United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed August 11, 1998
Division No. 96-1
In re: Eli J. Segal
(Sagawa Fee Application)
Division for the Purpose of
Appointing Independent Counsels
Ethics in Government Act of 1978, as Amended
---------
Before: Sentelle, Presiding Judge, Butzner and Fay,
Senior Circuit Judges.
O R D E R
This matter coming to be heard and being heard before the
Special Division of the Court upon the application of Shirley
Sagawa for reimbursement of attorneys' fees and costs pursu-
ant to section 593(f) of the Ethics in Government Act of 1978,
as amended, 28 U.S.C. s 591 et seq. (1994), and it appearing
to the court for the reasons set forth more fully in the opinion
filed contemporaneously herewith that the motion is well
taken, it is hereby
ORDERED, ADJUDGED, and DECREED that the Unit-
ed States reimburse Shirley Sagawa for attorneys' fees and
expenses she incurred during the investigation by Indepen-
dent Counsel Curtis Emery von Kann in the amount of
$7,863.95 this 11th day of August, 1998.
Per curiam
For the Court:
Mark J. Langer, Clerk
by
Marilyn R. Sargent
Chief Deputy Clerk
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed August 11, 1998
Division No. 96-1
In re: Eli J. Segal
(Sagawa Fee Application)
Division for the Purpose of
Appointing Independent Counsels
Ethics in Government Act of 1978, as Amended
---------
Before: Sentelle, Presiding Judge, Butzner and Fay,
Senior Circuit Judges.
ON APPLICATION FOR ATTORNEYS' FEES
Opinion for the Special Division filed Per Curiam.
Per Curiam: Shirley Sagawa ("Sagawa") petitions this
court under section 593(f) of the Ethics in Government Act of
1978, as amended, 28 U.S.C. s 591 et seq. (1994) ("Act"), for
reimbursement of attorneys' fees she incurred during and as
a result of the investigation conducted by Independent Coun-
sel ("IC") Curtis Emery von Kann. Sagawa seeks reimburse-
ment in the amount of $8,013.95. After considering Sagawa's
petition we find that her request is for the most part very
reasonable and that she is entitled to an award of attorneys'
fees and expenses totaling $7,863.95.
Background
The facts of the investigation conducted by IC von Kann
are set forth in detail in In re Segal (Segal Fee Application),
1998 WL 312145 (D.C. Cir., Spec. Div., June 16, 1998) (per
curiam). For our purposes here, we briefly note that the
Corporation for National and Community Service ("Corpora-
tion") was established in October 1993, with Eli J. Segal
("Segal") selected as Chief Executive Officer and Sagawa
selected as Executive Vice President. In November of 1994
high-level Corporation officials, including Segal and Sagawa,
formed the Partnership for National Service ("Partnership")
in order to support the operations of the Corporation and to
accept private donations to help support the Corporation's
goals. Segal served as Chairperson of the Partnership, Saga-
wa served as President, and both served as Directors.
Subsequently, concerns arose that Segal and other Corpo-
ration officials, including Sagawa, may have violated federal
conflict of interest laws in connection with their creation and
operation of the Partnership. Pursuant to sections 591 and
592 of the Act, the Attorney General conducted a preliminary
investigation into the matter and upon its completion applied
to this court for the appointment of an independent counsel.
On November 27, 1996, we appointed Curtis Emery von Kann
to serve as independent counsel for the investigation. During
the investigation, IC von Kann's office reviewed numerous
documents and interviewed various witnesses. After review-
ing all the evidence, IC von Kann concluded that no basis
existed for any criminal prosecution.
After the Independent Counsel's investigation, Sagawa,
pursuant to section 593(f)(1) of the Act, petitioned this court
for reimbursement of her attorneys' fees. As directed by
section 593(f)(2) of the Act, we forwarded copies of Sagawa's
fee petition to the Attorney General and the IC and request-
ed written evaluations of the petition. The court expresses
its appreciation to the IC and the Attorney General for
submitting these evaluations, which we have given due consid-
eration in arriving at the decision announced herein.
Analysis
The Act provides that:
Upon the request of an individual who is the subject of
an investigation conducted by an independent counsel
pursuant to this chapter, the division of the court may, if
no indictment is brought against such individual pursuant
to that investigation, award reimbursement for those
reasonable attorneys' fees incurred by that individual
during that investigation which would not have been
incurred but for the requirements of this chapter.
28 U.S.C. s 593(f)(1). Accordingly, to obtain an attorneys'
fees award under the Act a petitioner must show that the
following requirements are met:
1) the petitioner is a "subject" of the investigation;
2) the fees were incurred "during" the investigation;
3) the fees would not have been incurred "but for" the
requirements of the Act; and
4) the fees are "reasonable."
See In re North (Dutton Fee Application), 11 F.3d 1075,
1077-82 (D.C. Cir., Spec. Div., 1993) (per curiam). We will
address each of these requirements in turn.
A. "Subject" Status
We have previously defined the term "subject" as a person
whose conduct is within the scope of the independent coun-
sel's investigation such that "the Independent Counsel might
reasonably be expected to point the finger of accusation" at
her. Dutton, 11 F.3d at 1078; see also In re North (Shultz
Fee Application), 8 F.3d 847, 850 (D.C. Cir., Spec. Div., 1993)
(per curiam). Sagawa was involved in the establishment and
running of the Partnership while employed by the Corpora-
tion, and as such her conduct fell within the scope of the IC's
investigation.
Additionally, in Shultz we held that, under any definition of
the term, the criterion for "subject" status is squarely met
when the independent counsel tells a person that she is in fact
a subject. 8 F.3d at 850; see also In re North (Haskell Fee
Application), 74 F.3d 277, 280 (D.C. Cir., Spec. Div., 1996)
(per curiam) ("the fact that the IC's office told Haskell that
he was a subject makes it clear that he meets the subject
requirement"). Sagawa states that she was expressly in-
formed by the IC's office that she was a subject of the
investigation; the IC does not contest this assertion, noting
that he communicated Sagawa's subject status to Sagawa's
attorneys. There is no indication that this status changed
prior to the termination of the investigation.
B. Fees Incurred "During" the Investigation
This court has identified the maximum period for which
fees can be sought as spanning from the time an IC begins an
investigation of an individual to the deadline for filing com-
ments to the final report. See, e.g., In re Olson, 884 F.2d
1415, 1420-22 (D.C. Cir., Spec. Div., 1989) (per curiam). The
relevant period in this case is from November 27, 1996, when
IC von Kann was appointed, to October 20, 1997, the deadline
for filing comments to the final report. Sagawa is asking for
reimbursement for the time period of March 21, 1997, when
she retained counsel, until September 12, 1997, the date she
reviewed the IC's final report. Without question the fees and
expenses claimed by Sagawa were incurred during the appro-
priate time period.
C. Fees Not Incurred "But For" the Requirements of the
Act
The Act requires that to be reimbursable, attorneys' fees
must "not have been incurred but for the requirements of [the
Act]." 28 U.S.C. s 593(f)(1) (emphasis added). Accordingly,
"[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, 452 (D.C. Cir., Spec. Div., 1989) (per curiam). The
purpose of limiting fee awards to fees that would not have
been incurred "but for" the Act is to ensure that "officials
[and here derivative 'subjects'] who are investigated by inde-
pendent counsels will be subject only to paying those attor-
neys' fees that would normally be paid by private citizens
being investigated for the same offense by" federal executive
officials such as the United States Attorney. Id. (citing
S. Rep. No. 97-496, 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 [Act]")).
In In re Nofziger, 925 F.2d 428 (D.C. Cir., Spec. Div., 1991)
(per curiam), the court identified several circumstances under
which the "but for" requirement of the Act historically was
satisfied. For our purposes, we note that one of these
circumstances involved "cases in which if the requirements of
the Act, restricting the Attorney General's preliminary inves-
tigation, did not exist, the case could have been disposed of at
an early stage of the investigation, without seeking appoint-
ment of independent counsel." Id. at 438 (citation omitted).
Here, the Attorney General, in her Application to the court
requesting the appointment of an independent counsel, stat-
ed:
Although the Department of Justice would in all likeli-
hood exercise its discretion to decline to prosecute this
case as a criminal matter ... I nevertheless am com-
pelled by the terms of the Independent Counsel Act to
apply for the appointment of an Independent Counsel.
Application to the Court Pursuant to 28 U.S.C. s 592(c)(1) for
the Appointment of an Independent Counsel, In re Eli J.
Segal, Division No. 96-1 (D.C. Cir., Independent Counsel
Division) (filed October 30, 1996) at 2. Given this statement
by the Attorney General, we are persuaded that Sagawa
would not have incurred the attorneys' fees at issue "but for"
the requirements of the Act.
D. Fees are "Reasonable" under the Act
We must determine whether Sagawa's attorneys charged
reasonable rates, and whether the time expended by Saga-
wa's attorneys on her representation was reasonable. In re
Meese, 907 F.2d 1192, 1201 (D.C. Cir., Spec. Div., 1990) (per
curiam).
As to the reasonableness of the rates charged, we note that
Sagawa has submitted an affidavit by Jacob Stein, a Washing-
ton, D.C., attorney with extensive relevant experience, attest-
ing to the reasonableness of the billing rates of Sagawa's
counsel. Based on this affidavit, as well as on other exhibits
offered by Sagawa, we conclude that the hourly rates charged
by Sagawa's counsel ($200-$310) comport with prevailing
community standards and are within the realm of reasonable-
ness.
We turn then to the reasonableness of time expended.
First, the Attorney General and the IC both note an error of
arithmetic. The billing entries total 32.00 hours billed by
attorney Eric N. Lieberman at a rate of $200 per hour, and
not 32.75 as requested in the attorneys' fees application.
Therefore, we will make a reduction of $150 (.75 x $200).
Second, the IC takes issue with 7.5 hours billed on May 8
and 9, 1997 by Lieberman for telephone calls and review of
documents regarding the IC's interview of Segal. The IC
states that these billings are not reasonable because they
occurred more than three weeks after the IC declined to
provide Sagawa with a letter of immunity requested by her
attorney as a prerequisite for an interview with the IC, and
Sagawa had no interview scheduled with the IC and had not
been subpoenaed to testify before the grand jury. After
taking into consideration the importance to the investigation
of the IC's interview of Segal, as well as Sagawa's continuing
status as a subject of the investigation, we conclude that the
time expended by Sagawa's counsel in investigating the Segal
interview was not unreasonable.
Third, the IC objects to certain fees and expenses totaling
$605.25 on grounds of duplication of effort. These contested
entries concern a meeting on April 9, 1997 with the IC's office
that Lieberman and attorney Bruce R. Genderson attended.
The IC argues that having two of the subject's attorneys
involved in the same meeting is duplicative and therefore not
reimbursable.
We agree with the IC that a subject's representation by
more than one attorney in a meeting with the IC may be
duplicative. See In re Mullins (Mullins Fee Application), 84
F.3d 459, 468-469 (D.C. Cir., Spec. Div., 1996) (per curiam).
But according to Sagawa, this was the initial meeting with
attorneys from the IC's office, the purpose of which was for
her attorneys "to learn the scope of the investigation and the
particular allegations under investigation." As we recently
held in a related attorneys' fees matter, "[h]aving two attor-
neys at such an important initial meeting with the IC's office
is not unreasonably duplicative." Segal, 1998 WL 312145 at
*6. Consequently, no deduction for duplication of effort will
be made.
Conclusion
In accordance with the foregoing analysis, the award shall
reflect a deduction of $150 for miscalculation of hours billed.
It is ordered that Shirley Sagawa be awarded $7,863.95 in
reasonable attorneys' fees and expenses.