after Ranger's receipt of the FCC c-mails on or about March 28 to April 2, 1998. Even if the date of the *634disclosure of the FOIA FCC documents was used as the date from which Ranger must comply with the thirty-day limitation of the EAJA, the attorneys’ fees application was required to be filed at the latest on May 2, 1998. As the application was not filed until June 9, 1998, the district court lacked jurisdiction over Ranger’s application.
REVERSED.

. Pub.L. No. 105-119, 111 Stat. 2440, 2519 (1997) (reprinted in 18 U.S.C. § 3006A, historical and statutory notes). In its entirety, the Hyde Amendment provides:

. The Equal Access to Justice Act, 28 U.S.C. § 2412 et seq., authorizes the award of attorneys' fees and costs to private parties who prevail against the government in civil actions.

. Under the FCC regulations, radios cannot operate on the CB band unless express approval is obtained from the FCC to operate on the CB channels.

. 5 U.S.C. § 552 et seq.

.The government contends the investigation referred to concerned inquiries into the defendants’ attempts to circumvent the type acceptance requirements for "modifiable” radios, which were not the subject of the indictments.

. Gouvion pled guilty to accessory after the fact in importing illegal merchandise in viola-lion of 18 U.S.C. § 545.

. In his original proposal, Representative Hyde simply extended the EAJA’s standard for awards and the allocation of the burden of proof to successful federal criminal defendants. Thus, Hyde’s version would have permitted recovery of attorneys' fees and costs to any prevailing criminal defendant, unless the government showed that its position in the prosecution had been "substantially justified.” Additionally, the original version did not contain the language referring to disclosure and in camera review of evidence relevant to a Hyde Amendment claim. See 143 Cong. Rec. H7791 (daily ed. Sept. 24, 1997); 28 U.S.C. § 2412.

. The only circuit opinions issued thus far construe the time for appeal and whether the government's position was "vexatious, frivolous, or in bad faith.” The Tenth Circuit, in United States v. Robbins, 179 F.3d 1268, 1270 (10th Cir.1999), concluded that Fed. R.App. P. 4(b) applies and requires parties to "file a notice of appeal within the 10 days after the order appealed from is entered.” Most recently, the Eleventh Circuit held that a criminal defendant was not eligible for a Hyde award based on the government's alleged withholding of exculpatory information from the grand jury where "the trial jury convicts with knowledge of that evidence.” United States v. Gilbert, 198 F.3d 1293, 1304 (11th Cir.1999).