Wednesday, November 7, 2007
Ninth Circuit Overturns Fee Award to Criminal Defendant
By STEVEN M. ELLIS, Staff Writer
Criminal charges that are later dismissed because the underlying evidence is suppressed are not “vexatious” if the government articulates a viable basis for admission, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
Reversing a decision by U.S. District Judge Donald W. Molloy of the District of Montana to award fees to Scott Sherburne under the Hyde Amendment after his acquittal on conspiracy and wire fraud charges because an incriminating statement that he made was suppressed, the court held that the government had the right, in originally deciding whether to bring the charges, to rely on the statement in the light most favorable to the government, especially where it reasonably believed the statement was admissible.
As a result, the court held that Sherburne could not demonstrate intent by the government to harass him, and was therefore not entitled to fees under the Hyde Amendment, which permits a criminal defendant to recover fees when government’s position was vexatious, frivolous, or in bad faith.
The government brought criminal charges against Sherburne and 12 others based on alleged abuses in the funding and construction of a project by Blaze Construction to use federal grant funds from the Department of Housing and Urban Development to construct private homes for low income Native Americans on the Blackfeet Indian Reservation of Montana.
The project was plagued with difficulty and controversy, and in February of 1998 FBI agents interviewed Sherburne, the manager of an associated company.
Although represented by counsel, Sherburne admitted that he had drafted fraudulent “gift letters” in order to procure a loan for a tribal official’s son.
At a joint trial, Sherburne did not testify, so the district court excluded his statement under Bruton v. United States (1968) 391 U.S. 123 (1968), which precludes use of a defendant’s confession during a joint trial if the defendant does not testify and the confession implicates a co-defendant.
However, the government had relied on the statement in deciding to bring the charges, and could not prove its allegations without the excluded evidence. As a result, the government recommended that the court grant the defendants’ motion for an acquittal at the close of its case.
Blaze, Sherburne, and others then moved for attorney fees, and Molloy framed the inquiry into “vexatiousness” as whether a reasonable prosecutor should have concluded that applicable law and available evidence were insufficient to prove defendants’ guilt beyond a reasonable doubt. Holding that the prosecution should have arrived at such a conclusion, he awarded fees to Sherburne.
On appeal, a panel of the Ninth Circuit disagreed, ruling that the standard was not whether a reasonable prosecutor should have concluded that the government would lose the case, but whether prosecution was unwarranted because it was intended to harass the defendant and without sufficient foundation.
Vacating the fee awards, the panel remanded to the district court with instructions to consider whether the prosecution was actually intended to harass Sherburne, and maintained without sufficient foundation.
Sherburne then died, but his estate pressed the claim for fees.
Reinstating the fee award, Molloy concluded that the government’s prosecution was malicious and that it did not understand the case, particularly when it characterized Sherburne’s statement in the interview as a confession, rather than speculation. He also inferred an intent to harass because the government had charged Sherburne late in the investigation, had not challenged his motion for acquittal, and had not objectively assessed its proof.
The government appealed again, arguing that its position during prosecution exhibited neither the subjective intent to harass nor objective deficiency, and the Ninth Circuit agreed.
Writing for the court, Senior Judge Betty B. Fletcher said that Sherburne’s statement was “clear, unambiguous and incriminating,” and she wrote that the government’s characterization of the statement and the government’s reasonable belief that the statement would be admissible, did not give rise to an inference of a subjective intent to harass.
She also said that the district court’s reliance on its finding that prosecutors did not understand their case with respect to Sherburne, right or wrong, was not a basis for an award of fees under the Hyde Amendment.
“Even though the government lost the suppression motion and thus the bulk of its evidence against Sherburne,” Fletcher said, “it articulated a viable basis for admissibility; we conclude that its decision to prosecute was not vexatious. In any case, subjective intent to harass does not arise from merely factual mistakes or mistakes concerning the legal merit of the government’s position.”
Holding that it ruling meant that it did not need to address the second question of whether the prosecution was without foundation, the court reversed the district court’s award.
Fletcher was joined in her opinion by Eighth Circuit Judge Arlen C. Beam, sitting by designation, and Judge Pamela Ann Rymer.
The case is United States v. Sherburne, No. 06-30534.
Copyright 2007, Metropolitan News Company