U.S. v. Gilbert

• Decision Date: 28 December 1999
• Docket Number: No. 98-3635,98-3635
• Citation: 198 F.3d 1293
• Parties: (11th Cir. 1999) UNITED STATES of America, Plaintiff-Appellee, v. Richard L. GILBERT, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1293

198 F.3d 1293 (11th Cir. 1999)

UNITED STATES of America, Plaintiff-Appellee, v. Richard L. GILBERT, Defendant-Appellant.

No. 98-3635.

United States Court of Appeals, Eleventh Circuit.

Dec. 28, 1999.

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Appeal from the United States District Court for the Northern District of Florida.

(No. 3:96-CR-47/LAC), Lacey A. Collier, J.

Before CARNES and BARKETT, Circuit Judges, and PAINE^*, Senior District Judge.

CARNES, Circuit Judge:

This appeal requires us to address issues of first impression involving the Hyde Amendment, which provides for the award of attorney fees and costs to a prevailing criminal defendant who establishes that the position the government took in prosecuting him was "vexatious, frivolous, or in bad faith ... unless special circumstances make such an award unjust." Pub.L. No. 105-119, 111 Stat. 2440, 2519 (1997) (reprinted in 18 U.S.C. 3006A, historical and statutory notes).

Richard L. Gilbert was convicted of fraudulently concealing assets in a bankruptcy and sentenced to 33 months imprisonment, fined $60,000, and ordered to pay $337,000 in restitution. A panel of this Court reversed the conviction, because it concluded that the statute of limitations had expired before the indictment was returned. See United States v. Gilbert, 136 F.3d 1451 (11th Cir.1998) ("Gilbert I"). Gilbert subsequently filed a motion in the district court seeking an award of attorney fees and costs under the Hyde Amendment. After the district court denied that motion, Gilbert filed this appeal.

I. BACKGROUND

In 1985, Gilbert was the president and sole shareholder of Corporate Air Limited, Inc. ("CAL"), a Florida corporation. On March 25, 1985, Gilbert, acting both for CAL and for its realtor, Destin Resort Properties, Inc., executed an offer to purchase Robinson Island, an undeveloped island near Gulf Shores, Alabama. Because CAL did not have the money to make the down payment, it borrowed the money from two banks. In April 1985, CAL assigned the purchase contract to Isle of Fantasy, Inc. ("Isle of Fantasy"), a newly formed Florida corporation then solely owned by Gilbert. CAL wrote a check to Isle of Fantasy in the amount of $162,000 with a notation on the check indicating it was a "loan," and Isle of Fantasy used the money to purchase Robinson Island. Over the following year, CAL contributed an additional $380,000 to Isle of Fantasy for purchasing Robinson Island.

In March 1987, Gilbert filed on behalf of CAL a Chapter 11 petition seeking bankruptcy protection. He employed Charles Carter, a bankruptcy attorney, to prepare CAL's bankruptcy schedules. Carter listed the money loaned from CAL to Isle of Fantasy under the "receivables" category on the schedules. The schedules did not reveal the full extent of Gilbert's interest in Isle of Fantasy or Robinson Island, nor did they reveal that CAL had paid Gilbert money toward the purchase of Robinson Island. On December 1, 1987, the bankruptcy court converted the case to a Chapter 7 proceeding.

In December 1995, Gilbert learned that a grand jury had been convened to consider evidence regarding allegations that he concealed assets in the CAL bankruptcy. Gilbert's counsel scheduled an appointment with the Assistant United States Attorney assigned to the investigation of Gilbert and provided a seven page single-spaced letter dated January 11, 1996, which argued, among other things, that the statute of limitations precluded any prosecution of Gilbert.

On July 18, 1996, the grand jury returned a one count indictment, charging that Gilbert fraudulently concealed assets from CAL's bankruptcy estate. Gilbert filed a motion to dismiss the indictment on the grounds that the statute of limitations had run. The district court denied Gilbert's motion to dismiss. Thereafter, in November of 1996, a jury found Gilbert guilty as charged. The court sentenced him to 33 months imprisonment to be followed by three years supervised release and fined him $60,000. The court also ordered Gilbert to pay restitution in the amount of $337,000.

Gilbert appealed and this Court reversed his conviction, holding that the statute of limitations had expired prior to his indictment. See Gilbert I, 136 F.3d 1451. Specifically, we concluded that the five-year statute of limitations had begun to run on December 1, 1987, when the bankruptcy court converted the matter involving CAL from a Chapter 11 to a Chapter 7 proceeding, and therefore the limitations period had expired on December 1, 1992, well before Gilbert was indicted in June 1996. See id. at 1455.

After the reversal of his conviction, Gilbert filed a motion with this Court requesting an award of attorney fees and costs pursuant to the Hyde Amendment, Pub.L. No. 105-119, 111 Stat. 2440, 2519 (1997) (reprinted in 18 U.S.C. 3006A, historical and statutory notes). We denied Gilbert's motion without prejudice to renewal of it in the district court. Gilbert then filed a motion for award of attorney fees and costs in the district court, which that court denied.

Now the case is back before us in Gilbert's appeal of the district court's denial of his motion for the award of attorney fees and costs under the Hyde Amendment. Gilbert contends he is entitled to such an award because the government's position in prosecuting him was "vexatious, frivolous, or in bad faith." His claim is based primarily upon his belief that: (1) the government did not have a good faith basis for charging him in light of the statute of limitations; (2) the government did not give the grand jury exculpatory evidence relating to the disclosure of his interest in Robinson Island or the statute of limitations; and (3) the government recorded criminal liens against Gilbert's property in Pinellas and Pasco counties, three months after this Court reversed his conviction and ordered the indictment dismissed.

II. STANDARD OF REVIEW

The Hyde Amendment provides that an award of attorney fees "shall be granted pursuant to the procedures and limitations (but not the burden of proof) provided for an award under [the Equal Access to Justice Act]." Pub.L. No. 105-119, 111 Stat. 2440, 2519 (1997) (reprinted in 18 U.S.C. 3006A, historical and statutory notes). Under the Equal Access to Justice Act, a denial of attorney 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); Andrews v. United States, 122 F.3d 1367, 1374 (11th Cir.1997). That is also the standard of review applicable to attorney fee matters generally. See American Civil Liberties Union of Georgia v. Barnes, 168 F.3d 423, 427 (11th Cir.1999). Accordingly, we will review a district court's denial of Hyde Amendment fees and costs only for an abuse of discretion. "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. (quoting In re Hillsborough Holdings Corp., 127 F.3d 1398, 1401 (11th Cir.1997) (internal citation and quotation omitted)).

III. DISCUSSION

We begin our construction of the Hyde Amendment where courts should always begin the process of legislative interpretation, with the words of the statutory provision themselves. See United States v. Steele, 147 F.3d 1316, 1318 (11th Cir.1998) (en banc) ("In construing a statute we must begin, and often should end as well, with the language of the statute itself.") (quoting Merritt v. Dillard, 120 F.3d 1181, 1185 (11th Cir.1997)).

A. The Statutory Language

The Hyde Amendment was enacted as part of P.L. 105-119, the $31.8 billion Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act of 1998, and is found as a statutory note to 18 U.S.C. 3006A. It provides as follows:

During fiscal year 1998 and in any fiscal year thereafter, the court, in any criminal case (other than a case in which the defendant is represented by assigned counsel paid for by the public) pending on or after the date of the enactment of this Act [Nov. 26, 1997], may award to a prevailing party, other than the United States, a reasonable attorney's fee and other litigation expenses, 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. Such awards shall be granted pursuant to the procedures and limitations (but not the burden of proof) provided for an award under section 2412 of title 28, United States Code. To determine whether or not to award fees and costs under this section, the court, for good cause shown, may receive evidence ex parte and in camera (which shall include the submission of classified evidence or evidence that reveals or might reveal the identity of an informant or undercover agent or matters occurring before a grand jury) and evidence or testimony so received shall be kept under seal. Fees and other expenses awarded under this provision to a party shall be paid by the agency over which the party prevails from any funds made available to the agency by appropriation. No new appropriations shall be made as a result of this provision.

Pub.L. No. 105-119, 111 Stat. 2440, 2519 (1997) (reprinted in 18 U.S.C. 3006A, historical and statutory notes) (emphasis added). The key language requires a successful criminal defendant to establish that the position the government took in the prosecution was "vexatious, frivolous, or in bad faith." Those words are not defined in the statute, so they "must be given their ordinary meaning." Chapman v. United States, 500 U.S. 453, 462, 111 S.Ct. 1919, 1925, 114 L.Ed.2d 524 (1991).

"Vexatious" means "without reasonable or probable cause or excuse." Black's Law Dictionary 1559 (7th ed.1999); see also Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421, 98 S.Ct. 694, 700, 54 L.Ed.2d 648 (1978) (des...