16‐3848‐cr
United States v. Larson
In the
United States Court of Appeals
for the Second Circuit
AUGUST TERM 2017
No. 16‐3848‐cr
UNITED STATES OF AMERICA,
Appellee,
v.
GERALD E. BOVE,
Defendant‐Appellant,
CARL A. LARSON, MICHAEL J. CAGGIANO, JEFFREY C. LENNON, GERALD
H. FRANZ, JR., JAMES L. MINTER, III, JEFFREY A. PETERSON, KENNETH
EDBAUER, GEORGE DEWALD, MICHAEL J. EDDY, THOMAS FREEDENBERG,
MARK N. KIRSCH,
Defendants.*
The Clerk of Court is directed to amend the caption to read as set forth
*
above.
On Appeal from the United States District Court
for the Western District of New York
ARGUED: DECEMBER 6, 2017
DECIDED: APRIL 26, 2018
Before: CABRANES, LIVINGSTON, and CARNEY, Circuit Judges.
The question in this case is whether the United States District
Court for the Western District of New York (William M. Skretny,
Judge) lawfully denied Defendant‐Appellant’s motion for attorney’s
fees and other litigation expenses pursuant to the Hyde Amendment
of 1997. We answer the question in the affirmative and therefore
AFFIRM the District Court’s Decision and Order of November 7,
2016.
MARY E. FLEMING, Assistant United States
Attorney (for James P. Kennedy, Jr., Acting
United States Attorney), United States
Attorney’s Office, Buffalo, NY, for Appellee.
2
MARK J. MAHONEY, Harrington & Mahoney,
Buffalo, NY, for Defendant‐Appellant.
JOSÉ A. CABRANES, Circuit Judge:
The question in this case is whether the United States District
Court for the Western District of New York (William M. Skretny,
Judge) lawfully denied Defendant‐Appellant’s motion for attorney’s
fees and other litigation expenses pursuant to the Hyde Amendment
of 1997. We answer the question in the affirmative and therefore
AFFIRM the District Court’s Decision and Order of November 7,
2016.
I. BACKGROUND
Defendant‐Appellant Gerald E. Bove (“Bove”) appeals the
District Court’s Decision and Order of November 7, 2016 denying his
application for reimbursement of attorney’s fees and other litigation
expenses pursuant to the Hyde Amendment. Bove submitted his
application after being acquitted by a jury of one count of attempted
Hobbs Act extortion and one count of Hobbs Act extortion
conspiracy in violation of 18 U.S.C. § 1951(a).
3
II. DISCUSSION
A. Standard of Review
Our Circuit has not yet decided the standard of review for
Hyde Amendment appeals. Virtually all other circuits have held that
the applicable standard is “abuse of discretion.”1
We join our sister circuits in holding that the standard of
review applicable to the appeal of a district court’s denial of a
defendant’s application for attorney’s fees and other litigation
expenses pursuant to the Hyde Amendment is indeed abuse of
discretion. We do so for the reasons given by the Fifth Circuit in
United States v. Truesdale, 211 F.3d 898, 905–06 (5th Cir. 2000).
1 See United States v. Terzakis, 854 F.3d 951, 953 (7th Cir. 2017); United States
v. Manzo, 712 F.3d 805, 809‐10 (3d Cir. 2013) (adopting the abuse‐of‐discretion
standard for the Third Circuit and citing Fourth, Fifth, Sixth, Eighth, Ninth, Tenth,
Eleventh, and D.C. Circuit authorities); United States v. Knott, 256 F.3d 20, 36 (1st
Cir. 2001) (applying the abuse‐of‐discretion standard pace Bove’s assertion that
Knott “clearly takes a de novo approach,” Reply Br. Def.‐Appellant 16). We recall
that “abuse of discretion” is a nonpejorative term of art; it implies no misconduct
on the part of the district court. See Dinler v. City of New York (In re City of New
York), 607 F.3d 923, 943 n.21 (2d Cir. 2010). The term simply describes the
circumstance in which “a district court base[s] its ruling on an erroneous view of
the law or on a clearly erroneous assessment of the evidence, or render[s] a
decision that cannot be located within the range of permissible decisions.” United
States v. Ghailani, 733 F.3d 29, 44 (2d Cir. 2013) (alteration in original) (internal
quotation marks omitted).
4
B. Merits
1. Law
The Hyde Amendment provides that a district court “may
award to a prevailing [criminal defendant] . . . 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.”2 Hyde Amendment 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.”3
To construe the Hyde Amendment properly, we consider the
ordinary meaning in context of “vexatious,” “frivolous,” and “in bad
faith.”4 We can look to the standard dictionaries for general
orientation.5
Pub. L. No. 105‐119, § 617, 111 Stat. 2440, 2519 (1997) (reprinted in 18
2
U.S.C. § 3006A, historical and statutory notes).
3 Id. The statute’s mention of “the procedures and limitations” of 28 U.S.C.
§ 2412 refers to the current version of the Equal Access to Justice Act, Pub. L. No.
96‐481, 94 Stat. 2321, 2325. For discussion of some of these procedures and
limitations, see United States v. True, 250 F.3d 410, 419–22 (6th Cir. 2001).
See Asgrow Seed Co. v. Winterboer, 513 U.S. 179, 187 (1995) (“When terms
4
used in a statute are undefined, we give them their ordinary meaning.”); see also
Hayden v. Pataki, 449 F.3d 305, 314–15 (2d Cir. 2006) (en banc).
See, e.g., Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 566–68 (2012)
5
(reviewing dictionaries in use at the time of the enactment of a statute to help
5
Vexatious: In a legal context, “vexatious” is used to
describe an action “instituted without sufficient grounds
for the purpose of causing trouble or annoyance to the
defendant.”6
Frivolous: The word “frivolous,” used to describe
pleadings, is defined as “[m]anifestly insufficient or
futile”7—in other words, obviously lacking a “basis in
law or fact.”8
In bad faith: An act is “in bad faith” if it is intentionally
deceptive or dishonest. The Oxford English Dictionary
determine the ordinary meaning of a statutory term); United States v. Connolly, 552
F.3d 86, 90 & n.3, 92 (2d Cir. 2008) (same). For helpful cautionary advice about the
use of dictionaries in statutory interpretation, see also United States v. Costello, 666
F.3d 1040, 1043–44 (7th Cir. 2012).
Vexatious, Oxford English Dictionary (2d ed. 1989); see also Vexatious,
6
Webster’s Third New International Dictionary (1961) (“lacking justification and
intended to harass”).
7 Frivolous, Oxford English Dictionary, supra.
8 Frivolous, Webster’s Third New International Dictionary, supra. Black’s Law
Dictionary notes that “frivolous” also has a connotation of subjectivity. It defines a
“frivolous claim” as “[a] claim that has no legal basis or merit, esp. one brought
for an unreasonable purpose such as harassment.” Frivolous claim, Black’s Law
Dictionary (10th ed. 2014).
6
refers to “faithlessness” and “treachery” in defining the
term.9
These words are all used in the Hyde Amendment to qualify
another term: “the position of the United States.” We understand
“position” to mean here the government’s general litigation stance:
its reasons for bringing a prosecution, its characterization of the facts,
and its legal arguments.10
Using these definitions, we can sketch out a provisional
construction of the phrase “vexatious, frivolous, or in bad faith”
along the following lines.11 For the government’s position to be
See Bad faith, Black’s Law Dictionary, supra (“Dishonesty of belief, purpose,
9
or motive.”); Faith, n., Oxford English Dictionary, supra (“bad faith: faithlessness,
treachery; intent to deceive”).
10 Cf. Position of the United States, Black’s Law Dictionary, supra (“The legal
position of the federal government in a lawsuit, esp. in a case involving the Equal
Access to Justice Act.”). The Hyde Amendment apparently borrowed the phrase
“position of the United States” from the Equal Access to Justice Act § 204(a), 94
Stat. at 2328 (codified in relevant part as amended at 28 U.S.C. § 2412(d)(1)). See
United States v. Gilbert, 198 F.3d 1293, 1300 (11th Cir. 1999) (explaining that the
Hyde Amendment was modeled on the Equal Access to Justice Act). The phrase
cannot mean precisely the same thing in both provisions, however, since in its
current form the Equal Access to Justice Act defines “position of the United
States” to mean both “the position taken by the United States” in a civil
proceeding and “the action or failure to act by the agency upon which the civil
action is based,” 28 U.S.C. § 2412(d)(2)(D); neither applies exactly in a criminal
prosecution.
As we observed in a previous opinion interpreting the Hyde
11
Amendment, we “need not parse the precise meaning of the words ‘vexatious,’
‘frivolous,’ and ‘in bad faith’ because . . . [the defendant’s] case clearly falls short
7
“vexatious, frivolous, or in bad faith,” the prosecution must have
been brought (a) to hector or intimidate the defendant on shaky
factual or legal grounds (vexatious); (b) without even a reasonably
arguable factual and legal basis (frivolous); or (c) with an element of
intentional deceit or dishonesty (in bad faith).12
2. Analysis
Bove’s principal arguments in support of his application, all of
which the District Court rejected, can be summarized under three
headings: (a) that the legal theory of the prosecution was clearly
erroneous; (b) that the prosecution’s evidence was insufficient; and
(c) that the government committed misconduct.
of the type of abusive prosecutorial conduct that would trigger Hyde Amendment
liability.” United States v. Schneider, 395 F.3d 78, 86 (2d Cir. 2005).
12 The legislative history of the Hyde Amendment—reviewed at length in
Gilbert, 198 F.3d at 1299–1302—confirms that the standard for awarding attorney’s
fees is intentionally demanding. As originally drafted, the Hyde Amendment
would have allowed an award of attorney’s fees to any prevailing criminal
defendant unless the government proved that its position was “substantially
justified.” Id. at 1300. A conference committee replaced this language after the
original draft of the Hyde Amendment met with staunch opposition from the
Department of Justice, the Clinton Administration, and some members of
Congress; opponents feared that the government would have to waste resources
justifying itself in court every time it lost a criminal prosecution. Id. at 1300–02.
The conference committee also rejected proposed replacement language—which
would have allowed an award of attorney’s fees for a failed prosecution brought
“without foundation”—out of fear that the new wording was too favorable to
prevailing defendants. See id. at 1302.
8
a. Erroneous Legal Theory
Bove argues that the government’s case against him was
“frivolous and vexatious”13 because the prosecution’s theory of the
Hobbs Act was “contrary to clear law and [the District Court’s]
rulings in the same case.”14
The Hobbs Act prescribes criminal punishment for “[w]hoever
. . . obstructs, delays, or affects commerce . . . by robbery or extortion
or attempts or conspires so to do, or commits or threatens physical
violence to any person or property in furtherance of a plan or
purpose to do anything in violation of this section.”15 Extortion,
under the Hobbs Act, is “the obtaining of property from another,
with his consent, induced by wrongful use of actual or threatened
force, violence, or fear, or under color of official right.”16 In cases
involving union activity, the conduct proscribed by the Hobbs Act
includes the use of extortion “to exact ‘wage’ payments from
employers in return for imposed, unwanted, superfluous and
fictitious services of workers.”17
13 Br. & Special App. Def.‐Appellant 33 (internal quotation marks omitted).
14 Id. at 29.
15 18 U.S.C. § 1951(a).
16 Id. § 1951(b)(2).
United States v. Enmons, 410 U.S. 396, 400 (1973) (internal quotation
17
marks omitted).
9
The government’s unsuccessful prosecution of Bove relied on a
novel theory of the Hobbs Act, derived mainly from language in
United States v. Mulder.18 According to this theory, “unwanted,
superfluous and fictitious” labor includes labor that an employer
wants to be performed—and that is therefore not “superfluous”—but
that he wants performed by nonunion workers instead of union
workers. A person can thus violate the Hobbs Act under this theory
by using extortion to “replac[e] non‐union workers with union
workers,”19 even when the labor at issue is not “unwanted,
superfluous,” or “fictitious.”
The government’s position cannot have been vexatious.
Vexatiousness requires some wrongful, harassing purpose; nothing
in the record suggests to us that prosecutors adopted the theory for
the purpose of vexing or harassing Bove.
Nor was the theory so baseless as to make the government’s
position frivolous. No precedent had expressly adopted the
government’s theory. But no precedent in our Circuit definitely
foreclosed the theory either. A cursory reading of this Court’s
opinion in Mulder arguably lends some support to the theory; the
opinion discusses the replacement of some workers by others at the
18 273 F.3d 91 (2d Cir. 2001). See also United States v. Kirsch, No. 07‐CR‐304S
(6), 2015 WL 1472122, at *3–5 (W.D.N.Y. Mar. 31, 2015) (discussing the
government’s theory in the case before us).
19 Kirsch, 2015 WL 1472122, at *4.
10
instigation of a labor organization.20 The essential difference between
Mulder and this case, however, is that in Mulder the employer had not
wanted to hire either the original workers or their replacements.
None of the workers in question was performing labor that the
employer actually needed performed.
Bove is admittedly correct that the District Court eventually
held the government’s theory to be an erroneous interpretation of the
Hobbs Act. But the District Court drew this conclusion only in 2015,
several years after the failed prosecution of Bove, in a decision
concerning one of Bove’s codefendants.21 During the proceedings
against Bove, the District Court instead considered and denied
Bove’s motion to dismiss the indictment on the ground that the
government’s theory was erroneous.22
We note, furthermore, the District Court’s finding that the
government’s theory was approved both by superiors within the
United States Attorney’s Office for the Western District of New York
and by labor racketeering experts at the Criminal Division of the
United States Department of Justice.23
20 See 273 F.3d at 111.
21 See Kirsch, 2015 WL 1472122, at *4–5.
22 See United States v. Larson, 807 F. Supp. 2d 142, 151–59 (W.D.N.Y. 2011).
See United States v. Bove, No. 07‐cr‐3045, 2016 WL 6573838, at *7
23
(W.D.N.Y. Nov. 7, 2016). The mere fact that Justice Department officials in Buffalo
and in Washington, D.C. approved the prosecution’s theory is neither sufficient,
since multiple lawyers in multiple cities can endorse a frivolous position, nor
11
Under these circumstances—no controlling precedent
definitely foreclosed the government’s theory, and some language in
our case law arguably supported it;24 the District Court considered
and originally rejected a challenge to the theory; and the prosecution
consulted with informed superiors, including with experts in the
relevant area of law—the theory of prosecution cannot have made
the government’s position frivolous. An arguable theory is not a
frivolous theory.
b. Insufficient Evidence
Bove also argues that the government’s position was in “bad
faith”25 because the prosecution’s evidence was insufficient. The
government’s “only”26 evidence against him, he says, was the grand
jury testimony of witness Phillip Hale that contradicted Hale’s earlier
necessary for the government to prevail in a Hyde Amendment appeal. We do not
require prosecutors to solicit the views of Justice Department officials in
Washington, D.C. to avoid exposing the government to Hyde Amendment
liability if the prosecution does not succeed.
Cf. United States v. Adkinson, 247 F.3d 1289, 1292 (11th Cir. 2001)
24
(concluding that the district court had abused its discretion by denying a Hyde
Amendment application in a case in which the government had prosecuted the
applicant under a theory that “was contrary to recent and controlling precedent”
(emphasis in original)).
25 E.g., Br. & Special App. Def.‐Appellant 16.
26 Id. at 16.
12
statements to investigators. According to Bove, the government thus
knew or should have known that that testimony was “not credible.”27
We held in United States v. Schneider that a prosecution is not
vexatious, frivolous, or in bad faith simply because a witness whose
testimony directly inculpates the defendant is arguably not credible.28
This case falls under that holding. Hale’s credibility was a matter for
the jury. To support his claim that Hale’s testimony was not credible,
Bove alleged in the District Court that Hale had made two earlier
statements that contradicted his grand jury testimony. The
government, for its part, opposed the Hyde Amendment motion; it
submitted an affidavit contesting Bove’s assertions that Hale’s
testimony was inherently unreliable and that the testimony was the
only evidence of Bove’s guilt.29 Judged in light of Schneider, the
District Court did not “abuse its discretion” by rejecting Bove’s claim
on this point.30
27 Id. at 17.
28 395 F.3d at 87.
The government asserted in its affidavit that it also presented a video
29
and the testimony of a second witness at trial, among other evidence.
30 In any event, even if the evidence against Bove had been objectively
insufficient, the government’s position would not necessarily have been in bad
faith, as Bove suggests. To prove bad faith, Bove would need to have shown that
the government had acted dishonestly or deceptively. Presenting a losing case is
not in itself an act of bad faith.
13
c. Prosecutorial Misconduct
Bove further argues that the government’s position was in
“bad faith”31 and “vexatious”32 because of several alleged instances of
prosecutorial misconduct.
One alleged instance is the government’s decision not to
inform the grand jury of certain of Hale’s earlier statements that Bove
says contradicted Hale’s grand jury testimony and undermined
Hale’s credibility. Yet even if Hale’s earlier statements were indeed
exculpatory, the government had no duty to present exculpatory
evidence to the grand jury.33
Bove also argues that the government “sandbagged” him by
failing to disclose Hale’s testimony until trial or until shortly before
trial. We are unable to conclude, however, that the government’s
disclosure of the evidence in question was untimely. A district court
is required to grant a defendant’s motion to order disclosure of such
evidence, commonly referred to as “3500 material” or “Jencks Act
material,” only at the close of a witness’s direct examination at trial.34
In this case, as the District Court observed, the government disclosed
the evidence with which Bove says he was “sandbagged” well before
31 E.g., Br. & Special App. Def.‐Appellant 11–12.
32 E.g., id. at 13.
33 See United States v. Williams, 504 U.S. 36, 52–53 (1992).
34 See 18 U.S.C. § 3500(b).
14
trial, on January 17, 2014. Hale was not scheduled to testify until the
first week of February 2014.
Bove has further asserted, to support his argument of
prosecutorial misconduct, that the grand jury “expressly rejected” the
government’s Hobbs Act theory.35 Even if a grand jury were entitled
to interpret statutes, we cannot find any evidence in the record to
support Bove’s assertion.
We conclude that the District Court did not “abuse its
discretion” by rejecting Bove’s assertions of prosecutorial
misconduct.
III. CONCLUSION
In summary, we hold as follows:
(1) the standard of review applicable to a denial of a Hyde
Amendment application is “abuse of discretion”; and
(2) the District Court did not abuse its discretion by denying
Bove’s application and concluding that the position of the
United States was not vexatious, frivolous, or in bad faith,
since no controlling precedent foreclosed the government’s
35 Defendant Gerald Bove’s Reply to Response: Application for Attorney’s
Fees and Expenses Under the Hyde Amendment (Pub.L. 105‐119, Title VI, §617) at
8, United States v. Larson, No. 1:07‐cr‐00304‐WMS‐HBS‐8 (W.D.N.Y. May 15, 2014),
ECF No. 651 (emphasis in original); see also Br. & Special App. Def.‐Appellant 28–
29.
15
theory of prosecution and some language in our case law
arguably supported it, and since Bove’s other arguments
against the government’s case, including those not
expressly addressed above, are meritless.
We therefore AFFIRM the District Court’s Decision and Order
of November 7, 2016.
16