The U.S. Supreme Court on Tuesday passed on a thorny Miami prosecutorial misconduct case, putting an end to a three-year fight on whether the U.S. attorney’s office should pay $601,000 in defense costs for an acquitted physician accused of running a pill mill.

Dr. Ali Shaygan, who practiced in Miami Beach, was found not guilty in March 2009 of 141 counts of illegally prescribing narcotics to his patients. During the trial, a witness divulged on cross-examination that he was told by the prosecutors to secretly tape Shaygan’s defense attorney and his investigator.

It was later learned another witness also taped phone calls with attorney David O. Markus and the investigator.

After the acquittal, Senior U.S. District Judge Alan S. Gold in April 2009 made a finding of prosecutorial misconduct. He reprimanded assistant U.S. attorneys Sean Cronin, Andrea Hoffman, their supervisor and the office at large.

The prosecutors told Gold they suspected the defense team of witness tampering to justify the taping of the phone calls. Gold also found that Cronin followed through on a threat to add 100 more charges after Shaygan attempted to get his statements to Drug Enforcement Administration suppressed. He succeeded.

The judge ordered the office to pay $601,000 of Shaygan’s defense cost. The office admitted the prosecutors failed to get clearance for invading the defense team but refused to pay Shaygan.

Gold’s finding came at the time the Justice Department was already reeling from the prosecutorial misconduct that tanked the case against former U.S. Sen. Ted Stevens (R-Alaska).

But unlike that case, which was abandoned, Cronin and Hoffman fought back. In a bitter appeal that attacked Gold’s neutrality, the prosecutors argued to a three-judge panel for the U.S. Court of Appeals for the Eleventh Circuit that the judge denied them their due process when inquiring about the taped phone calls. The panel agreed.

The Twist

Shaygan then asked for all of the judges on the appellate court to review the case.

A divided court denied the rehearing, but with a twist. Judge William Pryor Jr. expanded on his original decision overturning Gold, writing that under the Hyde Amendment a defendant can only recoup legal fees if the case itself never should have been brought regardless of how the prosecutors behave post-indictment.

Appellate Judge Beverly Martin, writing for the minority, said Gold and other district judges should be allowed to police their courtrooms for rogue behavior by prosecutors.

“It also strikes me as dangerous to render trial judges mere spectators of extreme government misconduct,” Martin wrote.

At issue was whether the Hyde Amendment of 1997 applies to actions of prosecutors after an indictment is filed. The amendment holds that the government can be ordered to pay defense fees and court costs if “the position of the United States was ‘vexatious, frivolous, or in bad faith.’ ”

The Supreme Court was petitioned by Shaygan in July to hear argument on the Hyde Amendment issue with Markus writing in his brief that a mere finding of probable cause by a grand jury is not enough to insulate bad prosecutors.

The decision to not hear argument on the issue came with no explanation save that Justice Elena Kagan did not participate in it.

Disappointed

Markus, in an interview last month, said he felt the Supreme Court would hear the case because the Eleventh Circuit ruling conflicted with other circuits in its interpretation of Hyde.

The U.S. Justice Department urged the Supreme Court to not hear the case, saying in its brief that Shaygan was not entitled to fees because his prosecution was brought in good faith.

When contacted on Tuesday, Markus said, “They can’t take away the acquittal.”

Shaygan no longer practices medicine. He lives in Orlando. The U.S. attorney’s office did pay about $70,000 for costs incurred while the defense sought sanctions against Cronin and Hoffman.

“It’s easier to get a ticket to Willy Wonka’s chocolate factory than a ticket to the Supreme Court these days,” Markus said. “But I’m also surprised and disappointed because we had so much support.”

Amicus briefs were submitted in support of Shaygan’s position by the National Association of Criminal Defense Lawyers, the Constitution Project, the Association of American Physicians and Surgeons and a group of former federal judges and prosecutors.

Alicia Valle, spokeswoman for the U.S. Attorney Wifredo Ferrer, said the office had no comment.

Allegations Linger

And even though the fight over who pays Shaygan’s defense costs is settled, the prosecutorial misconduct allegations still linger.

Gold sent his findings to the respective state Bar associations of Cronin and Hoffman and to the Justice Department’s Office of Professional Responsibility, which investigates allegations of misconduct by prosecutors.

The Eleventh Circuit also ordered Gold to hold another hearing on the matter because of the lack of due process afforded the prosecutors the first time around. He recused himself and the issue now resides with U.S. District Judge Jose E. Martinez.

Miami criminal defense attorney Neal R. Sonnett, a past president of the NACDL, said he felt the Supreme Court made a bad call.

“I think they should have granted cert,” he said. “It is an important argument and it really needs to be vetted and decided by the Supreme Court.”