Court of Appeals reversed sanctions against the government for bad faith prosecution under the Hyde Amendment and set aside public reprimands against prosecutors

In a 2 to 1 decision the Eleventh Circuit Court of Appeals reversed a district court’s sanctions imposed under the Hyde Amendment. The majority called this case a high stakes appeal involving the sovereign immunity of the United States, the separation of powers and the civil rights and professional reputation of two federal prosecutors. In U.S. v. Shaygan, Dr. Shaygan was investigated by the D.E.A. after one of his patients died from a lethal combination of prescription drug and illegal drug. He was charged in a 23 count indictment with dispensing controlled substances outside the scope of professional practice. Shaygan’s attorney moved to suppress statements he made to agents alleging a violation of his right to counsel. Soon after the motion was filed, the AUSA informed the defense counsel that if the Defendant chose to litigate the issues, there would be no more plea discussions a “seismic shift” would result in the way he would prosecute the case. Within weeks, the government filed a superseding indictment containing 141 additional counts based on the newly identified patients.

During the pretrial phase, the government investigator expressed concern to the government prosecutors that he thought there was possible witness tampering by the defense team. After the two assistants approached the chief of narcotics section, an investigation was opened, though permission from United State Attorney was never given. A separate investigation of the defense team opened up under the direction of the chief of narcotics. The two witnesses recorded conversations with the defense investigator. After listening to the conversations, the chief of narcotics determined nothing wrong took place.

At trial, one of the cooperating government witnesses mentioned in cross examination that he recorded a conversation with the attorney. That was when the defendant’s attorneys learned they were subjects of a parallel witness tampering investigation and that two government witnesses were acting as informants. The defendant was allowed to reopen cross examination and the jury heard about the parallel investigation of the defendant’s attorneys
After the acquittal, the Defendant filed a motion for attorney’s fees under the Hyde Amendment. The district court held a hearing and granted the defendant’s Hyde Amendment motion awarding fees in the amount of $601,795 for Miami Attorneys who represented the acquitted of the crime chargee in the superseding indictment. It concluded that the prosecutors acted vexatiously and in bad faith in bringing the superseding indictment. The district court also publicly reprimanded the prosecutors.

The court of appeals reversed, stating that the district court misinterpreted and misapplied the Hyde Amendment. It reviewed the evidence against Shaygan and found the superseding indictment was not filed in bad faith, despite the prosecutor’s ill will towards the defense for filing a motion to suppress. The record shows the prosecutor has an objectively reasonable basis for superseding the indictment. It in light of the evidence, the majority found the charges were not objectively filed in bad faith. The court compared the standard to civil rules where bad faith is an objective standard that is satisfied when an attorney knowingly and recklessly pursues a frivolous claim. Imposing sanctions on the government for exercising prosecutorial discretion would conflict with the separation of powers clause of the constitution.

Additionally the court found the sanctions against the two prosecutors were imposed in violation of civil rights of the two prosecutors when it publicly reprimanded them without first affording them due process. Neither prosecutor was provided notice that the court was considering a public reprimand. The district court conducted an inquiry, not an adversarial hearing and both prosecutors were denies a meaningful opportunity to be heard in that proceeding.

The dissenting opinion believes the prosecutorial discretion to bring charges does not trump the “bad faith” language in the Hyde Amendment. The Hyde sanctions can still be imposed, even if the criminal prosecution was conducted in an objectively reasonable way and the prosecution had an objectively realistic likelihood of success. The sanctions were meant to apply if the defendant was completely acquitted and the judge who tried the case find the government’s position was motivated by prosecutorial bad faith or ill will. The dissent pointed to the thorough finding of fact by the district court in which he found sufficient evidence of bad faith in the decision to supersede the indictment with 118 counts as a result of the “seismic shift.”