March 27, 2013

By: Hyde Amendment Claim No Small Task: Third Circuit Affirms Denial Of Louis Manzo’s Petition

If securing the dismissal of an indictment is a monumental task, and it is, then successful pursuit of Hyde Amendment petition is surely a Rushmorian achievement.   The daunting burden of Hyde Amendment claims was on full display in Monday’s decision by the Third Circuit, affirming the U.S. District Court for the District of New Jersey’s denial of the Hyde Amendment petition by former Jersey City Mayoral candidate Louis Manzo. United States v. Manzo, No. 12-2294 (3d Cir. March 25, 2013).

The case arose out of the indictment of Manzo relating to an alleged bribery scheme while Manzo was a candidate for Mayor of Jersey City.  Manzo eventually lost his bid for Mayor, but while a candidate he was alleged to have agreed to accept cash payments from a real estate developer, Solomen Dwek, in exchange for help with Jersey City government matters if he was elected.  Dwek, it turned out, was actually an undercover government operative carrying out a government sting operation.  The indictment alleged four counts of conspiring and attempting to commit extortion under the Hobbs Act, and two counts of traveling in interstate commerce to promote and facilitate bribery, under the Travel Act.

According to the indictment, Manzo and his brother, Ronald Manzo, accepted as bribes three cash payments prior to the election, totaling $27,500. The indictment also alleged that Dwek had agreed to pay additional money after the election, assuming Manzo won.  Ronald Manzo was eventually convicted in a related matter, as reported on www.white-collared.com previously.

Manzo filed a motion to dismiss, which the district court granted with respect to the Hobbs Act counts, finding that there could not have been a violation because Manzo was not a public official at the time.   The district court refused, however, to deny the two Travel Act counts, based on the fact that the Travel Act also applied to any violation of state law, and the court’s determination that the New Jersey bribery statute did not preclude prosecution of an individual who hadn’t yet assumed office.

With the dismissal of the Hobbs Act charges affirmed on interlocutory appeal, the case was remanded to the district court where the grand jury then returned a second superseding indictment, charging Manzo with two counts of Travel Act violations and one count of misprision of a felony.  However, the district court then reversed its earlier position, and held that the receipt of something of value by an unsuccessful candidate for public office in exchange for a promise of future official conduct did not constitute bribery under the New Jersey bribery statute.

After the remaining charges against him had been dismissed, Manzo filed a pro se petition under the Hyde Amendment, which allows for an award of fees and expenses for being subjected to a vexatious, frivolous, or bad faith prosecution.  Pub. L. No. 105-119, § 617, 111 Stat. 2440, 2519 (1997), reprinted in 18 U.S.C. § 3006A, Statutory Note.  The District Court denied that petition, holding that Manzo had not borne his burden of demonstrating that the prosecution of him fit the criteria of the Hyde Amendment.

“The court went on to explain that a “defendant must show that the government’s position underlying the prosecution amounts to prosecutorial misconduct – a prosecution brought vexatiously, in bad faith, or so utterly without foundation in law or fact as to be frivolous.”

On appeal, the Third Circuit, acknowledging no prior interpretations of the Hyde Amendment within the Circuit, relied on a review of sister circuits in defining the parameters.  It reviewed with approval the Sixth Circuit’s holding in United States v. Isaiah, 434 F.3d 513, 519 (6^th Cir. 2006), that the Hyde Amendment “places a daunting obstacle before defendants.”  The court went on to explain that a “defendant must show that the government’s position underlying the prosecution amounts to prosecutorial misconduct – a prosecution brought vexatiously, in bad faith, or so utterly without foundation in law or fact as to be frivolous,” quoting United States v. Gilbert, 198 F.3d 1293, 1299 (11th Cir. 1999).

In reviewing the grounds for relief under the statute, the court found that courts have held that a vexatious position is one that is without reasonable or probable cause or excuse, citing Gilbert, 198 F.3d at 1298-99.  It added that to establish that the government’s prosecution was vexatious, a petitioner must show both that the criminal case was objectively deficient (lacking merit) and that the government’s conduct, when viewed objectively, manifests maliciousness or an intent to harass or annoy, citing U.S. v. Knott, 256 F.3d 20, 29 (1st Cir. 2001).

Manzo argued that his prosecution was either vexatious or frivolous because, even after the Third Circuit affirmed the district court’s dismissal of the Hobbs Act charges, the government continued to pursue him on the remaining Travel Act and misprision of a felony charges. The court found, however, that the government’s continued prosecution of Manzo under the remaining Travel Act charges was clearly not vexatious, given the district court’s original ruling on the applicability of the New Jersey bribery statute. It found that “Once a district court judge accepts the government’s legal position it will be extremely difficult to persuade us that the issue was not debatable among reasonable lawyers and jurists, i.e., that it was frivolous,” quoting Gilbert, 198 F.3d at 1304.

The court also rejected Manzo’s argument that the allegations in the indictment were “blatantly false,” noting those assertions relied primarily on the fact that, when he testified in a separate corruption trial, Ronald Manzo said he never physically gave his brother $10,000 in cash that he had received from Dwek.  The court pointed out, that the testimony of Ronald Manzo did not conclusively prove that the government’s accusations were false, much less that they were knowingly false. It reasoned further that even if Ronald Manzo’s testimony were true, the charges against Louis Manzo did not require the government to prove that he physically received a cash bribe, only that he traveled in interstate commerce with the intent to promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on of a bribe.

A complete copy of the opinion can be found here.