U.S. v. Adkinson, 00-14100

• Decision Date: 19 April 2001
• Docket Number: No. 00-14100,00-14100
• Citation: 247 F.3d 1289
• Parties: (11th Cir. 2001) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. WILLIAM MICHAEL ADKINSON, DANIEL A. KISTLER, et al. Defendants-Appellants. Non-Argument Calendar
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1289

247 F.3d 1289 (11th Cir. 2001)

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. WILLIAM MICHAEL ADKINSON, DANIEL A. KISTLER, et al. Defendants-Appellants.

No. 00-14100

Non-Argument Calendar

IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

April 19, 2001

Appeals from the United States District Court for the Northern District of Florida D.C. Docket No. 91-03052-CR-RV-3

Before TJOFLAT, BLACK and BARKETT, Circuit Judges.

PER CURIAM:

Robert L. Collins and Daniel D. Kistler, each appearing pro se, and William Michael Adkinson and Ann Powell Minks, counseled, appeal the district court's denial of their applications, pursuant to the Hyde Amendment. See 18 U.S.C. 30006A (statutory note), Pub.L.No. 105-119, 617, 111 Stat. 2440, 2519 (1997), for reasonable attorney's fees and other litigation expenses incurred in their criminal trial. The appellants argue, inter alia, that the district court abused its discretion in denying their Hyde Amendment applications by failing to apply the proper legal standard and procedures, and by making clearly erroneous factual findings.

The Hyde Amendment provides that an award of reasonable attorney's fees shall be granted to a prevailing criminal defendant, pursuant to the Equal Access to Justice Act, 28 U.S.C. 2412 ("EAJA"), if the defendant establishes that the government's prosecution was "vexatious, frivolous, or in bad faith." United States v. Gilbert, 198 F.3d 1293, 1296 (11th Cir. 1999). Under EAJA, a denial of attorney's fees is reviewed for an abuse of discretion. Id. An abuse of discretion occurs "if the judge fails to apply the proper legal standard or to follow proper procedures in making the determination, or bases an award [or a denial] upon findings of fact that are clearly erroneous." Id. at 1297-98 (citations and internal quotations omitted). Upon review of the record in the district court, the briefs of the parties, and other pertinent documents, we conclude that the district court abused its discretion in denying the application under the facts of this case.

We base our conclusions on the facts meticulously recounted previously in United States v. Adkinson, 135 F.3d 1363 (11th Cir. 1998) ("Adkinson I"), and United States v. Adkinson, 158 F.3d 1147 (11th Cir.1998) ("Adkinson II"). After Adkinson II was decided, the appellants filed Hyde Amendment applications to recover attorney's fees and other litigation expenses incurred as a result of their criminal prosecution. The district court denied the applications and this appeal followed.

The Hyde Amendment¹ "provides for the award of attorney's fees and [related litigation] costs to a prevailing criminal defendant who establishes that the position the government took in prosecuting him was vexatious, frivolous, or in bad faith." United States v. Gilbert, 198 F.3d 1293, 1296 (11th Cir. 1999). The criminal defendant bears the burden of proving this by a preponderance of the evidence, as well as establishing that he is otherwise qualified for the award under the law. See id.²

In Gilbert, this Court began its analysis of the Hyde Amendment with the words of the statute themselves, to wit:

"Vexatious" means "without reasonable or probable cause or excuse." A "frivolous action" is one that is "groundless . . . with little prospect of success; often brought to embarrass or annoy the defendant." Finally, "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."

Id. at 1298-99 (citations omitted). In Gilbert, the defendant's conviction in the underlying criminal case had been reversed because the statute of limitations had expired prior to his indictment. Id. at 1297. However, at that time, the issue of when the limitations period began to run for the charged offense was one of first impression not only in this Court, but also, with respect to the specific factual situation involved, in the country as a whole. This Court declined to hold "that prosecutors act in bad faith when they fail to anticipate how a court will decide an issue of first impression." Id. at 1303. At the same time, this Court made the following statement:

A defendant seeking Hyde Amendment fees and costs on the basis of a legal position the government took in prosecuting him must establish that the position was foreclosed by binding precedent or so obviously wrong as to be frivolous. Gilbert has not established that and he can not establish it. He is effectively foreclosed from doing so not only because a legal issue of first impression in this circuit was involved, but also by the fact that the district judge who presided at his trial accepted the government's statute of limitations position, the same position this Court later rejected in Gilbert I. Once a district court judge accepts the government's legal position it will be extremely difficult to persuade us that the issue was not debatable among reasonable lawyers and jurists, i.e., that it was frivolous.

Id. at 1304 (footnote omitted).

Here, in Adkinson I, this Court has already found that the government, "[w]ith full knowledge that it was contrary to recent and controlling precedent, . . . induced the grand jury" to charge in objectives 2-5 of Count I of the indictment that a bank-fraud conspiracy violated 18 U.S.C. 371. Adkinson I, 135 F.3d at 1374 (emphasis added). It further persuaded the district court to deny the Appellants' motion to dismiss the indictment which did not allege any crime under the existing law. The government did so on the future hope that this court would reverse the then existing precedent during the Appellants' trial, and willfully ignored Appellants' rights. In urging the trial court not to dismiss the indictment which concededly did not charge a crime, the government stated that the trial court should take:

the bold, high level, high risk approach, and that is to simply leave the indictment as is and if Hope [the controlling case] is sustained let them take it up on appeal and have it reversed. (emphasis added).

Id. at 1368-69.

Unlike our finding in Gilbert, this was not a case where the law was unclear and the district court accepted a viable legal argument on an "issue ...debatable among reasonable lawyers and jurists." 198 F.3d at 1304. The district court in this case knew that controlling precedent precluded prosecution.

The trial lasted five months; 115 witnesses generated more than 85 volumes, 17,500 pages of transcript and 1,447 exhibits. During these five months, defendants continuously objected to a mass of evidence on the grounds that it was all related to the non-crime with which they had been charged. "The district court, again upon the government's assurance that all the evidence was "inextricably intertwined" with the bank fraud conspiracy, allowed it under the government's "high risk" strategy." Adkinson I at 1369. As a result of these charges, during the government's case-in-chief, "[m]ountains of detail relevant only tangentially, if at all, to the ultimately charged scheme to defraud the IRS certainly must have confused the jury. Furthermore, under the circumstances of this case, this evidence obviously invited the jury to convict for conduct not, ultimately, even alleged to be a crime." Id. at 1372 (emphasis added). This Court also noted that the general rule that "misjoinder will not be found after the dismissal of a count in an indictment during trial" did not apply

where the count justifying the joinder was not alleged by the government in good faith, i.e., with the reasonable expectation that sufficient proof will be forthcoming at trial. Since the government in this case knew at the time the Indictment was obtained that no amount of evidence at trial would be sufficient to convict defendants of a Section 371 bank fraud conspiracy, these defendants were misjoined insofar as the joinder was predicated upon that conspiracy.

This misjoinder was not harmless. In a trial of this duration and size, guilt...