Opinion ID: 658772
Heading Depth: 2
Heading Rank: 1

Heading: The Statutory Elements of Reimbursable Fees

Text: 7 By its terms, the statute permits the reimbursement of fees only to an individual who is the subject of an investigation conducted by an independent counsel. 28 U.S.C. Sec. 593(f)(1) (emphasis added). The statute does not define subject, nor have we in prior cases given that term a definitive interpretation. Comments by the Department of Justice on that topic and portions of the application of Dutton give us some pause in applying that part of the statute to Dutton's petition. 8 First, the Department of Justice, noting as have we that the statute does not define subject, makes reference to the UNITED STATES ATTORNEYS' MANUAL, Title 9, Chapter 11, Section 9-11.150, which defines subject for general prosecutorial purposes in the federal courts as follows: a 'subject' of an investigation is a person whose conduct is within the scope of the grand jury's investigation. We find this Manual definition more helpful than anything available in general or legal dictionaries, as the word subject is susceptible of so many different definitions that we might quote one from any dictionary of our choice to include or exclude nearly anyone in the vicinity of an investigation. As the Manual was compiled by experts in the field of federal prosecution for the guidance of professionals in that field, we conclude that the Court should make use of [304 U.S.App.D.C. 182] that expertise, and we do in fact conclude that the Department of Justice definition of subject is useful to our inquiry. 9 Unfortunately, accepting the Department's definition of subject as useful does not approach a final answer to our question. The Manual definition itself is susceptible of a broad range of further redefinition. Taken broadly, the conduct of any fact witness could be said to be within the scope of the grand jury's investigation. Taken most narrowly, one might say that only the specific target of the investigation will fall within the definition. Neither of these extremes is satisfactory. As to the first, we have previously held that the fee provisions of the Act apply to fees charged that were reasonably related to a defense to such investigation. In re Olson, 884 F.2d 1415, 1427 (D.C.Cir.1989); In re Donovan, 877 F.2d 982, 993 (D.C.Cir.1989). Therefore, a status of mere witness is insufficient to confer upon one the brand of subject for purposes of the Act. Our determination to this effect is supported by the legislative history of the amendment to the Ethics in Government Act allowing for the fee reimbursement. The report of one house of the adopting Congress admonished that reimbursement of attorneys' fees [is] warranted, if at all, in only rare instances ... and ... reimbursement should not become a routine event. S.REP. NO. 496, 97th Cong., 2d Sess. 19, reprinted in 1982 U.S.C.C.A.N. 3537, 3555. While obviously not a part of the enactment and therefore not binding upon us, this language of the Senate Report is so consistent with the apparent scheme of the Act and with our prior decisions that it reassures us of the correctness of our holding. The Department of Justice, candidly noting that it is not advised as to the underlying facts of the investigation, suggests that at least an inquiry is appropriate into Dutton's status in this regard, as Dutton's fee petition asserted that he never was considered by the independent counsel to be anything but a potential witness. The Department suggests that this statement by the petitioner may constitute a disqualifying admission. 10 While the suggestion by the Department is worthy of consideration, with our more fulsome access to the underlying investigation, we do not find it dispositive. It may seem evident today (although access to the sealed Report of the Independent Counsel assures us that it is by no means certain) that Dutton was never regarded as a potential defendant, but that is hindsight. At the time that Dutton retained counsel and incurred the fees in his application, he knew what his conduct was and what the potential scope of the Independent Counsel's investigation was. He knew that his conduct was within that scope, not merely in the sense of a witness who might be called upon to testify at the trials of others, but also as a person toward whom the Independent Counsel might reasonably be expected to point the finger of accusation. It is as of the time of incurring the fees that we must determine Dutton's status as a subject, not at the time of the close of the Report. Therefore, we conclude that the ultimate status of Dutton as witness, not defendant, does not take him out of the category of subject entitled to counsel fees under the Act during such time as he remained a potential defendant. 11 We further note that the Independent Counsel obtained from the United States District Court for the District of Columbia an immunity order of March 6, 1987, granting use immunity for testimony Dutton was expected to give, and apparently did give, thereafter. The Department of Justice rightly suggests that we should examine this event to determine if it has bearing on Dutton's status as a subject under the Act, even if it is not necessarily determinative. The federal use immunity statute, 18 U.S.C. Sec. 6002, confers immunity only against the use of the testimony compelled under the immunizing order; it does not confer transactional immunity under which the witness could not be prosecuted at all for the transaction about which he testifies. United States v. Poindexter, 859 F.2d 216, 219 (D.C.Cir.1988) (citing Kastigar v. United States, 406 U.S. 441, 461, 92 S.Ct. 1653, 1665, 32 L.Ed.2d 212 (1972)). We therefore conclude that an individual who would otherwise qualify as a subject of an independent counsel investigation does not automatically lose that status (and his right to seek reimbursement of attorneys' fees) merely because the independent [304 U.S.App.D.C. 183] counsel exercises his discretion to obtain use immunity for that individual in order to secure his testimony against others. 12 Nonetheless, although the grant of use immunity is not dispositive, it does change the reasonable perception, even without the benefit of hindsight as to whether the attorneys' fees incurred by the purported subject after the grant of immunity were reasonably related to a defense to the independent counsel's investigation. As a general proposition, such an immunized witness will no longer be a subject. We conclude that this is the case as to Dutton. True, the Independent Counsel in the present investigation did prosecute at least two persons previously afforded use immunity. United States v. North, 910 F.2d 843 (D.C.Cir.1990); United States v. Poindexter, 951 F.2d 369 (D.C.Cir.1991). But, in each of those cases the use immunity was conferred, not by the Independent Counsel but by a congressional investigating committee, without the connivance of and indeed over objections of the Independent Counsel. See North, 910 F.2d at 863 (quoting the Independent Counsel's memorandum to congressional committees concerning use immunity). 13 In sum, we conclude that as a general proposition, the subject requirement of the Act means that an individual eligible for reimbursement of attorneys' fees must be one whose conduct was within the scope of the grand jury investigation, in the sense that the grand jury was examining conduct of his in a way that would lead a reasonably counseled person at the time of incurring the fees to believe that there was a realistic possibility that he would become a defendant. While a review of the exact factual circumstances that cause us to conclude that Dutton was a potential defendant from the commencement of the investigation until the time that he received use immunity would require a more extensive restatement of the Independent Counsel's Report than we deem appropriate in a published opinion, we do so conclude. Shortly put, the Report itself describes Dutton as an employee of retired Air Force Major General Richard V. Secord in the very enterprise which generated for Secord the status of defendant in an Independent Counsel case. While no indictment names Dutton, frequent indictment references to Secord acting in concert with others cover the activities and period of Dutton's employment. 14 We therefore conclude that a reasonable person situated as Dutton was would have defended against the Independent Counsel's investigation. Therefore, he occupied the status of subject. We further conclude that, for purposes of the Act, he lost that status at such time as the attorneys he employed in that defense successfully negotiated for him the status of immunized witness as opposed to likely defendant. Thus, we will subtract from the award of counsel fees any incurred after the obtaining of the immunity order on March 6, 1987.
15 The statute provides reimbursement only for attorneys' fees incurred ... during [the independent counsel's] investigation. 28 U.S.C. Sec. 593(f)(1). Thus, as we have previously noted, Congress did not provide in section 593(f) for the payment of fees incurred prior to the appointment of independent counsel. In re Nofziger, 938 F.2d 1397, 1403 (D.C.Cir.1991). Because the fee award is a consent to suit by the United States, a sovereign otherwise absolutely immune, [t]he limitations and conditions that Congress imposes on [such a waiver] must be strictly observed. Id. (citing Soriano v. United States, 352 U.S. 270, 77 S.Ct. 269, 1 L.Ed.2d 306 (1957)). In an amendment to his application, Dutton has candidly agreed that $12,543.67 of his attorneys' fees and expenses were incurred prior to the appointment of the Independent Counsel on December 19, 1986, and he concedes that these must be deducted from the fees prayed.
16 The statute requires that to be reimbursable, the attorneys' fees must be such as would not have been incurred but for the requirements of [the Ethics in Government Act]. 28 U.S.C. Sec. 593(f)(1). Therefore, [a]ll requests for attorneys' fees under the Act must satisfy the 'but for' requirement of the Act. In re Sealed Case, 890 F.2d 451, [304 U.S.App.D.C. 184] 452 (D.C.Cir.1989). The purpose in the award of reimbursement for fees that would not have been incurred but for the Act is to ensure that officials [and here derivative 'subjects'] who are investigated by independent counsels will be subject only to paying those attorneys' fees that would normally be paid by private citizens being investigated for the same offense by federal executive components such as the United States Attorney. Id. at 452-53 (citing S.REP. NO. 496, 97th Cong., 2d Sess. 18 (1982), reprinted in 1982 U.S.C.C.A.N. 3537, 3554 (referring to fees [that] would not have been incurred in the absence of the [independent counsel] law)). 17 It is not always apparent from the face of an indictment or the recitation of the role of a subject in an investigation whether such a subject would have incurred the same fees had the case been handled by the Department of Justice or other executive authorities rather than the Independent Counsel. In Olson, we found the but for requirement to be met where the independent counsel duplicated ground previously covered in the preliminary investigation conducted by the Department of Justice, 884 F.2d at 1420; where the Independent Counsel sought an expansion of her prosecutorial authority, id. at 1420-21; where the subject incurred legal fees challenging the constitutionality of the Independent Counsel Act, id. at 1421; and where the subject incurred fees for the preparation of comments to the Independent Counsel's report pursuant to the Act which were reasonably related to the substantive defense, id. at 1422. 18 In Donovan, we found the requirement met where it was apparent that if the Department of Justice had received the same allegations against an ordinary citizen, there might well have been only a non-public summary investigation instead of the extended investigation conducted because of strictures specified in 28 U.S.C. Sec. 592(a)(2). 877 F.2d at 989. In Nofziger, we held that a subject had not satisfied the but for requirement where he had shown no unique special factual features that but for the requirement of the Act would have permitted a quick termination if the investigation were conducted outside the Act. 925 F.2d 428, 439. But in so doing, we recognized that in enacting the 1983 amendments creating the right to reimbursement, Congress was motivated by an intent to correct an unequal application of 'the criminal law,' when high public officials were investigated under the Act in circumstances where private citizens would not be investigated. Id. at 442. 19 Dutton contends, and we agree, that his attorneys' fees during the period for which we allow them fall within this latter rationale. He argues convincingly that his position as a subject was created principally by the decision of the Independent Counsel to treat as a criminal conspiracy efforts to circumvent the Boland Amendments. The Boland Amendments were riders to the Department of Defense Appropriation Act, 1983, Pub.L. No. 97-377, 96 Stat. 1833, 1865 (1982), prohibiting the Central Intelligence Agency from spending money for the purpose of overthrowing the government of Nicaragua. Id. From the record before us, specifically the Report of the Independent Counsel and the investigation conducted by Attorney General Meese on behalf of President Reagan reported therein, we determine that executive branch authorities never treated circumvention of the Boland Amendments as having criminal consequences. We therefore agree with Dutton's proposition that a politically appointed Attorney General as the representative of the Executive would never have subjected such attempts to criminal prosecution. Therefore, the investigation would never have occurred, nor the fees have been incurred, but for the appointment of the Independent Counsel under the Act. 20 Unsurprisingly, given the fact-specific nature of each independent counsel's undertakings, Dutton's facts do not fit neatly into any box created by a prior opinion. Perhaps the closest prior authority is In re Sealed Case. There we found the but for requirement to be met where the Independent Counsel conducted a thorough investigation and actually examined applicant's tax returns, and his financial dealings, for nine years from 1976 to 1984, but where in the opinion [of the Court] the ordinary examination of a taxpayer for a Sec. 7203 violation would have been substantially less probing. 890 F.2d at 454. [304 U.S.App.D.C. 185] Similarly, we conclude that in this case no criminal investigation paralleling the present one would have occurred at all but for the Act and, therefore, hold that Dutton has met all eligibility requirements for reimbursement under the Act.