United States v. Chapman ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellant,
No. 06-10316
v.
 D.C. No.
DANIEL CHAPMAN; SEAN FLANAGAN; CR-03-00347-JCM
HERBERT JACOBI,
Defendants-Appellees.

UNITED STATES OF AMERICA, 
Plaintiff-Appellee, No. 06-10610
v.
 D.C. No.
CR-03-00347-JCM
DANIEL CHAPMAN; SEAN FLANAGAN;
HERBERT JACOBI, OPINION
Defendants-Appellants.

Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Argued and Submitted
August 13, 2007—San Francisco, California
Filed May 6, 2008
Before: Diarmuid F. O’Scannlain, Michael Daly Hawkins,
and Kim McLane Wardlaw, Circuit Judges.
Opinion by Judge Wardlaw
4937
4940 UNITED STATES v. CHAPMAN
COUNSEL
Steven W. Myhre, Acting United States Attorney; Robert L.
Ellman, Appellate Chief and Assistant United States Attor-
UNITED STATES v. CHAPMAN 4941
ney, District of Nevada, for the government-appellant-
cross-appellee.
Daniel G. Chapman, Las Vegas, Nevada (pro se); Sean P.
Flanagan, Las Vegas, Nevada (pro se); James L. Sanders,
McDermott Will & Emery LLP, Los Angeles, California; and
Maranda E. Fritz, Hinshaw & Culbertson LLP, New York,
New York, for the defendants-appellees-cross-appellants.
OPINION
WARDLAW, Circuit Judge:
The district court dismissed an indictment against Daniel
Chapman, Sean Flanagan, and Herbert Jacobi (collectively
“Defendants”) after the prosecution admitted that it had failed
to meet its obligations to disclose over 650 pages of docu-
ments to the defense. We must decide whether the govern-
ment’s appeal of the dismissal is precluded by the Double
Jeopardy Clause of the Fifth Amendment, see 18 U.S.C.
§ 3731, whether the dismissal was proper, and whether
Defendants are entitled to fees and costs under the Hyde
Amendment, Pub. L. No. 105-119, § 617, 111 Stat. 2440,
2519 (1997) (codified at 18 U.S.C. § 3006A Note). We con-
clude that the Double Jeopardy Clause does not bar the gov-
ernment’s appeal under the circumstances presented here, and
we affirm as to both the dismissal of the indictment and the
denial of fees and costs.
I. FACTUAL AND PROCEDURAL BACKGROUND
On August 8, 2003, a grand jury in the District of Nevada
returned a sixty-four-count indictment charging that Defen-
dants, along with Shawn Hackman and James Farrell (who
both pled guilty before trial), concocted a complex securities
trading scheme known as a “box job,” where a small number
4942 UNITED STATES v. CHAPMAN
of individuals secretly control a corporation’s shares and
manipulate the stock price through strawmen officers, direc-
tors, and shareholders.1 In this box job, Defendants allegedly
created multiple shell corporations, back-dated corporate
records to make their activities appear lawful, and named
dummy directors and officers who had no actual control over
the corporations and in some cases did not even know of their
existence. According to the government, Defendants duped
the National Association of Securities Dealers (“NASD”) and
the Securities and Exchange Commission (“SEC”) into
approving their corporations for listing on the Over-the-
Counter Bulletin Board (“OTCBB”) stock exchange. OTCBB
listing is a valuable asset, and these newly approved shell cor-
porations could be merged with third-party business enter-
prises to create a public market in the shares of those
enterprises. By selling and merging these shell corporations,
Defendants allegedly made over $12 million, which they
laundered through Flanagan and Chapman’s law firm and var-
ious corporations that Jacobi had registered in the Bahamas.
A. Events Leading up to the Mistrial Ruling
On April 9, 2004, the government agreed that it would dis-
close various documents prior to trial, including (1) all “crimi-
nal history and other background information regarding
Government witnesses that is material and reasonable,”
(2) any evidence favorable to Defendants material to their
guilt or innocence, as required by Brady v. Maryland, 373
U.S. 83 (1963), (3) any promises, inducements, or threats
made to witnesses to gain cooperation in the investigation or
prosecution, as required by Giglio v. United States, 405 U.S.
150 (1972), and (4) any witness statements required to be dis-
closed under Jencks v. United States, 353 U.S. 657 (1957),
1
A superseding indictment, naming only Chapman, Farrell, Flanagan,
and Jacobi as defendants, was filed on May 18, 2004. A second supersed-
ing indictment, which added various “Sentencing Allegations,” was filed
on July 27, 2004.
UNITED STATES v. CHAPMAN 4943
and 18 U.S.C. § 3500. Over the next 22 months, the govern-
ment claims to have turned over close to 400,000 pages of
documents.
There were, however, early indications that the government
had not fully complied with its discovery obligations. On Jan-
uary 23, 2006, one day before the trial was set to begin, the
government announced that it would present its case agent,
Michael Payne, to testify. Defendants objected that Payne was
not on the witness list and that none of his statements, memo-
randa, or notes has been disclosed, as required by Jencks, 353
U.S. 657, and 18 U.S.C. § 3500. The lead Assistant United
States Attorney (“AUSA”) disagreed and represented to the
court that all materials relating to Payne had been turned over.
Over the defense’s continued protestations, the district judge
stated that the AUSA “says that he’s done it.” In the end, the
court noted that if Payne “tries to testify, and there’s material
that [the prosecution] hasn’t turned over, then his testimony
will be stricken.”
Other hints of discovery violations surfaced. On February
3, the AUSA elicited testimony from a prosecution witness,
Lewis Eslick, about a prior conviction. Defendants objected
that they had not received information from the government
about that conviction and that this was the second time this
had occurred (the day before, the AUSA had attempted to
elicit information about a prior conviction from Doug Ansell
on redirect examination, but the court sustained an objection
that it was beyond the scope of the cross-examination). The
district court struck the questioning as unduly prejudicial and
reminded the AUSA of his obligation to disclose such mate-
rial.
On February 6, in the trial’s third week, matters came to a
head. While the government’s twenty-fifth witness, Michael
Haynes, was testifying for the prosecution, the AUSA
inquired about a prior conviction. Defendants again objected,
claiming they had not been provided with the relevant mate-
4944 UNITED STATES v. CHAPMAN
rial under Brady and Giglio. The AUSA originally responded
that he did not believe the defense objection was “accurate.”
However, when the district court asked for proof and pro-
posed a brief recess so that the government could produce
documentation showing that the relevant material had been
disclosed, the AUSA abruptly changed course:
AUSA: Your Honor, if I could just advise the
Court in an abundance of caution rather than find the
record of what we turned over, we’ll make another
copy of everything right now and provide it to the
defense counsel immediately.
COURT: Well, but it’s supposed to be turned over.
It’s not a matter of doing it now.
The judge declared a brief recess and the court reconvened
outside the presence of the jury. The following exchange took
place:
AUSA: Your Honor, we cannot find a record of
making this information available to defense coun-
sel. We believe, however, that we did or it was cer-
tainly our intention to do so.
COURT: But your belief isn’t good enough. This
stuff has to be disclosed to them.
AUSA: And we’ve disclosed it now, your Honor.
COURT: Well, I understand, but that’s late. I’m
[not] going to say it’s to[o] late, but it’s late.
AUSA: Your Honor, we apologize.
COURT: Okay, I want this stuff—this stuff is
going to be produced or I’m going to start striking
testimony or worse.
UNITED STATES v. CHAPMAN 4945
Defense counsel walked the court through various discovery
violations up to that point and urged it to impose immediate
sanctions. The AUSA acknowledged that “there are some
additional witnesses that do have criminal histories and con-
victions. . . . What we will do is that we will make full copies
of . . . any charging documents, plea agreements, for any of
the remaining witnesses and have that available for defense
counsel this evening.”
B. Mistrial Hearing
The next day, Chapman’s attorney alerted the court to hun-
dreds of pages of documents that the government had deliv-
ered that morning and the previous evening. They totaled
some 650 pages and consisted of rap sheets, plea agreements,
cooperation agreements, and other information related to
numerous government witnesses, including at least three
important witnesses whose testimony was already complete.
Chapman’s attorney provided the court with a thirty-four-
page sampling of some of the disclosed documents, entitled
“Hearing Exhibit 1.” Counsel explained that he had not had a
chance to review the newly disclosed material carefully, but
that it included conviction records for many government wit-
nesses, including several who had already testified and been
released. He further pointed to dates on some of the disclosed
“rap” sheets, which showed that the government had not even
inquired as to those witnesses’ criminal records until after the
trial had begun. Counsel argued that the defense had been
prejudiced by this failure to timely disclose the Brady and
Giglio material; that recalling the prior witnesses was imprac-
tical and would not cure the error; and that a mistrial would
only reward the government by giving them a second chance
to try their case; therefore, dismissal of the indictment was the
only appropriate remedy. Jacobi’s attorney agreed, asserting
that these late disclosures made the trial “nothing more than
a colossal waste of everybody’s time.”
In response, the AUSA represented that much of the mate-
rial under discussion had already been disclosed to the
4946 UNITED STATES v. CHAPMAN
defense, but admitted that he could not prove what informa-
tion had been disclosed because his office had not kept a log
of what materials the government had turned over. He assured
the district court, however, that he had made his best effort to
comply with the government’s obligations. The AUSA argued
that neither a mistrial nor a dismissal of the indictment was
the appropriate remedy. He urged that the court allow defense
counsel sufficient time to review the documents and to recall
as necessary any witnesses who had already testified.
The district court expressed frustration, lambasting the
prosecutor’s conduct as “unconscionable.” Based on the mate-
rial contained in Hearing Exhibit 1, the judge stated, “I don’t
see any way this trial can go forward. We’re in the third week
of it, so I say that regrettably.” He noted that he was inclined
to dismiss the indictment, but deferred ruling on the motion
to dismiss until the parties had a chance to brief the issue. The
district court then declared a mistrial, dismissed the jury, and
ordered briefing on Defendants’ motion to dismiss the second
superseding indictment.
C. Hearing on the Motion to Dismiss the Indictment
On February 27, the parties reconvened. Two new AUSAs
appeared on behalf of the government to argue against dis-
missal. The district court listened to argument and then
granted Defendants’ motion to dismiss, finding that the origi-
nal AUSA had acted “flagrantly, willfully, and in bad faith.”2
The court noted that the government’s case to date had been
quite weak and that the defendants would suffer substantial
prejudice if the case were retried because “the government
2
Despite finding that the AUSA acted “flagrantly, willfully, and in bad
faith,” the district court judge also stated that he “refuse[d] to believe . . .
the government would intentionally withhold documents . . . .” Drawing
a somewhat confusing distinction, he “found that the government did not
act intentionally” but also “did not find that the government acted uninten-
tionally.”
UNITED STATES v. CHAPMAN 4947
and its witness[es] will not make [the same] mistake[s]
again.” It concluded that the government should not be per-
mitted “to try out its case identifying any problem area[s] and
then correct those problems in a retrial.” It further concluded
that the government’s discovery violations “subvert[ed] the
due process rights that the defendants are guaranteed by the
Constitution” and also the “Sixth Amendment right to con-
front adverse witnesses.” Accordingly, the court granted
Defendants’ motion.
After the indictment was dismissed, the AUSAs asked to
place into the record all 650 pages of the recently disclosed
documents. On May 11, 2006, the court issued a written judg-
ment of dismissal of the indictment. The government timely
appeals.
II. JURISDICTION
Because dismissal of an indictment is a final decision of the
district court, United States v. Simpson, 813 F.2d 1462, 1464
(9th Cir. 1987), we generally have jurisdiction under 28
U.S.C. § 1291. However, we lack jurisdiction if permitting the
government to appeal would violate the Double Jeopardy
Clause of the Fifth Amendment. 18 U.S.C. § 3731; U.S.
Const. amend. V.
III. DISCUSSION
A. Double Jeopardy
[1] The Criminal Appeals Act grants jurisdiction to the fed-
eral courts of appeals to entertain criminal appeals by the
United States, except “where the double jeopardy clause of
the United States Constitution prohibits further prosecution.”
18 U.S.C. § 3731. Appellees contend that the district court’s
sua sponte declaration of a mistrial bars any further prosecu-
tion of them, and that we therefore lack jurisdiction to hear
this appeal. Because we conclude that, under the circum-
4948 UNITED STATES v. CHAPMAN
stances here, a new trial is not barred by the Double Jeopardy
Clause, we have jurisdiction over the government’s appeal.
[2] The Double Jeopardy Clause mandates that no person
shall “be subject for the same offence to be twice put in jeop-
ardy of life or limb.” U.S. Const. amend. V. “Criminal defen-
dants have a right to have the jury first impaneled to try them
reach a verdict.” United States v. Bates, 917 F.2d 388, 392
(9th Cir. 1990). When an initial prosecution ends in mistrial,
a subsequent retrial will increase the emotional and financial
burden imposed on the defendant, and may give the state an
unfair opportunity to tailor its case based on what it learned
the first time around. Arizona v. Washington, 434 U.S. 497,
503-04 & n.14 (1978). “Consequently, as a general rule, the
prosecutor is entitled to one, and only one, opportunity to
require an accused to stand trial.” Id. at 505.
[3] “If a case is dismissed after jeopardy attaches but before
the jury reaches a verdict, a defendant may be tried again for
the same crime only in two circumstances: (1) if he consents
to the dismissal; or (2) if the district court determines that the
dismissal was required by ‘manifest necessity.’ ” United
States v. Bonas, 344 F.3d 945, 948 (9th Cir. 2003). The “man-
ifest necessity” exception applies whenever the judge believes
to a “high degree” that a new trial is needed, Washington, 434
U.S. at 505-06, although the “classic basis for a proper mistri-
al” under this exception is a deadlocked jury, id. at 509.
Because we hold that the “manifest necessity” exception
applies in this case, we need not consider whether Defendants
“impliedly consented” to the mistrial. See Bates, 917 F.2d at
392.
[4] “[T]he district court [is] not required to make an explicit
finding of manifest necessity or to articulate on the record all
the factors which informed its discretion.” United States v.
Smith, 621 F.2d 350, 351 (9th Cir. 1980) (citing Washington,
434 U.S. at 516-17). In Washington, the Supreme Court con-
sidered whether an Arizona state court’s declaration of mis-
UNITED STATES v. CHAPMAN 4949
trial following improper and prejudicial comments by defense
counsel barred further prosecution or whether manifest neces-
sity for the mistrial ruling existed. 434 U.S. at 498. “The trial
judge did not expressly find that there was ‘manifest neces-
sity’ for a mistrial; nor did he expressly state that he had con-
sidered alternative solutions and concluded that none would
be adequate.” Id. at 501. Washington subsequently filed a
habeas petition in federal court, alleging that a new trial
would violate the Double Jeopardy Clause. Id. The federal
district judge granted the writ, noting that the record showed
neither a finding of manifest necessity nor a review of the
alternatives short of a mistrial. Id. at 501-02. A three-judge
panel of our Court affirmed, explaining that the state court
(1) never made an explicit finding of “manifest necessity,”
(2) did not explicitly describe his reasons for granting the mis-
trial, and (3) did not consider alternatives on the record.
Washington, 546 F.2d at 832. Reversing the panel’s opinion,
Justice Stevens wrote for the Court:
The basis for the trial judge’s mistrial order is ade-
quately disclosed by the record, which includes the
extensive argument of counsel prior to the judge’s
ruling. The state trial judge’s mistrial declaration is
not subject to collateral attack in a federal court sim-
ply because he failed to find “manifest necessity” in
those words or to articulate on the record all the fac-
tors which informed the deliberate exercise of his
discretion.
Washington, 434 U.S. at 517. Noting that the trial court was
institutionally best positioned to judge the impact of the error
on the jury, the Court held that the mistrial declaration did not
bar retrial. Id. at 513-14, 517.
A judicial determination of manifest necessity is reviewed
for abuse of discretion, but the level of deference varies
according to the circumstances in each case. Bonas, 344 F.3d
at 948. Where there is evidence that the prosecution sought
4950 UNITED STATES v. CHAPMAN
the mistrial for tactical advantage, a judicial determination of
“manifest necessity” is reviewed with “the strictest scrutiny.”
Washington, 434 U.S. at 508. In contrast, where the judge’s
determination is based on his or her own observations and
personal assessment that a fair trial would be impossible, that
view must be given special deference. See id. at 510-11 (giv-
ing “special respect” to judge’s determination of manifest
necessity when based on jury bias). Here, the prosecution
strenuously objected to the judge’s declaration of a mistrial,
and we do not believe the government’s Brady and Giglio
violations were committed as part of an effort to retry the case
before a different jury. We therefore review the district
court’s ruling under the more deferential standard.
Under this deferential standard of review, we must ensure
that the lower court exercised “sound discretion.” Bates, 917
F.2d at 394. A determination of manifest necessity may be
upheld even if other reasonable trial judges might have pro-
ceeded with the trial despite the error. Washington, 434 U.S.
at 511. Our review should weed out “irrational or irresponsi-
ble behavior by the trial judge,” Bates, 917 F.2d at 395, and
accordingly we focus on the procedures employed by the
judge in reaching his determination. We consider whether the
district court “(1) heard the opinions of the parties about the
propriety of the mistrial, (2) considered the alternatives to a
mistrial and chose[ ] the alternative least harmful to a defen-
dant’s rights, [and/or] (3) acted deliberately instead of
abruptly. . . .” Id. at 396 (rejecting district court’s determina-
tion of manifest necessity where the judge acted abruptly,
without a hearing, and without considering plausible alterna-
tives).3 Finally, the district court’s judgment must be based on
3
Bates also provides a fourth potential consideration: whether the judge
“properly determined that the defendant would benefit from the declara-
tion of mistrial.” 917 F.2d at 396. It is difficult to assess how this factor
should be weighted in light of the Supreme Court’s somewhat conflicting
discussions of this issue. Compare Gori v. United States, 367 U.S. 364,
369 (1961), with Illinois v. Somerville, 410 U.S. 458, 471 (1973), and
UNITED STATES v. CHAPMAN 4951
evidence presented in the record. Bonas, 344 F.3d at 948-51
(rejecting a district court’s judgment of manifest necessity
that was based on private conversations between the judge
and jurors).
[5] Here, as in Washington, the district judge did not make
an explicit finding of “manifest necessity,” but he made clear
that he believed the trial could not continue. The judge held
a hearing to determine the appropriate sanction, at the conclu-
sion of which he said, “All right. I don’t see any way this trial
can go forward. We’re in the third week of it, so I say that
regrettably.” Later, he repeated: “I’ll be candid with the par-
ties because there’s no way this can go on. There’s no way
this trial can go on.” Finally, when dismissing the jury, the
judge said “I do this with a good deal of regret, but I feel the
Court simply has no other alternative. So I’m going to declare
a mistrial . . . .” These statements clearly demonstrate that the
judge believed a fair verdict was impossible and that a mis-
trial was required to at least a “high degree” of necessity. See
Washington, 434 U.S. at 506. We therefore review this find-
ing of manifest necessity for abuse of discretion, asking
whether it was “one that a rational jurist could have made
based on the record presented to him.” Bonas, 344 F.3d at
948.
The record demonstrates that the district judge understood,
and considered, a wide range of alternative remedies to mis-
trial. When the defense first claimed that Jencks materials for
witness Michael Payne had been withheld, the judge took the
AUSA at his word that the information had been turned over,
but noted that if Payne “tries to testify, and there’s material
United States v. Jorn, 400 U.S. 470, 483 (1971) (plurality opinion). We
need not resolve this apparent conflict here, however, because our analysis
under the first three Bates factors convinces us that the trial judge did not
abuse his discretion in finding that a mistrial was manifestly necessary.
Because the fourth Bates factor would only bolster this conclusion, we feel
comfortable bypassing it.
4952 UNITED STATES v. CHAPMAN
that [the prosecution] hasn’t turned over, then his testimony
will be stricken.” When the government first admitted that it
had no record of certain documents being disclosed to the
defense, the judge demanded that “this stuff . . . be produced
or I’m going to start striking testimony or worse.” Finally,
when the full scope of the government’s discovery violations
was uncovered and the district court held a hearing to discuss
the appropriate remedy, the AUSA proposed two lesser alter-
natives to mistrial: (1) granting a continuance to give the
defense time to review the newly disclosed documents, and
(2) allowing the defense to recall government witnesses that
had already testified if it wished to impeach them with newly
disclosed evidence.
[6] The district court acted deliberately and offered both
sides a chance to argue the merits of alternative remedies. The
judge considered, and rejected, the prosecution’s proposed
continuance for the defense to review the new material:
I can’t take a break, take a week, take two weeks,
and just keep this jury, and say come back in two
weeks and have three or four or them show up or
whatever. Their attention span is gone . . . .
The court’s determination that the jury’s attention span could
not withstand such delay must be given substantial deference.
See Washington, 434 U.S. at 514 (noting that the trial judge
is “most familiar with the evidence and the background of the
case on trial” and “is far more conversant with the factors rel-
evant to the determination than any reviewing court can possi-
bly be.” (internal quotation marks omitted)). Moreover, the
record contains numerous arguments by defense counsel dem-
onstrating how the Defendants were prejudiced by the discov-
ery violations and how alternative remedies would have been
inadequate to remedy such prejudice. One attorney noted that
she would have opened the case differently had she known
about the impeaching information. Another explained that if
he called back witnesses who had already left the stand in
UNITED STATES v. CHAPMAN 4953
order to present the impeaching information, the jury would
likely view it as “browbeating.” As Washington makes clear,
a manifest necessity determination can be upheld based on
attorneys’ arguments in the record even when the trial judge
did not explicitly reference those arguments. Id. at 517
(upholding a determination of manifest necessity given with
no explicit reasoning, because “[t]he basis for the trial judge’s
mistrial order is adequately disclosed by the record, which
includes the extensive argument of counsel prior to the
judge’s ruling”).
[7] Just as in Washington, “[t]he basis for the trial judge’s
mistrial order is adequately disclosed by the record.” Id. at
517. The district court did not abuse its discretion in finding
that the trial could not continue. Because the mistrial was sup-
ported by a valid determination of manifest necessity, it does
not prohibit retrial under the double jeopardy clause and we
therefore have jurisdiction to hear this appeal.
B. Dismissal of the Indictment
[8] The district court did not abuse its discretion by dis-
missing the superseding indictment. An indictment may be
dismissed with prejudice4 under either of two theories:
[First, a] district court may dismiss an indictment on
the ground of outrageous government conduct if the
conduct amounts to a due process violation. [Second,
i]f the conduct does not rise to the level of a due pro-
4
The district court’s order states only that the superseding indictment “is
dismissed by the court,” but it is clear from the record that the district
court intended to dismiss the indictment with prejudice. The court had
already granted a mistrial, and the only remaining question was whether
the government would be entitled to retry Defendants. Accordingly, we
interpret the district court’s decision as a dismissal with prejudice. See
United States v. Brown, 425 F.3d 681, 682 (9th Cir. 2005) (per curiam)
(clarifying that an unspecified dismissal was “with prejudice” when that
was the clear intent).
4954 UNITED STATES v. CHAPMAN
cess violation, the court may nonetheless dismiss
under its supervisory powers.
United States v. Barrera-Moreno, 951 F.2d 1089, 1091 (9th
Cir. 1991) (citations omitted). In this case, Defendants moved
for dismissal solely pursuant to the court’s supervisory powers.5
Generally, “[f]indings of fact underlying the dismissal are
reviewed under the clearly erroneous standard.” Id. at 1091.
The government, however, argues that we should review the
record de novo. In support, it cites Fonseca v. Sysco Food
Services of Arizona, Inc., 374 F.3d 840 (9th Cir. 2004), a civil
case in which the district court excluded a witness who had
not been disclosed in a timely fashion. Id. at 846. We
reviewed the propriety of the sanctions de novo because the
district court had failed to make factual findings as to whether
the late disclosure was “substantially justified” or “harmless”
under Federal Rule of Civil Procedure 37(c)(1). Id. at 845-46.
Here, the government argues that “the district court failed to
examine any evidence or make any findings of fact attendant
to its dismissal of the indictment” and that de novo review
therefore applies.
This argument fails because it is unsupported by the record.
The district court did make specific factual findings, based on
the totality of the proceedings before it, that “the Assistant
U.S. Attorney acted flagrantly, willfully, and in bad faith”;
that he had made “affirmative misrepresentation[s] to the
court”; that the defendants would be prejudiced by a new trial;
and that no lesser sanction could adequately remedy the harm
done. It made these findings after reviewing the 34 pages of
5
In granting Defendants’ motion to dismiss, the district court applied the
legal standard relevant to its discretionary supervisory powers, but also
found that the government’s errors “subvert[ed] the due process rights that
the defendants are guaranteed by the Constitution.” Because the district
court did not abuse its discretion in dismissing the indictment under its
supervisory powers, we need not consider whether the dismissal was also
justified by the government’s violation of Defendants’ due process rights.
UNITED STATES v. CHAPMAN 4955
undisclosed materials admitted into evidence as “Hearing
Exhibit 1” and after witnessing firsthand the AUSA’s misrep-
resentations. While it is true that the district court did not
review all 650 pages of undisclosed documents, such a review
was unnecessary in light of the government’s own concession
that these were “all materials that we should have turned
over.” Accordingly, we reject the government’s suggestion
that the de novo standard of review is applicable, and we hold
that the district court’s findings were not clearly erroneous.
[9] A district court may exercise its supervisory power “to
implement a remedy for the violation of a recognized statu-
tory or constitutional right; to preserve judicial integrity by
ensuring that a conviction rests on appropriate considerations
validly before a jury; and to deter future illegal conduct.”
United States v. Simpson, 927 F.2d 1088, 1090 (9th Cir.
1991). However, because “[d]ismissing an indictment with
prejudice encroaches on the prosecutor’s charging authority,”
this sanction may be permitted only “in cases of flagrant pro-
secutorial misconduct.” Id. at 1091. Here, the district court
specifically found that the AUSA acted “flagrantly, willfully,
and in bad faith.” The government argues that the district
court’s finding of flagrancy cannot be upheld, because the
court declined to find that the documents were intentionally
withheld from the defense. The district court explained that
realistically “[t]here is no way for the defendants to prove that
the government acted intentionally. How would you prove
that that had happened unless the prosecutor concedes that he
or she deliberately withheld information?”
[10] We agree with the government that accidental or
merely negligent governmental conduct is insufficient to
establish flagrant misbehavior. See United States v. Kearns,
5 F.3d 1251, 1255 (9th Cir. 1993) (holding that even though
the government’s conduct “may have been negligent, or even
grossly negligent,” it did not rise to the level of flagrant mis-
conduct). We have never suggested, however, that “flagrant
misbehavior” does not embrace reckless disregard for the
4956 UNITED STATES v. CHAPMAN
prosecution’s constitutional obligations. Here, although the
case involved hundreds of thousands of pages of discovery,
the AUSA failed to keep a log indicating disclosed and non-
disclosed materials. The AUSA repeatedly represented to the
court that he had fully complied with Brady and Giglio, when
he knew full well that he could not verify these claims. When
the district court finally asked the AUSA to produce verifica-
tion of the required disclosures, he attempted to paper over his
mistake, offering “in an abundance of caution” to make new
copies “rather than find the record of what we turned over.”
Only when the court insisted on proof of disclosure did the
AUSA acknowledge that no record of compliance even
existed. Finally, the dates on many of the subsequently dis-
closed documents post-date the beginning of trial, so the gov-
ernment eventually had to concede that it had failed to
disclose material documents relevant to impeachment of wit-
nesses who had already testified. In this case, the failure to
produce documents and to record what had or had not been
disclosed, along with the affirmative misrepresentations to the
court of full compliance, support the district court’s finding of
“flagrant” prosecutorial misconduct even if the documents
themselves were not intentionally withheld from the defense.
We note as particularly relevant the fact that the government
received several indications, both before and during trial, that
there were problems with its discovery production and yet it
did nothing to ensure it had provided full disclosure until the
trial court insisted it produce verification of such after numer-
ous complaints from the defense.
The government misrelies upon United States v. Cadet, 727
F.2d 1453 (9th Cir. 1984), and United States v. Gatto, 763
F.2d 1040 (9th Cir. 1985), to argue that Brady/Giglio viola-
tions, no matter how flagrant, can never justify dismissing an
indictment. In Cadet, the district court dismissed the indict-
ment after the government failed to comply with an overly
broad discovery order. 727 F.2d at 1470. We first held that
“significant portions of the [district court’s] order were inval-
id.” Id. at 1454-55. “Because we . . . determined that the court
UNITED STATES v. CHAPMAN 4957
abused its discretion in ordering the government to comply
with an order which is partially invalid, we . . . vacate[d] the
judgment dismissing this action as a disproportionate sanction
for the lack of good faith compliance by the government.” Id.
at 1470. In Gatto, the district court excluded certain incrimi-
nating evidence that it found had not been disclosed pursuant
to Rule 16 of the Federal Rules of Criminal Procedure. 763
F.2d at 1043. The prosecution appealed the exclusionary sanc-
tion pursuant to 18 U.S.C. § 3731, but the district court
insisted that the trial go forward despite the interlocutory
appeal. Id. at 1044. The government refused to proceed until
the appeal was decided, and the district court dismissed the
indictment for the government’s “ ‘flagrant refusal to abide by
[the court’s] previous orders.’ ” Id. We reversed the order
excluding evidence, holding that the prosecution’s late disclo-
sure did not violate Rule 16 or any “constitutional provision,
federal statute, [or] specific discovery order.” Id. at 1046-49.
We similarly reversed the dismissal, noting that the govern-
ment had not in fact violated the court’s discovery order. Id.
at 1050.
[11] Neither Cadet nor Gatto suggests that a Brady/Giglio
violation can never justify dismissing an indictment. Indeed,
we have explicitly suggested to the contrary. See United
States v. Blanco, 392 F.3d 382, 395 (9th Cir. 2004); United
States v. Kojayan, 8 F.3d 1315, 1325 (9th Cir. 1993). In
Kojayan, the government failed to disclose an agreement it
had made with a co-conspirator whose statements were intro-
duced at trial. Id. at 1317. We held that the failure to disclose
this agreement violated Brady. Id. at 1322. Based on this vio-
lation, the prosecutor’s misleading statements at trial, and the
government’s failure to accept responsibility for its wrongdo-
ing, id. at 1322-23, we reversed the convictions and “remand-
[ed] for the district court to determine whether to retry the
defendants or dismiss the indictment with prejudice as a sanc-
tion for the government’s misbehavior,” id. at 1325. In
Blanco, the government failed to disclose “highly relevant
impeachment material” about a confidential informant and we
4958 UNITED STATES v. CHAPMAN
found it “obvious” that the material “should have been turned
over to Blanco under Brady and Giglio.” 392 F.3d at 392. We
remanded to the district court for further factfinding to deter-
mine the full extent of the Brady/Giglio violations, id. at 394,
and noted that, on remand, “[a] range of options will be avail-
able to the court, including, at one extreme, dismissal of the
indictment for governmental misconduct,” id. at 395 (citing
Barrera-Moreno, 951 F.2d at 1091). Kojayan and Blanco
make clear that Brady violations are just like other constitu-
tional violations. Although the appropriate remedy will usu-
ally be a new trial, see Giglio, 405 U.S. at 153-54 (explaining
when the suppression of material evidence or the solicitation
of false testimony justifies a new trial), a district court may
dismiss the indictment when the prosecution’s actions rise, as
they did here, to the level of flagrant prosecutorial miscon-
duct. Because the district court did not clearly err in finding
that the government recklessly violated its discovery obliga-
tions and made flagrant misrepresentations to the court, we
hold that the dismissal was not an abuse of discretion.
[12] Nor did the district court abuse its discretion by dis-
missing the indictment without reviewing all 650 pages of
newly disclosed materials that the government did not even
bother to introduce into the record until after the indictment
was dismissed. An explicit finding that disclosure was
required under Brady/Giglio as to each document was unnec-
essary given the evidence of numerous constitutional viola-
tions and the government’s own concessions. The government
admitted it had made “a very serious mistake in terms of [its]
discovery obligations.” It “acknowledge[d] that these materi-
als, the six hundred and fifty pages of documents, are all
materials that we should have turned over, we expect our
prosecutors to turn over, and [the original AUSA] I think in
large part acknowledges all those materials . . . should have
been turned over.” The government’s opposition to the
motion to dismiss conceded that “at least some potential
Giglio material either was unaccounted for or had not been
furnished in a timely manner” and focused on whether dis-
UNITED STATES v. CHAPMAN 4959
missal was “the appropriate remedy for untimely or inade-
quate Giglio disclosures.”
[13] A court may dismiss an indictment under its supervi-
sory powers only when the defendant suffers “substantial
prejudice,” United States v. Jacobs, 855 F.2d 652, 655 (9th
Cir. 1988), and where “no lesser remedial action is available,”
Barrera-Moreno, 951 F.2d at 1092. The government has only
proposed a single lesser remedy, the mistrial declaration itself,
which it insists is an adequate sanction for the discovery vio-
lations. The district court considered and properly rejected
that argument, because the mistrial remedy would advantage
the government, probably allowing it to salvage what the dis-
trict court viewed as a poorly conducted prosecution. The
court identified myriad weaknesses in the government’s pre-
sentation during the three-week trial. For example, many of
the witnesses presented by the government had primarily
implicated individuals other than the defendants, including
two government witnesses who had already testified, Peter
Berney and Doug Ansell. The court also noted that Berney,
one of the government’s main witnesses, had been substan-
tially impeached with inconsistent prior statements on cross-
examination. The court explained:
If this case were to be retried, the government and
its witness will not make that mistake again, and
that’s the advantage that the government gains by its
actions here. It gets a chance to try out its case[,]
identify[ ] any problem area[s], and then correct
those problems in a retrial, and that’s an advantage
the government should not be permitted to enjoy.
Now, I have to think that Peter Berney was sup-
posed to be a strong witness against the defendants.
. . . I guarantee you next time he would be a stronger
witness. That would be true of all of them. They
would all be better witnesses.
4960 UNITED STATES v. CHAPMAN
The district court is in the best position to evaluate the
strength of the prosecution’s case and to gauge the prejudicial
effect of a retrial. Cf. United States v. Hagege, 437 F.3d 943,
953 (9th Cir. 2006) (“Having presided over the entire pro-
ceedings . . . , the district court [i]s uniquely positioned to
evaluate the prosecutor’s conduct.”). Here, the case as origi-
nally prosecuted appeared to the district court to have been
faltering. Therefore, the district court did not abuse its discre-
tion in concluding that a dismissal was the only means of
avoiding prejudice to the Defendants.
[14] Finally, in Kojayan, we made clear that “[i]n determin-
ing the proper remedy [for prosecutorial misconduct], we
must consider the government’s willfulness in committing the
misconduct and its willingness to own up to it.” 8 F.3d at
1318. As described above, the district court here did not abuse
its discretion in finding that the government acted “flagrantly,
willfully, and in bad faith” in misrepresenting its compliance
with its discovery obligations. The court also emphasized the
AUSA’s unwillingness to take responsibility for his conduct:
[F]or over two weeks of trial, the prosecutor consis-
tently claimed that he had disclosed the required
material to the defendants . . . . And I accepted that,
I accepted [the AUSA’s] statement as an officer of
the Court and overruled the objection on several
occasions. . . . Only after I excoriated the Assistant
U.S. Attorney in the strongest terms did he then offer
an apology to the Court, not a heartfelt apology, but
simply a response to me. And finally I said, be quiet
and listen to me because he was just saying, yeah,
I’m sorry, I’m sorry, I’m sorry, and not really mean-
ing it.
The prosecutor has a “sworn duty . . . to assure that the defen-
dant has a fair and impartial trial,” and his “interest in a par-
ticular case is not necessarily to win, but to do justice.” N.
Mariana Islands v. Bowie, 236 F.3d 1083, 1089 (9th Cir.
UNITED STATES v. CHAPMAN 4961
2001) (internal quotation marks omitted). In this case, the dis-
trict court was clearly troubled by the government’s conduct
and its failure to own up to its actions. We are similarly trou-
bled, both by the AUSA’s actions at trial and by the govern-
ment’s lack of contrition on appeal. The government attorneys
who appeared in the original AUSA’s stead on the critical day
of the hearing on the motion to dismiss the indictment told the
trial court that they “took this matter extremely seriously” and
conceded that the government made a “very serious mistake
in terms of [its] discovery obligations.” Before us, however,
these same attorneys have attempted to minimize the extent of
the prosecutorial misconduct, completely disregarding the
AUSA’s repeated misrepresentations to the court and the fail-
ure to obtain and prepare many of the critical documents until
after the trial was underway. Instead, they claim for the first
time on appeal that none of the 650 pages were required dis-
closures under Brady/Giglio. When the district court first
indicated that it was inclined to dismiss the indictment, it
noted that it was “concerned [that] any lesser sanction [would
be] like endorsing [the AUSA’s conduct].” See Barrera-
Moreno, 951 F.2d at 1091 (noting that the court’s supervisory
powers can be used “to deter future illegal conduct”). The
government’s tactics on appeal only reinforce our conclusion
that it still has failed to grasp the severity of the prosecutorial
misconduct involved here, as well as the importance of its
constitutionally imposed discovery obligations. Accordingly,
although dismissal of the indictment was the most severe
sanction available to the district court, it was not an abuse of
discretion.
C. Denial of Fees and Costs
[15] After the district court dismissed the indictment,
Defendants moved for an award of fees and costs under the
Hyde Amendment, Pub. L. No. 105-119, § 617, 111 Stat.
2440, 2519 (1997) (codified at 18 U.S.C. § 3006A Note). The
Hyde Amendment provides that in a privately defended crimi-
nal case, the court “may award to a prevailing party, other
4962 UNITED STATES v. CHAPMAN
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
. . . .” The district court denied the motion on two grounds:
(1) Defendants were not “prevailing parties” because the dis-
missal was not a judgment on the merits, and (2) although the
discovery violations were conducted with bad faith, the entire
case was not “vexatious, frivolous, or in bad faith.” Defen-
dants timely cross-appeal this ruling.
“We review a district court’s denial of a Hyde Amendment
motion for abuse of discretion. An abuse of discretion is an
error of law or a determination based on a clearly erroneous
finding of fact.” United States v. Manchester Farming P’ship,
315 F.3d 1176, 1181 (9th Cir. 2003) (footnote omitted).
[16] The district court correctly determined that Defendants
were not “prevailing parties” under the Hyde Amendment.
Although the amendment does not explicitly define the term,
we have interpreted “prevailing party” to mean “one who has
gained by judgment or consent decree a material alteration of
the legal relationship of the parties.” Perez-Arellano v. Smith,
279 F.3d 791, 794 (9th Cir. 2002) (defining the term under the
Equal Access to Justice Act) (internal quotation marks omit-
ted); United States v. Campbell, 291 F.3d 1169, 1172 (9th Cir.
2002) (extending the Perez-Arrellano definition to the Hyde
Amendment). There can be no doubt that a dismissal with
prejudice materially alters the legal relationship of the parties,
as it precludes the government from bringing a prosecution
that it otherwise would be entitled to bring. However, our
cases have also required a prevailing party to have “ ‘rec-
eive[d] at least some relief on the merits of his claim.’ ”
Campbell, 291 F.3d at 1172 (quoting Buckhannon Bd. & Care
Home, Inc. v. W. Va. Dep’t of Health and Human Res., 532
U.S. 598, 603 (2001)) (alteration in original) (emphasis
added). In Campbell, for example, the defendant’s charges
were dismissed through his participation in a pre-trial diver-
sion program. Id. at 1171. We held that this did not constitute
UNITED STATES v. CHAPMAN 4963
relief “on the merits of his claim” and hence Campbell was
not a “prevailing party” under the Hyde Amendment. Id. at
1172.
[17] As the district court made clear, the dismissal was not
an enforceable judgment on the merits of the case. The court
dismissed the indictment based on the government’s failure to
disclose documents and the prosecutor’s affirmative misrepre-
sentations to the court. The district court never suggested that
this prosecutorial misconduct was relevant to Defendants’
guilt or innocence. Instead, the dismissal was purely intended
to sanction the government’s flagrant Brady/Giglio and proce-
dural violations and the misrepresentations used to conceal
these violations. As in Campbell, the relief was not based on
the merits of the case (except as necessary to calculate preju-
dice), so Defendants are not “prevailing parties” under the
Hyde Amendment.6 Because this is sufficient in and of itself
to affirm the district court’s denial of fees and costs, we need
not review the court’s finding that the overall case was not
“vexatious, frivolous, or in bad faith.”
6
This is not to suggest that a dismissal for flagrant discovery violations
could not, in other cases, constitute a sufficient judgment on the merits to
bestow a defendant with “prevailing party” status. The legislative history
of the Hyde Amendment makes clear that it was intended to protect
against some types of disclosure violations. See 143 Cong. Rec. H7786,
H7791 (daily ed. Sept. 24, 1997) (statement of Rep. Hyde) (noting that the
amendment would apply when prosecutors “keep information from you
that the law says they must disclose,” when they “hide information,” and
when they “do not disclose exculpatory information to which you are enti-
tled.”). If documents were intentionally withheld to bolster the prosecu-
tion’s case, that misconduct would be relevant to the defendant’s
innocence in that it would have a tendency to suggest weakness in the
prosecution’s case. Accordingly, a dismissal on those grounds could be a
judgment on the merits for Hyde Amendment purposes. Otherwise, minor
discovery violations would be relevant under the Hyde Amendment, but
major violations—those sufficient to prompt dismissal of the indictment—
would bar relief. That question, however, is not squarely presented in this
case, so we leave it for another day.
4964 UNITED STATES v. CHAPMAN
IV. CONCLUSION
The district court did not abuse its discretion in dismissing
the indictment. The government egregiously failed to meet its
constitutional obligations under Brady and Giglio. It failed to
even make inquiry as to conviction records, plea bargains, and
other discoverable materials concerning key witnesses until
after trial began. It repeatedly misrepresented to the district
court that all such documents had been disclosed prior to trial.
The government did not admit to the court that it failed to dis-
close Brady/Giglio material until after many of the key wit-
nesses had testified and been released. Even then, it failed to
turn over some 650 documents until the day the district court
declared a mistrial and submitted those documents to the
court only after the indictment had been dismissed. This is
prosecutorial misconduct in its highest form; conduct in fla-
grant disregard of the United States Constitution; and conduct
which should be deterred by the strongest sanction available.
Under these facts, the district court did not abuse its discretion
in characterizing these actions as flagrant prosecutorial mis-
conduct justifying dismissal. Nor did it abuse its discretion in
determining that a retrial—the only lesser remedy ever pro-
posed by the government—would substantially prejudice the
defendants.
AFFIRMED.