## Facts

- David T. Braunstein purchased Apple products from Apple Latin America Company (ALAC) and resold them at discounted prices, largely in the United States.
- Apple and ALAC had concerns about “gray-market” sales—products sold outside intended territorial channels.
- Federal prosecutors investigated whether Braunstein obtained products from ALAC through deception about where the products would be sold.
- Before indictment, Braunstein’s counsel told the prosecutor that Apple/ALAC employees would confirm ALAC knew Braunstein was selling in the United States.
- Prosecutors interviewed Apple/ALAC personnel; at least one employee stated Braunstein was allowed to sell in the United States, and a supervisor acknowledged ALAC’s awareness of gray-market practices.
- A grand jury indicted Braunstein on multiple fraud-related counts predicated on proving Braunstein used fraud or deception against ALAC to sell in the United States.
- After extended pretrial proceedings and delays, the district court dismissed the indictment.
- Braunstein, as a prevailing party, moved for attorneys’ fees and costs under the Hyde Amendment; the district court denied the motion.
- Braunstein appealed, and the government argued the appeal was untimely and that Hyde Amendment relief was unwarranted.

## Issues

1. Whether an appeal from an order denying Hyde Amendment attorneys’ fees is governed by the civil appeal deadline in Federal Rule of Appellate Procedure 4(a), making Braunstein’s appeal timely.
2. Whether the district court erred in denying Hyde Amendment fees because the government’s position was “vexatious, frivolous, or in bad faith.”

## Decision

- The Ninth Circuit held Braunstein’s appeal was timely and exercised appellate jurisdiction.
- The court reversed the denial of Hyde Amendment fees.
- The court concluded the government’s prosecution was “frivolous” within the meaning of the Hyde Amendment.
- The case was remanded for determination and award of reasonable fees and costs.

## Legal Principles

- A Hyde Amendment fee order is treated procedurally like a civil fee/cost order for purposes of appellate timing, so Federal Rule of Appellate Procedure 4(a) applies.
- Under the Hyde Amendment, a prevailing criminal defendant may recover reasonable attorneys’ fees and costs if the government’s position was vexatious, frivolous, or in bad faith, absent special circumstances making an award unjust.
- The Hyde Amendment’s terms are disjunctive; establishing any one of “vexatious,” “frivolous,” or “bad faith” is sufficient.
- A prosecution may be deemed “frivolous” where the government proceeds despite information in its possession that negates or fatally undermines an essential element of its theory (here, alleged deception of ALAC about U.S. sales).

## Conclusion

The Ninth Circuit held that Hyde Amendment fee appeals follow the civil timing rule in Federal Rule of Appellate Procedure 4(a) and that Braunstein was entitled to fees because the government pursued a fraud theory despite pre-indictment evidence that ALAC knew of and permitted the relevant U.S. sales, rendering the prosecution frivolous.


United States v. Braunstein, 281 F.3d 982 (9th Cir. 2002)