Following the disclosure of this information, after a jury had been empaneled, the United States offered and some Defendants accepted a plea agreement. Under the plea agreement, some of the Defendants agreed to plead guilty to certain charges and the charges against Ranger Taiwan and Jim Peng would be dismissed in their entirety upon the recommendation of the United States. The charges against Defendant Ranger Taiwan were, thus,dismissed with prejudice by this Court by Order of February 3, 1998 (Dkt. No. 305).
During the later sentencing of other Defendants, it was disclosed that the Ranger/A-1 Telecom indictments were nearly novel. As now indicated by the United States, prior to these related indictments, there have been only three federal prosecutions for importation of illegal CB radios--all stemming from two related cases in the Eastern District of New York. The three New York convictions resulted in probationary sentences and fines. (Dkt. No. 372 at 17.) The instant set of prosecutions has resulted in forfeitures of over one million dollars and many felony and misdemeanor convictions of defendants with no prior criminal records. It also resulted in financial hardship for the indicted companies and the loss of as many as 400 hundred jobs in the various Ranger companies. (Dkt. No. 364 at 11 .)
Early in these criminal proceedings, Michael Olson, attorney for Ranger Taiwan, made several Freedom of Information Act ("FOIA") requests of the FCC relating to documents, correspondence and e-mail discussions relating to certain FCC regulations prohibiting the importation of certain kinds of 10-meter radios. By letter of August 8, 1997, the FCC answered the FOIA requests by refusing to produce some of the requested documents on the ground that production would interfere with an on-going criminal investigation and prosecution such that the documents were exempt from FOIA, 5 U.S.C. § 552(b)(7). (Defendant's Exhibit A.) The FCC came to this conclusion based in part on the coordinated review of the documents by the Assistant United States Attorney responsible for the Ranger prosecutions. (Def.'s Ex: A at 3.) Michael Olson made other FOIA requests including one dated February 6, 1998. After the dismissal and resolution of the
charges against the other Defendants, the FCC wrote Olson by letter of March 30, 1998 to inform him that his February 6, 1998 request and prior requests could be answered and were fully answered by 617 pages of materials enclosed. (Def.'s Ex. B.)
Defendant has filed as exhibits a small percentage of the 617 pages of materials as evidence of withheld Brady materials. The materials filed include e-mail transmissions between FCC employees as to confusion about the 10-meter regulations and the need for public notices to clarify the regulations. Defendant asserts that these materials tend to prove its innocence in that it proves that there was legitimate confusion about the regulatory requirements such that it, like other members of the public, would not have realized that the radios imported were prohibited by law. The United States and the FCC engineers assert that these e-mails did not relate to the subject radios (which operated on the Citizens Band without FCC type-acceptance as required by 47 C.F.R. § 2.803 and 47 C.F.R. § 95.603), but to "modifiable" radios--i.e., those radios which do not operate on Citizens Band frequencies but can be modified to do so. While the FCC engineers may have so intended by their statements, their statements are also susceptible to the interpretation that they believed that the industry and the public required greater notice of illegality as to the "open radios" (radios operating on both amateur radio and CB frequencies) marketed by the Defendant, which radios were, according to Defendant, marketed as amateur radios. Indeed, were the statements not susceptible of this interpretation and were they unrelated to the prosecution, the FCC would have had no reason to withhold the documents as to the earlier FOIA request and then disclose them after dismissal!
Two of these documents are especially telling. In Defendant's Exhibit I, there is an e-mail .from Lawrence Brock (an FCC employee stationed in Dallas, Texas) to another FCC employee dated June 7, 1996. The document says in pertinent part:
As you know, the PUBLIC NOTICE went out on "Export" transceivers on May 13-many thanks to Gary.
I think now is the time to publicize it and issue warning letters to known or suspected violators. Gary has already disseminated copies of the notice at a ham convention. In the future, if we can convince AUSAs that there is no doubt that the importers/marketers knew the "export" transceivers were illegal, they may be willing to take on these cases knowing that they may have to argue this point to a jury.
I've prepared a sample warning letter that we may want to send importers and wholesalers ....
Before we mail any warnings, I'll provide ***** (the AUSA handing the A-1 case and its offshoots) with the proposed list and final draft, and determine if he has any objections or concerns relating to what he's doing. The last paragraph to the sample warning letter was added as a "just-in-case" to avoid any future conflict with anything which may be in the works.
I am also appending a sample CITATION, but I'm not recommending it. I believe the referenced sections in a formal citation indicates that it is being issued because it is required (under our Rules) prior to us issuing any administrative forfeitures,.. .which may be argued, implies that they may be ignorant of the violations and should have been informed of the illegalities prior to any criminal charges. I don't believe a citation is required under our Rules for violations relating to activities for which an FCC authorization (including an equipment authorization) is required.
When the warning letters are issued, I hope Gary will be able to address questions concerning the Public Notice (especially as it relates to the Ranger and RCI models).
(Def.'s Ex. I.) This document is susceptible to the interpretation that FCC engineers at the time of the message believed that it was arguable whether regulatory violators who had imported open radios had knowingly violated the law.
Another telling document is Defendant's Exhibit L--an e-mail written from FCC employee Gary Hendrickson to Julius Knapp (another FCC employee) and apparently referencing the "Motion to Dismiss" filed by Defendants in this case. The e-mail reads in part as follows:
In your note on the transmittal slip, you made the comment that to your knowledge "none of the major brands can be modified to operate outside amateur bands--certainly not with the ease provided on the Ranger units."
Unfortunately, this isn't quite the case. Virtually all models of the major brands of "real" amateur equipment CAN be modified for out-of-band operation. This applies both to MF/HF and to VHF/UHF amateur equipment from Icom, Kenwood, Yaesu, etc. Usually, the mods require opening up the unit and removing a resistor or diode-on some, a switch which is hidden on an obscure P.C. board has to be flipped. The mods may not be quite as easy to accomplish as on the Ranger units, but we're just talking about a matter of difficulty.
The mod information is readily available in the amateur versions of the "radio mod" books. The manufacturers will tell an amateur how to do it if he provides them with a copy of his license. Many of the ham radio store's service departments will do the mods (usually upon showing of a license).
There is an exemption in the Rules which permits the use of non-type accepted equipment in the Amateur Radio Service, and for MARS and CAP use. For some strange reason, this exemption is found within the CB Rules (See 95.655(a)), rather than in Part 2! (If we're going to provide a "loophole" for manufacturers, let's be sure to place it right where they can easily find it!) ....
(Def.'s Ex. L.) This document is susceptible to the interpretation that FCC engineers believed at the time of this message that the radios imported by Ranger were not legally distinguishable from modifiable radios, which radios, arguably, were not prohibited by law at the time of the criminal conduct at issue. It would have, thus, provided the Defendant an argument both that the radios imported were not "prohibited by law" and that the regulations in place did not provide adequate notice to importers that the radios were so prohibited.
These materials were not produced to the Defendant by the-United States of America prior to March 30, 1998. Presuming receipt of these documents by mail took three days, see Fed. R. Crim. Proc. 45(e), the Defendant received these documents on April 2, 1998. After taking some time to examine these documents, Defendant's attorney signed his Motion for Attorney Fees on June 4, 1998 and filed the same with the Court on June 11, 1998. Defendant's Motion for Attorney Fees requests attorney fees and costs in the amount of $404,737.01. The United States' response did not comment on the amount of fees requested. However, the United States' sur-reply states an objection to the fees requested, as to the hourly rate employed, the number of hours worked, and the documentation for the fees. (Dkt. No. 384 at 6.)
LAW
Title 18 United States Code Section 3006A was amended effective November 26, 1997 by the Departments of Commerce, Justice and State, the Judiciary, and the Related Agencies Appropriations Act of 1998, Pub. L. No. 105-119, 111 Stat. 2440, 2519 (Nov. 26, 1997). Section 617 of the Act, the Hyde Amendment, provides in pertinent part 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, 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 rout not the burden of proof) provided for an award under section 2412 of title 28, United States Code ....
111 Stat. at 2519.
This amendment's sponsor, Henry Hyde, Chairman of the House Judiciary Committee, has said that the law was necessary to curb abuses by federal prosecutors. According to Hyde,
[Some federal prosecutions are] not just wrong, but willfully wrong.., frivolously wrong. They [federal prosecutors] keep information from you that the law says they must disclose. . .. . They suborn perjury.
62 Criminal Law Reporter 1019 (Oct. 1, 1997). Thus, it is fair to say that the law was intended specifically to curb abuses associated with the bringing of frivolous indictments, the subordination of perjury and the failure to disclose exculpatory evidence. In this respect, the law holds United States Attorneys to the ideal stated by Justice Sutherland in his famous opinion in Berger v. United States, 295 U.S. 78, 88 (1935):
The United States Attorney is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all; and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done. As such, he is in a peculiar and very definite sense the servant of the law, the twofold aim of which is that guilt shall not escape or innocence suffer. He may prosecute with earnestness and vigor--indeed, he should do so. But, while he may strike hard blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one.
Berger, 295 U.S. at 88. See also United States v. Payne, 2 F.3d 706, 714 (6thCir. 1993) (following Berger).
As mentioned by Hyde, one of the special responsibilities of federal prosecutors is to disclose exculpatory information to criminal defendants. This basic principle of federal criminal jurisprudence was set forth by the United States Supreme Court in Brady v. Maryland, 373 U.S. 83 (1963), which requires the government to disclose information to a criminal defendant which is favorable to the defendant and material to guilt or punishment. The Supreme Court more recently explained in v. Whitley, 514 U.S. 419, 432-34 (1995) that this duty applies regardless of the good or bad faith of the prosecution and regardless of whether a specific request for the information was made. The Supreme Court also said that information's materiality is determined not by "whether the defendant would more likely than not have received a different verdict with the evidence, but whether in its absence he received a fair trial, understood as a trial resulting in a verdict worthy of confidence." Id. at 434. While the Supreme Court instructed that a Brady violation may be found even if the evidence is sufficient to convict, id. at 434, it also instructed that in considering a Brady challenge the courts should view the evidence collectively and not simply item-by-item. Id. at 436. See also United States v. Frost, 125 F.3d 346, 382-83 (6thCir. 1997) (adopting above interpretation of Brady).
In adopting the Hyde Amendment, Congress made criminal fee requests subject to the procedures and limitations utilized by civil litigants under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. The EAJA permits fees to a prevailing corporation only if the organization's net worth does not exceed 7 million dollars and the organization had less than 500 employees at the time the action was filed. The EAJA limits fee applicants to attorney fees at the rate of $125/hour "unless the court determines that an increase in the cost of living or a special factor, such as the limited - availability of qualified attorneys for the proceedings involved, justifies a higher fee." 28 U.S.C. § 2412(d)(2)(A). The EAJA also requires attorneys to make an application for fees "within 30 days of final judgment "28 U.S.C. § 2412(d)(1)(B). The term '"final judgment' means a judgment that is final and not appealable, and includes an order of settlement[.]" 28 U.S.C. § 2412(d)(2)(G). The time limitation has been construed as a jurisdictional limitation for the filing of an application for attorney fees. Peters v. Secretary of Health and Human Services, 934 F.2d 693,694 (6th Cir. 10 1991); Allen v. Secretary of Health & Human Services, 781 F.2d 92, 94 (6thCir. 1986). One consequence of this jurisdictional limitation is that the 30-day time period is not ordinarily subject to equitable tolling. Clifton v. Heckler, 755 F.2d 1138, 1144-45 (5thCir. 1985); Epling v. United States, 958F. Supp. 312,315 n.1 (W.D. Ky. 1997); United States v. Linderr, 142 F.3d 437, 1998 WL 180519 (6thCir. April 8, 1998) (unpublished). This jurisdictional limitation is especially fatal to claims for attorney fees in criminal actions because the EAJA waiver of sovereign immunity as to other fee statutes and under the common law applies only to civil and not criminal actions. See 28 U.S.C. § 2412(b). For this reason, and because Federal Rule of Criminal Procedure 16 does not expressly permit monetary sanctions against the United States, at least one federal court prior to the enactment of the Hyde Amendment forbade awards of attorney fees as relief for discovery abuses in criminal actions. United States v. Horn, 29 F.3d 754 (1st Cir. 1994).
In the typical civil case justifying an EAJA award, final judgment is not reached until either a settlement resolving all claims is reached and ordered or all claims in the lawsuit are fully and finally litigated through appeal. This conclusion follows in part from federal practice under Federal Rule of Civil Procedure 54, which usually makes determinations of civil claims non-appealable until such time as all claims are decided. Fed. R. Civ. Proc. 54(b). After a final judgment within the meaning of Rule 54 is entered, the matter will become non-appealable either through exhaustion of the appeal process or through expiration of the time for appeal. Once the time for appeal expires,a moving party will have the statutory 30 days to file an application for attorney fees. Melkonyan v. Sullivan, 501 U.S. 89, 96 (1991). In other words, the 30-day period begins to run as soon as the judgment is no longer appealable. Shalala v. Schaefer, 509 U.S. 292, 302 (1993).
Nevertheless, EAJA time limitation works differently in criminal cases. The Double Jeopardy Clause of the Fifth Amendment to the United States Constitution prevents the United States from twice placing a criminal defendant in jeopardy for the same offense. Downum v. United States, 372 U.S. 734, 736 (1963); Ball v. United States, 163 U.S. 662, 669 (1896). The United States may not appeal a dismissal of an indictment when further prosecution is barred by a defendant's right against double jeopardy. 18 U.S.C. § 3731. Once a criminal jury is empaneled and sworn, jeopardy attaches. Serfass v. United-States, 420 U.S. 377, 388 (1975); Crist v. Bretz, 437 U.S. 28, 34-36 (1978); Downum, 372 U.S. at 737-38. After jeopardy attaches and the prosecution terminates, with certain exceptions not applicable here (e.g., failure of jurors to seasonably agree, mistrial caused by "manifest necessity" and etc.), further prosecution on the charges is barred. Crist, 437 at 34-36; Downum, 372 U.S. at 737. The United States Supreme Court held in Crist that a prosecutor's dismissal of criminal charges after jeopardy had attached prevented further prosecution. The Supreme Court held in Downum that a judge's discharge of a jury because of the unavailability of a prosecution witness also prevented timer prosecution. Thus, under the Hyde amendment and the EAJA, the dismissal of charges against a defendant after jeopardy has attached begins the 30-day limitation period since the dismissal is non-appealable as of the date of dismissal.
With these general principles in mind, there is no federal precedent as to the interpretation of the EAJA limitation of the Hyde Amendment. In particular, there is no precedent as to how the EAJA limitation period should apply in a case when the United States' bad faith is the concealment of exculpatory evidence and the exculpatory evidence is not revealed until after the expiration of the 30-day limitation period. A strict reading of the EAJA limitation in this context would preclude recovery. However, such a reading--that the United States can avoid liability by compounding its wrong -- is diametrically opposed to the purposes of Henry Hyde in offering this legislation and would convert the law into an empty legislative promise. The legislative history of the Amendment supports the creation of a limited extension of the application period in such a circumstance. This is because the legislature history recognized that the withholding of Brady materials sometimes occurs and that when it occurs it, absent a delay attributable to a defendant, it should be punished. This conclusion is buttressed by general principles of statutory interpretation. Among these principles are the principles that all Statutes should be read fully and interpreted judiciously rather than mechanically, Connecticut v. National Bank of Germain, 503 U.S. 249, 255 n. 1 (1992) (concurring opinion of Justice Stevens); and that remedial statutes should be interpreted in accordance with their remedial purposes, County of Washington v. Gunther, 452 U.S. 161, 178 (1981). The "cardinal principle of statutory construction is to save and not to destroy." National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1, 30 (1937). For this reason, the law favors those statutory interpretations which give effect to every word of the statute. United States v. Menasche, 348 U.S. 528, 538-39 (1955); United States v. Page, 131 F.3d 1173, 1180 (6th Cir. 1997). In order to give effect to Congress' purpose and words in awarding attorneys fees in criminal cases involving "bad faith" where the United States conceals its bad faith until more than 30 days after entry of judgment, a further reasonable time period should be permitted for the filing of an application for attorney fees.
Regardless of the application of the above fee-shifting statute, the Court has an obligation to enforce ethical rules as to attorneys including federal prosecutors. W.D. Michigan Local Rule of Criminal Practice and Procedure 57(j)-(k). Under said Rule, federal prosecutors are governed by the Michigan Rules of Professional Conduct especially including Rule 3.8, Special Responsibilities of a Prosecutor, when practicing in this Court. Rule 3.8(d) of the Michigan Rules of Professional Conduct provides that a prosecutor in a criminal case shall "make timely disclosure to the defense of all evidence of information known to the prosecutor that tends to negate the guilt of the accused..." Where there are apparent violations of law and/or the standards of professional conduct by Assistant United States Attorneys, the United States Supreme Court and lower courts have recommended referral for investigation and discipline by the Department of Justice Office of Professional Responsibility. United States v. Hasting, 461 U.S. 499, 506 n.5 (1983); United States v. Bernal-Obeso, 989 F.2d 331,333 n.2 (9thCir. 1993).
LEGAL ANALYSIS
Upon review of the matter, the Court determines that the moving party, Ranger Taiwan, is a "party" within the meaning of the EAJA, 28 U.S.C. § 2412(d)(2)(B), and a "prevailing party" within the meaning of the EAJA and the Hyde Amendment, 28 U.S.C. § 2412(d)(2)(H) and 18 U.S.C. § 3006A note.
Upon review of the alleged misconduct, the Court determines that the conduct of the Assistant United States Attomey assigned this matter violated his obligations to share exculpatory information under Brady v. Maryland, 373 U.S. 83 (1963) and constituted "bad faith" within the meaning of the Hyde Amendment. The Court also determines that there are no "special Circumstances" which would make an award of fees unjust. The guilt of other related companies is not under this set of facts a "special circumstance" which makes an award of fees unjust nor does it deprive the Defendant of the presumption of innocence that attends a binding dismissal after the empaneling of a jury.
Based on the timing of events in this suit, the Court determines that the application for fees was filed more than thirty (30) days after the entry of the order dismissing the criminal charges ' against the Defendant, which dismissal constituted "final judgment'' under the EAJA and the Hyde Amendment. This delay was not due to the fault of the Defendant in that the documents revealing the Brady violation were not disclosed until the expiration of the 30-day limitation period. The documents disclosed were numerous and at the time of disclosure were not expected to reveal Brady violations. Therefore, the Court determines that the Defendant was permitted under the statute a reasonable period of time to discover the Brady violation from the documents and to file its application for attorney fees under the EAJA. The Court determines that, as such, the application was timely filed.
Because the United States has made a late objection to the amount of fees by raising the issue in its sur-reply brief, the Court has not received complete briefing as to the amount of attorney fees which should be assessed under the Hyde Amendment. The Court will permit further briefing from the parties before determining the amount of fees due.
Finally, the obligation of the Court to enforce its ethical standards in federal prosecutions requires this Court to order the Assistant United States Attorney involved to appear before this Court to show cause why the allegations made here should not be referred to the Office of Professional Responsibility of the Department of Justice for investigation pursuant to 28 C.F.R. § 0.39.a.
CONCLUSION
Accordingly, for the reasons stated, an order shall issue granting the Motion for Attorney Fees but ordering further briefing to determine the amount of fees. An order to show cause shall also issue and shall require the Assistant United States Attorney to show cause why a formal investigation before the Office of Professional Responsibility of the Department of Justice should not be commenced.
DATED in Kalamazoo, MI Aug 24, 1998
/s/
RICHARD ALAN ENSLEN
Chief Judge
