United States v. Lain, 2011 U.S. App. LEXIS 9693

Lain, after being acquitted on one count, sought attorney's fees under the Hyde Amendment for the Government's pursuit of the case.
The August 2009 facts show Lain borrowed firearms and distributed them across state lines without the required licenses, leading to charges that included willful transfer of a firearm across state lines.
A Missouri indictment against Lain for possession of a stolen firearm had been dismissed prior to the superseding federal indictment, and diversion terms were ongoing at the time of the relevant events.
The Government filed a superseding indictment alleging willful transfer while Lain was under Missouri indictment, but the Missouri indictment had already been dismissed, creating a procedural irregularity the district court later corrected.
Lain argued the Government’s position was vexatious, frivolous, or in bad faith for improper motive and the way the superseding indictment was pursued; the district court denied Hyde fees, and the issue on appeal is whether that denial was proper.
The court applied abuse-of-discretion review under EAJA principles as incorporated by the Hyde Amendment to determine if fee-shifting was warranted.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Hyde Amendment standard application	Lain argues the district court abused its discretion in denying Hyde fees.	Government contends no abuse; position not vexatious or frivolous overall.	No abuse; fee denial affirmed.
Improper motive for prosecution	Lain asserts selective/vindictive prosecution showing improper motive.	Government denies discriminatory purpose; probable cause justifies charges.	Insufficient evidence of selective/vindictive prosecution.
Superseding indictment conduct	Lain claims the superseding indictment was pursued with improper motive or error.	Sloppy work, not bad faith; government promptly corrected error.	No improper motive proven; corrective actions supported decision.
Willfulness and evidentiary basis	Lain contends there was no evidence he knew his conduct was unlawful.	Government presented evidence of intentional deception and knowledge of illegality.	Evidence supported willfulness; prosecution not frivolous.
Totality of the Government's position	When viewed as a whole, government position was frivolous/vexatious.	Position viewed in aggregate does not meet the Hyde standard.	No overall showing of vexatious/frivolous/bad faith.

Pierce v. Underwood, 487 U.S. 552 (U.S. 1988) (abuse of discretion standard for fee awards under Hyde/EAJA)
United States v. Armstrong, 517 U.S. 456 (U.S. 1996) (probable cause standard for selective prosecution challenges)
United States v. Beeks, 266 F.3d 880 (8th Cir. 2001) (abuse of discretion review for Hyde Amendment fee awards)
United States v. Wade, 255 F.3d 833 (D.C. Cir. 2001) (standard for assessing prosecutorial motives in Hyde context)
United States v. True, 250 F.3d 410 (6th Cir. 2001) (prosecutorial conduct and Hyde Amendment considerations)
United States v. Lindberg, 220 F.3d 1120 (9th Cir. 2000) (approach to evaluating vexatious/frivolous government positions)
In re 1997 Grand Jury, 215 F.3d 430 (4th Cir. 2000) (grand jury/fee-award considerations in Hyde context)
United States v. Truesdale, 211 F.3d 898 (5th Cir. 2000) (guidance on willfulness and prosecutorial conduct)
United States v. Gilbert, 198 F.3d 1293 (11th Cir. 1999) (statutory interpretation and Hyde Amendment considerations)