REVISED - June 2, 2000
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 99-10096 _____________________
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
JAMES TRUESDALE; RONALD HAMILTON
Defendants - Appellants
_________________________________________________________________
Appeal from the United States District Court for the Northern District of Texas _________________________________________________________________ May 5, 2000
Before KING, Chief Judge, and DUHÉ and DeMOSS, Circuit Judges.
KING, Chief Judge:
Defendants-Appellants James Truesdale and Ronald Hamilton
appeal from the district court’s denial of their joint
application for reimbursement of attorney’s fees. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
This case revisits the story of an offshore sports wagering
enterprise that is well-chronicled in one of our previous
opinions. See United States v. Truesdale, 152 F.3d 443 (5th Cir.
1998). Defendants-Appellants James Truesdale and Ronald Hamilton (“Appellants”), along with two others, were indicted and tried on
multiple charges, including conspiracy, money laundering, and
conducting an illegal gambling operation. There was evidence at
trial that bets were placed over toll-free numbers that
terminated in offices offshore, where such activity is legal;
however, toll-free numbers also terminated at Appellants’ homes,
but these lines were used for information purposes only. There
was also evidence that Appellants received money in Texas to
establish betting accounts, that they deposited the money
received in Texas bank accounts, and that they paid winners out
of accounts held in Texas. Appellants and their co-defendants
were convicted of several of the charges, including conducting an
illegal gambling operation. On direct appeal, we reversed their
convictions on all counts. See id. at 450.
18 U.S.C. § 1955 was the basis for the illegal gambling
operation charge. It prohibits “conduct[ing], financ[ing],
manag[ing], supervis[ing], direct[ing], or own[ing] all or part
of an illegal gambling business.” 18 U.S.C. § 1955(a) (1994).
An illegal gambling business is defined, in part, as one that “is
in violation of the law of the State or political subdivision in
which it is conducted.” 18 U.S.C. § 1955(b)(1)(i) (1994). As we
explained in the direct appeal of Appellants’ and their co-
defendants’ convictions:
In order to meet the first prong (violation of state law), the indictment alleged that appellants’ gambling operation was being conducted in violation of Chapter 47,
2 Gambling, of the Texas Penal Code. The indictment did not cite a specific provision within this chapter, but it alleged only “bookmaking.” Additionally, the government’s case focused entirely on and the jury charge instructed only on the “bookmaking” provisions of Chapter 47. Chapter 47 defines “bookmaking” as follows:
(A) to receive and record or to forward more than five bets or offers to bet in a period of 24 hours; (B) to receive and record or to forward bets or offers to bet totaling more than $1,000 in a period of 24 hours; or (C) a scheme by three or more persons to receive, record, or forward a bet or an offer to bet.
Tex. Penal Code § 47.01(2)(A)-(C).
Under Texas law “bookmaking” is illegal, and if a person intentionally or knowingly commits “bookmaking,” he commits the offense of gambling promotion. Tex. Penal Code § 47.03(a)(2). Bookmaking, however, is not the only activity that constitutes gambling promotion. Section 47.03(a) lists five separate categories of activity (including “bookmaking”) each of which can constitute gambling promotion. Section 47.03(a) makes it a separate offense for an individual, for gain, to “... become[ ] a custodian of anything of value bet or offered to be bet[.]” Tex. Penal Code § 47.03(a)(3). In this case, neither the indictment nor the jury charge nor the government’s argument alluded to this section. The indictment only mentioned bookmaking and the jury charge only tracked the language of sections 47.01(2) and 47.03(a)(2).
Truesdale, 152 F.3d at 446-47. The evidence in the case
indicated “that the bookmaking activities occurred outside the
United States” and not in the state of Texas, as § 1955 requires.
Id. at 447. There was evidence that Appellants had the
capability to accept bets in Texas and that callers attempted to
place bets in Texas, and a notebook seized at Hamilton’s
residence could have indicated that bets were being taken in
Texas. However, the opinion noted that Appellants went to great
3 lengths to ensure that their business was conducted legally. See
id. at 448. In sum, “the circumstantial evidence . . . [did] not
furnish an adequate basis from which a reasonable juror could
conclude beyond a reasonable doubt that the appellants were
engaged in bookmaking.” Id. at 448-49. We indicated that there
may have been some evidence that Appellants became custodians of
gambling money in violation of section 47.03(a)(3), but the
government did not indict them on that section, try them on that
section, or instruct the jury on that section.
Following our decision, Appellants’ co-defendants moved the
district court for reimbursement of attorneys’ fees under the so-
called Hyde Amendment,1 and Appellants soon followed suit. The
1 The Hyde Amendment was passed in order to provide the reimbursement of attorney’s fees to defendants in certain criminal cases. It provides:
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
4 district court denied their co-defendants’ motion, which denial
was never appealed, and it further denied Appellants’ motion in
an order entered on December 22, 1998. Appellants filed a notice
of appeal (“NOA”) on January 20, 1999, twenty-nine days after the
district court’s order was entered. Before reaching the merits
of Truesdale and Hamilton’s appeal, we must decide whether their
NOA was timely filed.
II. APPELLATE JURISDICTION: RULE 4(a) OR 4(b)?
Federal Rule of Appellate Procedure 4 governs the time
period during which an NOA may be filed. “A timely notice of
appeal is necessary to the exercise of appellate jurisdiction.”
United States v. Cooper, 135 F.3d 960, 961 (5th Cir. 1998)
(citing United States v. Robinson, 361 U.S. 220, 224 (1960)).
Simply put, if a notice of appeal is untimely, we cannot
entertain the merits of a case. In order to establish the
timeliness of the NOA filed in the instant appeal, we must begin
by determining whether it is governed by Rule 4(a)2 or Rule
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.
Pub. L. No. 105-119, § 617, 111 Stat. 2440, 2519 (1997), reprinted in 18 U.S.C. app. § 3006A (Supp. III 1997). 2 Rule 4(a) provides, in pertinent part, that, “[i]n a civil case, . . . the notice of appeal . . . must be filed with the district clerk within 30 days after the judgment or order appealed from is entered.” FED. R. APP. P. 4(a)(1)(A). This time
5 4(b).3 Only one other court of appeals has addressed this issue.
In United States v. Robbins, the Court of Appeals for the Tenth
Circuit held that an appeal from a district court’s denial of a
motion filed under the Hyde Amendment is governed by Rule 4(b).
See 179 F.3d 1268, 1270 (10th Cir. 1999).
At the outset, what is most important here is to establish a
clear rule governing NOAs in cases like this one. Unfortunately,
however, the text of the Hyde Amendment does not clearly
establish whether Rule 4(a) or 4(b) should apply. A compelling
case can be made that Rule 4(b) should apply to this case and
others like it. The Hyde Amendment clearly states that “the
court, in any criminal case . . . may award to a prevailing party
. . . a reasonable attorney’s fee . . . .” Pub. L. No. 105-119,
§ 617, 111 Stat. 2440, 2519 (1997), reprinted in 18 U.S.C. app.
§ 3006A (Supp. III 1997) [hereinafter “Hyde Amendment”]. This
language can be read as signaling that a Hyde Amendment motion
arises in a criminal case. See Robbins, 179 F.3d at 1270. On
the other hand, the language can be read as simply signaling that
the provision is intended to provide relief when, “in any
criminal case . . . the court finds that the position of the
period is extended to 60 days when the United States is a party. See FED. R. APP. P. 4(a)(1)(B). 3 Rule 4(b) provides, in pertinent part, that, “[i]n a criminal case, a defendant’s notice of appeal must be filed in the district court within 10 days after . . . the entry of either the judgment or the order being appealed . . . .” FED. R. APP. P. 4(b)(1)(A).
6 United States was vexatious, frivolous, or in bad faith.” Id.
The latter reading does not necessitate the conclusion that the
motion itself is a part of the underlying criminal case. For the
reasons that follow, we conclude that the latter reading is
appropriate. We are consequently unable to join the Tenth
Circuit’s conclusion and decide that Rule 4(a) governs an appeal
from a district court’s ruling on a motion filed under the Hyde
Amendment.
Citing United States v. Young, 966 F.2d 164, 165 (5th Cir.
1992), and United States v. De Los Reyes, 842 F.2d 755, 757 (5th
Cir. 1988),4 the government argues that, like a motion to correct
sentence under Federal Rule of Criminal Procedure 35, “a motion
for reimbursement of attorney’s fees and costs, pursuant to the
Hyde Amendment, should be considered part and parcel of the
criminal matter rather than a separate civil proceeding.”
Government’s Brief at 19. The government provides no support for
4 In each of those cases, the defendant appealed from the district court’s disposition of a motion to correct sentence under Rule 35 of the Federal Rules of Criminal Procedure, and in both cases, the notice of appeal was filed outside of the window allowed by Rule 4(b) but inside the window allowed by Rule 4(a). We recognized that “[a]n appeal from a ruling on a Rule 35 motion is considered part of the original criminal proceeding and must be taken within the ten days provided by [Rule 4(b)].” De Los Reyes, 842 F.2d at 757. We also recognized in each case that the same motion could have been raised in a proceeding under 28 U.S.C. § 2255, in which case the sixty-day window in Rule 4(a)(1)(B) would have applied. Citing “the liberality accorded to pro se filings,” id., we decided to treat the ill-styled motions as § 2255 motions and found jurisdiction to entertain the appeals.
7 this argument, and after comparing a motion under the Hyde
Amendment to a Rule 35 motion, we cannot agree. A Rule 35 motion
deals directly with the movant’s liberty interest, precisely the
sort of consideration that has been cited to support the shorter
filing period under Rule 4(b). See United States v. Craig, 907
F.2d 653, 656 (7th Cir. 1990) (“The shorter time limit for
criminal appeals furthers the public interest in the prompt
resolution of criminal proceedings. Neither the interests of
society nor of individual criminal defendants are served by a
plodding appellate process that could change the results of a
trial, often while the defendant has already begun to serve a
sentence of incarceration.”). A motion under the Hyde Amendment,
on the other hand, does not implicate the movant’s liberty
interest. Indeed, as we discuss shortly, the interests it
implicates are identical to those implicated by a motion for
attorney’s fees under 28 U.S.C. § 2412, the Equal Access to
Justice Act (the “EAJA”), the procedures and limitations of
which, with a few exceptions, are made applicable to proceedings
under the Hyde Amendment. The longer time period provided in
Rule 4(a) applies to proceedings under the EAJA. We find the
comparison of a motion filed pursuant to the Hyde Amendment to
one filed under the EAJA a closer analogy than the Rule 35
comparison provided by the government on brief.
We have in the past used this sort of analogy to decide
which Rule 4 time period to apply. For example, United States v.
8 Cooper, 876 F.2d 1192 (5th Cir. 1989), dealt with a petition for
a writ of error coram nobis. We determined that such a petition
was equivalent to a motion under 28 U.S.C. § 2255, the difference
being that a § 2255 motion is made by a person in federal custody
and a petition for a writ of error coram nobis is filed by a
person who has been released. We explained that the rules
governing § 2255 cases state specifically that Rule 4(a) applies
to such motions, see Rule 11 Governing § 2255 Proceedings for the
United States District Courts, 28 U.S.C. app. § 2255 (1994), and
concluded that Rule 4(a) should apply to an appeal from the
denial of the petition, just as the Rules Governing § 2255
Proceedings specifically apply Rule 4(a) to an appeal from a
denial of a § 2255 motion. Two cases cited by Appellants from
the Court of Appeals for the Seventh Circuit similarly apply Rule
4(a) after comparing the proceeding at issue to a § 2255
proceeding. See Betts v. United States, 10 F.3d 1278 (7th Cir.
1993) (petition for a certificate of innocence); United States
v. Craig, 907 F.2d 653 (7th Cir. 1990) (petition for a writ of
error coram nobis).
Here, a motion under the Hyde Amendment is equivalent to a
motion under the EAJA. In each case, the movant is seeking an
award of attorney’s fees based upon a litigating strategy
employed by the government that, the movant claims, conflicts
with certain statutorily defined notions of fair play. It makes
little sense that the time period during which the movant may
9 file an NOA from the denial of such a motion should differ
depending upon whether the government’s potentially offensive
litigation strategy was employed in a civil case or a criminal
case. Our comparison of Hyde Amendment motions to EAJA motions
is bolstered by Congress’ direction that the procedures and
limitations of the EAJA are, with limited exceptions,
incorporated into the Hyde Amendment.5
Finally, it could prove problematic for the government were
we to hold that a motion filed pursuant to the Hyde Amendment is
part and parcel of the underlying criminal case and therefore
subject to the Rule 4(b) filing period. As a general rule, the
government cannot, without statutory authority, appeal from a
decision in a criminal case. See United States v. Sanges, 144
U.S. 310, 312 (1892). While the question is not before us, we
are aware of no statute that authorizes the government to appeal
from a ruling on a motion for an award of fees in a criminal
case.6 We anticipate that holding as the government argues would
5 We agree that application of the Rule 4(a) appeals period is not a procedure contained directly within the text of the EAJA. But, as we see it, Congress’ direction that the procedures of the EAJA should apply to proceedings under the Hyde Amendment evinces its intent that, absent statutory direction to treat the proceedings differently, the case giving rise to the motion for an award of fees does not control, and Hyde Amendment proceedings and EAJA proceedings should be conducted in a like manner. 6 We suspect that because of the Tenth Circuit’s construction of 28 U.S.C. § 3731, which authorizes the government to appeal in certain criminal cases, this concern was not apparent to the panel that decided Robbins. Compare United States v. Prescon Corp., 695 F.2d 1236, 1240 (10th Cir. 1982)
10 create a situation in this circuit where a movant would be
entitled to appeal from an adverse ruling on a motion filed
pursuant to the Hyde Amendment, but the government would not be
afforded the same privilege. We cannot imagine that the Congress
intended such a result and are unwilling, absent clearer
statutory direction, to establish precedent in this circuit
lending support to such an outcome. If Congress had indeed
desired these sorts of proceedings to be treated as part and
parcel of the underlying criminal case, we would have expected a
path to have been established for the government to appeal. We
conclude that Rule 4(a) applies to an appeal from a ruling on a
motion pursuant to the Hyde Amendment.
Having so decided, we are left with one last jurisdictional
question: Is the NOA in this case fatally premature? Rule
4(a)(1)(B) provides that when the United States is a party to a
civil case, the NOA “may be filed . . . within 60 days after the
judgment or order appealed from is entered.” Rule 4(a)(2)
provides that an NOA “filed after the court announces a decision
or order--but before the entry of the judgment or order--is
treated as filed on the date of and after the entry.” Under Rule
4(a), entry occurs “when [the judgment or order] is entered in
(section 3731 authorizes any government appeal from a final order that does not implicate the Double Jeopardy Clause) with United States v. Denson, 588 F.2d 1112, 1125, adopted en banc, 603 F.2d 1143, 1145 (5th Cir. 1979) (section 3731 only authorizes appeals from orders similar to those in it).
11 compliance with Rules 58 and 79(a) of the Federal Rules of Civil
Procedure.” FED. R. APP. P. 4(a)(7).
Federal Rule of Civil Procedure 79(a) requires that the
decision of the district court be recorded on the civil docket.
Here, the ruling below was recorded on the criminal docket. It
has therefore never been entered in strict compliance with Rule
4(a)(7), and an argument can be made that an appeal is not
perfected under Rule 4(a)(2) until so entered. Neither party has
argued, however, that our appellate jurisdiction is defeated by
the failure of the clerk of the district court to record the
ruling in this case on the civil docket, and we can see no reason
why our jurisdiction should be so defeated. Were we to dismiss
this action for lack of jurisdiction, “the district court would
simply [enter its judgment on the civil docket], from which a
timely appeal would then be taken. Wheels would spin for no
practical purpose.” Bankers Trust Co. v. Mallis, 435 U.S. 381,
385 (1978). We find it unnecessary to dismiss this action for
two reasons.
First, what is important is that the judgment of the
district court be final,7 which it obviously was in this case,
and the appellee, the government here, not be misled or
7 “For a ruling to be final, it must end the litigation on the merits and the judge must clearly declare his intention in this respect.” Firstier Mortgage Co. v. Investors Mortgage Ins. Co., 498 U.S. 269, 273-74 (1991) (citations and internal quotation marks omitted).
12 prejudiced by the fact that the judgment was recorded on the
criminal docket. See Mallis, 435 U.S. at 387; Firstier Mortgage
Co. v. Investors Mortgage Ins. Co., 498 U.S. 269, 276 (1991).
The government was neither misled nor prejudiced in this case.
Second, in the past we have not found our jurisdiction
defeated by a judment being entered on the wrong docket. In
Smith v. Smith, 145 F.3d 335 (5th Cir. 1998), we were confronted
with an appeal from a criminal contempt ruling that was entered
on the civil docket. We determined that we did not need to
decide whether Rule 4(a) or 4(b) applied, because the notice of
appeal was timely in either case. See id. at 339. Implicit in
that decision was a determination that the entry of judgment on
the civil docket did not defeat jurisdiction if the case was
criminal and Rule 4(b) applied. It follows that the converse
should hold true in this case, and we determine that we have
jurisdiction to entertain the appeal.
III. STANDARD OF REVIEW
In Pierce v. Underwood, the Supreme Court determined that a
district court’s decision regarding an award of attorney’s fees
under the EAJA was subject to appellate review under the abuse of
discretion standard. See 487 U.S. 552, 563 (1988). Appellants
argue that the factors articulated in Pierce militate against an
abuse of discretion standard and support de novo review in this
13 case. We disagree and conclude that the close ties between the
EAJA and the Hyde Amendment coupled with an application of the
factors relied upon by the Court in Pierce support an application
of the abuse of discretion standard.8
Awards made pursuant to the Hyde Amendment “shall be granted
pursuant to the procedures and limitation (but not the burden of
proof) provided for an award under [the EAJA].” Hyde Amendment,
supra. The proper standard of appellate review is not one of the
procedures and limitations of the EAJA, but the language of the
Hyde Amendment indicates Congress’ intent to have proceedings
under the Hyde Amendment treated similarly to those under the
EAJA. While the language quoted above does not conclusively
determine the proper standard of review, the tie-in between the
two provisions lends support to finding that the same standard
applies in both situations.
In Pierce, the Supreme Court considered several factors in
determining the correct standard of review for EAJA proceedings.
First, the Court looked to the language of the statute itself.
The EAJA
provides that attorney’s fees shall be awarded “unless the court finds that the position of the United States was substantially justified.” 28 U.S.C. § 2412(d)(1)(A) (emphasis added). This formulation, as opposed to simply
8 In United States v. Gilbert, the Court of Appeals for the Eleventh Circuit, the only other circuit court to consider the proper standard of review for Hyde Amendment cases, likewise determined that an abuse of discretion standard was appropriate. See 198 F.3d 1293, 1298 (11th Cir. 1999).
14 “unless the position of the United States was substantially justified,” emphasizes that the determination is for the district court to make, and thus suggests some deference to the district court on appeal.
Pierce, 487 U.S. at 559. The Hyde Amendment similarly provides
that “the court . . . may award . . . a reasonable attorney’s fee
. . . where the court finds that the position of the United
States was vexations, frivolous, or in bad faith . . . .” Hyde
Amendment, supra (emphasis added). The similar language in the
Hyde Amendment supports deference to the district court’s
decision as well.
The Court in Pierce also considered whether “‘one judicial
actor is better positioned than another to decide the issue in
question.’” 487 U.S. at 560 (quoting Miller v. Fenton, 474 U.S.
104, 114 (1985)). The Court noted that some aspects of the
government’s litigating strategy may be known only to the
district court. Also, the circuit court may have to spend
inordinate time becoming more familiar with the record than is
usually required for appeals in order to evaluate not only the
merits of the case, but also the government’s litigating
strategy. While the Hyde Amendment deals with criminal cases
rather than civil cases, we find these considerations weigh
equally in favor of applying a deferential level of review in
Hyde Amendment appeals. The district court is much more familiar
with the ins-and-outs of the case, and its judgment will often
reflect its unique perspective. Applying a less deferential
15 standard of review would show disrespect for that unique
perspective.
Finally, the Supreme Court recognized that flexibility was
needed in the area in order for the “substantially justified”
standard to develop. “[T]he question . . . is . . . little
susceptible, for the time being at least, of useful
generalization, and likely to profit from the experience that an
abuse-of-discretion rule will permit to develop.” Id. at 562.
The “vexatious, frivolous, or in bad faith” standard of the Hyde
Amendment, along with the “for good cause shown” standard that
governs whether the court may receive evidence in camera and ex
parte, will similarly benefit from the experience envisioned by
the Supreme Court in Pierce. We conclude that an abuse of
discretion standard should apply to appeals from judgments in
Hyde Amendment proceedings.
Legal determinations underlying the district court’s
decision are, however, reviewed de novo. See Spawn v. Western
Bank-Westheimer, 989 F.2d 830, 839 (5th Cir. 1993). “As Judge
Friendly has stated, ‘[i]t is not inconsistent with the
discretion standard for an appellate court to decline to honor a
purported exercise of discretion which was infected by an error
of law.’” Id. (quoting Abrams v. Interco, Inc., 719 F.2d 23, 28
(2d Cir.1983)).
16 IV. APPELLANTS’ RIGHT TO DISCOVERY AND A HEARING
We begin by disposing of Appellants’ argument that the Hyde
Amendment entitles them to discovery and a hearing as a matter of
right. For this proposition, Appellants cite United States v.
Gardner, 23 F. Supp. 2d 1283 (N.D. Okla. 1998). There, however,
the court explained that the movant had requested discovery and
the government opposed that request. See id. at 1295-96. That
is not the case here. Appellants do not allege that they moved
for discovery or a hearing in the district court, and our
independent review of the record likewise reveals no such motion.
The scope of discovery allowable or required upon request of a
movant for attorney’s fees pursuant to the Hyde Amendment is
therefore not an issue we need address in this case. We must
decide only whether the district court abused its discretion by
ruling on Appellants’ motion without granting discovery or a
hearing, despite the fact that neither was requested.
The Hyde Amendment provides that, “[t]o 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
. . . and evidence or testimony so received shall be kept under
seal.” Hyde Amendment, supra. The Amendment, as originally
introduced by Representative Hyde, included no such provision.
See 143 Cong. Rec. H7786-04, H7791 (daily ed. Sept. 24, 1997).
17 The provision was added in response to concerns voiced by some
members of the House regarding
the after-the-fact exercise required under [the Hyde Amendment] to determine justification for prosecution. . . . There may be evidence that was relied upon in good faith by the prosecution in coming to its decision to prosecute, but was later suppressed at trial; there may be disclosure or required disclosure and compromise of confidential sources or law enforcement techniques . . . .
Id. at H7793 (remarks of Representative Rivers). See also
Gilbert, 198 F.3d at 1300-01.
Appellants assert that Representative Rivers’s remarks were
made at a time when the government was expected to bear the
burden of proof under the Amendment. They argue that the burden
was changed to the defendant, yet the Amendment still provides
for the confidential submission of evidence. They conclude that
it “stand[s] to reason that Congress intended for the claimant to
have access to evidence except such evidence which is
confidential, and such evidence is to be presented to the court
in camera.” Appellants’ Brief at 21-22. We disagree. It
appears the provision for in camera review of evidence was
included to enable the government to defend itself against Hyde
Amendment motions and at the same time protect confidential
information. We do not read the Amendment as providing for
discovery and a hearing as a matter of right.
The EAJA, the procedures and limitations of which are
incorporated into the Hyde Amendment, provides that:
18 Whether or not the position of the United States was substantially justified shall be determined on the basis of the record (including the record with respect to the action or failure to act by the agency upon which the civil action is based) which is made in the civil action for which fees and other expenses are sought.
28 U.S.C. § 2412(d)(1)(B) (1994). The government argues that
this provision is a procedure contained in the EAJA, and that it
is therefore incorporated into the Hyde Amendment, except to the
extent that the latter provides otherwise. The government
contends that the language of the Hyde Amendment “suggests that a
district court has latitude to permit an expansion of the record,
for good cause, beyond that available under the EAJA, while at
the same time providing necessary safeguards.” Government’s
Brief at 31. The government’s reading of the Amendment seems
reasonable, but we need not today determine the situations under
which discovery or a hearing is allowed or required, assuming
either is allowed at all. It is clear that the Amendment,
especially when read in conjunction with the EAJA, does not
provide for discovery or a hearing as a matter of right. The
district court, therefore, did not abuse its discretion in ruling
on Appellants’ motion without first affording them an opportunity
for discovery or a hearing, because no motion for either was ever
filed with the court.
V. THE BURDEN AND LEVEL OF PROOF
19 Both parties argue that in order to recover attorney’s fees
as a prevailing party, the Appellants bear the burden of proof
under the Hyde Amendment to show by a preponderance of the
evidence that the government’s position was vexatious, frivolous,
or in bad faith. We agree. The Hyde Amendment provides that
awards under it “shall be granted pursuant to the procedures and
limitation (but not the burden of proof) provided for an award
under [the EAJA].” Hyde Amendment, supra. It is clearly
established that, under the EAJA, the government bears the burden
of proof with regard to its litigating position. See United
States v. 5,507.38 Acres of Land, 832 F.2d 882, 883 (5th Cir.
1987). The language of the Hyde Amendment expresses a desire to
shift that burden to the movant. The only other court of appeals
that has addressed this issue agrees that the movant bears the
burden of proof. See Gilbert, 198 F.3d at 1304.
Under the EAJA, the government must prove by a preponderance
of the evidence that its position was substantially justified.
See United States v. One Parcel of Real Property, 960 F.2d 200,
208 (1st Cir. 1992). The Hyde Amendment changes only the party
with whom burden of proof lies, not the level of proof by which
the claim must be established. We conclude that a party moving
for an award of attorney’s fees under the Hyde Amendment must
establish by a preponderance of the evidence that the
government’s position was vexatious, frivolous, or in bad faith.
20 VI. THE VEXATIOUS, FRIVOLOUS, OR IN BAD FAITH STANDARD
The EAJA directs courts to award “to a prevailing party
other than the United States fees and other expenses . . .
incurred by that party in any civil action . . . unless the court
finds that the position of the United States was substantially
justified or that special circumstances make an award unjust.”
28 U.S.C. § 2412(d)(1)(A) (1994) (emphasis added). The Supreme
Court has interpreted the phrase substantially justified to mean
“justified to a degree that could satisfy a reasonable person.”
Pierce, 487 U.S. at 565. The Court equated a substantially
justified position with one having a “reasonable basis in law and
fact.” Id. at 566 n.2. The Hyde Amendment, on the other hand,
allows a district court in a criminal case to “award to a
prevailing party, other than the United States, a reasonable
attorney’s fee and other litigating 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.” Hyde Amendment, supra
(emphasis added). Appellants suggest that, other than the
switched burden of proof, the standards in the EAJA and the Hyde
Amendment are the same; a movant may succeed under the Hyde
Amendment if he establishes that the prosecution was not
substantially justified. The language of the two provisions and
the legislative history prove otherwise.
21 The Hyde Amendment, as originally introduced on the floor of
the House, made attorney’s fees available absent special
circumstances making such an award unjust, “unless the court
finds that the position of the United States was substantially
justified.” 143 Cong. Rec. H7786-04, H7791 (daily ed. Sept. 24,
1997). In discussing the proposed Amendment, Representative Hyde
drew parallels between it and the EAJA. As far as the standard
applicable in such proceedings, he stated that the Amendment
“ought to protect anybody who is abused by a suit that is not
substantially justified. . . . What is the remedy, if not this,
for somebody who has been unjustly, maliciously, improperly,
abusively tried by the Government . . . .” Id. at H7792.
Representative David Skaggs responded to these comments, stating,
“I think the gentleman proves too much. Were the words
‘malicious’ and ‘abusive’ in his amendment, and maybe those are
criteria that also ought to be introduced, it would be a
different matter.” Id. The standard was eventually changed to
“vexatious, frivolous, or in bad faith” in the Conference
Committee. See Gilbert, 198 F.3d at 1301-02. This change
signifies Congress’ desire to limit the scope of the Amendment.
A movant under the Hyde Amendment must prove more than just that
the government’s position was not substantially justified. See
id. at 1302, 1304; cf. Pierce, 487 U.S. at 566 (“To be
‘substantially justified’ means, of course, more than merely
undeserving of sanctions for frivolousness . . . .”).
22 VII. APPELLANTS’ CASE
The district court seems to have agreed with Appellants’
position. It held that a motion filed pursuant to the Hyde
Amendment can succeed only if the movant can “establish that the
government did not possess sufficient evidence that could satisfy
a reasonable person to believe that the prosecution . . . had a
reasonable basis in law and fact.” Memorandum Opinion and Order
denying a motion by Richard Jones and Sandra Miller, filed
December 7, 1998, at 4, incorporated by reference in Order filed
Dec. 22, 1998. This conclusion was based on the district court’s
ruling that, “because the procedures and limitations of the EAJA
apply to the Hyde Amendment, a prevailing party is not entitled
to an award if the government’s position in the litigation was
‘substantially justified.’” Id.
We disagree with the district court that a movant need only
prove that the government’s position was not substantially
justified, i.e. that “a reasonable person considering the
government’s evidence could [not] find that the prosecution of
defendants had a rational basis in both law and fact.” Id. at 5.
As previously explained, the “vexatious, frivolous, or in bad
faith” standard is more demanding on a movant than the “not
substantially justified” standard. The district court was
correct, however, that if a movant is unable even to establish
that the prosecution was not substantially justified, he
23 certainly cannot establish that it was vexatious, frivolous, or
brought in bad faith. The district court here concluded that
Appellants failed to establish that the government’s prosecution
of them was not substantially justified. If the district court
was correct in this conclusion, then it did not abuse its
discretion in denying Appellants’ Hyde Amendment motion, which
calls for an even more demanding standard.
Appellants first argue that the government knew, or should
have known, that they were not engaged in bookmaking in Texas,
and that, therefore, the government’s prosecution of them was
vexatious and frivolous. According to Appellants, the
government’s star witness testified that no bets were taken in
Texas. Appellants argue that this case “was clearly a situation
where [a Dallas police officer involved in the case] was saying
that the F.B.I. contended that the operation was illegal, and the
F.B.I. was saying that they were relying on [the Dallas police
officer’s] training and experience in illegal gambling
operations.” Appellant’s Brief at 33. Appellant’s own
description sounds more of confusion and sloppiness than
vexatiousness or frivolousness. This conclusion is supported by
the government’s argument that there was some evidence that
Appellants had broken state gambling laws by becoming custodians
of gambling proceeds, but the government neglected to proceed on
this theory, arguing instead only that Appellants broke state law
by engaging in bookmaking.
24 In reaching its conclusion that Appellants had failed to
establish that the government’s position was not substantially
justified, the district court relied on evidence that toll-free
numbers terminated at Appellants’ homes, Appellants paid out
winnings from Texas bank accounts, the notebook found in
Hamilton’s house contained betting information, several callers
attempted to place bets with federal agents on the toll-free
lines terminating at Appellants’ homes, and certain documents
seized from Truesdale’s home contained possible betting
information. The district court had previously tied the “not
substantially justified” standard to the “vexatious, frivolous,
or in bad faith” standard, and it ruled that “[a]lthough this
evidence was insufficient for a reasonable jury to find beyond a
reasonable doubt that [Appellants] had engaged in bookmaking
operations in Texas, it was sufficient evidence to indicate that
the government’s prosecution of Truesdale and Hamilton was
neither vexatious, frivolous, nor in bad faith.” Order filed
Dec. 22, 1998, at 2. While we disagree with the standard the
district court applied, we agree that Appellants failed to
establish even that the government’s position was not
substantially justified. “To be substantial, evidence must be
relevant and sufficient for a reasonable mind to accept as
adequate to support a conclusion; it must be more than a speck or
scintilla but it need not be a preponderance.” Taylor v. Bowen,
782 F.2d 1294, 1298 (5th Cir. 1986). Because Appellants failed
25 even to establish that the government’s prosecution of them was
not substantially justified, they cannot establish that the
prosecution was vexatious, frivolous, or in bad faith. The
district court, therefore, did not abuse its discretion in
denying Appellants’ motion.
Finally, Appellants argue that the money laundering charges
against them were brought in bad faith. Our independent review
of the record reveals that Appellants failed to raise this issue
before the district court. If a party raises an issue for the
first time on appeal, it can prevail only if it shows that the
district court committed a plain error that affects the party’s
substantial rights. Douglass v. United Servs. Auto. Ass’n, 79
F.3d 1415, 1423 (5th Cir. 1996) (en banc). If the trial court
committed a plain error that affects a party’s substantial
rights, we may correct the error only if it “seriously affects
the fairness, integrity, or public reputation of judicial
proceedings.” United States v. Olano, 507 U.S. 725, 736 (1993).
Appellants have not made the requisite showings in this case.9
VIII. CONCLUSION
For the foregoing reasons, the judgment of the district
court is AFFIRMED.
9 We therefore need not address the issue of whether the Hyde Amendment provides relief if just a portion of the government’s prosecution is vexatious, frivolous, or brought in bad faith.