U.S. v. Horn

Decision Date03 May 1994
Docket NumberNo. 93-2041,93-2041
Citation29 F.3d 754
PartiesUNITED STATES of America, Appellant, v. Richard A. HORN, et al., Defendants, Appellees. . Heard
CourtU.S. Court of Appeals — First Circuit

Ellen R. Meltzer, Sp. Counsel, Fraud Section, U.S. Dept. of Justice, Washington, DC, with whom Peter E. Papps, U.S. Atty., Concord, NH, and Alexander Weir III, Trial Atty., U.S. Dept. of Justice, Washington, DC, were on brief, for U.S.

Christopher R. Goddu and Peter G. Callaghan, with whom James M. Costello, Robert E. McDaniel, Devine, Millimet & Branch P.A., Manchester, NH, Steven M. Gordon, Shaheen, Cappiello, Stein & Gordon, Concord, NH, William E. Brennan, Timothy I. Robinson, and Brennan, Caron, Lenehan & Iacopino, Manchester, NH, were on consolidated brief, for appellees.

Before SELYA, Circuit Judge, BOWNES, Senior Circuit Judge, and BOUDIN, Circuit Judge.

SELYA, Circuit Judge.

We decide today a question of first impression: Do principles of sovereign immunity bar a federal district court, exercising its supervisory power, from assessing attorneys' fees and costs against the federal government in a criminal case? We answer this question affirmatively and, therefore, annul the district court's fee-shifting orders.


This appeal arises out of unpardonable misconduct committed by a federal prosecutor who should have known better. The factual background of the criminal case in which the misconduct occurred--a multi-defendant prosecution for, inter alia, conspiracy to defraud a federally insured financial institution--is memorialized in a recent opinion of this court. See United States v. Lacroix, 28 F.3d 223, 225-226 (1st Cir.1994). The facts pertaining to the misconduct are recounted in the opinion below. See United States v. Horn, 811 F.Supp. 739, 741-44, 748-51 (D.N.H.1992). For purposes of deciding the abstract question of law that confronts us today, we largely omit the former set of facts, and limn the latter in less than exegetic detail.

In mid-1992, a federal grand jury returned a 102-count indictment against seven individuals allegedly involved in a conspiracy to market and sell newly constructed homes by fraudulent means. The indictment charged violations of 18 U.S.C. Secs. 371, 1014 and 1344. The prosecutors who controlled the case were members of the Justice Department's "New England Bank Fraud Task Force," so called. The defendants, none of whom were indigent, obtained counsel at their own expense.

During pretrial proceedings, the government made more than 10,000 documents available for inspection at the Boston office of Aspen Systems, an independent document management firm retained by the Task Force. On November 9, 1992, an attorney representing defendants Matthew Zsofka, John Lee, and Evangelist Lacroix visited the document repository to search for papers that might prove helpful in cross-examination. A government paralegal volunteered to have a member of Aspen's clerical staff photocopy any document that caught the lawyer's eye. The attorney accepted the offer. When the paralegal mentioned this undertaking to the lead prosecutor, she was instructed to have the Aspen employee make an extra copy of each defense-selected document for the government's edification. Defense counsel was not informed of this added flourish.

To paraphrase the Scottish poet, the best-laid schemes of mice and prosecutors often go awry. Cf. Robert Burns, To a Mouse (1785). When the photocopying of desired documents took longer than seemed reasonable, the defense attorney smelled a rat. A cursory investigation uncovered the prosecution's experiment in duplicitous duplication. The lawyer promptly demanded that the government return its copies of the papers culled by the defense. When his demand fell on deaf ears, he immediately drafted a motion to seal, filed the motion with the district court, and served it before the close of business that day.

At this delicate juncture, the lead prosecutor poured kerosene on a raging fire. 1 She did not passively await the court's ruling on the motion, but, instead, during the three days that elapsed before the district court took up the motion, the prosecutor reviewed the surreptitiously duplicated documents, discussed them with two of her subalterns, and used them to prepare a key prosecution witness (in the presence of a second possible witness). Thus, by November 13, 1992, when the court granted the motion to seal and explicitly instructed the lead prosecutor not to make further use of the papers singled out by the defense or take further advantage of the situation, appreciable damage already had been done.

The lead prosecutor then made a bad situation worse. Two pages mysteriously disappeared from the lead prosecutor's cache of ill-gotten documents before the set was submitted to the district court for sealing. And in direct defiance of the court's order, the lead prosecutor prepared a complete new set for her own use. Adding insult to injury, she next signed an affidavit of somewhat questionable veracity. Finally, when she appeared before the district court to discuss the bizarre game she had been playing, she made a series of inconsistent statements evincing what the court charitably called a "lack of candor." Horn, 811 F.Supp. at 749, 750 n. 4.

From the outset, defendants Zsofka, Lee, and Lacroix had mounted a cooperative defense. Thus, the three of them were equally vulnerable to the misconduct that occurred. Not surprisingly, the trio moved to dismiss the case on the ground of prosecutorial misconduct. 2 The government objected. In evaluating the motions, the lower court ruled that the current selection during the discovery phase of a pending case offers insight into counsel's thoughts, and, therefore, constitutes privileged work product. See id. at 745-47 (citing In re San Juan Dupont Plaza Hotel Fire Litig., 859 F.2d 1007 (1st Cir.1988)). After rejecting the government's argument that the privilege had been waived, the court determined that the lead prosecutor, by furtively copying and thereafter reviewing the selected documents, crossed the ethical line. The court further ruled that this prosecutorial misconduct not only violated the defendants' work-product privilege, but also abridged their Fifth Amendment right to due process and their Sixth Amendment right to effective assistance of counsel. See id. at 747-52.

Finding prejudice, but not a stain so indelible as to justify dismissing the indictment, see id. at 751, the court stitched together a serviceable fabric of narrowly tailored remedies, see id. at 751-52. The court ordered the government to provide the defense with summaries of its witnesses' testimony and lists of its exhibits; permit the defense to depose the two potential witnesses who had been exposed to the bootleg documents; refrain from referring at trial to the substance of the documents except in response to defense references; and remove the lead prosecutor from the case. See id. at 752. Additionally, the court referred the lead prosecutor to the disciplinary committees of her two bar associations, and, in the portion of its order that sparked the current controversy, the court directed the government to pay the fees and costs incurred by the defendants in litigating the misconduct issue. See id. Although the court's original order was inexplicit concerning the source of its authority to assess fees and costs, the court, in denying the government's motion to reconsider, explained that it grounded this sanction in the judiciary's supervisory power. See id. at 753-54.

Zsofka, Lee, and Lacroix stood trial early in 1993. They were each convicted on at least one count, and were sentenced in July. 3 On August 18, 1993, the district court quantified its earlier order, assessing a grand total of $46,477.80 in fees and costs. The other sanctions have been carried out and the defense no longer presses the claim that the district court should have dismissed the indictment. Hence, all that remains of the case is the government's appeal from the assessment of fees.

The government contests the award chiefly on the ground that it is prohibited by principles of sovereign immunity. 4 Extracted from its complicated factual predicate, drained of rancor, and separated from other, essentially extraneous disputes, this appeal requires us to serve as the dispatcher at a crossing where two powerful engines--the judiciary's supervisory power and the government's sovereign immunity--are on a collision course.


In ascertaining what happens when doctrines clash, derivation frequently becomes important. Thus, we turn to this task.

A. Supervisory Power.

Supervisory power, sometimes known as inherent power, encompasses those powers which, though "not specifically required by the Constitution or the Congress," United States v. Hasting, 461 U.S. 499, 505, 103 S.Ct. 1974, 1978, 76 L.Ed.2d 96 (1983), are nonetheless "necessary to the exercise of all others," Roadway Express, Inc. v. Piper, 447 U.S. 752, 764, 100 S.Ct. 2455, 2463, 65 L.Ed.2d 488 (1980) (quoting United States v. Hudson, 11 U.S. (7 Cranch) 32, 34, 3 L.Ed. 259 (1812)). See generally United States v. Santana, 6 F.3d 1, 9-10 (1st Cir.1993).

Although the doctrine's ancestry can be traced to the early days of the Republic, see, e.g., Hudson, 11 U.S. at 34; see also Ex parte Robinson, 86 U.S. (19 Wall.) 505, 510, 22 L.Ed. 205 (1873) (observing that the "moment the courts of the United States were called into existence ... they became possessed of [inherent] power"), a full-scale genealogical dig would serve no useful purpose. It suffices to say that the doctrine emerged in modern form roughly a half-century ago, see McNabb v. United States, 318 U.S. 332, 341, 63 S.Ct. 608, 613, 87 L.Ed. 819 (1943), and it has since developed most robustly in the area of criminal procedure, see Sara Sun Beale, Reconsidering Supervisory Power in Criminal...

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