United States v. Skeddle

United States Court of Appeals for the Sixth Circuit · Evidence

EvidenceHyde AmendmentAttorney's FeesCriminal ProcedureHyde Amendmentattorneys' feesvexatiousfrivolous

Facts

Skeddle was first prosecuted in a large fraud case arising from transactions involving LOF, CTM, and a network of corporations connected to LOF executives; the defendants were acquitted. Prosecutors then referred Skeddle, Costin, and their accountant to the Tax Division, which obtained an eighteen-count indictment including tax-fraud charges. The district court entered judgments of acquittal on all counts against Skeddle before the case went to the jury. Skeddle then sought $654,000 in fees under the Hyde Amendment, arguing the government's tax theories were obviously defective and thus vexatious, frivolous, or in bad faith.

Issue

Did the district court abuse its discretion in denying Hyde Amendment attorneys' fees to Skeddle after his acquittal, where he argued the government's tax-fraud prosecution was vexatious, frivolous, or in bad faith? More specifically, did the government's positions on SWR ownership, SWR's status as a shell, and the children's salary payments meet the Hyde Amendment standard?

Rule

Under the Hyde Amendment, a criminal defendant may recover fees only if the government's position was vexatious, frivolous, or in bad faith, unless special circumstances would make an award unjust. This standard is more demanding than the Equal Access to Justice Act's 'not substantially justified' test, the defendant bears the burden of proof, an unsuccessful prosecution alone is insufficient, bad faith requires more than negligence and some evidence of conscious wrongdoing, and denial of fees is reviewed only for abuse of discretion.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Nashville, federal prosecutors charged Elena Morris with filing false payroll-tax returns for her catering company, Riverstone Events. After the government rested, the district court granted a judgment of acquittal on every count because the proof did not establish willfulness.

Elena moves for attorneys' fees under the Hyde Amendment, arguing that because she was acquitted on all counts, the prosecution necessarily was vexatious, frivolous, or in bad faith. How should the court rule?

Explanation. The Hyde Amendment does not authorize fees merely because the defendant wins. The defendant bears the burden to prove that the government's position was vexatious, frivolous, or in bad faith, and a failed prosecution alone is insufficient. The standard is stricter than a mere lack of substantial justification. (Derived from United States v. Skeddle (n.d.).)