United States v. Knott

United States Court of Appeals
For the First Circuit

No. 00-2238
No. 00-2239

UNITED STATES OF AMERICA,

Appellant and Cross-Appellee,

v.

JAMES M. KNOTT, SR.; RIVERDALE MILLS CORP.,

Defendants, Appellees and Cross-Appellants.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before

Torruella, Circuit Judge,
Cyr, Senior Circuit Judge,
and Lynch, Circuit Judge.

John L. Smeltzer, Trial Attorney, Environment & Natural Resources
Division, United States Department of Justice, with whom John C.
Cruden, Acting Assistant Attorney General, Patty Merkamp Stemler, Trial
Attorney, Criminal Division, and David M. Uhlmann and Jared Goldstein,
Trial Attorneys, Environment & Natural Resources Division, were on
brief, for appellant and cross-appellee.

Warren G. Miller, with whom Henry T. Dunker and Jamy B. Buchanan
were on brief, for appellees and cross-appellants.
 July 12, 2001

LYNCH, Circuit Judge. This is a case of first

impression for this court as to the standards for awarding

attorneys' fees against the United States for its initiation of

criminal proceedings, as provided for under the Hyde Amendment,

Pub.L. No. 105-119, 111 Stat. 2440, 2519 (1997), reprinted in 18

U.S.C. § 3006A (statutory note). The district court awarded

$68,726.00 in fees to Riverdale Mills, which had been one

defendant in a criminal prosecution for violation of the Clean

Water Act, and denied fees to James Knott, the other defendant.

The government voluntarily dismissed the action after the

district court suppressed some of the prosecution’s evidence.

The district court awarded fees on the grounds that the

government’s prosecution was "vexatious." We reverse the award

of fees to Riverdale Mills and affirm the denial of fees to

Knott.

I.

Riverdale Mills Corporation and its principal owner,

James Knott, operate a plant in Northbridge, Massachusetts, that

manufactures plastic-coated steel wire mesh. The production

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involves two processes, one producing rather acidic wastewater,

and the other producing quite caustic (i.e., alkaline)

wastewater. Riverdale Mills ultimately discharges this

industrial waste into the public sewer owned by the Town of

Northbridge.

The Clean Water Act prohibits the indirect discharge

of pollutants into the waters of the United States through

publicly owned treatment works. 33 U.S.C. § 1317(b)(1). The

implementing regulations for the Act prohibit the discharge of

wastewater with a pH below 5.0 standard units ("s.u.")1 into

publicly owned sewer systems. 40 C.F.R. § 403.5(b)(2). Any

person who "knowingly" violates these standards is subject to

felony prosecution. 33 U.S.C. § 1319(c)(2)(A).

Riverdale Mills's state permit for discharging its

waste into the public sewer states that Riverdale Mills will

ensure that the wastewater falls within acceptable limits by

1 The term pH stands for a measure of acidity and
alkalinity on a logarithmic scale from 0 to 14, with 7.0
representing neutrality, numbers below 7 representing increasing
degrees of acidity, and numbers above 7 representing increasing
alkalinity. Each whole number step away from 7 represents a
ten-fold increase in acidity or alkalinity, such that a sample
with a pH of 4.0 s.u. is ten times more acidic than a sample
with a pH of 5.0 s.u., and so forth.

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combining the two streams inside the plant so that the caustic

water neutralizes the acidic water, and then further

neutralizing the waste by adding a caustic soda. Following this

pretreatment, on the design in the permit, the now-combined

wastewaters would flow intermittently through an effluent pipe

to a manhole outside the building on Riverdale Street (Manhole

#1), where it joins a sewer pipe. The discharge then would flow

through that sewer pipe approximately 100 yards to a second

manhole (Manhole #2), where the pipe joins the public sewer

line.

Acting on an anonymous tip that this pretreatment

system was not in operation, two EPA civil inspectors went to

Riverdale Mills for an unannounced inspection on October 21,

1997. The district court determined that Knott consented to the

inspection, but determined on disputed facts that his consent

was qualified by the express condition that the EPA inspectors

be accompanied by Riverdale Mills representatives during the

entire course of their inspection. Knott then accompanied the

inspectors to Manhole #1, where they took two initial samples

(neither below pH 5.0 s.u.) and observed only an intermittent

discharge. Because of the intermittent nature of the discharge

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flow, the inspectors then allegedly informed Knott that they

would have to conduct periodic sampling throughout the day. The

group then embarked on a tour of the facility, during which the

EPA inspectors discovered that, contrary to Knott's alleged

statement that morning, the wastewater treatment facility at

Riverdale Mills was not in operation. Apparently, the two

wastewater streams were not being mixed in the treatment

facility as intended because a valve was turned to the wrong

position, and also the tank where caustic soda was to be added

to the wastewater was being bypassed.

In the early afternoon, the inspectors returned to

Manhole #1, on the street in front of the plant and in the plain

view of Riverdale Mills employees. There they took a series of

samples, and those additional samples yielded pH readings

ranging from 2.19 to 7.48 s.u., with thirteen of the fourteen

samples showing extremely low pH readings (between 2.19 and 2.59

s.u.).2 The district court determined that the EPA inspectors

were not accompanied by a Riverdale Mills representative for

2 Riverdale Mills disputes the log of these samples,
arguing that the readings were actually in the "7" range, but
that the number "7" originally written in the log was
subsequently altered to appear to be a "2."

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this sampling. The inspectors then returned to the plant and a

Riverdale Mills employee completed their tour of the facilities.

The EPA inspectors also gave a split sample from one of their

afternoon samples to the employee, who signed the chain of

custody form for it. At the EPA’s closing conference with

Knott, they discussed the low pH discharges, and Knott informed

the EPA inspectors that he owned Riverdale Street and he claimed

ownership of the sewer line under the street.

After leaving the plant, the EPA inspectors went to

Manhole #2. This is where the "private" sewer line joined the

municipal line, according to Knott's statement at the meeting.

There the inspectors noted a second residential sewer line also

joined at the manhole, seven feet below the Riverdale Mills

line. Accordingly, they took three different samples at this

site. One was from the discharge of the residential line, which

the EPA says yielded a pH of approximately 7 s.u. One was from

water standing in a trough at the manhole, which the EPA says

yielded a pH around 7 s.u. The last one was from the discharge

flowing from the Riverdale Mills line, which the EPA says

yielded a pH of around 4 s.u. In their field log, the number

"4" for this final measurement appears to be written over a "7."

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(The district court later concluded that the recorded entry for

that sample had been altered from its actual reading of 7 s.u.)

Based on this information, the EPA criminal division

obtained a federal search warrant and conducted a second

inspection on November 7, 1997. A large number of samples were

taken at Manhole #1. Most had a pH below 5.0 s.u. and the

samples worsened -- that is, became even more acidic -- as the

day progressed. EPA agents also took seven samples in the

morning at Manhole #2, and all had pH readings around 5.0 or 6.0

s.u. Again, the agents observed that the required pretreatment

system at the Riverdale Mills plant was largely not operational;

although on that day the two wastewater streams were mixing in

the plant, the process adding caustic soda was still being

bypassed. Plant employees told the EPA that the pretreatment

system had not been in operation since sometime in the spring of

1997, and that Knott was aware that wastewater was being

discharged without pretreatment.

In July 1998, the EPA executed a second search warrant

to measure the effects of groundwater infiltration between

Manhole #1 and Manhole #2. This was done in response to Knott's

claim that he owned the intervening sewer line and that by the

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time the wastewater reached the public sewer at Manhole #2,

groundwater infiltration inevitably brought it within the legal

limit. The EPA's expert concluded that even making assumptions

favorable to Knott, any wastewater with a pH below 3.0 s.u. at

the first manhole would reach the sewer line at the second

manhole with a pH below 5.0 s.u.

On August 12, 1998, a federal grand jury indicted Knott and

Riverdale Mills on two counts of violating the Clean Water Act by

knowingly discharging industrial wastewater with a pH below 5.0 s.u.

into a publicly owned treatment works on October 21 and November 7,

1997. Following the indictment, both the U.S. Attorney's office and

the regional EPA issued standard press releases announcing the

indictment and its allegations.

On October 14, 1998, Knott and Riverdale Mills moved to

suppress evidence from the afternoon sampling on October 21, 1997 as

the result of an unlawful search, and also to suppress the sampling

obtained through the November 7 search warrant, as the fruit of the

October 21 sampling. On February 16, 1999, the district court

suppressed the sampling results from the afternoon of October 21, 1997,

finding that the EPA inspectors exceeded the scope of Knott's consent

when they sampled the wastewater stream without a Riverdale Mills

representative present. However, the district court declined to

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suppress the evidence obtained on November 7, reasoning that even

though the basis of the warrant was in part the October 21 afternoon

sampling, the agents acted in good faith executing the warrant.

The government sought leave of court to dismiss the

indictment without prejudice on April 23, 1999, because in the course

of preparing for trial, it determined that the suppression had

substantially weakened its case and raised a question as to whether it

could make a sufficiently compelling case to the jury to meet its

burden of proof on the remaining evidence. Leave of the court to

dismiss the indictment without prejudice was granted by the district

court on May 6, 1999.

Following the dismissal of the indictment, Knott and

Riverdale Mills filed a motion to recover reasonable attorneys' fees

under the Hyde Amendment. The district court awarded attorneys' fees

to Riverdale Mills as a prevailing party3 because, in the view of the

court, while the prosecution was neither frivolous nor in bad faith, it

was "clearly vexatious" within the meaning of the Hyde Amendment.

United States v. Knott, 106 F. Supp. 2d 174, 180 (D. Mass. 2000). The

district court, relying in part on the Eleventh Circuit's decision in

United States v. Gilbert, 198 F.3d 1293 (11th Cir. 1999), held that a

3 In the district court, the government contested whether
the defendants were properly considered "prevailing parties"
within the meaning of the Hyde Amendment, as the indictment was
dismissed without prejudice.

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defendant seeking fees under the Hyde Amendment must show that the

government's legal position was asserted "in bad faith or without any

foundation or basis for belief that it might prevail" and thus amounted

to "prosecutorial misconduct."4 See 106 F.Supp.2d at 179 (quoting

Gilbert, 198 F.3d at 1303-04). The district court rested its

conclusion that the prosecution here was "vexatious" on the court’s

belief that the government did not have "any credible evidence" to

support the accusation that the defendants discharged waste with a pH

below 5.0 s.u. into the public sewer. Id. To the contrary, the court

concluded, the samples taken at the second manhole, "the point of

discharge into the public sewer," showed that Riverdale Mills "was not

in violation of the Clean Water Act." Id. The district court did not,

however, find that the agents or prosecutors in this case acted

maliciously, or with any particular personal motive to vex the

defendants. The court rested instead simply on the purported absence

of credible evidence, though it also discussed some alleged misconduct

in the collection of samples and the conduct of searches. Accordingly,

the court awarded fees in the sum of $68,726.00 to the company against

the United States under the Hyde Amendment. Id. at 181. The court

4 The district court also cited to two different
definitions of "vexatious" from Black's Law Dictionary: one
defining vexatious as "without reasonable or probable cause,"
the other defining a "vexatious" charge as one that is
calculated to "harass, disquiet, or annoy." 106 F. Supp. 2d at
179 (citing Black's Law Dictionary 1565 (6th ed. 1990)).

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denied fees to Knott because his net worth exceeded $2 million,

reasoning that the limitations of 28 U.S.C. § 2412(d) apply to the Hyde

Amendment. Id. at 178.

The government appeals this fee award, arguing (1) that the

court applied the wrong legal standard in defining vexatiousness, as it

did not find any malice or intent to harass in the prosecution, but

rather found only that the prosecution lacked foundation; (2) that the

district court's conclusion that the prosecution lacked foundation was

in clear error, as the government had ample evidence to prove the

violations prior to the suppression ruling, and indeed it could have

pursued the charges even on the evidence that remained after the

court's suppression order; and (3) that the court erred in identifying

certain isolated acts of government agents as evidence of

vexatiousness.

Knott, in turn, challenges the district court's ruling

against him, arguing that he could seek an award under the Hyde

Amendment pursuant to the procedures and limitations of 28 U.S.C. §

2412(b) instead of § 2412(d), thereby eliminating the net worth

limitation and entitling him to recovery.

II.

We initially determine the legal issue raised in

Knott's cross-appeal from the district court's dismissal of his

claim for fees under the Hyde Amendment on the ground that his

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net worth renders him ineligible for an award of fees. At issue

is whether the Hyde Amendment's incorporation of the "procedures

and limitations" of the Equal Access to Justice Act, 28 U.S.C. §

2412, encompasses all of the avenues to relief contained in §

2412, or simply refers to the procedures and limitations imposed

in § 2412(d).

The Hyde Amendment provides that fee awards "shall be

granted pursuant to the procedures and limitations (but not the burden

of proof) provided for an award under section 2412 of [the Equal Access

to Justice Act] . . . ." 111 Stat. at 2519. Section 2412 of the

EAJA, however, provides for the award of attorneys' fees in two

separate subsections, each containing different procedures and

limitations.

EAJA Subsection 2412(b) provides for the recovery of

attorneys' fees against the United States, not by supplying an

independent basis for recovering fees, but instead by subjecting

the United States to other existing provisions which allow

recovery of fees against private parties in the civil context.

It provides that "a court may award reasonable fees and expenses

of attorneys, in addition to [costs], to the prevailing party in

any civil action brought by or against the United States . . .

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. The United States shall be liable for such fees and expenses

to the same extent that any other party would be liable under

the common law or under the terms of any statute which

specifically provides for such an award." 28 U.S.C. § 2412(b).

Awards under § 2412(b) are limited, of course, by the standards

of the common law or the terms of the incorporated statutory

provision upon which the award is based, just as an award

against a private party would be, but § 2412(b) itself does not

otherwise provide procedures for or limitations upon fee awards

under the EAJA.

EAJA Subsection 2412(d) supplies an additional

substantive basis for a civil party to recover fees against the

United States. It provides that "a court shall award [fees and

expenses] to a prevailing party . . . unless the court finds

that the position of the United States was substantially

justified." 28 U.S.C. § 2412(d)(1)(A). Unlike § 2412(b), §

2412(d) itself subjects fee awards to certain procedures and

limitations. An individual may not recover fees under

subsection (d) if his individual net worth exceeds $2 million

(nor can a corporation, if its net worth exceeds $7 million and

it has more than 500 employees). See 28 U.S.C. § 2412(d)(2)(B).

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In addition, subsection (d) caps the hourly rate at which an

award may be granted at $125. 28 U.S.C. § 2412(d)(2)(A). Knott

concedes that he would be ineligible under the $2 million net

worth limitation, but contests its applicability.

The district court rejected Knott's argument that he

is not subject to the net worth limitation or the cap on hourly

rates because defendants may elect to proceed under either 28

U.S.C. § 2412(b) or (d). The district court concluded that the

procedures and limitations of EAJA § 2412(d) applied to

applications for fees under the Hyde Amendment for two main

reasons. First, the district court reasoned that allowing

defendants to elect to proceed under § 2412(b) would effectively

read the clause "under the procedures and limitations of section

2412" out of the Hyde Amendment. Second, the district court,

confronted with two interpretations of the statute, construed it

narrowly in accord with the principle that waivers of sovereign

immunity are to be construed narrowly. See 106 F. Supp. 2d at

177-78.

The district court was correct to require fee

applicants to meet the eligibility requirements of EAJA §

2412(d). The Hyde Amendment expressly adopts "procedures and

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limitations" from the EAJA. We hold that this reference

incorporates the "procedures and limitations" contained in EAJA

§ 2412(d). Accord United States v Ranger Elec. Communications,

Inc., 210 F.3d 627, 632-33 (6th Cir. 2000).

Knott's suggested reading of the Hyde Amendment

undercuts the language of the provision and policy concerns

underlying the incorporation of these procedures and

limitations. If defendants could elect to proceed under §

2412(b), as Knott argues, it is not clear that the Hyde

Amendment's incorporation of "procedures and limitations" from

the EAJA would have any practical effect. In order to give

meaningful effect to the plain language of the Hyde Amendment,

then, the incorporation is best read to refer to the limitations

contained in EAJA § 2412(d).

This is particularly so given that, unlike EAJA §

2412(d), EAJA § 2412(b) does not supply an independent

substantive ground upon which to recover fees, instead directing

applicants to other bases providing a remedy of attorneys' fees,

including their procedures and limitations, and simply

subjecting the United States to the same obligations regarding

attorneys' fees as private parties. Because EAJA § 2412(b) does

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not provide a complete and independent ground for a fee award

but instead affords relief only by reference to otherwise

existing avenues to recover fees, it would create a peculiar

circularity to allow a defendant relying on the Hyde Amendment

as the substantive basis of a request for attorneys' fees to

elect to proceed through EAJA § 2412(b) in order to avoid the

limitations imposed in EAJA § 2412(d), given that the Hyde

Amendment itself incorporates the procedures and limitations of

the EAJA. See Ranger Elec. Communications, 210 F.3d at 633.

Finally, the fact that the Hyde Amendment waives

sovereign immunity and the policy concerns regarding the impact

of awarding fees in the criminal context, as reflected in the

legislative history of the Amendment, both counsel in favor of

narrowly construing the Amendment, and therefore incorporating

the procedures and limitations of EAJA § 2412(d). In order to

make best sense of the language of the statute, then, we

conclude that the procedures and limitations referenced are

those laid out in § 2412(d).

III.

We next address the government's appeal from the award of

attorneys' fees in favor of Riverdale Mills.

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A. The Hyde Amendment Legal Standard

Congress enacted the Hyde Amendment in 1997 in response to

perceived instances of prosecutorial abuse by the United States. See

United States v. Gilbert, 198 F.3d 1293, 1299-1303 (11th Cir. 1999)

(reviewing legislative history). The purpose of the Amendment was to

allow defendants to recover attorney's fees and costs in cases of

prosecutorial misconduct. Id. The provision provides that a district

court may award attorneys' fees and other costs to a prevailing

defendant "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 [the Equal Access to Justice Act]

. . . ." 111 Stat. at 2519.

The Hyde Amendment was patterned after the Equal Access to

Justice Act, 28 U.S.C. § 2412, which provides for an award of

attorney's fees against the United States in civil cases. The Hyde

Amendment differs in at least two important respects. First, it raises

the standard for awarding fees. The Hyde Amendment allows recovery by

prevailing criminal defendants only where the position of the United

States was "vexatious, frivolous, or in bad faith," in contrast to the

EAJA, which authorizes an award to a prevailing civil party in any case

where the position of the United States was not "substantially

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justified," see 28 U.S.C. § 2412(d)(1)(A). Indeed, the legislative

history of the Hyde Amendment shows that in drafting the provision,

Congress considered and rejected as too easily met both the "not

substantially justified" standard of the EAJA and a standard (modeled

after the Firearms Owners' Protection Act of 1986, see 18 U.S.C. §

924(d)(2)(B)) which would have awarded fees, inter alia, where the

United States' position was "without foundation." See Gilbert, 198

F.3d at 1301-02. Second, unlike the EAJA, the Hyde Amendment places

the burden of proof on the defendant to demonstrate that the

government's position was "vexatious," "frivolous," or "in bad faith."

See id.

In construing and applying statutory terms, we begin by

examining the language of the statute itself. See, e.g., Bailey v.

United States, 516 U.S. 137, 144 (1995). The words "vexatious,

frivolous, or in bad faith" are not defined in the statute. In such

circumstances, courts typically read statutory terms to convey their

ordinary meaning, see, e.g., Gilbert, 198 F.3d at 1298 (citing Chapman

v. United States, 500 U.S. 453, 462 (1991)), including as reflected in

dictionary definitions, see, e.g., Buckhannon Bd. & Care Home, Inc. v.

West Virginia Dep't of Health & Human Servs., --- U.S. ---, 121 S. Ct.

1835, 1839 (2001) (relying on definition of "prevailing party" in

Black's Law Dictionary); id. at 1846 (Scalia, J., concurring). Black's

Law Dictionary defines the term "vexatious" -- the term at issue in

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this case -- to mean "without reasonable or probable cause or excuse;

harassing; annoying." Black's Law Dictionary 1559 (7th ed. 1999). It

further defines "vexatious suit" to mean a "lawsuit instituted

maliciously and without good cause." Id. Standard English-language

dictionaries give the term similar meaning. See, e.g., Webster's Third

New Int'l Dictionary 2548 (3d ed. 1961) (defining "vexatious" to mean,

inter alia, "lacking justification and intended to harass"); 19 Oxford

English Dictionary 596 (2d ed. 1989) (defining "vexatious" for legal

purposes as "[i]nstituted without sufficient grounds for the purpose of

causing trouble or annoyance to the defendant").

Circuit courts construing the Hyde Amendment have varied in

interpreting the term "vexatious." The Gilbert court, for instance,

relies on a definition of "vexatious" as "without reasonable or

probable cause or excuse." See 198 F.3d at 1298-99; accord In re 1997

Grand Jury, 215 F.3d 430, 436 (4th Cir. 2000). By contrast, the Ninth

Circuit, in United States v. Sherburne, 249 F.3d 1121 (9th Cir. 2001),

held that a finding of vexatiousness under the Hyde Amendment requires

both a determination that the prosecution was "objectively deficient"

in that it "lack[ed] merit" and a finding that the prosecution

possessed "an element of maliciousness, or an intent to harass." Id.

at 1126. The Sherburne court referred to the finding that the suit

lacked merit as an "objective" component of vexatiousness and the

finding that the suit was prosecuted with some subjective malice or

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intent to harass or annoy as a "subjective" component. Id. at 1127.

Other courts have utilized a standard more amenable to the party

seeking fees. See United States v. Holland, 34 F. Supp. 2d 346 (E.D.

Va. 1999) (framing the inquiry as "whether a reasonable prosecutor

should have concluded that the applicable law and the available

evidence were insufficient to prove the defendants' guilt beyond a

reasonable doubt, and, if so, was the continuation of the prosecution

vexatious").

We hold that a determination that a prosecution was

"vexatious" for the purposes of the Hyde Amendment requires both a

showing that the criminal case was objectively deficient, in that it

lacked either legal merit or factual foundation, and a showing that the

government's conduct, when viewed objectively, manifests maliciousness

or an intent to harass or annoy. Such a reading best comports with the

language employed by Congress in the Amendment. This is especially so

when considered in the context of Congress's concern to protect against

prosecutorial misconduct while at the same time providing a

sufficiently stringent standard to avoid undermining appropriate

prosecutorial zeal.

The standard implied by the district court and advanced

by the defendants -- that "vexatious" conduct can be shown

simply by showing that the charges brought by the United States

were ultimately determined to be without either evidentiary or

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legal foundation -- does not adequately account for Congress's

efforts to limit Hyde Amendment awards to cases of affirmative

prosecutorial misconduct rather than simply any prosecution

which failed. As the Gilbert court notes, "[i]n prosecuting

crime, government attorneys are entitled to be zealous advocates

of the law on behalf of their client, the people of the United

States. While a prosecutor is not at liberty to strike foul

blows, he may strike hard ones, and '[h]e may prosecute with

earnestness and vigor -- indeed, he should do so.'" 198 F.3d at

1303 (quoting Berger v. United States, 295 U.S. 78, 88 (1935)).

The structure of the statute also militates against

resting vexatiousness simply upon a finding that the prosecution

lacked "any credible evidence." It may be that if the

government pursued a position so obviously wrong that no

reasonable prosecutor could have supported it, the defendant

would be entitled to a fee award under the Hyde Amendment.

Without a finding of bad faith or improper motive, however, if

the government pursues a prosecution without any foundation or

basis for belief that it might prevail, such a prosecution would

more appropriately be deemed "frivolous" than "vexatious."

Reading "vexatious" to encompass such a case would render it

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synonymous with "frivolous," thus improperly rendering the term

mere surplusage.

Finally, awarding fees upon a determination that the

prosecution lacked sufficient evidence does not accord with the

legislative history of the Hyde Amendment. In rejecting the

"not substantially justified" formulation of the EAJA and the

"without foundation" formulation of the Firearms Act, Congress

sought narrow language "meant to sanction and deter

prosecutorial misconduct, not prosecutorial zealousness per se."

Gilbert, 198 F.3d at 1304.5 The Hyde Amendment's shifting of the

burden of proof also reflects this concern. The alternative

construction urged by the defendants would burden the United

States with the threat of a large number of fee applications

arising from circumstances quite different than those against

which Congress sought to protect.

5 Indeed, though the Gilbert court provides a definition
for "vexatious" that does not explicitly require improper
motive, it assesses the government's conduct in light of all
three elements that would support a Hyde Amendment award
simultaneously, so it is not entirely clear how the court would
apply "vexatious" in isolation. The court does note that the
Hyde Amendment was "targeted at prosecutorial misconduct, not
prosecutorial mistake." 198 F.3d at 1304.

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 To make best sense of the statutory language and in

light of the purposes embodied in the Hyde Amendment, we

conclude that something more than simply an inadequate

evidentiary foundation is required to demonstrate that the

prosecution was "vexatious" within the meaning of the Hyde

Amendment -- that is, some finding of malice or improper

motivation is required.6 After all, there is an alternate ground

6 In requiring this element of malice or improper motive,
we recognize that our construction of "vexatious" here differs
from the way the term is construed in the Title VII context.
See Tang v. Rhode Island Dep't of Elderly Affairs, 163 F.3d 7, 13 (1st
Cir. 1998) ("A district court may in its discretion award attorney's
fees to a prevailing defendant . . . upon a finding that the
plaintiff's action was frivolous, unreasonable, or without foundation,
even though not brought in subjective bad faith.") (quoting
Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978)). Like
the Sherburne court, we conclude that the context differs in
material ways, most importantly in that, because the Hyde
Amendment addresses fees in the criminal context, Congress
enacted it against a background in which courts have no inherent
power to award fees. See Sherburne, 249 F.3d at 1127 n.5.
Defendants also point to common law awards of attorneys'
fees, where "vexatious" litigation need not always require subjective
bad faith in order to justify a fee award. See Local 285 v. Nonotuck
Res. Assocs., 64 F.3d 735, 737-38 (1st Cir. 1995) (holding that
subjective bad faith is not a prerequisite to a fee award under the
common law); but cf. Rivera Morales v. Benitez de Rexach, 541 F.2d 882
(1st Cir. 1976) (overturning common law fee award where there was no
finding that defendants acted in bad faith). This reliance on
occasional cases from a civil context which did not require subjective
bad faith ignores the peculiar concern, unique to the criminal context,
that the drafters of the Hyde Amendment had to avoid chilling
legitimate prosecutions. In addition, common law fee awards involve a
full-blown equitable analysis and depend on the discretion of the
court, a requirement overlooked in the attempt to draw a parallel to

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in the statute to award fees where an action is frivolous. In

requiring that the government's conduct manifest malice or an

intent to harass or annoy in order to be "vexatious," however, we do

not intend an inquiry into subjective intent, and we reject the

approach of Sherburne to the extent it suggests that such attention to

subjective motivations is required. Rather, the issue is whether the

government's conduct, when viewed objectively, manifests, or is

tantamount to, malice or an intent to harass or annoy. Cf. Braley v.

Campbell, 832 F.2d 1504, 1512 (10th Cir. 1987) (en banc) (rejecting

subjective intent standard "as virtually impossible to apply" for fee

awards under 28 U.S.C. § 1927).7

B. Evidence of Malice or Intent to Harass or Annoy

The district court here did not make any express

findings that the government's actions in this case manifested

malice or an intent to harass or annoy, resting its fee award

the Hyde Amendment awards at issue here.
7 The Supreme Court has expressly rejected an inquiry
into subjective intent in deciding questions of official
immunity in the law enforcement context, replacing it with an
objective inquiry into the legal reasonableness of the official
action. See Harlow v. Fitzgerald, 457 U.S. 800, 815-20 (1982);
see also Whren v. United States, 517 U.S. 806, 811-13 (1996)
(rejecting subjective intent test in Fourth Amendment context).
It would be odd if against this background Congress intended an
inquiry into the subjective motivations of prosecutors under the
vexatiousness standard of the Hyde Amendment. We do not address
whether the "bad faith" test requires a subjective inquiry.

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instead on the purported absence of credible evidence to support

the charges. Under the standard articulated here, the absence

of objective evidence of such improper motive renders the fee

award inappropriate. The district court did, however, identify

and criticize isolated conduct of the EPA and prosecution, and

defendants suggest that this conduct suffices to prove

vexatiousness and support the award in any event.

Defendants point to an array of government conduct both

before the indictment and during litigation in an effort to

demonstrate that the prosecution was indeed vexatious. As

defendants contend, it is permissible for courts to consider the

conduct of the investigation in order to provide a context in

which to assess whether a prosecution was "vexatious" within the

terms of the Hyde Amendment. However, the alleged conduct in

this case, whether taken independently or collectively, either

lacks sufficient record support or fails to rise to the level of

conduct required to find vexatiousness. Therefore this tacit

argument that the government proceeded with improper purposes

does not succeed. We address the contentions in turn.

First, defendants point to the district court's

conclusion that some samples taken during the October 21

-25-
inspection of the site exceeded the scope of the permission

given by Knott. The validity of the order suppressing the

afternoon samples is not before us, but the issue was close and

the ultimate decision to suppress the evidence was by no means

a foregone conclusion. In any event, the mere fact that EPA

inspectors took samples exceeding the scope of permission hardly

warrants an inference that their conduct was vexatious; their

conduct could just as well have rested on an honest mistake of

fact or misapprehension of the authority they had been granted,

a possibility suggested by the fact that they subsequently

provided a split sample from that afternoon to the defendants.

Second, defendants seize on the district court's

determination that there was "credible evidence" that the

annotation of some of the sampling results had been altered;

they contend that such alteration is evidence of governmental

abuse. As an initial matter, there is little evidence in the

record that any of the annotations were altered apart from the

4 pH reading at Manhole #2 on October 21. Putting aside the

question of support in the record, even assuming dubitante that

some of the sample readings were deliberately and erroneously

re-recorded, that alone would not necessarily be enough to

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establish vexatious prosecution where properly recorded samples

showed a violation. But here the district court did not render

any findings as to the reasons why annotations were changed,

just that there was "credible evidence" that they may have been.

The annotations in the log may have been written over for any

number of reasons, some as benign as the correction of a

mistake. Nor is there any record evidence suggesting any

improper conduct in recording the sample results. Even assuming

that the fact of some alterations is supported in the record,

since the existence of the purported alterations is equally open

to benign and malign interpretations on the present record, it

hardly provides sufficient evidence of vexatious conduct.

Third, defendants charge that the EPA agents continued

to take readings at Manhole #1 despite their awareness of

Knott's claim to ownership of the sewer line under Riverdale

Street, and subsequently prosecuted them largely on the basis of

pH readings taken at Manhole #1. This charge does not support

any determination of vexatiousness. The question of ownership

of the sewer under Riverdale Street, as discussed further below,

was open to reasonable dispute, and the EPA was entitled to

pursue charges based on discharges at the first manhole so long

-27-
as it had a legal argument that the public sewer began there.

More importantly, as discussed below, the pH level of discharges

at Manhole #1 provides relevant evidence of violations even if

the public sewer begins at Manhole #2, regardless of ownership.

Next, defendants contend that the fact that the EPA and

the U.S. Attorney issued press releases following the indictment

reveals malice. The press releases simply state that the

defendants were indicted and describe the charges for which the

indictments were issued. Such standard press releases do not

suggest any intent to vex.

Defendants also contend that vexatiousness is shown by

the government's failure to produce automatically some evidence

the court deemed exculpatory, where such production is required

by a local court rule. The court deemed a certain log to be

exculpatory because it showed a series of pH readings at Manhole

#2 above 5.0 s.u. on the morning of November 7. While the

government is correct that the existence of some discharges

within the legal limit is not clearly exculpatory, the better

practice would have been for the government to produce the logs

as part of automatic discovery given the local rule. However,

in this case, the logs were turned over in a timely fashion upon

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a discovery request from the defendants, and the short delay did

not prejudice the defendants. In these circumstances, given

that the exculpatory nature of the evidence is questionable, the

failure to produce the evidence automatically does not amount to

vexatious behavior within the meaning of the Hyde Amendment.

Defendants also claim that the government unduly

delayed dismissing the case following the district court's

suppression order. The district court ruled on the suppression

motion on February 16, 1999; the government moved to dismiss the

case on April 23, 1999. Such a delay does not suggest vexatious

conduct. The government is entitled to weigh carefully whether

or not to appeal the exclusion of evidence and to assess

carefully whether or not to continue the case in the absence of

the excluded evidence. In doing so, the government is engaging

in precisely the sort of prosecutorial decisionmaking that is

its business, and assessing the strength of the remaining case

requires some consideration. Indeed, the decision here to move

for a dismissal of the indictment was by no means preordained by

the suppression order, as the government had evidence with which

it might have pressed its case even without the excluded

evidence. We would not want the Hyde Amendment to deter the

-29-
prosecution from exercising its discretion to dismiss cases

where it concludes that prosecution is no longer warranted.

Finally, defendants contend that the manner in which

the EPA executed the November 7 search warrant evinces

vexatiousness. The district court stated that the EPA brought

"a virtual 'SWAT team'" to conduct the search and that the

agents involved engaged in "humiliating" conduct. (The search

involved the presence of 21 agents, some armed, who interviewed

and videotaped employees.) 106 F. Supp. 2d at 180. However,

any conclusion that the EPA agents engaged in unwarranted

behavior in executing the search is not supported by the record.

The affidavits of Knott and Agent Creavin contain conflicting

statements regarding the search. But even crediting all of

Knott's sworn allegations regarding the search, the conduct of

the search does not amount to vexatious conduct. Knott alleges

that the EPA brought 21 agents, some armed, that they engaged in

"outrageous and disruptive" behavior in conducting the search,

and that some of the seized documents were outside the scope of

the search warrant. In an unsworn letter to the assistant U.S.

attorney, Knott supplemented these charges, contending that the

EPA did not show him the search warrant until the premises were

-30-
secured, that they interviewed Riverdale Mills employees both

during the search and later in the day at their homes, that

these interviews were videotaped, and that in one instance the

agent holding the video camera held it too close to the face of

the interviewee until another agent asked him to back up.

None of these contentions -- apart from the conclusory

characterization of the conduct as "outrageous" -- set forth

conduct that is properly deemed vexatious, at least absent more

specific facts. There is nothing untoward about criminal

investigative agents of the EPA wearing holstered firearms while

in the field, nor about securing premises before showing the

search warrant. That the EPA wanted to interview Riverdale

Mills employees is also hardly surprising, as is the fact that

the EPA wanted to record the interviews. It was, after all, a

tip from an employee which started the whole investigation, and

it appears that the employees knew the pretreatment system was

not operating as required, and that Knott was aware of this.

The record does not reflect any misconduct in the manner in

which the interviews were carried out, or even provide any

reason to suspect it, and the defendants opted not to provide

affidavits from the interviewed employees. On the record before

-31-
the court, there was no basis to find that the EPA engaged in

such unwarranted conduct in executing the warrant as to render

its behavior vexatious within the meaning of the Hyde Amendment.8

The record simply does not reflect the sort of malice

or prosecutorial misconduct toward which the Hyde Amendment was

directed. While the government might have handled itself better

in some of these instances, that does not render its conduct

"vexatious." Rather, an award of fees for "vexatious"

prosecution under the Hyde Amendment requires some evidence upon

which a reasonable observer can conclude that the prosecution

was based in malice or an intent to harass or annoy. The

district court erred as a matter of law in applying a legal

standard that would award fees under the Hyde Amendment in any

case where the prosecution is ultimately deemed to have been

without sufficient foundation.

C. Evidence to Support Prosecution

Of equal importance is that the district court's

finding that there was no "credible evidence" upon which to

pursue charges was clear error. The government had ample reason

8 We bypass the question of whether one vexatious raid
would render the pursuit of a criminal case "vexatious."

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to investigate and pursue charges against the defendants, and

indeed still had adequate cause to prosecute even after the

suppression of evidence. Thus an award of attorneys' fees under

the Hyde Amendment is clearly not warranted, given the failure

to meet the first part of the test of vexatiousness: that the

government's suit lacked either legal merit or factual

foundation.

The EPA had ample reason to initiate an investigation

of Knott and Riverdale Mills. In the summer of 1997, the EPA

received an anonymous letter from an employee of the company

indicating that the company was not complying with the

pretreatment requirements set out in its agreement with the

state, as embodied in its state permit to discharge industrial

wastewater into the public sewer. Upon arriving to investigate

this allegation on October 21, the EPA inspectors observed that,

contrary to Knott's alleged representation that morning, the

pretreatment system at the plant was not in operation. Indeed,

although at the closing conference on the afternoon of October

21, the EPA inspectors discussed with Knott the fact that the

pretreatment system was not operational and that low pH

discharges into the public sewer were occurring as a result,

-33-
when the EPA returned to conduct the November 7 search, the

pretreatment system was still not operating properly.

Interviews with Riverdale Mills employees that day confirmed

that the pretreatment system had been out of operation for

several months and that Knott was aware that it was not

functioning. Defendants do not contest the fact that the

pretreatment system was not in operation on either day but

rather resort to arguments that other processes would dilute the

wastewater before it reached the public sewer.

In addition, there was considerable direct evidence of

a Clean Water Act violation. As defendants acknowledge, a

single knowing discharge of wastewater with pH below 5.0 s.u.

into the public sewer is sufficient to prosecute as a Clean

Water Act violation. Here, at the time the government sought

the indictment, it had over fifty samples that it considered

direct evidence of discharges below pH 5.0 s.u. For the first

count, covering October 21, the EPA had 13 samples from Manhole

#1 below pH 3.0 s.u. and one disputed sample at Manhole #2 at pH

around 4.0 s.u. For the second count, covering November 7, the

EPA had over 40 samples below pH 5.0 s.u., including three below

pH 3.0 s.u., all taken at Manhole #1.

-34-
 The district court discounted much of this evidence as

immaterial, giving two reasons: first, much of it resulted from

samples taken at Manhole #1; and second, much of it was later

suppressed. The decision not to consider the government's

evidence taken at Manhole #1 is flawed, in two respects. First,

at the time the government sought the indictment, the ownership

of the street where Manhole #1 is located remained in dispute,

and the government had a good faith legal argument that the

relevant point of discharge into the public sewers was the first

manhole. Therefore it was entitled to pursue charges based on

discharges at Manhole #1.

More importantly, the district court's decision to

disregard the sampling results at Manhole #1 misapprehends or

ignores the relationship between sampling data collected at the

first manhole and the acidity of Riverdale Mills's discharges

into the public sewer, even if the public sewer begins only at

the second manhole. The prosecution had ample evidence that the

defendant discharged highly acidic water at the first manhole on

both days. Even if the relevant public sewer does not begin

until the second manhole 100 yards away, these samples still

provide evidence that the water ultimately discharged by the

-35-
defendants at the second manhole had a highly acidic content.

That is particularly so in light of the EPA expert's

conclusions. The EPA was not required to accept Knott's lay

theory, not even advanced on appeal, that the slope of the pipes

over that 100 yard distance ensured that pulses of highly acidic

water would inevitably be neutralized by mixing with pulses of

highly caustic water before they both hit Manhole #2. Nor was

the EPA required to accept the later-advanced theory that the

pipes were subject to so much groundwater infiltration that the

groundwater would dilute the effluent down to an acceptable

level over the short distance of 100 yards. By overlooking the

bearing which the pH readings at the first manhole have on the

acidity of discharges at the second, the district court

committed clear error.

The defendants argue that the district court is free

to accept or reject the conclusions of the EPA expert who stated

that the groundwater infiltration rate would not sufficiently

dilute highly acidic water within the 100 yard span of the sewer

line under Riverdale Street. While this assertion may be true

as to the ultimate factual determination, it misses the issue at

stake in the application for fees under the Hyde Amendment,

-36-
which is whether the EPA was vexatious in deciding to proceed in

its prosecution. Even if the court or jury did not ultimately

credit the EPA expert's conclusions, there is no evidence in the

record to suggest that that expert was so wantonly and obviously

wrong that the EPA was not entitled to rely upon his

determinations in proceeding. Indeed his determination may well

be correct. For these reasons, the evidence of samples below pH

3.0 s.u. at Manhole #1 remains credible evidence upon which the

EPA was entitled to pursue charges.

Second, in concluding that the prosecution lacked "any

credible evidence," the district court erroneously discounted

all the evidence that it had suppressed. For Hyde Amendment

purposes, however, the court must assess the basis for pursuing

charges from the perspective of the government at the time.

Instead, the district court required undue prescience on the

part of the government. The government was entitled, ab initio,

to rely on the evidence subsequently suppressed in making its

prosecutorial decision, provided it could articulate, in good

faith, a reasonable position on the suppression issue.

There were genuine factual disputes regarding what

happened on October 21, and the conditions which were imposed

-37-
upon the consent to the EPA inspection were, at the very least,

ambiguous. The government was entitled to rely on its evidence

so long as it had a good-faith basis for contending that the

evidence was admissible. The suppression issue presented here

was not so clear cut as to deprive the prosecution of a

reasonable basis for believing that its evidence was admissible.

An interpretation of the Hyde Amendment which effectively

requires the government precisely to anticipate later

evidentiary rulings, where reasonable grounds for disagreement

exist, is untenable in light of the language and purposes of the

Hyde Amendment.

Indeed, even after the suppression ruling, there

remained an adequate evidentiary foundation for the prosecution,

at least as concerns the second count. There were three

readings below pH 3.0 at the first manhole on November 7, each

of which, in conjunction with the testimony of the EPA expert,

could provide an adequate foundation for a Clean Water Act

charge. In addition, the EPA directly observed that the

pretreatment system was not in operation on either day, as

corroborated through employee interviews. Moreover, there was

evidence the system had not been in operation for some time,

-38-
which Knott well knew. Although the EPA ultimately concluded

that it would not proceed, there remained credible evidence to

support a prosecution. Weighing the strength of the evidence

and determining whether or not to prosecute are precisely the

sorts of choices the government is entitled to make, based on

information it has acquired through due diligence.

Since the EPA had a reasonably sufficient evidentiary

basis upon which to pursue charges against the defendants, both

before and even after the suppression ruling, and absent any

finding or reason to believe that the government acted either

out of malice or with any intent to harass or annoy, the fee

award to Riverdale Mills constituted an abuse of discretion.

IV.

For these reasons, we affirm the denial of fees to

Knott, reverse the grant of fees to Riverdale Mills, and remand

the application for fees under the Hyde Amendment to the

district court for dismissal, with prejudice.

So ordered. No costs are awarded.

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