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CAUSE Nos. Fll-00180, Fll-00181, Fll-00182, Fll-00183 AND Fll-00191

ST ATE OF TEXAS § § § § §

VS.

ALBERT G. HILL, III

DEFENDANT ALBERT G. HILL, lIPS MOTION TO QUASH AND DISMISS INDICTMENTS

DUE TO PROSECUTORIAL MISCONDUCT

TO THE HONORABLE JUDGE ERNEST WHITE:

COMES NOW, Defendant, Albert G. Hill, III ("Mr. Hill"), by and tlrrough his counsel of record, and files this Motion to Quash and Dismiss Indictments Due to Prosecutorial Misconduct, and in support thereof respectfully shows the Court the following:

INTRODUCTION

On April 4, 2011, Mr. Hill and his wife, Erin, were notified by the Dallas District Attorney's Office that they had been indicted on multiple felony counts of "mortgage fraud," and that warrants had been issued for their arrests. The Hills - parents of three young children - were stunned. Neither they nor their attorneys had received any notice from the D.A.'s Office that such charges were even being considered.

More than 18 months after indicting this case, the D.A:s Office dismissed all charges against Mrs. Hill "in the interest of justice." The D.A. 's Office has so far refused, however, to dismiss against Mr. Hill. Mr. Hill respectfully submits that the following facts, largely if not entirely undisputed, require the Court to do what the D.A's Office has not - dismiss all remaining charges:

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• Fact: The case against the Hills was referred to the D.A.'s Office on behalf of Mr. Hill's father, Albert G. Hill, Jr. ("Hill Jr."), who at the time was adverse to his son in a hotly-contested federal lawsuit involving multi-billion dollar trusts. In February 2010, the

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federal judge presiding over that case entered an order finding that Hill Jr. had testified falsely and submitted evidence in bad faith. Just four days later, in apparent retaliation for this ruling, Hill Jr. submitted a letter to the D.A.'s Office, through his lawyer Michael Lynn, that accused his son and daughter-in-law of mortgage fraud.

• Fact: In the months after Mr. Lynn submitted these allegations to the D.A.'s Office, his law partner, Jeffrey Tillotson, donated a total of $48,500, in three contributions, to the re-election campaign of Dallas District Attorney Craig Watkins. Although neither Mr. Tillotson nor other members of his firm had previously donated to Mr. Watkins' campaigns, these contributions immediately made Mr. Tillotson one of Mr. Watkins' largest individual contributors. Shortly after the last of Mr. Tillotson's donations, in November 2010, Mr. Watkins was narrowly re-elected as District Attorney. The Hills were indicted five months later.

• Fact: The "mortgage fraud" allegations submitted by Hill Jr. were highly unusual, if not unprecedented for a criminal case. Among other things, the home equity loan at issue was never in default, was repaid in full just a few months after it was obtained (and long before any criminal case was even being considered), and was fully secured at all times by the Hills' undisputed equity in their home. In other words, the lender did not suffer and was never at risk of suffering any loss, and never complained to authorities that the Hills had done anything wrong.

• Fact: Prior to indicting the Hills, the D.A.'s Office apparently did not conduct any standard interviews, including such obvious witnesses as the loan officer, the mortgage broker, or the borrowers themselves.

• Fact: The D.A.'s Office did not provide any notice to the Hills that indictments were being considered, or give them or their lawyers an opportunity to address the grand jury before charges were presented, despite the Office's policy of providing such notice and opportunity to be heard. When that policy was announced in 2007, then-First Assistant D.A. Terri Moore reportedly told Texas Lawyer that it was !lall about fairness ... This is not a railroad we are running ... This is a justice system."

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• Fact: Beginning in November 2009, Mr. Hill was represented for several months in the federal trust litigation by a group of attorneys that included Lisa Blue Baron e'Ms. Blue"). During this time, Ms. Blue bragged to Mr. Hill about her relationship with District Attorney Watkins, which includes a personal friendship, generous campaign contributions, and even a brief, pro bono representation of Mr. Watkins as his personal lawyer. Ms. Blue and her co-plaintiff in the fee dispute case, Charla Aldous, even schemed at one point while representing Mr. Hill about ways they might use Ms. Blue's influence with Mr. Watkins to intimidate opposing counsel in the trust litigation.

• Fact: The trust litigation settled in May 2010. Shortly thereafter, Ms. Blue and her colleagues began demanding that the Hills pay them more than $50 million in attorney's fees for approximately six months of active work. When Mr. Hili refused, Ms. Blue and the others eventually withdrew from representing him and filed suit against the Hills. The parties to the fee dispute case agreed that it would be heard in federal court, with a trial eventuaUy set to begin on April 18, 2011.

• Fact: Exactly two weeks before the fee dispute trial was scheduled to begin, the Hills learned for the first time that they had been indicted. As a result of the indictments, the Hills were advised to and did invoke their constitutional rights not to testify during the fee dispute trial. After the trial ended, the federal court made factual findings that favored Ms. Blue and her colleagues, and entered a judgment against the Hills for more than $34 million, later reduced to $21.9 million. Ms. Blue personally stands to receive one-third of any recovery (approximately $7.3 million).

• Fact: After the fee dispute trial ended, the Hills obtained discovery from Ms. Blue regarding her communications with the D.A.'s Office relating to the Hills. During a court-ordered deposition, Ms. Blue made a stunning admission - that District Attorney Watkins had in fact called her before the illdictmellts were returned to attempt to discuss potential charges against the Hills. She testified that in the first of two such calls, Mr. Watkins said that "there could be an indictment or are you still interested in the indictments, II or words to that effect .

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• Fact: The Hills also obtained phone records for Ms. Blue that confinn a dramatic spike in communications between her and phone numbers for District Attorney Watkins in the weeks and days before the indictments were obtained, including calls with both Mr. Watkins' office and cellphone numbers. On March 30, 2011 alone - the day before indictments against the Hills were presented to the grand jury - Ms. Blue traded seven calls with Mr. Watkins' cellphone number.

• Fact: In addition, campaign finance records reflect that on March 9, 2011 - just weeks before the indictments were presented - the Watkins campaign accepted a $5,000 donation from Ms. Blue (even though Mr. Watkins' re-election campaign had ended months earlier). Ms. Blue also apparently solicited others who donated thousands more around the same time.

• Fact: On October 12, 2012 - approximately 18 months after the Hills were indicted - the Hills' defense counsel met with ADA Deborah Smith, a prosecutor who had taken over the cases against the Hills long after they were indicted. During this meeting, Ms . Smith described a "re-evaluation" of the cases that she had been conducting, and said that she had already decided to recommend dismissing certain charges against both Mr. and Mrs. Hill. ADA Smith also said that she was conducting "due diligence" interviews of witnesses regarding the remaining charges, and would eventually make a recommendation regarding those charges as well.

• Fact: During the October 12 meeting with defense counsel, ADA Smith expressed significant concerns about the cases against the Hills, made clear that she had no role in obtaining the indictments, said that the interviews of witnesses she was conducting should have been conducted much earlier, and stated that she would refuse to try the case if the D.A.'s Office decided to go forward on any of the charges. ADA Smith also "apologized" on behalf of the Office.

• Fact: Shortly after the meeting with ADA Smith concluded, the D.A.'s Office moved to dismiss all charges against Erin Hill"in the interest of justice," effectively acknowledging the wrongfulness of those charges .

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• Fact: During the meeting with ADA Smith, defense counsel had described a variety of reasons why the charges against Mr. Hill were without merit. ADA Smith requested that this infonnatjon be put in a written submission for her to use in connection with her recommendations. One week later, on October 19, defense counsel e-mailedthewrittensubmissiontoMs.Smith.

• Fact: On October 22,2012, and in response to the e-mail from defense counsel, Ms. Smith conveyed remarkable news: Even though she was in the middle of a careful "re-evaluation" of the cases against the Hills, which had already led her to recommend and obtain dismissals against Mrs. Hill, she had nonetheless been removed from the Hill case effective the previous Friday. Even more remarkable, Ms. Smith wrote in her e-mail that she had been reassigned "to prosecute Animal Cruelty cases. '1

It is time for this misbegotten prosecution to come to an end. The D.A.ls Office has served as a stalking horse in this case for various interests, none of them the interest of justice. These include Mr. Hill's father, Hill Jr., who reported the allegations in retaliation for Mr. Hill's exercise of his constitutional rights in the trust litigation; Hill 1r.'5 lawyer, Mr. Lynn, who submitted the allegations on behalf of his client and whose law partner thereafter donated $48,500 to the District Attorney's re-election campaign; and Ms. Blue, the D.A.'s personal friend, generous campaign contributor and former lawyer, who was seeking tens of millions of dollars from the Hills at the time the indictments were obtained, and whom the D.A. indisputably contacted beforehand to discuss potelttial charges agaillst the Hills - charges that were obtained and had the desired effect of impairing the Hills' ability to exercise their constitutional rights to defend themselves in the fee dispute litigation (_gainst Ms. Blue.

Mr. Hill's constitutional rights, including his due process right to a disinterested prosecutor, have thus been violated repeatedly and brazenly. Accordingly, and for the reasons set forth herein, the Court is respectfully urged to sustain this motion and to dismiss the indictments against Mr. Hill with prejudice .

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FACTUAL BACKGROUND

I. The Hill v. HUllt Litigation

Albert G. Hi1l, III is the eldest great-grandson of fanner Texas oil magnate H.L. Hunt, who was once one of the wealthiest men in America. In 1935, H.L. Hunt created trusts for six of his children, including his daughter Margaret (Mr. Hill's grandmother). At the time of Margaret's death, in June 2007, the "Margaret Trust" was worth more than $1 billion.

In 2005 - two years before Margaret's death - her son, Albert G. Hill, Jr. ("Hill Jr."), signed an "irrevocable disclaimerll pursuant to which most of the interest in the Margaret Trust that would otherwise pass to him upon his mother's death would instead pass directly, in equal shares, to his three children, including Mr. Hill (also known as "Hill III"). Accordingly, when Margaret died in 2007, Mr. Hill became a current beneficial)' of the Margaret Trust.

Shortly after Margaret's death, members of Mr. Hill's family and those responsible for administering the Margaret Trust began exploring the potential sale of the trust's primary asset, Hunt Petroleum Corp. As a vested beneficial)' of the Margaret Trust, Mr. Hill was legally entitled to and sought information regarding the business affairs and value of the company and the trust. Mr. Hill's family quickly soured on his demands, which induded requests for statutory accountings and compliance with all tax obligations. In a coordinated series of actions beginning in October 2007, Mr. HilPs family fired him from his job with a family-owned entity, sought to disinherit him from the family fortune, and sued him in state probate court to carry out their plan. Mr. Hill counter-sued in a lawsuit that ultimately landed in Dallas federal court (the "Hill v. Hunt litigation"), in which Mr. Hill alleged that those responsibie for administering the trusts, induding members of his family, had misappropriated or dissipated trust assets, and committed other civil and criminal violations, including tax, mail and wire fraud.

II. Hill Jr. is Found to Have Given False Testimony

A key issue in the Hill v. Hunt litigation was a claim by Mr. Hill's father, Hill Jr., that he "was not capable ... of making a proper decision ll to sign the irrevocable disclaimer in 2005, which made Mr. Hill a current beneficiary of his grandmother'S trust upon her death. Ex. 1.1 In an effort to support his

1 See Appendix of Exhibits filed herewith .

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position on this key issue, Hill Jr. gave testimony and submitted evidence that Mr. Hill believed to be false. Mr. Hill filed a motion with the federal court asking that Hill Jr. be held in contempt for this conduct. Ex. 2. On February 18, 2010, after a series of hearings and briefs in which Hill Jr. and his lawyers vigorously opposed a contempt finding, the federal judge entered an order rmding that Hill Jr. had submitted materials to the court in bad faith and testified falsely under oath. Ex. 3. The order also found that arguments advanced by Hill Jr.'s counsel- Michael Lynn of the law finn Lynn Tillotson Pinker & Cox, LLP - "far exceeded the bounds of advocacy, permissible or otherwise." Id. at 31.

The Order was a stinging defeat for Hill Jr. and his counsel Mr. Lynn. Hill Jr. immediately sought to retaliate against his son, Mr. Hill, and daughter­in-law, Erin Hill. Exactly four days (and only two business days) after the order against Hill Jr. had been entered by the federal court, Mr. Lynn submitted a letter on behalf of Hill Jr. to the Dallas D.A.'s Office that complained of alleged mortgage fraud by the Hills in connection with a home equity loan they had obtained. Ex. 4. The letter took the position that a trust of which Hill Jr. was a beneficiary had purchased an 80% interest in the Hills' residence in 2004, and that the Hills had acted improperly by obtaining the home equity in light of that transaction.

Between the time Mr. Lynn submitted this letter to the D.A.'s Office in February 2010, and Mr. Watkins' re-election as District Attorney in November 2010, Mr. Lynn's law partner, Jeffrey Tillotson, made three contributions to the Watkins campaign totaling $48,500. Ex. 5. According to campaign finance reports, neither Mr. Tillotson nor anyone from his firm had ever made a campaign contribution previously to Mr. Watkins, nor have they since. Mr. Tillotson's sudden interest in Mr. Watkins' re-election in the months after Hill J r.' s letter was submitted nonetheless made him one of Mr. Watkins' largest individual campaign contributors.

District Attorney Watkins was re-elected by a razor-thin margin just days after Mr. Tillotson's third and final contribution. The Hills were indicted five months later.

III. Lisa Blue and the "BAM" Lawyers

In November 2009, in the midst of the Hill v. Hunt litigation, Mr. Hill hired a new team of lawyers on a contingent fee basis to take over from his prior counsel. The new team eventually included Lisa Blue, Charla Aldous, Stephen Malouf and their affiliated law firms (the team of Blue, Aldous, and

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Malouf are referred to collectively as "BAM"). Ex. 6. Mr. Hill agreed to pay BAM 30% of any" gross affinnative recovery" he obtained in the Hill v. Hunt litigation. Jd. at 2.

Ms. Blue and Ms. Aldous, and later Mr. Malouf, actively represented Mr. Hill for less than six months, from mid-November 2009 until the parties in the Hill v. Hunt case reached a settlement in May 2010. Soon thereafter, and before the settlement had even been approved by the federal court, the BAM attorneys began lobbying a court-appointed guardian ad litem to support awarding BAM a contingent fee of more than $50 million. Exs. 7_8. 2 This lobbying eventually led to a fee dispute between BAM and the Hills.

In July 2010, BA1\1 filed a motion to withdraw as Mr. HillIs counsel in the Hill v. Hunt case, citing the fee dispute as the reason for their withdrawal. The federal court granted BAM's motion three months later, in November 2010. Ex. 11. Shortly thereafter BAM filed a complaint against the Hills for fees. Ex. 12. In January 2011, the Hills and BAl\1 entered into a written agreement to have their fee dispute heard in the U.S. District Court, with a trial beginning in April 2011. Ex.i3.

iV. The Hills Are Indicted on the Eve of the Fee Trial

The trial in the fee dispute litigation was scheduled to begin on April 18, 2011. Ex. 14. On April 4 - exactly two weeks earlier - the Hills were notified for the first time that felony indictments had been returned against them, and that arrest warrants had been issued. This news came as a shock to the Hills and their counsel, none of whom had received any notice from the D.A.'s Office: that indictments were even being contemplated. The charges against the Hills were reported the same day in the Dallas Morning News. Ex. 15,

V. Li~a Blue is a Close Friend and Associate of District Attorney Craig ,,'atkins

During BAM's representation of Mr. Hill, Ms. Blue bragged to Mr. Hill about her close relationship with District Attorney Watkins. For instance, in a November 2009 e-mail.Ms. Blue wrote, in part, 1'1 got hired to represent the

2 Two federal judges expressed concern with the efforts by Ms. Blue and her BAM colleagues tp lobby the guardian ad litem to support a $50 million fee. See Ex. 9 (describing JAM's efforts as "troubling"); Ex. 10 ("BAM came close to overstepping the bounds of appropriateness in its discussion with the GAL over its fees, and it is not surprising that Hill III was uncomfortable enough with these discussions, once he learned the extent of them, to want to discharge BAM. ") .

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DA of dallas craig watkins ... [T]his is a good thing." Ex. 16 (emphasis added). In another email, she wrote to Mr. Hill that she IISpent the whole eve with the D.A. Craig watkins." Ex. 17 (emphasis added). In addition, in a chilling prelude to the indictments against the Hills, and while still representing Mr. Hill, Ms. Blue and her fellow BAM attorney Ms. Aldous schemed about ways to use Blue's influence with the D.A. to intimidate their opponents in the Hill v. Hunt litigation. Ex. 18 (e-mail from Aldous to Blue asking if Watkins could "drop by" a hearing to attempt to "freak out" opposing counsel).

Ms. Blue's statements to Mr. Hill were not idle bragging - she in fact has d very close personal, professional and political relationship with Mr. Watkins. Among other things:

• Ms. Blue is one of the largest individual donors to Mr. Watkins' campaigns, having personally contributed (together with her late husband Fred Baron) in excess of $25,000 since 2007, including $7,500 in the five-month period before the indictments were returned. Ex. 5. In November 2009, Mr. Watkins announced his re-election campaign at Ms. Blue's house. Ex. 19.

• Also commencing in November 2009, Ms. Blue represented Mr. Watkins, pro bono, in connection with a lawsuit he brought against a former FBI agent who had been hired by the Dallas County Commissioner's Court to investigate allegedly corrupt Dallas County constables. Ex. 20 at 13-16.

• In 2010, the SMU law school announced a $100,000 donation by Ms. Blue to create a scholarship in Mr. Watkins' name. The District Attorney's Office announced the donation on the front page of its newsletter, "The Justice Report." Exs.21-22.

• As discussed more fully below, after the fee dispute between BAM and the Hills was tried, Mr. Watkins retained Ms. Blue and her BAM colleague Mr. Malouf to represent Dallas County in a contingent fee suit. Ex. 23.

VI. Pre-Indictment Communications Between Lisa Blue and District Attornev Craig Watkins

In connection with the fee dispute litigation, and in response to a motion to compel, Ms. Blue was required to produce her telephone records and contact information for Mr. Watkins (which includes, among other things, office and

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sellphone numbers for Mr. Watkins, and a cellphone number for his secretary). Ex. 24 at 207-08.3

By examining Ms. Blue's voluminous phone records for calls with the numbers associated with Mr. Watkins, a stunning pattern emerges: In the first four and a half months of 20 10, before a potential fee dispute had arisen between the Hills and BAM, Ms. Blue placed or received just one call with Mr. Watkins' office phone number, and none with his cellphone number. In contrast, from mid-May 20 I 0, when the BAM lawyers first began lobbying for a fee in excess of $50 million, until April 4, 2011, when the indictments against the Hills were publicly announced, Ms. Blue's records reflect that she placed or received a total of 3 7 calls to or from Mr. Watkins' office and cellular phone numbers, many of them at or near the date of key events in the fee dispute litigation. Indeed, of these 37 calls, 14 occurred in March 2011 atone - the month the Hills were indicted - including six on the night before the indictments were presented to the Grand Jury (March 30, 2011).

A similar pattern exists for calls and text messages between Ms. Blue and the cellphone for Mr. Watkins' secretary, Sharon Fuller. Ms. Blue's :'ecords reflect no calls or text messages with Ms. Fullers cellphone during the first six months of 2010. In contrast, between mid-2010 and April 4, 2011, Ms. Blue's records reflect 28 calls and text messages with Ms. Fuller, including 19 in f.1arch 2011 alone.

The following chart dramatically illustrates this pattern in the months leading up to the indictments:

3 The following exhibits are inc1uded in the appendix to this motion: Ex. 25 (phone records produced by Ms. Blue to the Hills during the fee litigation); Ex. 26 (records of text message records produced by Ms. Blue during the fee litigation); Ex. 27 (contact infonnation for Craig Watkins produced by Ms. Blue reflecting office and cellular phone numbers for Mr. Watkins, his secretary Sharon Fuller, and others (redacted)). The Hills have also identified, through infonnation produced during the fee litigation, commercial subscriber databases, and other public sources, several other telephone numbers contained in Ms. Blue's phone records, including the following numbers referenced herein (redacted): Craig Watkins campaign office (214-428-7799); Stephen Malouf cellphone (214-843.); Charla Aldous cellphone (214-683.); and Terri Moorecellphone (817-808.) .

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The heated exchange of calls between Ms. Blue and Mr. Watkins ended abruptly after the indictments were announced. According to her records, Ms. Blue did not place or receive another call with either Mr. Watkins' office or cellphone number for nearly three weeks after the indictments were publicly announced, and placed only two during the entire month. Notably, those two calls were placed to Mr. Watkins' cellphone number on the evening of April 27,2011 - just hours after Ms. Blue had completed her testimony in the fee dispute trial against the Hills.

vII. Evidence Obtained After the BAM v. Hill Trial

The evidence of improper communications between Ms. Blue and Mr. Watkins regarding this case is not limited to phone records or other circumstantial evidence. To the contrary, Ms. Blue admitted to such contact during a court-ordered deposition she was compelled to attend, over objection, after the fee dispute trial. See Ex. 24. During that deposition, Ms. Blue testified under oath that the District Attorney had in fact contacted her OIl at least two occasions to discuss the charges against the Hills before the indictments were obtained.

1. Januarv 21, 2011

During her deposition, ~s. Blue testified that she received a call from D.A. Watkins "shortly before the indictments came down," though she later said she could not be sure exactly how long before the indictments the call occurred, only that it was "before the indictments[.]" Ex. 24 (Tr. 233, 272). When asked what the District Attorney said during this call, she answered in part as follows:

He said -- I don't remember specifically. He said something about the -- there was -- there could be an indictment or are you still interested in tbe indictments or -- I don't remember. It was one or two sentences about the indictments, but the exact wording I don It remember, but it had to do with indicting the Hills or indicting AI. At that time I didn't know if it was one or both.

Ex. 24 (Tr. 235) (emphasis added). During her testimony, Ms. Blue claimed that she responded to Mr. Watkins by saying, "I don't represent the Hills anymore and so it would be inappropriate for me to talk about it." Id. (Tr .

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236) (emphasis added). She further testified that the entire call lasted "Less than a minute. A minute. It was short." Id.

Although Ms. Blue claimed in her deposition that she could not remember exactly what Mr. Watkins said about indicting the Hi1Is, she did claim to have explicit memories where she was, who was present and even what she vvas lvearing when she received this call from the District Attorney:

[W]hen the DA called me, I remember[] where I was in Steve Maloufs office and I remember Steve Malouf was there and I remember where I was sitting and I remember what room I was facing towards. So that kind of thing. Date, I just can't - I remember what I had on.

Ex. 24 (Tr. 379-80).

Mr. Malouf was also deposed regarding his knowledge of r:ommunications between BAM attorneys and the D.A.'s Office relating to the Hills. Ex. 35. Mr. Malouf's testimony confirmed that he was present on one occasion when Ms. Blue received a phone call from Mr. Watkins. According to Mr. Malouf, he could not hear what Mr. Watkins said, but he did hear Ms. Blue say, "I'll have to stop you there. I don't represent them anymore, and it'~ not appropriate -- or I can't talk to you about that." Ex. 35 (Tr. 134) (err:phasis added). Much like Ms. Blue, Mr. Malouf claimed that the call from Mr.Watkins was short - "20 or 30 seconds, maybe 60 seconds[.]" Ex. 35 (Tr. 135).

According to Mr. Malouf's testimony, after the call with Mr. Watkins ended, Ms. Blue told Mr. Malouf that Watkins "was calling to talk to me about the Hill case - about the Hills, and I told him I don't represent them anymore and I -- it's not appropriate for me to talk about it." Ex. 35 (Tr. 134-35) (emphasis added). Unlike Ms. Blue, however, Mr. Maloufrecalled approximately when the call occurred:

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"I have seen the phone records, so I know [Ms. Blue]'s had conversations with somebody at the DA's office over a period of time. The only one that I heard or overheard any part of was the one in my office. And that was November to January of­November 2010 to January 2011."

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Ex. 35 (Tr. 136) (emphasis added).

Ms. Blue's phone records contain only one incoming phone call from the District Attorney's phone numbers during the period identified by Mr. Malouf: a call from Mr. Watkins' cellphone on Friday, January 21,2011, at 10:54 a.m. 4

However, Ms. Blue's telephone records flatly contradict many of the other details to which Ms. Blue and Mr. Malouf testified regarding that call.

As an ini tial matter, both Mr. Malouf and Ms. Blue testified that the can from Mr. Watkins was short - a minute or less. Ms. Blue's phone records suggest that this is false. In fact, the January 21,2011, call from Mr. Watkins' cellphone lasted four minutes - far longer than it would take Ms. Blue to cut off the District Attorney and tell him that his call to discuss indictments of the Hills was "inappropriate," as both she and Mr. Maloufclaimed in their depositions.

Ms. Blue's pbone records also undermine her and Mr. Maloufs testimony in other ways:

• The call jl-om Mr. Watkins on January 21, 2011, was not the first call between Ms. Blue and phone numbers for the District Attorney on that date. Rather, according to Ms. Blue's records, the caIl from Mr. Watkins' cellphone, which occurred at 10:54 a.m., came three minutes after Ms. Blue placed a one-minute call to Mr. Watkins' office number. Thus, it appears that Mr. Watkins was returning Ms. Blue's call when he called her, not calling her out of nowhere to discuss indictments of the Hills. Moreover, it appears that Ms. Blue placed the initial call from Mr. Alalmif's office - because that's where both she and Mr. Malouf testified that she was sitting, with Mr. Malouf present, when the District Attorney apparently called her back three minutes later.

• In addition, the call Ms. Blue received from Mr. Watkins l cellphone does not appear to be the last time she spoke with the District Attorney that day. Rather, at 11: 13 a.m. - just J 5 minutes after her

4 The call on January 21, 2011, is almost certainly that about which Mr. Malouf and Ms. Blue testified, as there are no other calls incoming calls from Mr. Watkins' office or cell phone numbers that are even close in time to the period identified by Mr. Malouf - i.e., November 2010 to January 2011 - much less within that period. (The previous incoming call from either of Mr. Watkins' phone numbers reflected in Ms. Blue's records was in mid­July 2010, and the next call after January 21 did not occur until March 30, 2011.)

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call with Mr. Watkins' cellphone apparently ended - Ms. Blue's records reflect that she called the District Attorney's office number again, in a call lasting six more minutes.

Ms. Blue's phone records thus contradict her and Mr. Malouf not only regarding the length of the call from Mr. Watkins, but its context. Not only was it a substantial call- four minutes - it apparently carne in response to an initial call from Ms. Blue, and was followed up minutes later by another call from Ms. Blue. It is thus unlikely in the extreme that Mr. Watkins called Ms. Blue unprompted and out of the blue, and attempted to discuss the "inappropriate" subject of indicting the Hills against her wishes.

Moreover, even if Ms. Blue did as she and Mr. Malouf testified - i.e., quickly rejected the District Attorney's efforts to discuss potential charges against the Hills - efforts by Mr. Watkins to contact a close friend and campaign contributor regarding potential indictments against that person's adversaries in a civil litigation would still be grossly improper.

2. March 30, 2011

During her deposition, Ms. Blue testified that she subsequently received a second call from Mr. Watkins in which the District Attorney once again tried to discuss indictments of the Hills with her. According to Ms. Blue, she once again cut off Mr. Watkins and quickly ended the call:

Q. And what in substance did Mr. Watkins sayan that occasion?

A. He mentioned the -- he mentioned the Hills. And I said, Craig, remember, I don't represent the Hills, so I can't -- there's nothing tbat I could talk about.

Ex. 24 (Ir. 241 : 13 -18 ) (emphasis added). As with the prior call, Ms. Blue could not pinpoint the precise date, only that it was before the indictments were returned. Ex. 24 (Ir. 272).

Even if this testimony were credited, however, it would be fatal to any innocent explanation for the original contact from Mr. Watkins: Having already been told that it was lIinappropriate" for him to attempt to discuss charges against the Hills with Ms. Blue, because she no longer represented them, the District Attorney tried again to raise the subject with her. If true, this means that the District Attorney repeatedly tried to speak to his close friend

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and campaign contributor about potential criminal charges against her adversaries in a high-stakes fee dispute even after being told that it was "inappropriate" for him to do so.

As set forth above, however, Ms. Blue's phone records - and common sense - belie the notion that the District Attorney was repeatedly attempting to raise with his close friend Ms. Blue a subject that she did not wish to discuss. M"s. Blue's phone records confirm that she received another call from one of Mr. Watkins' phone numbers subsequent to the January 2011 call described above, and prior to the return of the indictments. Specifically, her records reflect several incoming calls from Mr. Watkins cellphone on March 30, 2011 - the day before the indictments were returned.

As with the prior call from Mr. Watkins, however, Ms. Blue's phone records flatly contradict her on the details:

• Ms. Blue did not simply receive one, short call from Mr. Watkins on March 30, 2011, as her deposition testimony implied. Rather, she receivedfour, ranging in length from 1 to 3 minutes, and they occurred in quick succession - all within a lO-minute period .

• In addition, the callsfram Mr. Watkins! cellphone only came after a call was placed from Ms. Blue to Mr. Watkins' cellphone hours earlier. Thus, just as before, it appears that Mr. Watkins was returning Ms. Blue's call, not contacting her apropos of nothing to discuss criminal charges against the Hills, much less doing so even after purportedly being told that it would be "inappropriate" for the two to do so.

• Moreover, Ms. Blue's initial cail to Mr. Watkins came shortly after the end of a deposition in the fee dispute litigation that Ms. Blue attended, and it was followed by several calls between Ms. Blue and the cellphones of her co-plaintiffs (Mr. Malouf and Ms. Aldous). This further suggests that Ms. Blue's contacts with the District Attorney on March 30 - the day before the indictments were obtained - related to her fee dispute with the Hills.

• Finally, Ms. Blue's records indicate that she immediately followed her initial call ta Mr. Watkins with a call to AI Biertnat's restaurant, a spot repOltedly "favored by" Ms. Blue and Mr. Watkins according to the Dallas lvtorning Nev'v's. Ex. 36. (Indeed, Blue and Watkins are, or at least were, such regular customers there, that the article even depicted a booth they were known to frequent. See id.)

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Moreover, even if Ms. Blue's testimony regarding the calls from D.A. Watkins were credible (which it is not), and were supported by her phone ""ecords (as opposed to being largely contradicted by them), her testimony would still reflect highly improper communications between the District Attorney and close friend and campaign contributor. In short, there is simply no benign explanation for Mr. Watkins to personally call Ms. Blue - twice - to attempt to discuss potential criminal charges against the Hills while Ms. Blue is locked in a high-profile and high-stakes civil dispute with them. The impropriety of such contact would be exacerbated by the fact that in this case, the D.A.'s Office denied the Hins routine pre-indictment notice,S such that they could potentially have retained criminal counsel to make a defense presentation to the grand jury and avoided these charges altogether, while the District Attorney was personally providing such notice to their civil adversary, Ms. Blue.

As set forth above, however, Ms. Blue's testimony is not credible as to the details of her interactions with D.A. Watkins regarding the Hills; her phone records suggest that the truth is far worse. Beyond the phone records, however, her testimony is also facially unbelievable. It is simply inconceivable that

5 The Dallas D.A. 's Office, as a matter of general practice and policy, provides the iiubje<:ts of a criminal investigation with notice and an oWortunity to be heard before indichnent. Prosecutors regularly meet with defense counsel to discuss potential charges before they are presented to the grand jury. Ex. 38. There is also a "longstanding practice of allowing criminal-defense lawyers to submit letters to grand juries summarizing their clients' views of cases." Ex. 39. According to then First Assistant D.A. Terri Moore, this policy "is all about fairness ... This is not a railroad we are nmning ... This is a justice system." Ex. 39 .

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Mr. Watkins was unaware, well into 2011, that Ms. Blue - his good friend, former lawyer and a leading campaign contributor - was engaged in a high­profile, multi-million dollar fee dispute with the Hills. Even less believable is Ms. Blue's testimony that Mr. Watkins called her twice to attempt to discuss criminal charges against the Hills, apparently "forgetting" that she had already told him once that it was lIinappropriate" for him to raise the subject with her.

Indeed, it is far more likely that Mr. Watkins called Ms. Blue in response to her calls to him, and that she initiated these communications precisely because she wanted to discuss potential criminal charges against the Hills, in the hope that such charges might (as they did) affect the high-stakes fee dispute litigation, and that Mr. Watkins obliged her. This inference was nearly confirmed during Ms. Blue's deposition, when she made a stunning - and probably unintended - concession. When asked how she could be sure that the calls from Mr. Watkins regarding the Hills came before the indictments were returned, she answered in part:

I can only place the calls before the indictments, because after the indictmentfsJ there would be no reason for Mr. Watkins or anybody at the DA's office to have any contact with me about the Hills .

Ex. 24 (Ir. 272:8-12) (emphasis added).

Of course, this testimony makes no sense unless Ms. Blue's purpose in communicating with the Mr. Watkins (or the D.A.'s Office) regarding the Hills Nas to attempt to get them indicted. It is this unfortunate explanation that is supported by the phone records described above: Ms. Blue's communications with phone numbers for the District Attorney and his secretary increased dramatically in the weeks and days just before the indictments were returned and publicly announced, and they ceased almost completely in the days and weeks afterwards.

VIII. The BAM v. HilI Trial

After the charges were announced, the Hills' counsel urged the federal court to stay the fee dispute case until the criminal charges could be resolved, or at least until they could be more fully assessed by criminal counseL Ex. 40. BAM strongly opposed any delay, and the court ultimately granted just a two­day continuance. Id.

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The fee trial thus began on April 20, 2011. During the trial, and in light of the sudden criminal charges, the Hills' newly-retained criminal counsel advised the Hills not to testify, pursuant to their Fifth Amendment privilege. The Hills heeded this advice and declined to testify at trial. Exs. 41-42.

After the conclusion of the trial, the magistrate judge proceeded to make certain factual findings in favor of the BAM attorneys and against the Hills (who as noted above had not testified at trial), and awarded BAM more than 530 million in attorneys' fees. Ex. 10. The Hills appealed to the district court, which issued a decision on December 31, 2011, that largely adopted the magistrate's factual findings but reduced the fee award in favor of BAM to $21.9 million. Ex. 9.

IX. D.A. Watkins Retains the BAM Team After BAM's Fee Trial with the Hills

In September 2011, after the trial in the fee dispute case, the District Attorney publicly announced that he had retained Lisa Blue and Stephen Malouf - i.e., two-thirds of the BAM team - to represent Dallas County on a contingent fee basis in a lawsuit against the Mortgage Electronic Registration System ("MERS") and its parent company. Ex. 23,43. The case involved allegations that MERS had failed to properly record certain mortgage transfers (and pay fees to the county associated with those transfers). Id.

D.A. Watkins also retained attorney Terri Moore to work with Blue and Malouf on the MERS engagement. Id. Ms. Moore was Mr. Watkins' highest­ranking deputy at the time the Hills were indicted - the First Assistant D.A. -but left for private practice in summer 2011. Id. Ms. Blue's telephone records indicate that she had also been in regular contact with Ms. Moore in the spring and summer of 20 1 0, during a time when the D .A.'s Office was apparently investigating the allegations against the Hills. Her records also show that she traded two calls with Ms. Moore's cellphone number on April 16,2011 - just four days before the fee dispute trial began.

x. The Assigned Prosecutor Expresses Doubts about the Case and is PromptlY Reassigned to Prosecute Animal Cruelty Cases

Months after the indictments of the Hills were obtained, the D.A.'s Office apparently reassigned the cases to ADA Deborah Smith, a prosecutor who had not been involved with the decision to indict. Over the course of nearly a year, deftnse counsel made oral and written submissions to Ms. Smith and the D.A.'s Office outlining numerous problems with the charges .

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Finally, in or about October 2012, ADA Smith advised defense counsel that she was conducting a "re-evaluation" of the cases against the Hills. On October 12,2012, ADA Smith met with three members of the Hills' defense team at the Criminal Courts building. During this meeting:

• ADA Smith confinned that she and other members of the D.A.'s Office were conducting a "re-evaluation" of the charges against the Hills, including iflterviewing witnesses. ADA Smith stated that although the re-evaluation was not yet complete, she intended to recommend dismissals of at least some of the charges against both Mr. and Mrs. Hill. As to the remaining counts, ADA Smith said that she planned to conduct two additional "due diligence" interviews, and would then make a recommendation regarding dismissal of those counts. ADA Smith represented that final decisions would be made before the next case setting, scheduled for November 12,2012.

• During the October 12 meeting, ADA Smith also described concerns she had with the charges against the Hills, clarified that she was not involved with the decision to indict the case, and indicated that she believed the interviews she was currently conducting should have been conducted long ago. Remarkably, ADA Smith even "apologized" on behalf of the Office for the way the case had been handled, and said that she did not intend to try the case if the D.A.'s Office decided to move forward with any charges.

• Also during the meeting, defense counsel summarized a variety of facts and legal issues that, in the view of defense counsel, warranted dismissal of all charges against the Hills. Counsel also provided ADA Smith with a copy of an exculpatory e-mail that ADA Smith said she had not previously seen. ADA Smith asked if defense counsel could put their submission in writing to assist her in discussions within the office, and counsel readily agreed.

Just hours after the meeting between ADA Smith and defense counsel concluded, the D.A.'s Office submitted motions to the Court dismissing all counts against Mrs. Hill. The motions stated that "After investigation, it has been detennined that this case should be dismissed in the interest of justice." The Court promptly granted the motions .

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One week after the meeting with ADA Smith, on Friday, October 19, defense counsel sent the promised written submission via e-maiL The following Monday, October 22, ADA Smith responded, writing in part:

Thank you for outlining your position regarding the pending charges against Mr. Hill ...

Effective last Friday, I am assigned to prosecute Animal Cruelty cases, therefore, I willllo IOllger be involved with Mr. Hill's cases. I will fOlWard the attached documents to my Division Chief, Donna Strittmatter. She is familiar with the cases and will be the contact person for future questions.

Ex. 44 (emphasis added). Thus, despite having been signed to the Hill cases for nearly a year, and being in the midst of a reevaluation that had already prompted complete dismissals against one of the two defendants, ADA Smith was precipitously remove from the Hill case and reassigned to handle "animal cruelty cases." No explanation for this decision has been given to defense counsel.

ARGUMENT

The circumstances set forth above constitute clear and appalling violations of the Hills' constitutional rights to due process and equal protection, and cannot be tolerated. As a matter of law, the charges against Mr. Hill should now be dismissed.

I. Th_e Indictments Should Be Dismissed Due to Deprivation of the Due Process Right to a Disinterested Prosecutor

The right to a disinterested prosecutor is a fundamental due process right inherent to our criminal justice system. As stated by Judge Friendly in Wright v. United States, a case cited favorably by the Texas Courts of Appeal:

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It is a bit easier to say what a disinterested prosecutor is not than what he is. He is not disinterested if he has, or is under the influence of others who have, an axe to grind against the defendant .... Moreover l as the New York Court of Appeals has recently said in dismissing an indictment where a part-time district attorney had been corporate counsel to and a stockholder of a

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corporation which the defendant was charged with defrauding, 'the practical impossibility of establishing that the conflict has worked to defendant's disadvantage dictates the adoption of standards under which a reasonable potential for prejudice will suffice.' [Citation omitted].

Wright v. United States, 732 F.2d 1048, 1056 (2d Cir. 1984). Judge Friendly also quoted the following statement by the same New York Court:

[W]hat impression could the defendant have had of the fairness of a prosecution instituted by one with the personal and financial attachments of this prosecutor? Would it have been unreasonable for the defendant - or others - to doubt that the public officer, whose burden it was to screen the complaint for frivolousness and, if necessary, guide its destiny before the Grand Jury, would do so dis interestedly?

Id. at 1055, n.6.

The influence exercised upon the District Attorney by Hill Jr. and his counsel, and by Ms. Blue, deprived the Hills of due process. The contacts from the District Attorney admitted by Ms. Blue alone confinn this - according to Ms. Blue's sworn deposition testimony, D.A. Watkins contacted Ms. Blue - his close friend and political patron - before the indictments against the Hills were retllrned in an effort to discuss potential charges. Whether or not Ms. Blue solicited or indulged these contacts from the District Attorney - and her phone reuJrds, unlike her deposition testimony, suggest she did - the fact of the contact alone demonstrates conclusively that the District Attorney was not disil,terested in the prosecution of the Hills as due process requires.

The fundamental fairness required by due process is violated when a prosecutor uses the "awful instruments of the criminallawll in furtherance of a privat; interest that impedes the prosecutor's ability to impartially discharge his duty to seek justice. See, Wright, 732 F.2d at 1058 ; Ganger v. Peyton, 379 F.2d 709,714 (4th Cir. 1967); In re Guerm, 235 S.W.3d 392, 429-31 (Tex.App.-Corpus Christi 2007). In In re Guerra, Gustavo Garza was appointed as a special prosecutor to investigate allegations of improper behavior by Juan Guerra, the Willacy County D.A. Guerra challenged Garza's appointment on the ground that Garza had a conflict of interest. Specifically, the charges against Guerra involved voter fraud allegedly committed during an election in which he had defeated Garza. Accordingly, the defendant argued tha,t the special prosecutor had an untenable conflict of interest.

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The Texas Court of Appeals agreed. It noted that "[tJhe absence of an impartial and disinterested prosecutor has been held to violate a criminal defendant's due process right to a fundamentally fair trial. Put another way, the due process rights of a criminal defendant are violated when a prosecuting attorney who has a conflict of interest relevant to the defendant's case prosecutes the defendant." Id. at 429 (citations omitted). It elaborated:

A prosecutor's "primary duty" is "not to convict, but to see that justice is done." In this regard, any interest that is inconsistent with the proseclltor/s duty to see that justice is done is a conflict that could potentially violate a defendant'S right to fundamental fairness. For example, if a prosecutor has a financial stake in the outcome of a prosecution, the conflict between that interest and the duties of the public office clearly presents constitutional concerns .... Moreover, a conflict arising from a prosecutor's non­economic, personal interest in the case can vi01ate a defendant's right to due process.

Id. at 430-31 (quoting Tex. Code Crim. Proe. art. 2.01 (2005») (other citations omitted) (emphasis added). The Court found that Garza had such a conflict of interest, and that the prosecution violated the defendant's right to due process .

Similarly, in Ganger, a prosecutor simultaneously represented the defendant's wife in a civil divorce proceeding and prosecuted the defendant for a~:sau1t. The defendant was convicted, but the Fourth Circuit reversed, finding a due process violation:

[The prosecutor] was not in a pOSItIOn to exercise fair-minded judgment with respect to (1) whether to decline to prosecute, (2) whether to reduce the charge to a lesser degree of assault, or (3) whether to recommend a suspended sentence or other clemency.

Representing Ganger's wife in the divorce proceeding suggests the strong possibility that the prosecuting attorney may have abdicated to the prosecuting witness (Ganger's wife) in the criminal case the exercise of his responsibility and discretion in Illaking charge decisions. If she did not actually make the decision to prosecute for felonious assault, certainly her interests were influential, and those conflicted interests may have impeded appropriate plea bargaining ....

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We think the conduct of this prosecuting attorney in attempting at once to serve two masters, the people of the Commonwealth and the wife of Ganger, violates the requirement of fundamental fairness assured by the Due Process Clause of the Fourteenth Amendment.

Id. at 713-14 (footnotes and citations omitted).

As in the cases cited above, here D.A. Watkins' conflicts of interest violated the Hills' right to due process. The evidence demonstrates that D.A. Watkins was "under the influence" of Ms. Blue, with whom D.A. Watkins had a close personal, professional and political relationship. Wright, 732 F.2d at 1056. There is simply no other explanation, apart fonn Ms. Blue's "influence," for the D.A. to call her at least twice to attempt to discuss potential charges against the Hills, much less doing so while his office simultaneously denied the Hills routine pre-indictment notice.

As in Ganger, D.A. Watkins served Iltwo masters!!: the people of Dallas County, and his friend, fundraiser and political benefactor, Ms. Blue. And as in Ganger, D.A. Watkins had a financial stake in the prosecution of the Hills­indicting them benefited Ms. Blue (and also counsel for HllI Jr., who was also a major contributor to D.A. Watkins), which in turn benefited D.A. Watkins. The public and this Court cannot "have confidence in a proceeding in which an interested prosecutor plays the critical role of preparing and presenting the case .lor the defendant's guilt." In re Guerra, 235 S.W.3d at 431. The Hill indictments, approved by a manifestly interested prosecutor violated the Hills' right to due process and should be dismissed.

II. The Indictments Must Also Be Dismissed as Vindictive and Therefore a Violation of Due Process.

A decision to prosecute is vindictive and "violates due process when criminal charges are brought in retaliation for the defendant's exercise of his legal rights." Neal v. State, 150 S.W.3d 169, 173 (Tex. Crim. App. 2004) (en banc). A defendant has two routes to challenge an indictment for vindictive prosecution. Fie'}t, a defendant may proffer "proof of circumstances that pose a realistic likelihood of such misconduct sufficient to raise a presumption of prosecutorial vindictiveness, which the State must rebut or face dismissal of the charges." Id. (quotations omitted). Alternatively, vindictive prosecution can be shown with "proof of actual vindictiveness-that is, direct evidence that the prosecutor's charging decision is an unjustifiable penalty resulting solely from the defendant's exercise ofa protected legal right." Id. (quotation omitted) .

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Under both formulations of the test for vindictive prosecution, courts ask if the decision to charge a defendant is based on animus - whether that of the prosecutor or of a third party wielding influence over the prosecutor. See United States v. Adams, 870 F.2d 1140, 1145 (6th Cir. 1989) (liThe broad discretion accorded to prosecutors in deciding whom to prosecute is not 'unfettered,' and a decision to prosecute may not be deliberately based upon the exercise of protected statutory rights."). Thus, a defendant claiming vindictive prosecution must show that "( 1) the prosecutor harbored genuine animus toward the defendant, or was prevailed upon to bring the charges by another with animus such that the prosecutor could be considered a 'stalking horse', and (2) he would not have been prosecuted except for the animus. II u.s. v. Koh, 199 F.3d 632, 640 (2d Cif. 1999) (quoting United States v. Aviv, 923 F. Supp. 35,36 (S.D.N.Y. 1996)) (emphasis added).6 Vindictive prosecution is properly raised in a pretrial motion. United States v. Hooton, 662 F.2d 628, rj34 (9th Cir. 1981) ("This court holds that the mere filing of an indictment can support a charge of vindictive prosecution'l

Here, the Hills have been prosecuted for having exercised their fundamental right to petition the court in two civil cases. First, as discussed above, this matter initially came to the attention of the District Attomeyls office via a submission made by Mike Lynn, counsel for Hill Jr., in February 2010. That submission came in direct response to a finding by the federal court that Hill Jr. had committed perjury and submitted evidence in bad faith as part of his litigation against Mr. Hill, and that Mr. Lynn had overstepped the bounds of advocacy in assisting Hill Jr. with those submissions. Ex. 3.

6 In fact, federal courts in the Fifth Circuit have actually enjoined state criminal procl~edings when they are brought in "bad faith" - i.e., for an improper purpose. See, e.g., Shaw 1'. Garrison, 467 F.2d 113, 122 (5th Cir. 1972) (injunction can be granted where "prosecution was brought in bad faith to harass him"); Wilsoll v. Thompson, 593 F .2d 1375, 1387 (Sth Cir. 1979) ("irreparable injury is sufficiently established if the federal plaintiff demonstrates that the state prosecution against him was brought in bad faith for the purpose nfretaliating for or deterring the exercise of constitutionally protected rights"). These courts have recognized "a federal right to be free from bad faith prosecutions." Shaw, 467 F.2d at 120. State criminal proceedings have been enjoined when the prosecution was initiated for the purpose of punishing an individual for exercising a legal right, or where the prosecution was mOlivated by a desire for personal or political gain. See, e.g., Fitzgerald v. Peek, 636 F .2d 943,945 (5th Cir. 1981) ("the prosecution was brought for the purposes of harassment and retaliation and would not have been brought but for the improper influence exerted on the prosecutor by certain DeKalb judges to seek the indictments")~ Pizzolato v. Perez, 524 F. Supp. 914, 921 (E.D. La. 1981) ("bad faith prosecution arises when the prosecution is motivated by a desire for personal and political gain") .

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In other words, Hill Jr. and his counsel were apparently so angry that the federal court had found their conduct to be unlawful and in bad faith, or to have to overstepped pennissible advocacy, that they immediately tried to interest the District Attorney in prosecuting Mr. Hill for a totally unrelated "crime." That submission by Hill Jr. and Mr. Lynn - which was quickly followed by three Jonations totaling $48,500 by Mr. Lynn's law partner Jeffrey Tillotson to Mr. Watkin's campaign - subsequently provided a convenient basis for the District Attorney to initiate prosecutions against Mr. Hill and his wife once a fee dispute erupted between the Hills and Ms. Blue a few months later. Thus, Mr. Hill's decision to litigate his right to his inheritance, and then to defend himself against a $50+ million dollar fee claim by the BAM attorneys that arose out of the settlement, gave rise to this criminal case.

"The right to sue and defend in the courts is ... the right conservative of all other rights, and lies at the foundation of orderly government." Chambers v. Baltimore & Ohio R.R. Co., 207 U.S. 142,148 (1907); see Ryland v. Shapiro, 708 F .2d 967, 971 (5th CiT. 1983) (liThe right of access to the courts is basic to our system of government, and it is well established today that it is one of the fundamental rights protected by the Constitution.") .

Criminal prosecution in retaliation for htigating a civil lawsuit is vindictive prosecution. See United Stales v. Adams, 870 F.2d 1140, 1145 (6th Cir. 1989). In Adams, the defendant husband and wife were indicted for underreporting their income on federal tax returns and for perjury. [d. at 1 141.7

['he defendants were prosecuted even though they had previously filed amended tax returns and paid all outstanding tax deficiencies. [d. at 1143. The defendants moved to dismiss the indictments, alleging that they had been br('ught in retaliation for a sex discrimination lawsuit filed by Mrs. Adams against her employer, the EEOC. fd. at 1141.

The defendants asserted that the inaccuracies in the Adams's tax returns would not nonnally be referred for prosecution, and that but for Mrs. Adams's suit against the EEOC, there would not have been an indictment. Id. at 1144. After the District Court denied the defendants' motion to dismiss, the case proceeded to trial, and the defendants were convicted. On appeal, the Sixth Circuit reversed the convictions, explaining that:

7 The peIjury charge was based on the Mrs. Adams' statement in a deposition in a lawsuit against her employer that she took income figures from "the Form C that I had prepared for income tax purposes," when she had in fact never completed Ponn C. [d. at 1142 .

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The record suggests, for one thing, that taxpayers who undelTeport their income and then voluntarily amend their returns and pay the deficiency have not heretofore been subjected to prosecution in the Western District of Tennessee-at least not within the memory of the district judge, whose tenure goes back to 1966. The record suggests, similarly, that prosecutions for perjury have not heretofore been instituted in respect of testimony given in civil proceedings-a fact the significance of which increases, as we see it, in direct proportion to the thinness of the charges.

Id. at 1145-46. (emphasis added).

The Court in Adams could not be sure on the record before it B[w]hether the power to prosecute was misused in the case at bar ... some evidence of vindictive prosecution has been presented here." Id. at 1145-46. Indeed, it was "hard to see ... how the defendants could have gone much farther than they did without the benefit of discovery on the process through which this prosecution was initiated. 1I Id. at 1146. The Court imputed any potential animus towards the defendants by the EEOC to the prosecution, reversed the District Court's denial of the Adams' motion to dismiss, and remanded for further proceedings, including discovery as to "whether the EEOC, acting on an improper motive, induced the Department of Justice to institute a prosecution that would not otherwise have been undertaken. II Id.

Even without the benefit of discovery in this case, the Hills have presented strong evidence of prosecutorial vindictiveness. The improprieties inherent to the indictments are manifest. For example, despite a long-standing policy of the Dallas D.A.'s Office, the Hills were denied any pre-indictment notice or an opportunity to be heard by the grand jury, while D.A. Watkins simultaneously contact Ms. Blue to discuss potential charges. In addition, D.A. Watkins decided to indict the Hills on charges that, like those in Adams, are not commonly (or for that matter, ever) brought by his office - i.e., alleged "mortgage fraud" in which the lender never suffered any loss, was never at risk of any loss, and never accused the borrowers of doing anything wrong.

Moreover, as discussed above, the Dallas County D.A. 's Office has a policy of providing pre-indictment notice and opportunity to be heard to potential criminal defendants - a policy that has been publicly lauded by Terri Moore, the former First Assistant D.A. and a close friend of Ms. Blue's. In addition to notice, those policies include allowing criminal defense lawyers to submit letters to the grand jury summarizing their view of the case. Since at

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least 2007, D.A. Watkins Office's policies have included allowing defense counsel to make presentations to the grand jury on their clients' behalf. There is no plausible, non-invidious reason for the District Attorney to circumvent these procedures when indicting the Hills, especially when the District Attorney himself did provide advance infonnation about the indictments to his close friend Ms. Blue. The Hills are not alleged to be violent criminals or a flight risk-they were longstanding and weB-known members of the Dallas community with three young children enrolled in local schools. Nor were the Hills absent or difficult to locate or contact through counsel - indeed, after the charges were obtained, the D.A.'s Office easily contacted the Hills through their civil lawyer to inform them of the indictments.

Nor was there any need to rush an indictment due to imminent expiration of statutes of limitations. The conduct underlying the indictments occurred in 2009. The applicable statute oflimitations for the violations charged against the Hills is seven years - meaning that the applicable statute of 1imitations does not expire until 2016. See Tex. Code Crim. Proc. art. 12.01. It is therefore inexplicable - other than as an effort to aid Ms. Blue - that the District Attorney's Office would indict the Hills without any prior notice, and without even having interviewed any representative of the lender that is the supposed 'victim."

The nature of the charges against the Hills also suggests that, but for some improper motive, these indictments never would have gone to the grand jury. As in Adams, the conduct alleged in the Hill indictments is not normally the subject of criminal prosecution, let alone felony charges.s Even more than the defendants in Adams, the Hills complied with their financial obligations, never defaulted, and paid the debt in question in full, ahead of schedule, and befon: any hint of a criminal investigation. There is no allegation that the Hills were insolvent or would default on the loan-indeed there was never any risk of loss on the mortgage because the loan was fully secured by the undisputed equity the Hills had in the home. Moreover, despite the tenuous nature of the charges, the defense understands that the D.A.'s Office did not, before indicting, interview the mortgage broker who prepared the loan application, the title agent, the lender, or the Hills themselves. Nonethe1ess, the D,A.'s Office rushed forward and indicted the Hills on the eve of their civil trial against the

8 The. Hills do not concede that any of the allegations in the indictments are true. The substance of the charges is addressed here only in the context of illustrating the unusual and vindictive nature of the decision to indict the H11ls .

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D.A.'s close friend Lisa Blue, without any prior notice to the Hills or their counsel.

The timing, circumstances, and unusual if not unprecedented nature of the Hill indictments make abundantly clear that the real motivation of these indictments was to benefit the D.A.'s prolific campaign contributor Mr. Tillotson, and to assist the D.A.'s friend and benefactor, Ms. Blue, by impairing the Hills' ability to contest Ms. Blue's enonnous fee claims.

In the BAM v. Hill case, the Hills stood between Ms. Blue and tens of millions of dollars. Blue had both strong motive and frequent opportunities to influence D.A. Watkins to hamstring the Hills in their defense of the fee litigation by unveiling criminal charges on the eve of trial in that case. Blue's telephone records show an extreme, and escalated, level of contact between her 1nd D.A. Watkins (and others in his office) in the days and weeks surrounding the Hill indictments. She gave substantial amounts of money to D.A. Watkins shortly before the indictments were returned - even though Watkins was not running for election at that time. Further, Blue has admitted to two conversations with D.A. Watkins about the charges against the Hills, "shortly before the indictments came down." Ex. 24 at 232-33 .

Simply put, the evidence compels the conclusion that D.A. Watkins knew about Ms. Blue's fee dispute with the Hills, knew what both Ms. Blue and Hill Jr. (whose counsel had recently donated nearly $50,000 to D.A. Watkins' campaign) stood to gain by the Hills being indicted shortly before the fee trial, and was a stalking horse for Ms. Blue. Her animus is thus imputed to him. See Adams, 870 F.2d at 1146. In this regard, the fact that the criminal investigations of the Hills were originally opened in response to a submission by the law partner (Mike Lynn) of the one of the largest individual campaign donors (Jeffrey Tillotson) to the District Attorney further underscores the rank impropriety of these indictments. Simply put, the indictments against Mr. Hill violate his constitutional rights, and the indictments should be dismissed.9

9 The facts here so strongly support a finding of improper motive in charging that the Court may also find that the Hills have met their burden of production and proof to show "a realistic likelihood of such misconduct sufficient to raise a presumption of prosecutorial vindictiveness" under the first test set forth in Neal, 150 S. W.3d at 173 .

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III. In Addition, or in the Alternative, The Indictments Must Be Dismissed Due to Selective Prosecution In Violation of Mr. Hill's Right to Equal Protection

The indictments also should be dismissed because the Dallas D.A.'s Office denied the Hills equal protection of the laws by prosecuting them under circumstances that do not normally lead to criminal prosecution, and by denying the Hills the benefit of the D.A.'s pre-indictment grand jury policies, without justification.

A defendant makes a prima facie showing of selective prosecution, by showing: (1) some evidence of discriminatory prosecutorial treatment; and (2) "exceptionally clear evidence" that the grounds for the discrimination were impennissible, "such as race, religion, or a desire to prevent the exercise of constitutional rights, or based on some arbitrary classification." Ex parte Quintana, 346 S. W.3d 681,685 (Tex.App.-El Paso 2009). Once a defendant makes this showing, the prosecutor bears the burden of justifying the discriminatory treatment. Id.

In Ex parte Quin tana, an elected city representative of El Paso (Quintana) was charged with misdemeanor forgery. The EI Paso D.A. publicly instructed the assigned prosecutor that, even if Quintana pled guilty, she should not be considered for pretrial diversion or deferred adjudication programs, Jnder which she could avoid serving prison time. Id. at 684. Quintana challenged the indictment, on the basis that denying her access to those programs was discriminatory and amounted to selective prosecution. The Court agreed: "It is uncontested that Appellant is eligible for pretrial diversion under the El Paso District Attorneys ordinary policies. However, the EI Paso District Attorney has very publicly singled her out for disparate treatment, and we find that she has satisfied the first part of the selective prosecution test." Id. at 685.

Quintana further argued that the basis for the discrimination against her was that she was an elected official-an arbitrary classification. The Court again agreed: "because one of the factors the State used in basing its decision to prosecu~€ Appellant concerns her elected official status, we find that the State's discriminatory selection to prosecute her is based on an arbitrary classification." ld. at 686 (citing Garcia v. State, 172 S.W.3d 270, 273-74 (Tex.App.-El Paso 2005) and Gunnels v. City of Brownfield, 153 S.W.3d 452, 464 (Tex.App.-Amarillo 2003». Accordingly, the Court held that Quintana had made a prima facie showing of selective prosecution .

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In the present case, as in Quintana, D.A. Watkins deviated from established policies of the Dallas County D.A.'s Office of providing pre­indictment notice and an opportunity to be heard. As discussed above, the Dallas D.A.'s Office has a '1 longstanding practice of allowing criminal-defense lawyers to submit letters to grand juries swnmarizing their clients' views of cases." Needless to say, this policy inherently involves providing pre­indictment notice of a contemplated grand jury charge. Moreover, since at least 2007, the Dallas D.A.IS Office has had a policy of also providing criminal defense attorneys an opportunity make presentations to the grand jury on their clients' behalf. The Dallas D.A.'s Office denied the Hills the benefits of both these policies before they were indicted. Instead, as discussed above, it appears that the only interested party who received pre-indictment notice of the charges against the Hills was Lisa Blue, the D.A.'s close friend and the Hills' ddversary in a separate civil litigation.

Similar to the denial of pretrial diversion in Quintana, the Dallas D.A. Office's denial to the Hills of the pre-indictment notice policies satisfies the first prong of the selective prosecution test. Just as the defendant in Quintana was "eligible for pretrial diversion under the El Paso D.A.'s ordinary policies," the Hills were indisputably eligible for the pre-indictment notice policies . Accordingly, the Hills have satisfied the first prong of the selective prosecution tr~st.

As discussed above in the context of vindictive prosecution, the Hills ha,e proffered "exceptionally clear evidence" that the basis for the discrimination against them was D.A. Watkins's desire to impede their abil1ty to litigate effectively against Ms. Blue, in derogation of the Hills' fundamental constitutional right to access the courts. See Ryland, 708 F.2d at 971 (liThe right of access to the courts is basic to our system of government, and it is well established today that it is one of the fundamental rights protected by the Constitution. ").

Indeed, the only plausible reason for denying the Hills the benefits of the pre-indictment notice policies and for obtaining indictments against them in early April 2011 before conducting interviews of any of the key witnesses to the alleged "crime" was to prejudice them vis-a-vis Ms. Blue in the BAM v. Hill litigation. The Hills were manifestly not a danger to the community, nor, as high profile members of the Dallas community with three young children who were not even aware that they were being criminally investigated, were they a flight risk. Affording the Hills pre-indictment notice could not possibly hav~ hindered the investigation. Further, the Hills and their attorneys were not

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difficult to reach-the District Attorney's Office readily contacted their attorney the morning the indictments were made public. Yet, the evidence shows that not only did the D.A:s Office not attempt to contact the Hills or their lawyers prior to the indictments, but that instead D.A. Watkins contacted Blue-the Hills' litigation adversary--not once, but at least twice, to discuss the indictments.

The obvious purpose of not giving the Hills any advance notice and of rushing to obtain the indictments before witness interviews had been conducted was to maximize the impact of the indictments on the eve of the BAM v. Hill trial. These purposes are obviously improper. Indeed, D.A. Watkins's decision to deny the Hills the benefits of his office's own pre-indictment policies constitutes discrimination based on lithe desire to prevent the exercise of constitutional rights," satisfying the second prong of the selective prosecution test. Garcia, 172 S.W.3d at 272. The pre-indichnent notice policies are touted by the D.A.'s Office as being generally and widely applicable, designed to further justice and fundamental fairness for defendants like the Hills. No plausible legitimate government interest could be furthered by denying the Hills such notice, and the associated opportunities to be heard, much less while providing notice to a good friend and political patron of the D.A. The Court should therefore dismiss the indictments.

~V. If The Court Does Not Dismiss the Hill Indictments, It Should. At a Minimum, Hold An Evidentiary Hearing and Grant Discovery Into the Indictment Process.

If the Court does not dismiss the indictments, it should, at a minimum, order an evidentiary hearing, with related discovery, to allow the Hills to investigate the communications and motivations behind the indictments. Discovery is appropriate where, as here, a defendant has made a strong showing of irregularity and discrimination in the indictments.

"[WJhen the record strongly suggests invidious discrimination and selective application of a regulation ... and where it appears the government is in ready possession of the facts, and the defendants are not, it is not unreasonable to reverse the burden of proof and to require the govenunent to come forward with evidence ... It is nether novel nor unfair to require the party in possession of the facts to disclose them." United States v. Crowthers, 456 F.2d 1074, 1078 (4th Cir. 1972). Here, the Hills do not have access to information held by the Dallas D.A.'s Office about the process by which they were indicted. Nonetheless, the Hills have made a strong showing that their ~onstitutional rights have been violated. Similarly, in Adams, the court granted

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defendants discovery because, like here, it was "hard to see ... how the defendants could have gone much farther than they did without the benefit of ctiscovery on the process through which this prosecution was initiated." 870 F.2d at 1146.

Other courts have articulated similar principles and granted discovery. In United States v. Sanders, 17 F. Supp. 2d 141 (E.D.N.Y. 1998), the defendants alleged they were targeted for prosecution due to their exercise of First Amendment rights. In deciding whether the defendants were entitled to discovery, the court wrote:

Before the defendants are entitled to discovery or an evidentiary hearing on a claim of selective prosecution, they must make two showings. First, the defendants must present at least "some evidence tending to show the existence of the essential elements of the defense." . .. This standard applies whether termed as providing a "colorable basis," "substantial threshold showing," "substantial and concrete basis," or /treasonable likelihood." ... Second, the defendants must show that the documents in the government's possession would indeed be probative of these elements. . . . The basis for this requirement is to prevent unwarranted fishing expeditions to obtain documents to which the defense normally would not be entitled.

Id. at 144-45 (citations omitted). See also United States v. Berrigan, 482 F.2d 171,181 (3d Cir. 1973) (defendants had a "burden of proving a colorable entitlement to the defense of discriminatory prosecution so as to entitle them to the desired testimonial and documentary evidence."); United States v. Torquato, 602 F.2d 564, 569 (3d Cir. 1979) (when claiming selective prosecution, a defendant must make a threshold showing before an evidentiary hearing will be granted).

The Hills ha ve presented overwhelming evidence of: (i) a close, mutually-beneficial relationship between D.A. Watkins and Ms. Blue; (ii) an extraordinary increase in communications and campaign contributions between Ms. Blue and D.A. Watkins the month before the indictments were issued; (iii) an indictment of a type that is unprecedented or at least exceedingly uncommon; (iv) unusual and unexplained deviations from the District Attorneys' Office's long-standing policies, as well as D.A. Watkins' own stated poliCIes, of notice and an opportunity to be heard, prior to a grand jury voting on indictments; and (v) the filing by the District Attorney of the indictments against the Hills on the eve oftTial in a civil lawsuit where Blue sought to

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recover at least S 17 million (her one-third share of the more than $50 million sought by BAM) from the Hills.

The indictments should be dismissed. At a bare minimum, the Hills are entitled to an evidentiary hearing and associated discovery relating to the motivations behind the District Attorney's prosecutoriat decisions, including the decisions to indict and to deny the Hills pre-indictment notice and an opportunity to be heard by the grand jury .

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CO~CLUSION

F or the foregoing reasons, the Court is respectfully urged to dismiss the indictments on the grounds that they violate Mr. Hill's due process and equal protection rights under the Texas and U.S. Constitutions. In the alternative, the Court should grant Mr. Hill an evidential)' heating and discovery into the issues surrounding the District Attorney's decision to indict this case.

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Respectfully submitted,

lRELL & MANELLA LLP

John C. H s on (pro hac vice) Marshall A. Camp (pro hac vice) 1800 Avenue of the Stars, Suite 900 Los Angeles, CA 90067 310.277.1010 (Ph) / 310.203.7199 (Fax)

Royce We t 320 S. R.L. Thornton Freeway, Suite 300 Dallas, TX 75203 214.941.1881 (Ph)/214.941.1399(Fax)

LA W OFFICE OF ANTHONY LYONS

Anthony D. Lyons 320 S. R.L. Thornton Freeway, Suite 300 Dallas, TX 75203 214.941.1881 (Ph) / 214.941.1399 (Fax)

ATTORNEYS FOR DEFENDANT ALBERT G. HILL, III

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CERTIFICATE OF SERVICE

I hereby certify that I have served a true copy of this motion, and the appendix of exhibits filed concurrently herewith, to Donna Strittmatter, Assistant District Attorney, Dallas County, 133 N. Riverfront, LB 19, Dallas, TX 75207, either by first·c1ass mail, postage prepaid, or hand-delivery, on this 16 th day of November 2012.

~'-~ Roy& West

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CAUSE No. FII-00180, Fll-00181, Fll-00182, Fll-00183 Al,\D Fll-00191

STATE OF TEXAS § § § § §

IN THE 194TH CRIMINAL COURT

VS. OF

ALBERT HILL, III DALLAS COUNTY, TEXAS

APPENDIX OF EXHIBITS TO DEFENDANT ALBERT G. IDLL, III'S MOTION TO QUASH AND DISMISS INDICTMENTS

DUE TO PROSECUTORIAL MISCONDUCT

TO THE HONORABLE JUDGE ERNEST WHITE:

Defendant Albert G. Hill, III hereby files this Appendix of Exhibits to his Motion to Quash and Dismiss Indictments Due to Prosecutorial Misconduct:

1 10/9/2007 Letter from Al G. Hill, Jr. to Tom Hunt

2 1/712010 Motion for Sanctions and for an Order to Show Cause Why Albert G. Hill, Jr. and Joyce E. Waller Should Not be Held in Contempt (Dkt. 439) (3:07-CV-02020-0)

3 2118/2010 Order Finding Albert G. Hill, Jr. Submitted Summary Judgment Materials to the Court in Bad Faith and Testified Falsely at the January Hearing (Dkt. 541) (3:07-CV-02020-0) (excerpts)

4 2/22/2010 Memorandum from Michael P. Lynn, P.e. to Chief, Specialized Crime Division of the Dallas County District Attorney's Office (excerpts)

5 Various Campaign Finance Reports of Craig Watkins (excerpts)

6 Contingent Fee Contract and Power of Attorney between Ai Hill, III and The Law Offices of Stephen F. MaloufP.e., Lisa Blue/Baron & Blue, and Charla G. Aldous dba Aldous Law Firm.

7 6/8/2010 Email from Charla Aldous to Steve Malouf and Michael K. Hurst

8 6/9/2010 Email from Charla Aldous to Steve Malouf and Michael K. Hurst

9 12131/2011 Memorandum Opinion and Order (Dkt. 379) (3: 1O-CV-02269-0) (excerpts)

10 6115/2011 Findings of Fact and Conclusions of Law (Dkt. 319) (3:1O-CV-02269-0) (excerpts)

11 11/8/2010 Order re: Blue, Aldous, Malouf, and Gresham's Emergency Motion to Withdraw (Dkt. 996) (3:07-CV-02020-0)

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• 12 12/7/2010 Blue, Aldous, and Maloufs Complaint in Intervention (Dkt. 17) (3: 1 O-CV -02269-0) (excerpts)

13 1117/2011 Agreement re: U.S. Magistrate Judge Toliver (Dkt. 52-1) (3:10-CV-02269-0) (excerpts)

14 1119/2011 Order re: Evidentiary Hearing (Dkt. 57) (3:1O-CV-02269-0)

15 4/4/2011 Dallas Morning News Article, "Oil heir A1 O. Hill III and socialite wife charged with mortgage fraud"

16 11119/2009 Email from Lisa Blue to Albert G. Hill, III

17 5114/2010 Email from Lisa Blue to Albert G. Hill, III, Steve Malouf and Charla Aldous

18 12112/2009 Email from Charla Aldous to Lisa Blue

19 11112/2009 Press Release, "District Attorney Craig Watkins to Officially Announce Bid for Re-Election in 2010 at Campaign KjckoffEvent"

20 3/22/2011 Lisa Blue Deposition Transcript (excerpts)

21 Fall 2010 SMU Dedman Law Publication (excerpts)

• 22 Winter 2011 The Justice Report Newsletter (excerpts)

23 9/21/2011 Dallas Morning News Crime Blog, "Dallas DA Craig Watkins assembles notable legal team to fight big banks"

24 6114/2011 Lisa Blue Deposition Transcript (3:10-CV-02269-0) (excerpts)

25 Lisa Blue Phone Records

26 Lisa Blue Text Message Records

27 Lisa Blue Outlook Contact for Craig Watkins (redacted)

28 3/3/2011 Electronic Order Granting Application for Admission Pro Hac Vice of John C. Hueston (Dkt. 119) (3: 1 O-CV-02269-0) (excerpts)

29 3/3/2011 Electronic Order Granting Application for Admission Pro Hac Vice of Marshall A. Camp (Dkt. 118) (3:1O-CV-02269-0) (excerpts)

30 3/3/2011 Electronic Order Granting Application for Admission Pro Hac Vice oflian D. Jablon (DIct. 120) (3:10-CV-02269-0) (excerpts)

31 3/7/2011 Email from Marshall Camp to Alan Loewinsohn

32 3/24/2011 Alan R. Struble Deposition Transcript (3: 10-CV-02269-0) (excerpts)

• 33 3/3112011 True Bill Indictments

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4/5/2011 Arrest Warrants for Albert Hill, III

5/27/2011 Stephen F. Malouf of Deposition Transcript (3:10-CV-02269-0) (excerpts) 3/29/2012 Dallas Morning News Article Entitled "Power tables: Where the elite, Hollywood superstars eat in Dallas" 3/30/2011 A. Kimbrough Davis Deposition Transcript (3: 10-CV-02269-0) (excerpts) 4/25/2012 Dallas County District Attorney's Office Website - Intake/Grand Jury Page 1011 12007 Texas La-vvyer Article Entitled "New Dallas Grant Jury Policy-Texas Lawyer" 4115/2011 Hearing Transcript on Emergency Motion to Compel (3:1O-CV-02269-0) (excerpts) 4/25/2011 Evidentiary Hearing Transcript (3:1O-CV-02269-0) (excerpts)

4/26/2011 Evidentiary Hearing Transcript (3:10-CV-02269-0) (excerpts)

9/20/2011 Contingent Fee Contract for Legal Services

10/22/2012 Email from Deborah Smith to Marshall Camp

Respectfully submitted,

[RELL & MANELLA LLP

/s/ John C. Hueston John C. Hueston (pro hac vice) CA State Bar No. 164921 Marshall A. Camp (pro hac vice) CA State Bar No. 231389 1800 Avenue of the Stars, Suite 900 Los Angeles, CA 90067 310.277.1010 (Ph) 310.203.7199 (Fax)

Royce West WEST & ASSOCIATES L.L.P. TX State BarNo. 21206800 320 S. RL. Thorton Freeway, Suite 300 Dallas, TX 75203 214.941.1881 (Ph) 214.941.1399 (Fax)

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Anthony D. Lyons LA W OFFICES OF ANTHONY D. LYONS TX State Bar No. 12741750 320 S. RL. Thorton Freeway, Suite 300 Dallas, TX 75203 214.94l.1881 (Ph) 214.94l.1399 (Fax)

ATTORNEYS FOR DEFENDANT ALBERT G. HILL, III

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