Petition for Writ of Certiorari — Riverdale Mills Corp. v. United States

Supreme Court, U.S.

(\) FILED

: 01 717 NO 2 i 2001

No. 01— uihiceundomsteneas

IN THE

Supreme Court of the United States

RIVERDALE MILLS CORPORATION,

Vv.

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the First Circuit

PETITION FOR A WRIT OF CERTIORARI

DANIEL J. POPEO

PAUL D. KAMENAR

WASHINGTON LEGAL FOUNDATION

WARREN G. MILLER

2009 Massachusetts Ave., N.W.

Washington, D.C. 20036

(202) 588-0302

November 21, 2001

(Counsel of Record)

Attorney At Law

15 Court Square

Boston, MA 02108

(617) 227-6493

HENRY T. DUNKER

Attorney at Law

555 Bridge Street

Weymouth, MA 02191

(781) 331-8624

Counsel for Petitioner

RR RAR i EE A A

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, D.C. 20001

QUESTIONS PRESENTED FOR REVIEW

The district court, at the urging of the United States,

dismissed a two-count felony indictment against petitioner

Riverdale Mills Corporation (“RMC”) and its president and

chief executive officer, James M. Knott, Sr. (“Knott”), for

a regulatory offense under the Clean Water Act. The

United States stated that the evidence was insufficient to

sustain its burden of proof.

The district court granted petitioner RMC’s subsequent

motion for attorneys’ fees and expenses under the Hyde

Amendment, 18 U.S.C. §3006A (historical and statutory

notes), finding as a fact that the government had no

credible evidence to support the indictment and that the

prosecution of RMC was “vexatious” within the meaning

of the Hyde Amendment because it was conducted without

any probable cause, noting, among other shortcomings,

altered pH levels of RMC’s rinsewater transcribed in EPA

log books.

The court of appeals reversed, holding, contrary to the

decisions of other circuit courts, that there must be

“objective evidence of improper motive” and of “intent to

harass or annoy” the defendants to establish that a

prosecution was vexatious. The court also applied a de

novo standard of review by declining to accord deference

to the trial judge’s findings of fact, and declined to remand

the case for further proceedings consistent with its newly

adopted definition of “vexatious.”

The questions presented for review are:

1. Whether the court of appeals improperly defined

the term “vexatious” as used in the Hyde

Amendment to require, contrary to other circuits,

ii

“objective evidence of improper motive” and of

“intent to harass or annoy” in addition to proof of

the absence of probable cause.

Whether the court of appeals improperly applied

a de novo standard of review instead of reviewing

the district court’s findings of fact under an abuse

of discretion standard.

Whether the court of appeals erred in refusing to

remand the case for further proceedings, including

opportunity for discovery consistent with the court

of appeals’ newly adopted definition of

“vexatious,” especially where, as here, there was

evidence of altered pH readings, and where

petitioner had proffered expert evidence showing

that no Clean Water Act violation had occurred.

iii

PARTIES TO THE PROCEEDING

All of the parties to the proceeding in the Court of

Appeals for the First Circuit, whose judgment is sought to

be reviewed, are

Riverdale Mills Corporation

James M. Knott, Sr.'

United States of America

There is no parent corporation of Riverdale Mills

Corporation and no publicly held company owns any of its

shares of stock.

' Co-defendant, James M. Knott, Sr., against whom the

indictment was also voluntarily dismissed, had also sought an award

of attorneys’ fees. The District Court denied recovery by Knott

because his net worth rendered him ineligible under the net worth

limitations of 28 U.S.C. §2412(d) which the court held was

incorporated into the Hyde Amendment. The Court of Appeals

affirmed the District Court decision in that respect. Mr. Knott, who

was also represented by counsel for petitioner Riverdale Mills

Corporation, does not seek further review in this Court.

Vv

TABLE OF CONTEN’ ;

Page

QUESTIONS PRESENTED FOR REVIEW ....... i

PARTIES TO THE PROCEEDING ............ ill

TABLE OF AUTHORITICG® wi cic c civic ees vi

PETITION FOR A WRIT OF CERTIORARI ...... |

Ce eee re ROUEN PUI |

pk eS ere re ee ee ere are |

ie gt Boe A | SU er ee ere 2

STATEMENT OF THE CASE ................ 3

REASONS FOR GRANTING THE WRIT ........ 9

I. THE DECISION OF THE FIRST CIRCUIT

CONFLICTS WITH DECISIONS OF OTHER

UNITED STATES COURTS OF APPEALS ON

THE SAME IMPORTANT QUESTION OF

FEDERAL LAW THAT HAS NOT BEEN, BUT

SHOULD BE, SETTLED BY THIS COURT .. 10

Il. THE COURT OF APPEALS APPLIED AN

IMPROPER STANDARD OF REVIEW ..... 13

lil. THE COURT OF APPEALS IMPROPERLY

REMANDED THE CASE FOR DISMISSAL

WITH PREJUDICE INSTEAD OF

REMANDING IT FOR FURTHER

PROCEEDINGS CONSISTENT WITH THE

COURT’S NEWLY MINTED DEFINITION OF

PUTER N60 0k 08 00 8 PERO RD 16

i 18

linet ape silerntiner angeles names

vi

TABLE OF AUTHORITIES

Cases Page

In Re: 1997 Grand Jury, 215 F. 3d 430

CP: SU og PASE 11 fa Pains Sea) 11

Millipore Corp. v. Travelers Ind. Co., 115 F. 3d

Bh £7 ee ee, 3a Ss oie Os We a> 17

Pierce v. Underwood, 487 U.S. 552 (1988) ....... 13

United States v. Adkinson, 247 F.3d 1289

Ce SONS 65 o's vo vs R208 ema 11

United States v. Beeks, 2001 U.S. App. Lexis

SUSIE Ce DOG 65s Sb as RR 12, 13

United States v. Gardner, 23 F. Supp. 2d 1283

CORE IED SOUR bled o hav OEE ANG is eek 17

United States v. Gilbert, 198 F. 3d 1293

ChFC 10 as ee ee ak 11, 12, 13, 16

United States v. James M. Knott, Sr. and

Riverdale Mills Corporation, 106 F.

Supp. 2d 174 (D. Mass. 2000) .............. |

United States v. James M. Knott, Sr. and

Riverdale Mills Corp., 256 F. 3d 20

Ci Gee Se. ee eee a bee eet mae bt is l

United States v. Lindberg, 220 F. 3d 1120

FO Ne Corin cl eke see ek: 12, 13

United States v. Sherburne, 249 F. 3d 1121

Oe eg ee ree ees Y wate et 11

United States v. True, 250 F. 3d 410

(OP Ge I ei ies FEI 11, 14

United States v. Truesdale, 211 F. 3d 898

Oe ee ir Ee Ee 13

Vii

Page q

Statutes, Rules and Regulations

Hyde Amendment, Pub. L. No. 105-1 19, 111 :

Stat. 2440, 2519 (1997) reprinted in 18

U.S.C. §3006A (historical and statutory

amen Bo Oe CS en aie Re Ot passim

ee SE <5. 6 baled ela tc boc cake 1

ea os 6 eA OS Laie e., Sas. 4

Clean Water Act, 33 U.S.C. a eee ae 4

Equal Access to Justice Act (“EAJA”) '

en Me PU Sie, Vee Stik 10

Supreme Court Rule 10(a)................... 13

Supreme Court Rule 10(c)................... 13

Miscellaneous

Baok's Law Dictionary. ..............5..... 16

Circuit Split Roundup, 70 U.S.L.W. 2166

Sr WU ss oe 6 ea sc 9

PETITION FOR A WRIT OF CERTIORARI

Riverdale Mills Corporation respectfully petitions this

Court for a writ of certiorari to review the judgment of the

United States Court of Appeals for the First Circuit in this

case.

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the First Circuit in United States of America v. James M.

Knott, Sr. and Riverdale Mills Corp. is reported at 256 F.

3d 20 (1* Cir. 2001) and is reprinted in the Appendix at

App. la. The opinion of the United States District Court

for the District of Massachusetts in United States of

America v. James M. Knott, Sr. and Riverdale Mills

Corporation is reported at 106 F. Supp. 2d 174 (D. Mass.

2000) and is reprinted at App. 30a. The judgment of the

Court of Appeals entered on July 12, 2001 is unreported

and reprinted at App. 29a.

JURISDICTION

The judgment of the United States Court of Appeals

for the First Circuit sought to be reviewed was entered on

July 12, 2001. (App. 29a). The time for the appellees to

file their petition for rehearing and rehearing en banc was

enlarged to and including August 10, 2001 by order of the

Court of Appeals entered on July 26, 2001. (App. 46a).

On August 24, 2001 the Court of Appeals entered an Order

denying appellee RMC’s timely petition for rehearing and

its timely suggestion for the holding of a rehearing en

banc. (App. 47a).

The jurisdiction of this court is invoked under 28

U.S.C. §1254(1).

2

STATUTE INVOLVED

The statute which is the primary subject of this

petition is the Hyde Amendment, Pub. L. No. 105-119,

111 Stat. 2440, 2519 (1997) (reprinted in 18 U.S.C.S.

§3006A, historical and statutory notes). The full text of

the statute 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, 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.

3

STATEMENT OF THE CASE

The petitioner, Riverdale Mills Corporation (“RMC”),

manufactures plastic-coated steel wire mesh at a

manufacturing plant in Northbridge, Massachusetts. The

manufacturing process involves two production lines, each

of which utilizes contact rinsewater that is ultimately

discharged into a publicly-owned wastewater \.eatment

works of the Town of Northbridge (“POTW”).

The rinsewater discharge from the galvanizing line is

acidic, while the rinsewater from the coating line is

caustic. The two neutralize each other when they are

mixed within RMC’s plant en route to a privately owned

test pit located directly outside the plant (Manhole #1).

From that pit the combined rinsewaters flow through 300

feet of a sewer line privately owned by defendant, Knott,

to Manhole #2 where the public sewer begins. From there,

the combined rinsewaters travel approximately three miles

to the Northbridge POTW facility where, along with all

other township wastewater, they are treated as necessary

and discharged into the Blackstone River.

On October 21, 1997, two inspectors from the United

States Environmental Protection Agency (“EPA”), acting

on an alleged anonymous tip from an RMC employee,

sought permission to inspect RMC’s wastewater treatment

system. Mr. Knott, president and chief executive officer

of RMC, granted permission on the condition that the EPA

officials be accompanied by RMC representatives at all

times during their inspection.

Despite the express condition imposed by Mr. Knott,

the EPA officials took several rinsewater samples from

private Manhole #1 and one sample from public Manhole

4

#2 in the absence of any representativeof RMC. The EPA

asserted that these samples all had a pH below 5.0 s.u.

Discharges of rinsewater below pH 5.0 s.u. into a POTW

are prohibited under the Clean Water Act. See 40 C.F.R.

§403.5; 33 U.S.C. §1251, et seg. There was only one

reading at public Manhole #2 which was hand-recorded at

4.0 s.u.

On November 7, 1997, approximately 21 armed EPA

law enforcement agents made a surprise raid of RMC’s

plant—this time pursuant to a criminal search warrant. At

that time, the EPA obtained seven rinsewater samples from

the relevant public Manhole #2. All read above 5.0 s.u.,

within the legal limit prescribed by the Clean Water Act.

(App. 33a). At no time did the EPA obtain or attempt to

obtain any other rinsewater sample from public Manhole

#2.

On August 12, 1998, a Grand Jury returned an

indictment against RMC and Knott charging them in two

counts with having violated the Clean Water Act on

October 21 and November 7, 1997 by knowingly

discharging rinsewater with a pH of less than 5.0 s.u. into

a POTW sometime during each of those two days.

On October 14, 1998, RMC and Knott moved to

suppress the evidence obtained from the EPA’s

surreptitious afternoon sampling on October 21, 1997. The

district court allowed that motion on February 16, 1999,

2 The district judge, who conducted a hearing on the

defendants’ successful motion to suppress the unconstitutionally

obtained evidence on October 21, 1997, found that the alleged 4.0

reading had actually been 7.0, but had been altered to appear as 4.0

(App. 32a, 40a, 49a, 50a).

5

finding that the EPA inspectors violated the fourth

amendment rights of RMC and Knott by sampling

rinsewater discharges in the absence of an RMC

representative, contrary to the terms of Knott’s conditional

consent to the inspection. (App. 32a, 33a). The United

States declined to appeal the suppression order.

On April 23, 1999, the government sought leave of

court to dismiss the indictment because, in the course of

preparing for trial, it determined that the evidence was

insufficient to sustain its burden of proof for either count,

even though the evidence that was suppressed related only

to pH readings for October 21, 1997, that formed the basis

of Count 1. The district court granted leave to dismiss the

indictment on May 6, 1999. (App. 33a, 34a).

RMC and Knott timely filed their motion to recover

attorneys’ fees and litigation expenses pursuant to the Hyde

Amendment. At the same time they moved for leave to

conduct discovery to support their Hyde Amendment

application. During the pendency of the Hyde Amendment

proceedings, the defendants renewed their requests for an

opportunity to conduct such discovery.

After consideration of RMC’s Hyde Amendment

motion and the government’s opposition, Judge Nathaniel

Gorton of the United States District Court for the District

of Massachusetts (who had conducted the hearing on the

motion to suppress evidence and was the only judge to see

or hear any evidence in this case) ruled, without holding a

hearing, that the government’s prosecution of the

defendants was “vexatious” within the meaning of the

Hyde Amendment because he found as facts that “the

government did not . . . have any credible evidence to

support [the] accusation. To the contrary, the samples

6

taken at Manhole #2, the point of discharge into the public

sewer, showed that RMC was not in violation of the Clean

Water Act.” (App. 40a). The district court did not find it

necessary to address RMC’s proffered expert evidence

showing that readings below S5pH could not occur because

of the configuration of the plant’s rinsewater disposal

system.

Judge Gorton defined “vexatious” as meaning “without

reasonable or probable cause or excuse.” (App. 39a). In

addition to finding that the government lacked any credible

evidence to support the indictment, Judge Gorton cited

several instances of the EPA’s vexatious conduct. Among

them were his findings that:

¢ The EPA’s collection of evidence was suspect

because of the surreptitious sampling on October 21,

1997, in direct violation of RMC’s and Knott’s fourth

amendment rights. (Ap. 40a).

¢ Obvious alterations in the EPA agent’s field

notes where neutral pH readings in the “7” range were

changed to appear as acidic readings in the “2” and

“4” ranges. (App. 40a, 49a, 50a, 51a, 52a).

¢ The government’s failure to collect any

additional wastewater samples at public Manhole #2

after all samples it had obtained there on November 7,

1997, proved to be innocuous and exculpatory, and

despite the fact that the government was fully aware

as early as December 1997 of Knott’s claim of private

ownership of the sewer pipe leading from Manhole #1

to Manhole #2 and of the street above that pipe.

(App. 40a, 41a).

7

* The government’s misrepresentation in its

mandatory pretrial disclosures that “The United States

is unaware of the existence of any exculpatory

evidence,” when, in fact, every pH reading at public

Manhole #2 was at or above the legal minimum of 5.0

s.u. (App. 41a).

* The government’s excessive zeal in executing

the November 7, 1997 search when it stormed the

defendants’ premises with a virtual “SWAT team” of

twenty-one EPA law enforcement officers and agents,

many of whom were armed. The agents “vigorously

interrogated and videotaped employees causing them

great distress and discomfort.” (App. 41a, 42a).

* The United States Attorney and the EPA

exacerbated the defendants’ humiliation at being

criminally indicted by issuing press releases, on the

day of the indictment, falsely accusing the defendants

of knowingly polluting the rivers of the

Commonwealth when they knew no_ evidence

supported that conclusion. (App. 41a).

Based on all of these factual findings, Judge Gorton

concluded that the government’s prosecution of the

defendants was “clearly vexatious.” (App. 42a). He

awarded fees and litigation expenses to RMC. The judge

also denied the defendants’ requests for discovery as moot.

(App. 44a, 45a).

The government appealed to the United States Court

of Appeals for the First Circuit. The First Circuit adopted

a definition of “vexatious” that it acknowledged differed

from the definition embraced by the district court and from

the definition applied by other circuit courts of appeal.

8

The First Circuit required that in order for a prosecution to

be “vexatious” within the meaning of the Hyde

Amendment, it must not only lack legal merit or factual

foundation, but also must be proven to have been based on

“objective evidence of improper motive” and to have been

undertaken with “intent to harass or annoy.” (App. 19a,

17a).

Despite having adopted this unprecedented definition

of “vexatious,” the Court of Appeals declined RMC’s

suggestion that the case be remanded to the District Court

for proceedingsconsistent with the newly defined standard.

Instead, the Court of Appeals vacated the award of fees to

RMC and remanded the Hyde Amendment application to

the District Court for dismissal with prejudice. (App. 28a).

The Court of Appeals also failed to accord proper

deference to the district judge’s findings of fact on the

issue of probable cause to support the prosecution. Instead

of reviewing the district judge’s findings for abuse of

discretion, the Court of Appeals actually applied an

improper de novo standard of review.

RMC’s timely petition for rehearing and suggestion for

rehearing en banc was denied on August 24, 2001. (App.

47a, 48a). .

REASONS FOR GRANTING THE WRIT

1. This Court should review this case because the

United States Court of Appeals for the First Circuit has

entered a decision in conflict with the decision of all other

United States Courts of Appeals that have addressed the

same important matter. Since its passage four years ago,

there have been a steadily increasing number of reported

9

cases based on the Hyde Amendment. The substantial

likelihood that prevailing defendants in criminal cases

initiated by the United States will increasingly resort to the

amendment for recovery of their legal fees and expenses

makes it important for this Court to interpret the language

of the Hyde Amendment in order to provide guidance to

the lower courts, the public, and the bar, and to resolve the

conflict demonstrated by the decisions of those Courts of

Appeals which have considered the issue.’ This case

provides the Court with an opportunity to resolve these

circuit differences, and there is no sound veason to delay

addressing this issue. Moreover, the First Circuit has

decided an important question of federal law that has not

been, but skould be, settled by this Court.

2. The Court of Appeals also applied an incorrect

standard of review. Instead of according deference to the

district judge’s findings of fact, as required by an abuse of

discretion standard, the Court of Appeals reviewed his

findings de novo and afforded them no deference

whatsoever.

3. The Court of Appeals for the First Circuit has so

far departed from the accepted and usual course of judicial

proceeding as to call for an exercise of this Court’s

supervisory power. By adopting a definition of

“vexatious” at odds with the standard applied by any other

Court of Appeals as well as with the standard applied by

the district judge, and then declining to remand the case to

the district court for further proceedings consistent with the

newly enunciated standard—including an opportunity for

> See Circuit Split Roundup, 70 U.S.L.W. 2166 (Sept. 18,

2001) (describing circuit split between First Circuit and other

Circuits on the proper interpretation of the Hyde Amendment).

10

discovery—the Court of Appeals has deprived the

petitioner of its right fully and fairly to present its case to

meet the court’s newly minted interpretation of the statute.

I. THE DECISION OF THE FIRST CIRCUIT

CONFLICTS WITH DECISIONS OF OTHER

UNITED STATES COURTS OF APPEALS

ON THE SAME IMPORTANT QUESTION

OF FEDERAL LAW THAT HAS NOT BEEN,

BUT SHOULD BE, SETTLED BY THIS

COURT.

In November 1997, Representative Henry Hyde,

Chairman of the House Judiciary Committee, offered an

amendment to an appropriations bill to enable defendants

who prevailed in criminal prosecutions initiated by the

United States to recover reasonable attorneys’ fees and

litigation expenses from the government. Representative

Hyde was concerned about the irreparable damage to

reputation and the considerable expense incurred by an

innocent defendant who had been subjected to unfounded

prosecution by the United States.

As originally proposed, the Hyde Amendment was

modeled after the Equal Access to Justice Act (“EAJA”),

28 U.S.C. §2412, that applies in civil proceedings by or

against the United States. The amendment would have

permitted a prevailing criminal defendant to recover

attorney’s fees and expenses from the United States unless

the government could prove that the prosecution was

“substantially justified.” The House of Representatives

adopted the Hyde Amendment, but the Senate passed the

appropriations bill without the amendment.

11

The Conference Committee compromised the

differences by replacing the “substantially justified”

standard of the EAJA with a requirement that a prevailing

defendant must bear the burden of proving 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.” The Hyde Amendment

became law in that revised form.‘

All United States Courts of Appeals which have ruled

on the issue agree that a prevailing party in a criminal case

brought by the United States may recover reasonable

attorneys’ fees and expenses under the Hyde Amendment

if he can establish that the position of the United States

was either vexatious, frivolous, or in bad faith. (18 U.S.C.

§3006A, historical and statutory notes). Circuit Courts

have differed, however, in their interpretation of the term

' “vexatious.”

In United States v. Gilbert, 198 F. 3d 1293 (11" Cir.

1999), the Eleventh Circuit defined “vexatious” as “without

reasonable or probable cause or excuse.” 198 F. 3d at

1298-99. See United States v. Adkinson, 247 F.3d 1289

(11" Cir. 2001) (affirming Gilbert's definition of

“vexatious”). The Fourth Circuit adopted the same

definition In Re: 1997 Grand Jury, 215 F. 3d 430, 436 (4"

Cir. 2000). The Sixth Circuit has weighed in with the

Eleventh and the Fourth in United States v. True, 250 F.

3d 410, 423 (6 Cir. 2001). In United States v. Sherburne,

249 F. 3d 1121 (9" Cir. 2001) the Ninth Circuit held that

a prosecution was “vexatious” under the Hyde Amendment

* For a comprehensive review of the legislative history of the

Hyde Amendment, see United States v. Gilbert, 198 F. 3d 1293,

1299-1303 (11 Cir. 1999).

12

only if it both lacked merit and was prosecuted with some

subjective malice or intent to harass or annoy. See also

United States v. Lindberg, 220 F. 3d 1120, 1125 (9" Cir.

2000) (resisting any rigid definition of “vexatious,

frivolous or in bad faith”); United States v. Beeks, 2001

U.S. App. Lexis 20614 (8" Cir. 2001) (adopting Gilbert's

definition).

The District Court in this case adopted the definition

of "vexatious" enunciated in Gilbert and followed by most

other circuits that have addressed the issue. The court

found that the prosecution was vexatious because the

government had no probable cause to support it.

The First Circuit’s decision in this case rejects both the

subjective malice standard of Sherburne and the absence of

probable cause standard of Gilbert. The First Circuit

attempts to strike a muddled middle ground by defining a

vexatious prosecution as one which both lacks either legal

merit or factual foundation and is proven to have been

based on “objective evidence of improper motive.” (App.

35a). The Court required proof that “the government’s

conduct when viewed objectively, manifests maliciousness

or an intent to harass or annoy.” (App. 17a).

The Court acknowledged that other circuits had

applied conflicting definitions (App. 14a), but it adopted

a definition that differed from any previously articulated.

The issue is sufficiently important to justify review by this

Court in order to provide a reliable definition for the

guidance of lower courts, the public, and the bar on an

issue which is arising with increasing frequency. See S.

Ct. R. 10(a).

13

~—Moreover, the First Circuit’s novel interpretation of

the Hyde Amendment decides an important question of

federal law that has not been, but, for the reasons

heretofore indicated, should be, settled by this Court. See

S. Ct. R. 10(c).

Il. THE COURT OF APPEALS APPLIED AN

IMPROPER STANDARD OF REVIEW.

All of the parties agree that the appropriate standard of

review in Hyde Amendment proceedings is for abuse of

discretion. Although the Court of Appeals paid lip service

to that standard (App. 28a), it failed to apply it. Instead,

the Court of Appeals accorded no deference to the district

judge’s findings of fact. It made its own findings, thereby

so far departing from the accepted and usual course of

judicial proceedings as to call for an exercise of this

Court’s supervisory power. See S. Ct. R. 10(a).

Every court of appeals that has considered the issue

has held that the appropriate standard of review in Hyde

Amendment proceedings is for abuse of discretion by the

trial judge. An abuse of discretion occurs only if the

district judge bases an award of attorneys’ fees and

expenses on findings of fact that are Clearly erroneous.

United States v. Gilbert, 198 F. 3d 1293, 1298 (11" Cir.

1999); United States v. Lindberg, 220 F. 3d 1120, 1124

(9" Cir. 2000); United States v. Beeks, 2001 U.S. App.

Lexis 20614, 5 (8" Cir. 2001) (and cases cited therein).

In United States v. Truesdale, 211 F. 3d 898, 905-06

(S" Cir. 2000) the Fifth Circuit held, citing Pierce y.

Underwood, 487 U.S. 552, 563 (1988), that the district

court’s findings of fact in awarding fees under the Hyde

Amendment are entitled to deference for several reasons.

14

First, the district court is the only court with first-hand

familiarity with the underlying facts. Second, the circuit

court should not be burdened with evaluating the merits of

the underlying case or the government’s litigation strategy.

See United States v. True, 250 F. 3d 410, 422 (6" Cir.

2001) (court generally reviews district court decisions

regarding attorney’s fees under a deferential standard).

The First Circuit’s decision stands these principles of

review for abuse of discretion on their head. Instead of

according the required deference to the district judge’s

findings, the Court completely ignored them and

substituted its own findings of fact as in a case of de novo

review. It accorded no deference whatsoever to the district

court’s findings of fact.

The decision second guesses the trial judge. Where

Judge Gorton found as fact, for example, that someone

changed the only incriminating reading on October 21,

1997, at Manhole #2 from a 7 to a 4, (App. 32a, 49a, 50a)

the Circuit Court cavalierly disregarded that factual

finding, speculating that the altered reading could have

been a simple mistake. (App. 20a). But the trial judge

was not bound to conclude that it was a simple mistake.

And he did not so conclude.

Another example is the Court of Appeals’ disregard of

the trial judge’s finding that the “government knew, or

should have known, that RMC’s discharge did not enter

the public sewer until it reached manhole #2, yet for

unexplained reasons, the government failed to take further

tests there.” (App. 41a). This finding was firmly

supported by the evidence presented at the suppression

hearing. But the Court of Appeals improperly concluded

15

that the trial judge’s finding of fact was wrong. (App.

20a).

Similarly, the Court of Appeals improperly discounted

the district judge’s finding that the government had

withheld evidence of the exculpatory November 7, 1997

pH readings at Manhole #2. (App. 41a). While the

district court emphasized the significance of that

improperly withheld evidence, the Court of Appeals

ignored it without any basis for finding that the trial

judge’s finding was clearly erroneous. (App. 21a).

The Court of Appeals inappropriately emphasized and

relied upon the proffered and untested opinion of a

government "expert" regarding the probability that acidic

discharges of less than 3.0 pH at Manhole #1 would reach

Manhole #2 at less than 5.0 pH. (App. 25a, 26a).

However, the district judge never referred to this proffered

opinion in its own decision. Nothing in the record

establishes that the government obtained that opinion at

any time prior to its motion to dismiss the indictments.°

Moreover, the Court of Appeals conveniently failed to

mention that the record before the district judge contained

a detailed report and affidavit from the defendants’ own

expert that established the impossibility of a discharge of

less than 5.0 pH into Manhole #2 based on conditions

within the plant as reported by the EPA’s own inspectors.°

* The government’s expert’s affidavit of Brian McKeown is

dated October 12, 1999. It appears as Tab 28 in the Joint Appendix

(JA) filed at the Court of Appeals.

_ © The defendants’ expert’s report of James C. O’Shaughnessy,

PhD., P.E., appears at Tab 13 of the JA.

16

Perhaps most important is the Court of Appeals

disavowal of the district judge’s factual finding that the

government had no credible evidence to support the

prosecution. (App. 40a). Without an opportunity to have

heard the witnesses at the suppression hearing, the Court

of Appeals improperly usurped the role of the trial judge

and erroneously applied a de novo standard of review to

his findings of fact.

Ill. THE COURT OF APPEALS IMPROPERLY

REMANDED THE CASE FOR DISMISSAL

WITH PREJUDICE INSTEAD OF

REMANDING IT FOR FURTHER

PROCEEDINGS CONSISTENT WITH THE

COURT’S NEWLY MINTED DEFINITION

OF “VEXATIOUS.”

The district judge denied the defendants’ several

requests for leave to conduct discovery to support their

Hyde Amendment motion. He did so initially without

prejudice, and ultimately because the issue of discovery

became moot as a result of his award of fees and expenses

based on his determination that the prosecution was

“vexatious” as the term was used in the Hyde Amendment.

He did not believe that the law required a finding of

objective malice. He applied the Black’s Law Dictionary

definition of “vexatious” as meaning “without probable

cause or excuse” and relied on precedent established by

Gilbert. (App. 39a). When the district judge decided this

case, no court had ever defined “vexatious” to require

proof of objective malice—whateverthat may mean—or of

intent to harass or annoy. The trial judge could not have

foreseen that the Court of Appeals for the First Circuit

would impose such a heavy and ambiguous burden of

proof on a Hyde Amendment applicant.

17

The Court of Appeals’ decision is replete with

references to the absence in the undeveloped record of

findings of objective malice or of an intent to harass or

annoy the defendants. (App. 18a, 20a, 22a, 41a). But the

district judge did not believe that proof of objective malice

or of an intent to harass or annoy was required to establish

that the prosecution was vexatious. He believed that a

complete absence of credible evidence to justify the

prosecution was sufficient.

If the district judge had known that the Court of

Appeals would require proof of objective malice or of an

intent to harass or annoy, he would most likely have

allowed the defendants’ motions to conduct discovery as

expressly contemplated by the language of the Hyde

Amendment.

The petitioner should not be deprived of its fee award

because the Court of Appeals adopted a definition of

“vexatious” that differed from that of any court that had

previously addressed the issue. Under these circumstances,

the appropriate disposition would have been to remand the

case for further proceedings consistent with the newly

adopted definition of “vexatious” including an opportunity

for the petitioner to develop evidence through discovery of

“objective malice” and of “intent to harass or annoy.” See,

e.g., Millipore Corp. v. Travelers Ind. Co., 115 F. 3d 21,

41 (1* Cir. 1997) (Lynch, J.) (citing cases) (district court,

with its extensive knowledge of the facts and proceedings

is in a far better position than the Court of Appeals to

address and first apply new case law; “justice requires”

remand.) See also United States v. Gardner, 23 F. Supp.

2d 1283 (N.D. Okla. 1998) (Hyde Amendment itself

provides for discovery controlled by the court even where

there has been a full trial of the underlying criminal case.)

18

Accordingly, even if the. Court of Appeals

interpretation of the term “vexatious” is correct, the Court

of Appeals so departed from the usual course of judicial

proceedings by failing to remand the case as to call for an

exercise of this Court’s supervisory power.

CONCLUSION

For the foregoing reasons, the petition for writ of

certiorari should be granted.

Respectfully submitted,

DANIEL J. POPEO WARREN G. MILLER

PAUL D. KAMENAR (Counsel of Record)

WASHINGTON LEGAL Attorney at Law

FOUNDATION 15 Court Square

2009 Massachusetts Ave., N.W. Boston, MA 02108

Washington, D.C. 20036 (617) 227-6493

(202) 588-0302

HENRY T. DUNKER

Attorney at Law

555 Bridge Street

Weymouth, MA 02191

(781) 331-8624

November 21, 2001 Counsel for Petitioner

(

APPENDIX

Neer

APPENDIX TABLE OF CONTENTS

Page

Opinion of the United States Court of Appeals for

the First Circuit in United States v. James M.

Knott, Sr. and Riverdale Mills Corporation, 256

a sa ddeebosevevenenecunts la

Judgment of the United States Court of Appeals

for the First Circuit entered July 12, 2001 ..............00008 29a

Opinion of the United States District Court

for the District of Massachusetts in United States

v. James M. Knott, Sr. and Riverdale Mills

Corporation, 106 F. Supp. 2d 174 (D. Mass.

MRS SSRIS IES 9 5 ESI SO ec 30a

Order of the United States Court of Appeals for

the First Circuit extending time for filing

Petition for Rehearing and Rehearing En Banc

Cee on sceemsunnvoreebiooens 46a

Order of the United States Court of Appeals for

the First Circuit denying Petition for Rehearing

and Suggestion for Rehearing En Banc entered

alin ene aaicnaseednobints 47a

Copy of a portion of EPA Agent Granz’s field notes

of October 21, 1997-page 934 of the Record

Appendix at the Court of Appeals for the First

Ss SEE Ca el 49a

ES EUR SNS eth ED ea RON 50a

Copy of a portion of Agent Granz’s field notes of

October 21, 1997-page 929 of the Record

PETE cnscssincishvsucritintetlsasiiaipasinlidtnnameiicntvineintininith Sla

Enlargement of a portion of page 929 of the

POOGIG RIE siciciitnsvictnsitiiattntnainiiaaediilndaiiiiaaiiiein 52a

}

i

|

j

i

la

UNITED STATES OF AMERICA, Appellant

and Cross-Appellee, v. JAMES M. KNOTT, SR.;

RIVERDALE MILLS CORP., Defendants,

Appellees and Cross-Appellants.

No. 00-2238, No. 00-2239

UNITED STATES COURT OF APPEALS FOR THE

FIRST CIRCUIT

256 F.3d 20; 2001 U.S.App.LEXIS 15586; 52 ERC

(BNA) 1705

July 12, 2001, Decided

COUNSEL:

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 Stemier, 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.

JUDGES:

Before Torruella, Circuit Judge, Cyr, Senior Circuit Judge,

and Lynch, Circuit Judge.

2a

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 J8 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.

Riverdale Mills Corporation and its principal owner,

James Knott, operate a plant in Northbridge, Massachusetts,

that manufactures plastic-coated steel wire mesh. The

production 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.")' into publicly owned sewer systems. 40 C.F.R.

' The term pH stands for a measure of acidity and alkalinity on a

logarithmic scale from 0 to 14, with 7.0 representing neutrality,

3a

§ 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

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 flow, the inspectors then allegedly

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.

4a

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 aileged 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.).? The district court determined that the EPA

inspectors were not accompanied by a Riverdale Mills

representative for 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.

? 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."

it hia ce a _ a

Sa

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." (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

6a

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 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 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

Ta

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 te recover reasonable

attorneys’ fees under the Hyde Amendment. The district court

awarded attorneys’ fees to Riverdale Mills as a prevailing

party’ 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 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

* 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.

* 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)).

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. 106 F. Supp. 2d at 181. The court

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. /d. at / 78.

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

9a

U.S.C. § 2412(b) instead of § 2412(d), thereby eliminating

the net worth limitation and entitling him to recovery.

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

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 .... 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

10a

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). 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.

lla

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

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., 2:0 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 § 241 2(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 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.

12a

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).

We next address the government's appeal from the award

of attorneys’ fees in favor of Riverdale Mills.

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]

we” TLD 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

13a

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 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 /8 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, 133 L. Ed. 2d 472, 1168S.

Ct. 501 (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, 114 L. Ed. 2d

524, 111 S. Ct. 1919 (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. 149 L. Ed. 2d 855, 121. Ct. 1835, 1839 (2001) (relying

on definition of “prevailing party" in Black's Law

Dictionary); /2/ S. Ct. at 1846 (Scalia, J., concurring).

Black's Law Dictionary defines the term "vexatious" -- the

term at issue in this case -- to mean "without reasonable or

probable cause or excuse; harassing; annoying." Black's Law

l4a

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 "instituted 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 "lacked merit" and a finding

that the prosecution possessed "an element of maliciousness,

or an intent to harass." Jd. 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 intent

to harass or annoy as a "subjective" component. /d. 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").

!

l5a

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 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, "in 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 ‘he 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, 79 L. Ed. 1314, 55S. Ct. 629 (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,

16a

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 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.’ 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.

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

> 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.

17a

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

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).’

° 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 (Ist 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, 54 L. Ed. 2d 648, 98S.

Ct. 694 (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 1127n.5.

” 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, 73 L. Ed. 2d 396, 102 S. Ct. 2727

(1982); see also Whren v. United States, 517 U.S. 806, 811-13, 135

18a

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, 54] 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

the Hyde Amendment awards at issue here.

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 instead on the

purported absence of credible evidence to support the

charges. Under the standard articulated here, the absence of

L. Ed. 2d 89, 116 S. Ct. 1769 (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.

19a

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 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

20a

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 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 # | 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 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.

2la

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 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 decision making that is its business, and

22a

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 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

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.

23a

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 recuid 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 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.’

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

* We bypass the question of whether one vexatious raid would

render the pursuit of a criminal case "vexatious."

24a

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 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, 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

25a

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.

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. 2

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

26a

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

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, 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

27a

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 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

28a

was evidence the system had not been in operation for some

time, which Knott well knew. Although the /:PA 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.

29a

United States Court of Appeals

For the First Circuit

No. 00-2238

No. 00-2239

UNITED STATES,

Appellant\Cross - Appellee,

V.

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

Defendants - Appellees\Cross - Appellants.

JUDGMENT

Entered: July 12, 2001

These causes came on to be heard on appeals from the

United States District Court for the District of Massachusetts,

and were argued by counsel.

Upen consideration whereof, It is now here ordered,

adjudged and decreed as follows: The denial of fees to Knott

is affirmed. The grant of fees to Riverdale Mills is reversed

and the application for fees under the Hyde Amendment is

remanded to the district court for dismissal, with prejudice.

So ordered. No costs are awarded.

By the Court:

JANICE M. O’NEIL

Acting Clerk

30a

UNITED STATES OF AMERICA,

v. JAMES M. KNOTT, SR., and

RIVERDALE MILLS

CORPORATION, Defendants.

Criminal Action No. 98-40022-NMG

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF MASSACHUSETTS

106 F. Supp. 2d 174; 2000 U.S.

Dist. LEXTS 11226; 51 ERC (BNA) 1246

July 27, 2000, Decided

JUDGES:

Nathaniel M. Gorton, United States District Judge.

OPINION BY:

Nathaniel M. Gorton

OPINION:

MEMORANDUM & ORDER

The motion before this Court arises out of the United

States’ prosecution of James M. Knott, Sr. ("Knott") and

Riverdale Mills Corporation ("RMC") for violating, inter alia,

33 US.C. § 131%c) (2) (A), the Clean Water Act, by

knowingly discharging industrial wastewater with a pH of

less than 5.0 standard units ("S.U.") into a publicly-owned

wastewater treatment works, i.e. a public sewer.

Knott and RMC allege that the prosecution of those

charges by the United States was vexatious, frivolous and in

3la

bad faith and seek to have this Court assess attorneys’ fees

and expenses incurred in their defense pursuant to Pvblic Law

No. 105-109, § 617, 111 Stat. 2440, 2519 (1997) (reprinted

in 18 U.S.C. § 3006A, historical and statutory notes) ("the

Hyde Amendment") (Docket No. 51). Defendants also seek

leave to conduct discovery to support their Hyde Amendment

application (Docket No. 70).

I. Background

RMC manufactures plastic-coated steel wire mesh at a

manufacturing facility in Northbridge, Massachusetts. Knott

is the controlling shareholder, a director and an officer of

RMC and directs its daily operations. RMC's manufacturing

process includes two production lines that produce

wastewater ultimately discharged into a publicly-owned

wastewater treatment works ("the public sewer").

The discharge from the two lines neutralize each other

when they are mixed in RMC's wastewater treatment facility

and in the pipes that lead from that facility through the plant

to a privately owned test pit ("Manhole # 1). From that pit,

the wastewater flows through a privately-owned sewer line

under Riverdale Street to an outlet in the public sewer at

which point there is a manhole ("Manhole # 2") from which

samples may be obtained.

On October 21, 1997, officials from the United States

Environmental Protection Agency ("EPA"), acting on an

anonymous tip from an RMC employee that RMC's

wastewater treatment system was not in operation, arrived at

the RMC facility to make an unannounced inspection ("the

October inspection"). They asked Knott's permission to

inspect the facility and Knott acquiesced, on the condition

that the EPA officials be accompanied by RMC

representatives during the entire course of their inspection.

32a

Knott directed the inspectors to Manhole if # 1 and in the

presence of Knott, the inspectors took a sample which yielded

a pH of 12.36 S.U. Thereafter, they took a sample yielding a

pH of about 2.2 S.U. Discharge of wastewater below pH 5.0

S.U. into a publicly owned sewer system is prohibited under

the Clean Water Act ("CWA"). See 40 C.F.R. § 403.5. The

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

the EPA officers discovered that the wastewater treatment

facility at RMC 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.

Later that afternoon, outside the presence of RMC

personnel, the inspectors reopened Manhole # 1 and took

additional samples yielding pH readings ranging from 2.19

S.U. to 7.48 S.U. Because RMC personnel were not present

during the afternoon sampling activity, in violation of the

prior agreement between Knott and the inspectors, the results

of those sample takings were later suppressed by this Court.

The EPA also took three samples at Manhole # 2. One was

recorded as having a pH lower than the applicable standard

(4.0 S.U.) but the defendants offered persuasive evidence that

the particular recorded entry for that sample had been altered

from its actual reading of 7.0 S.U.

Pursuant to a search warrant, EPA law enforcement

officials conducted another inspection of the RMC premises

on November 7, 1997 ("the November search"). The

underlying affidavit in the application for the search warrant

recited, inter alia, the sampling activity from the October

inspection as probable cause for the warrant, although that

33a

evidence was later suppressed by this Court. ° A large number

of samples were taken at Manhole # 1 (on private property).

Most had a pH below 5.0 S.U. and they worsened as the day

progressed. EPA officials took seven samples at Manhole

#2 (on public property) and all had pH readings of 5.0 or 6.0

S.U., within the legal limit under the CWA.

A second search warrant (and third inspection) was

executed at RMC on July 17, 1998 in response to Knott's

intervening claims that (1) because he owned the property

between Manhole # | and Manhole # 2, the discharge from

the RMC plant did not enter the public sewer system until

Manhole # 2, located 300 feet beyond Manhole # 1, and (2)

the infiltration of groundwater into the sewer lines between

Manholes # 1 and # 2 would (and did) dilute the facility's

waste and raise the pH levels to within authorized limits by

the time it reached Manhole # 2.

On August 12, 1998, a Grand Jury returned an Indictment

charging defendants Knott and RMC in two counts with

having violated the CWA by knowingly discharging

industrial wastewater with a pH of less than 5.0 S.U. into a

publicly-owned treatmert works. On February 16, 1999, this

Court suppressed the sampling results obtained during the

afternoon of the October inspection, finding that the EPA

exceeded the scope of Knott's consent when it sampled the

wastewater stream without a RMC representative present.

The government sought leave of court to dismiss the

indictment without prejudice on April 23, 1999 because in the

' Although the suppressed evidence from the October inspection

provided the basis for subsequent searches, this Court did not

suppress evidence obtained in those later searches because it

applied the "good faith" exception to the exclusionary rule.

34a

course of preparing for trial, it determined that the evidence

was insufficient to sustain its burden of proof. Leave of court

to dismiss the indictment without prejudice was granted by

this Court on May 6, 1999.

II. Discussion

The Hyde Amendment, the statute under which

defendants seek attorneys’ fees and expenses, was enacted as

part of a 1997 appropriations bill and is found as a statutory

note to /8 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 [November

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 [the Equal Access to

Justice Act]...

- Departments of Commerce, Justice, and State, the Judiciary,

and Related Agencies Appropriations Act, Pub.L. No. 105-

119, § 617, 111 Stat. 2519. The Hyde Amendment was

patterned after the Equal Access to Justice Act, ("EAJA"), 28

U.S.C. § 2412, which provides for an award of attorneys’ fees

in the civil context.

35a

Defendants argue that their prosecution was vexatious,

frivolous and in bad faith because there was never any

credible evidence to support the charges of the indictment.

The government contends that although its evidence was

insufficient to proceed to trial after much of the sampling

evidence was lost on a motion to suppress, there was

substantial evidence supporting the charges.

A. Prerequisites for an Award Under the Hyde

Amendment

1. "Prevailing Party" To recover attorneys’ fees under the

Hyde Amendment, a criminal defendant first must be a

"prevailing party." The Hyde Amendment does not, however,

define that term. The government argues that defendants are

not "prevailing parties" for Hyde Amendment purposes

because the Government voluntarily moved to dismiss the

Indictment without prejudice prior to trial. It offers the

following reasons why a dismissal without prejudice does not

render the defendants "prevailing parties":

(1) __ there is no bar to its obtaining a new indictment

charging exactly the same offenses,

(2) avoluntary dismissal without prejudice may rest on

a number of factors, the vast majority of which have

nothing to do with the defendants’ guilt or innocence

or whether the government acted improperly,

(3) the determination that a defendant is a prevailing

party based upon a voluntary dismissal may be an

incentive for prosecutors not to dismiss cases, and

(4) the Court would have to conduct a "minitrial" for

36a

each dismissal without prejudice to consider the

prosecutor's motives, wasting judicial resources,

intruding on the Government's deliberative process

and infringing on separation of powers.

Those reasons were rejected by the court in United States

v. Gardner, 23 F. Supp. 2d 1283, 1289-90 (N.D.Okla. 1998),

when it determined that the government's voluntary dismissal

of the charges against a defendant made him a "prevailing

party" under the Hyde Amendment. Here, this Court finds

that defendants are "prevailing parties" for Hyde Amendment

purposes.

2. "Procedures and Limitations" of 28 U.S.C. § 2412

The Hyde Amendment expressly directs that awards of

fees :

shall be granted pursuant to the procedures and

limitations (but not the burden of proof) provided for

an award under § 2412 of [the EAJA].

Section 2412 of the EAJA provides for the award of

attorneys’ fees in two separate subsections. Subsection

2412(b) 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.... 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.

The EAJA does not otherwise restrict awards under

37a

§ 2412(b). Subsection 2412(d) 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.

Unlike awards under § 2412(b), awards under § 2412(d) are

subject to certain limitations. An individual may not recover

attorneys’ fees under subsection (d) if his net worth exceeds

$ 2,000,000 and a corporation may not recover fees if its net

worth exceeds $ 7,000,000 and it had more than 500

employees at the time the action was filed. 28 U.S.C.

§2412(d) (1) (C) (2) (B). In addition, the hourly rate for

which an award recipient may recover is capped at $ 125 per

hour. 28 U.S.C. §2412(d) (1) (C) (2) (A). Here, Knott

concedes that he would be ineligible under the $ 2,000,000

net worth limitation. RMC would not be barred, however,

because its net worth does not exceed $7,000,000 and it has

never had more than 500 employees.

Knott argues that he is not subject to the net worth

limitation or the cap on fees because defendants may elect to

proceed under either 28 U.S.C. § 2412(b) or (d). No Circuit

Court of Appeals has yet construed the Hyde Amendment's

incorporation of the procedures and limitations of the EAJA

and the district courts which have addressed this issue are

split. Some conclude that the procedures and limitations of

the EAJA are contained in § 2412(d). See United States v.

Peterson, 71 F. Supp. 2d 695, 698 (S.D.Tex. 1999); Gardner

at 1289. Another district court has held that the procedural

limitations set forth in § 2412(d) are not applicable if the

prevailing party chooses to seek attorneys’ fees under

§2412(b). See United States v. Holland, 34 F. Supp. 2d 346,

358 (E.D.Va. 1999), vacated in part on other grounds by U.S.

38a

V. Holland, 48 F. Supp. 2d 571 (E.D.Va. 1999).

This Court is persuaded that the cases holding that the

procedures and limitations of § 2412(d) apply to Hyde

Amendment applications are better reasoned and adopts the

reasoning of the district court in United States v. Peterson,

supra, which found that the limitations of § 2412(d) apply to

applications made under the Hyde Amendment.

The Court does so for three reasons. First, to allow a

Hyde Amendment fee applicant to proceed under either

subsection would require the court either 1) to ignore and

read out of § 2412(b) the clause "under the terms of any

statute ...," or 2) to ignore and read out of the Hyde

Amendment its express adoption of the procedures and

limitations of § 2412, in contravention of its plain statutory

language. Peterson at 699.

Second, the Hyde Amendment was enacted in order to

"incorporate the EAJA into the criminal context to the extent

applicable." Id. (quotation omitted). If this Court adopted

Knott's view of the Hyde Amendment, however, every

litigant would choose to proceed only under § 2412(b),

thereby avoiding all limitations of § 2412. Id.

Third, waivers of sovereign immunity are to be narrowly

construed azd the award of legal fees is such a waiver. See

Gardner a 1297 n. 24.

Becwase this Court concludes that the procedures and

limitations of § 2412(d) apply to defendants’ fee application,

Knott, whose net worth exceeds $ 2,000,000, is ineligible for

an award. This Court is unpersuaded by the government's

argument that RMC is an alter ego of Knott and finds that

RMC is not similarly barred by the limitations of §

2412(d) but rather, is eligible for an award of fees.

B. "Vexatious, Frivolous or In Bad Faith"

39a

Whereas the government must prove that its position was

substantially justified when faced with a motion for attorneys'

fees under the EAJA, under the Hyde Amendment, the

movant seeking an award of attorneys' fees must show more.

See United States v. Truesdale, 211 F.3d 898, 909 (Sth Cir.

2000). A Hyde Amendment applicant has the burden of

proving, by a preponderance of the evidence, that the

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

faith (emphasis supplied)." Because those words are not

defined in the statute, they "must be given their ordinary

meaning." United States v. Gilbert, 198 F.3d 1293, 1298

(1999), quoting Chapman v. United States, 500 U.S. 453, 462,

114 L. Ed. 2d 524, 111 S. Ct. 1919 (1991).

"Vexatious” means "without reasonable or probable cause

or excuse." Black's Law Dictionary 1565 (6th Ed. 1990). A

charge is "vexatious" if it is calculated to "harass, disquiet or

annoy." Id. A "frivolous action" is one that is "groundless ...

with little prospect of success; often brought to embarrass or

annoy the defendant." Black's Law Dictionary 668 (6th Ed.

1990). "Bad faith" is not simply bad judgment or negligence,

but rather it "implies the conscious doing of a wrong because

of dishonest purpose or moral obliquity; ... it contemplates a

state of mind affirmatively operating with furtive design or ill

will." Black's Law Dictionary 139 (6th Ed. 1990). Gilbert at

1303.

Courts have awarded fees under the Hyde Amendment

when the prosecution "clearly violated the law or pursued

baseless charges unjustifiably." United States v. Pritt, 77 F.

Supp. 2d 743, 748 (S.D.W.Va. 1999). In other words, the

defendant 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." Gilbert at 1303. A Hyde

Amendment applicant must show that the government's

position underlying the prosecution amounts to prosecutorial

40a

misconduct. Gilbert at 1299.

Here, defendants were prosecuted for violating the Clean

Water Act by discharging waste with a pH of less than 5.0

S.U. into the public sewer. The government did not, however,

have any credible evidence to support that accusation. To the

contrary, the samples taken at Manhole # 2, the point of

discharge into the public sewer, showed that RMC was not in

violation of the Clean Water Act.

Further, the EPA's collection of evidence in support of the

government's charges is suspect. At the October inspection,

the EPA ignored the clear condition that Knott imposed upon

his consent for the inspection of RMC's facilities and

surreptitiously obtained samples in the absence of RMC

personnel. Defendants presented credible evidence that

recorded sample readings were altered by someone.

Apparently, several recorded readings in the pH "7" range

taken at both Manholes # 1 and # 2 were altered to look like

readings in the "2" and "4" ranges.

During the October inspection, Knott informed the EPA

agents that he owned Riverdale Street. In later applying for a

search warrant, an EPA official acknowledged that if RMC

owned the sewer under Riverdale Street "the discharge might

not enter the town sewer system until it reaches the main

sewer connection [Manhole # 2]." That indicates that the EPA

was aware of Knott's ownership claim.

Furthermore, counsel for defendants told the government

on November 18, 1997 that RMC's wastewater streams were

neutralized before reaching the public sewer. At the very

least, the government was aware, on December 19, 1997,

when Knott escorted government agents on a tour of the

RMC facility, of his claimed ownership of Manhole # 1, the

sewer line running to Manhole # 2 and Riverdale Street.

Moreover, Knott followed up by sending documentation to

i aiiilellalilladiaiaaiaiiaiiadd

4la

the prosecutor confirming that he owned that property as he

had represented.

The government knew, or should have known, that RMC's

discharge did not enter the public sewer until it reached

Manhole # 2, yet for unexplained reasons, the government

failed to take further samples there. There were no obstacles

to its doing so because Manhole # 2 is on public property,

leaving the impression, at least, that the government took no

more samples at Manhole # 2 because it had no reasonable

expectation of discovering a violation of the CWA by doing

so.

Instead, in the absence of evidence of an illegal

wastewater discharge into the public sewer at Manhole # 2,

the government persisted in the presentation of evidence to

the Grand Jury. The defendants’ humiliation at being

criminally prosecuted was intensified when the United States

Attorney and the EPA issued a Press Release following the

indictment which stated that RMC and Knott were knowingly

polluting the rivers of the Commonwealth.

A small number of samples which had been obtained at

Manhole # | indicated that RMC was not discharging

wastewater in violation of the applicable limit. The

government failed, however, to produce a laboratory log from

the November search revealing that exculpatory information

as part of its automatic discovery disclosures on September

14, 1998. Instead, it stated that "The United States is unaware

of the existence of any exculpatory evidence." The

government provided the exculpatory evidence only after

defendants specifically requested the log.

This Court is also troubled by the government's

unnecessary harassment of defendants and their employees

during the November search. At that time, a virtual "SWAT

team" consisting of twenty-one EPA law enforcement officers

42a

and agents, many of whom were armed, stormed the RMC

facility to conduct pH samplings. They vigorously

interrogated and videotaped employees causing them great

distress and discomfort.

After consideration of the conduct of the EPA personnel

and the government in connection with this case, this Court

finds that the United States’ prosecution of defendants,

although not provably frivolous or in bad faith, was clearly

vexatious. Knott is barred from recovering attorneys’ fees by

the net worth limitation of 28 U.S.C. § 2412(d), but RMC is

entitled to an award of attorneys’ fees under the Hyde

Amendment. Additional discovery in support of defendants’

application for attorneys fees is therefore unnecessary.

C. Calculation of Fee Award

Pursuant to 28 U.S.C. § 2412(d) (2) (A) (ii), recovery of

attorneys’ fees is capped at $ 125 per hour. RMC has not

shown that the three attorneys it retained were "qualified" in

some "specialized sense" or that they had some "specialized

skill needful for the litigation in question" as required to be

reimbursed at a higher rate. Further, because Knott does not

satisfy the net-worth limitation of § 2412(d) (2) (B) (i) and

is not, therefore, entitled to an award of attorneys’ fees, the

amount requested for the joint representation of Knott and

RMC will be reduced accordingly. The number of hours

incurred by each of the defendants’ attorneys will be reduced

by one-half and the resulting total hours will be reimbursed

at the statutory rate of $ 125. Attorneys’ costs will be

similarly reduced.

Knott, on behalf of RMC, requests reimbursement for

litigation expenses, exclusive of attorneys’ fees and expenses,

as follows:

43a

(1) expert witness fees $ 6,998.69

(2) costs of tests and studies 30,110.50

(3) private investigator fees 500.90

(4) copying expense 223.17

(5) costs of a projector and

tape recorder 4,708.85

(6) miscellaneous expense 895.12

(7) automobile expense 729.78

(8) cost of service of witness subpoena 244.00

(9) fees paid to a public rela’ ‘ons firm 2,520.93

TOTAL: $ 46,931.94"°

RMC is entitled to reimbursement for costs associated

with expert witnesses, tests and studies, copying,

transportation and service of witness subpoenas but it will not

be reimbursed for its expenditures for a private investigator

or for public relations services. Reimbursement for the cost

of a projector and a tape recorder may be appropriate if it

were a necessary rental expense, but because RMC fails to

specify whether that equipment was rented or purchased or

exactly what the equipment was used for, RMC will not be

reimbursed for that expenditure. Moreover, "miscellaneous

expenses" will not be reimbursed because no detail is

provided. Because the allowed litigation expenses were

incurred partially in Knott's defense, they will be reduced by

one-half and RMC will be reimbursed for litigation expenses

in the amount of $ 19,153.07.

Thus, the Court finds that RMC is entitled to an award of

attorneys’ fees and expenses as follows:

? Knott submitted Schedule A to his Affidavit with a modest

mathematical error. The total of the submitted expenses is

$46,931.94, not $46,631.94 as claimed.

Attorneys’ Fees:

Jamy B. Buchanan 245.5 hours / 2 x $ 125 $ 15,343.75

Henry T. Dunker'' 159.9 hours / 2 x $ 125 $ 9,993.75

Warren G. Miller 341.1 hours /2 x $125 $ 21,318.75

$46,656.25

Attorney’s Costs:

Jamy B. Buchanan $5,564.63 /2 $ 2,782.31

Henry T. Dunker $ 104.42/2 $ 52.21

Warten G. Miller $ 164.31/2 $ 82.16

$ 2,916.68

Litigations Expenses: $ 19,153.07

(see summary above)

TOTAL: $68,726.00

ORDER

For the foregoing reasons, with respect to RMC's request

for an award of attorneys’ fees and expenses, defendants’

motion for attorneys’ fees (Docket No. 51) is hereby

ALLOWED. The United states shall reimburse RMC for

attorneys’ fees and expenses inthe amountof $ 68,726.00

as more fully set forth in the Memorandum above.

Defendants’ motion for leave to conduct discovery and

> Henry Dunker’s Affidavit also contains a mathematical error. He

claims that he billed defendants $25,564 for legal services. The

itemizations attached to his Affidavit show, however, that he

charged $25,584.

45a

request for oral argument (Docket No. 70) is hereby

DENIED, as moot.

So ordered.

Nathaniel M. Gorton

United States District Judge

Dated: July 27, 2000

46a

United States Court of Appeals

For the First Circuit

No. 00-2238

No. 00-2239

UNITED STATES,

Appellant\Cross - Appellee,

v.

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

Defendants - Appellees\Cross - Appellants.

ORDER OF COURT

Entered: July 26, 2001

Upon consideration of appellees’ “Motion to Extend Time

Within Which to File a Petition for Rehearing and Rehearing

En Banc”,

It is ordered that the time for appellees to file their petition

for rehearing and rehearing en banc be enlarged to and

including August 10, 2001.

By the Court:

JANICE M. O’NEIL

Acting Clerk.

47a

United States Court of Appeals

For the First Circuit

No. 00-2238

No. 00-2239

UNITED STATES,

Appellant\Cross - Appellee,

V.

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

Defendants - Appellees\Cross - Appellants.

Before

Boudin, Chief Judge,

Torruella and Selya,* Circuit Judges,

Cyr, Seni es

Senior Circuit Judge,

Lynch and Lipez, Circuit Judges

ORDER OF COURT

Entered: August 24, 2001

The panel of judges that rendered the decision in these

cases having voted to deny the petition for rehearing and the

suggestion for the holding of a rehearing en banc having been

carefully considered by the judges of the Court in regular

active service and a majority of said judges not having voted

to order that the appeals be heard or reheard by the Court en

banc,

48a

It is ordered that the petition for rehearing and the

suggestion for rehearing en banc be denied.

By the Court:

JANICE M. O’NIEL

Acting Clerk.

* Judge Selya is recused from this matter.

OL

49a

a. --4h-I---

| —- ee ee + ee ee - ——<-<——- ae —— i

-—— — ————— —_—— ———

eee ae i

peter FIN OTN FI VISE < 7

>

ag: ™=

a

CC

hedheeed

— ii

co

—

—

—

=>

—

-

Cc)

bedhead

oO

~o : aes — as ~ ,

234 Sve 36 4° on =< a — — Nong

: | ~ , ay 4? PT ee. a7 —S < ‘i

ese, Sikes Basa | age : :

, gnaw J :

at oSg= sy-¥ @ 0 ae Ae a seni OE ded - b MAS wd pet ra

Tet

afte pry? APL Ts arg Sore tema |

bees MesGa! ws OSWhy vorY +9 ee | peta eked -

a

| iS a ll EE Ee ee i i

50a

\ i frie I a. od < 27a ee, |

‘ sw ome Ve se gee — ° (mow ee

_——— « *- _- = ' e 2e& = =@ ~—s me © co mee ame os eee oe Sie

<q |

p tfOt ” 4

“pers . @

* @e ed wacre . em ee Fa = 2 + (+08 comme: « , ’ _— => <e oe ame... ——

or st i

SFE wT He a2 _ vu, het ae

Le.

,

r)

oor. = > 2 am wees ae ee °e¢ —* eee ooo on eeBeepe «2s «+ eae . . —e Pe © +6 + 6 eae «es .o @ wumee mee ww - a:

ete REA Ul. LWA ROL LE PLT

prem *© Saar _ J pcob bz’

ee 4 z 2 Oh Z)

ied died

.° ~ ef

at ie pants Sect «6 silk asl noy- yor Fs a7?

)

bed yaa 4 oa ¢ —vY ~ YG Wb Low t& 4

mad aed, wae oF aes 7 wea! sriv* yo te

a wd 4

: > ovr7 oC” ~~

aE % Hwee” wey + G & 298,

es oes ie Te” a i .

9h w aw 339

¥ oy ~woy >” aral ab poe Jv,

52a