United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed June 22, 1999
Division No. 89-5
In re: Samuel R. Pierce, Jr.
(Kisner Fee Application)
Division for the Purpose of
Appointing Independent Counsels
Ethics in Government Act of 1978, as Amended
---------
Before: Sentelle, Presiding, Fay and Cudahy, 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 petition of Gerald D.
Kisner 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 petition is not well
taken, it is hereby
ORDERED, ADJUDGED, and DECREED that the peti-
tion of Gerald D. Kisner for attorneys' fees he incurred
during the investigation by Independent Counsels Arlin M.
Adams and Larry D. Thompson be denied.
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 June 22, 1999
Division No. 89-5
In re: Samuel R. Pierce, Jr.
(Kisner Fee Application)
Division for the Purpose of
Appointing Independent Counsels
Ethics in Government Act of 1978, as Amended
Before: Sentelle, Presiding, Fay and Cudahy, Senior
Circuit Judges.
ON APPLICATION FOR ATTORNEYS' FEES
Opinion for the Special Court filed Per Curiam.
Concurring opinion filed by Senior Circuit Judge Cudahy.
Per curiam: Gerald D. Kisner 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) (the "Act"), for
reimbursement of attorneys' fees in the amount of $2,759.39
that he incurred during and as a result of the investigation
conducted by Independent Counsels ("IC") Arlin M. Adams
and Larry D. Thompson. Because we conclude that Kisner
has not carried his burden of showing that the fees would not
have been incurred but for the requirements of the Act, we
deny the petition in its entirety.
Background1
In 1978 Congress established the moderate rehabilitation
("mod rehab") program within the U.S. Department of Hous-
ing and Urban Development ("HUD"). This program encour-
aged developers to upgrade moderately substandard housing
units for occupation by low income families. In 1988 HUD's
Inspector General conducted an audit of the mod rehab
program as administered from 1984 through 1988 and found
that the program was not being administered efficiently,
effectively, or economically. The Inspector General's audit
report triggered congressional investigations into abuses, fa-
voritism, and mismanagement at HUD during the 1980's
under the tenure of HUD Secretary Samuel R. Pierce, Jr.
Gerald D. Kisner, the fee petitioner here, was Deputy Gener-
al Counsel of HUD during a portion of the time that Pierce
was Secretary. In May of 1990 Kisner was called to testify
before the Employment and Housing Subcommittee of the
Committee on Government Operations of the United States
House of Representatives (the "Lantos Committee") about his
activities as Deputy General Counsel.
Based on information elicited during the congressional
investigations, the House Judiciary Committee wrote to At-
torney General Richard Thornburgh seeking the appointment
of an independent counsel to investigate the matter. Follow-
ing a preliminary investigation, Attorney General Thornburgh
applied to this court for appointment of an independent
counsel. On March 1, 1990, we appointed former United
__________
1 We have had recent occasion to review the facts of this matter
in In re: Samuel R. Pierce, Jr. (Olivas Fee Application, No. 89-5
(D.C. Cir., Spec. Div., June 22, 1999) (per curiam). Rather than re-
plow recently tilled ground, we have adopted much of the language
in the background portion of this opinion, and, where applicable, a
portion of the analysis from that decision.
States Circuit Judge Arlin Adams2 as independent counsel "to
investigate ... whether Samuel R. Pierce, Jr., and other
[HUD] officials may have committed the crime of conspiracy
to defraud the United States or any other Federal crimes ...
relating to the administration of the selection process of the
Department's Moderate Rehabilitation Program from 1984
through 1988." Order Appointing Independent Counsel,
March 1, 1990.
The IC conducted a comprehensive investigation ultimately
confirming a widespread pattern of corruption at HUD dur-
ing Pierce's tenure. Although the IC announced on January
11, 1995, that he would not seek indictment of Pierce, during
the course of the investigation seventeen (17) other persons
were charged with and convicted of federal crimes as a result
of the IC's investigation. That investigation and the indict-
ments ranged well beyond the core facts of the original
application for appointment of independent counsel. Of par-
ticular reference to the petitioner before us, in November of
1993 the IC apparently called Kisner before the grand jury to
ask again about his activities as Deputy General Counsel.
Kisner Application at 2.
Subsequently, in March of 1994, Kisner received a letter
from the IC's office which stated, in pertinent part, "that you
were not truthful about several matters on which you testified
in the grand jury and in front of the Lantos Committee."
March 3, 1994 Letter from Roscoe C. Howard, Jr., Esq.,
Associate Independent Counsel. Upon receipt of the letter
Kisner retained legal counsel. Although he states that he
was informed by the IC's office that he would be indicted, see
Kisner Application at 3, no charges were ever filed against
him.
The IC's investigation is now complete. Pursuant to the
statute, the IC submitted a final report to this court on
March 30, 1998. See 28 U.S.C. s 594(h)(1)(B). We ordered
the report made public by order of October 27, 1998. There-
__________
2 Independent Counsel Adams resigned in May of 1995. This
court appointed his deputy, Mr. Larry D. Thompson of the Atlanta
bar, to succeed him.
after, Kisner, pursuant to Section 593(f)(1) of the Act, peti-
tioned this court for reimbursement of his attorneys' fees.
As directed by Section 593(f)(2) of the Act, we forwarded
copies of Kisner's fee petition to the Attorney General and
the IC and requested 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 consideration in arriving at the decision announced
herein.
Analysis
Unique in the criminal law structure of the United States,
the Ethics in Government Act provides for reimbursement of
attorneys' fees expended by subjects in defense against an
investigation under the Act. Specifically, 28 U.S.C.
s 593(f)(1) states:
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.
Because the Act "constitutes a waiver of sovereign immuni-
ty it is to be strictly construed." In re Nofziger, 925 F.2d
428, 438 (D.C. Cir., Spec. Div., 1991) (per curiam). Therefore,
the Act provides only reimbursement for attorneys' fees that
survive an elemental analysis determining whether the peti-
tioner is the "subject" of the independent counsel's investiga-
tion, incurred the fees "during" that investigation, and would
not have incurred them "but for" the requirements of the Act.
The petitioner "bears the burden of establishing all elements
of his entitlement." In re North (Reagan Fee Application),
94 F.3d 685, 690 (D.C. Cir., Spec. Div., 1996) (per curiam).
We conclude that Kisner has met the "subject" and "during"
requirements. However, we agree with the evaluations of the
Independent Counsel and the Attorney General that Kisner
has not carried his burden of establishing that he would not
have incurred the fees "but for" the requirements of the
Ethics in Government Act.
As we have held, "[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 awarding only 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 citi-
zens being investigated for the same offense by" federal
executive officials such as the United States Attorney. Id. at
452-53 (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 special prosecutor [independent counsel] law")).
As we have stated "the most difficult element for a fee
applicant to establish under the act is that the fees 'would not
have been incurred but for the requirements of [the Act].' "
In re North (Bush Fee Application), 59 F.3d 184, 188 (D.C.
Cir., Spec. Div., 1995) (quoting In re North (Dutton Fee
Application), 11 F.3d 1075, 1079 (D.C. Cir., Spec. Div., 1993)
(per curiam)). In part this is so because the element requires
a petitioner to prove a negative and one with a high compo-
nent of speculation. In part, though, it is difficult because the
law contemplates that it should be difficult, that such fees will
not be a common thing. As we stated above, the contempla-
tion of the legislation is not that subjects of independent
counsel investigations will be reimbursed for all legal fees,
but only that they will be reimbursed for those legal fees that
would not have been incurred by a similarly-situated subject
investigated in the absence of the Act.
Nonetheless, we have found that petitioners qualify for an
award of fees in the face of the but-for test in at least four (4)
circumstances:
1. When the independent counsel's investigation sub-
stantially constituted duplication of the preliminary in-
vestigation conducted by the Department of Justice. In
re Olson, 884 F.2d 1415, 1420 (D.C. Cir., Spec. Div., 1989)
(per curiam); In re North (Dutton Fee Application) 11
F.3d at 1080.
2. When the petitioning subject has been "prejudiced
by the Department of Justice's failure to comply with the
substantial protective features of the Act." In re Nofzig-
er, 925 F.2d at 438 (citing In re Meese, 907 F.2d 1192
(D.C. Cir., Spec. Div., 1990)).
3. When in the absence of the requirements of the Act
"'the case could have been disposed of at an early stage
of the investigation,"' without subjecting the petitioning
subject to the conditions that led to his incurring the fees
sought. In re Segal (Sagawa Fee Application), 151 F.3d
1085, 1089 (D.C. Cir., Spec. Div., 1998) (quoting In re
Nofziger, 925 F.2d at 438.
4. Not wholly distinct from No. 3, supra, when "high
public officials [or derivative subjects] were investigated
under the Act in circumstances where private citizens
would not [have been] investigated." In re Nofziger, 925
F.2d at 442; In re North (Dutton Fee Application), 11
F.3d at 1080.
Kisner fits none of the four categories. Granted, these
categories are not exhaustive, and probably could not be,
given the "fact-specific nature of each independent counsel's
undertakings." In re North (Dutton Fee Application), 11
F.3d at 1080. Nonetheless, if Kisner is to establish his
entitlement under the Act he must establish some sort of
"unique special factual features that but for the requirement
of the Act would have permitted a quick termination" of the
investigation or otherwise not have subjected him to the fees
for which he petitions. In re Nofziger, 925 F.2d at 439.
There can be no serious argument that Kisner's claim fits
in either of the first two categories previously identified by
the court. As to the first, the Independent Counsel's investi-
gation ranged far beyond the preliminary investigation not
only in depth but breadth. The matters investigated as to
Kisner are far beyond anything in the preliminary investiga-
tion. He cannot fit category one. As to category two there
is neither allegation nor evidence of the Department's failure
to comply with substantial protective features and thereby
pretermit the investigation that cost Kisner his counsel fees.
He cannot fit this category either. Therefore, in order to
establish eligibility for counsel fees under the "but for" test,
Kisner must either put his facts within category three or four
or otherwise establish the necessary unique special features.
This he has not done.
Kisner argues that he satisfies the "but for" requirement
because "if the statute had not authorized the appointment of
the Independent Counsel, then the grand jury before whom
Rev. Kisner testified would not be in existence." Kisner
Response at 3. We have repeatedly held, however, that
subjects of an independent counsel investigation do not auto-
matically meet the "but for" test simply because the investi-
gation was conducted by an independent counsel under the
Act. As we stated in Olivas, "If the investigative act generat-
ing the defensive costs would, in the absence of the Act, have
been pursued by other authorities--'had the case been han-
dled by the Department of Justice or other executive authori-
ties rather than the Independent Counsel,'--then Congress
did not contemplate the award of counsel fees." In re Pierce,
(Olivas Fee Application), slip op. at 7 (quoting In re North
(Dutton Fee Application), 11 F.3d at 1080). We have found
this requirement to be met where, as in Dutton, among other
cases, the independent counsel has treated as criminal acts
that would not have been investigated by a political or
professional attorney in the Department of Justice. Similar-
ly, in In re Segal (Sagawa Fee Application), 151 F.3d 1085
(D.C. Cir., Spec. Div., 1998) (per curiam), we awarded fees
where the investigation would have been terminated by a
political or professional Department of Justice attorney with-
out the incurrence of the fees sought. Here, in contrast, it is
the case that if the grand jury that Kisner testified before
had not been in existence then some other would have been
employed to investigate the HUD matter, i.e., the Attorney
General or other investigative authority would have pursued
allegations of corruption as deep and widespread as those
occasioning the Independent Counsel's investigation.
In a similar vein, Kisner makes the argument that the Act
"prohibits the Attorney General from actually calling a grand
jury to make his or her preliminary determination of whether
an investigation is warranted.... Thus, the Attorney Gener-
al could not have investigated whether or not Rev. Kisner had
committed perjury before the Lantos Committee, and the
DOJ was not empowered to call Rev. Kisner before a grand
jury." Kisner Response at 3. But as we noted above, if the
Independent Counsel had not called a grand jury to investi-
gate the HUD matter, then the Attorney General or some
other government entity would likely have done so. Conse-
quently, if Kisner's argument has any force at all it would
seem to work against him, i.e., but for the Act the grand jury
would have been in use sooner and his attorneys' fees would
have been incurred at an earlier date.
Relying on In re Donovan, 877 F.2d 982 (D.C. Cir., Spec.
Div., 1989) (per curiam), Kisner further claims that the extent
of the IC's investigation "added to the complexity of the
investigation ... and exceeded anything the DOJ would have
undertaken merely to review his actions." Kisner Response
at 4. In Donovan we held that the "but for" requirement was
satisfied where the alleged wrongdoing was based upon a
single allegation by a single witness of extremely questionable
credibility, and the Attorney General, because of the stric-
tures of the Act, could not convene a grand jury, plea bargain,
or issue subpoenas, and therefore could not evaluate the
credibility of the witness, and consequently was required to
refer the matter to an independent counsel. In re Donovan,
877 F.2d at 990. In that case if the charges had been made
against an ordinary citizen then the Attorney General could
have disposed of the case much sooner and at much less cost.
Here, as we have noted, the allegations concerning fraud at
HUD would in all probability have been extensively investi-
gated by the Executive Branch in the absence of the indepen-
dent counsel statute.
The most that Kisner can argue under this theory is that
the complexity of the investigation lengthened his need for
representation and increased the attorneys' fees involved.
The difficulty for Kisner is that the complexity and length of
the investigation was not caused by the requirements of the
Independent Counsel Act. The convoluted nature of the
corruption involved and the high profile identity of the sus-
pects and defendants would no doubt have resulted in a
complex and lengthy investigation with or without the ap-
pointment of an independent counsel. Kisner's difficulties
were occasioned by his being suspected of having done mis-
chief in high company, not by the identity of the authority
investigating the allegations of mischief.
Further, as we pointed out in Nofziger, Congress when it
was first considering reimbursement of attorneys' fees in
1982 was aware that the inherently different nature of the
independent counsel process could result in added legal ex-
penses to subjects of independent counsel investigations, but
"[n]evertheless ... refused to authorize reimbursement for
such alleged 'inherent' costs of subjects." In re Nofziger, 925
F.2d at 445. If Congress had wanted to so provide, it could
have authorized reimbursement for those fees incurred for no
other reason than the triggering of the Act itself. Instead,
Congress provided only for reimbursement of those attor-
neys' fees that "would not have been incurred but for the
requirements of [the Act]." Id. And requirements "refers to
the special limitations and procedures established by the
Act," e.g., the two-step investigatory procedure by the Attor-
ney General and the restrictions on the Attorney General in
complying with that procedure, id., which we discern as
having no bearing on Kisner's situation here. Investigation
and potential prosecution of Kisner by the IC for perjury
"does not satisfy the 'but for' requirement since it is a type of
prosecution that is not uniquely related to the Act." In re
North (Corr Fee Application), 56 F.3d 261, 264 (D.C. Cir.,
Spec. Div., 1995) (per curiam).
Finally, Kisner attempts to bring his situation within the
precedential sphere of In re North (Shultz Fee Application),
8 F.3d 847 (D.C. Cir., Spec. Div., 1993) (per curiam). In
Shultz, we awarded counsel fees to a petitioner who had been
converted from witness to subject status far along in a
lengthy investigation, stating that "it is not reasonable to
expect that a professional prosecutor, as opposed to an inde-
pendent counsel under the Act, would have been making
subjects out of persons theretofore treated as witnesses four
and one-half years after the commencement of an investiga-
tion." Id. at 851. Kisner contends that that same reasoning
should benefit him, pointing out that the investigation by the
IC began on March 1, 1990, that the IC called Kisner as a
witness in November of 1993, and that "[i]t was not until
March, 1994, that Rev. Kisner was notified by the IC that he
was, at that point, a subject of their investigation." Kisner
Response at 4. These facts are not by any means governed
by the Shultz reasoning.
We entered the opinion in Shultz in the context of a witness
who had actually been interviewed five times at broad inter-
vals as a regular part of the investigation, and then informed
that his status was being changed to subject. Kisner, on the
other hand, was simply an existing potential witness or
potential subject for the first three and one half years of the
investigation. He had no status as witness. From the time
of his testimony in November of 1993, until he was notified of
his status as subject was a period of only four months.
Kisner has shown nothing to establish that a professional
prosecutor would have handled his case any differently than
did the IC. Therefore, absent some showing not made by
Kisner, we cannot say that the fees would pass the "but for"
test.
CONCLUSION
The petition of Gerald D. Kisner for reimbursement of
attorneys' fees is denied for failure to comply with the "but
for" requirement of 28 U.S.C. s 593(f)(1).
Cudahy, Senior Circuit Judge, concurring in the judgment:
The result here is dictated by the extensive Special Division
precedent establishing an extraordinarily demanding test for
eligibility for attorneys' fees. Whether Congress originally
intended that the bar for eligibility be set this high is to me
unclear. But we are not writing on a clean slate.