United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed June 28, 2002
Division No. 98-1
In Re: Bruce Edward Babbitt
(Stetson 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 Catherine
Baker Stetson for reimbursement of attorneys' fees and costs
pursuant 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 peti-
tion is not well taken, it is hereby
__________
* Dissenting opinion filed by Senior Circuit Judge Cudahy.
ORDERED, ADJUDGED, and DECREED that the peti-
tion of Catherine Baker Stetson for attorneys' fees she in-
curred during the investigation by Independent Counsel Car-
ol Elder Bruce 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 28, 2002
Division No. 98-1
In Re: Bruce Edward Babbitt
(Stetson 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 of the Special Court filed Per Curiam.
Dissenting opinion filed by Senior Circuit Judge Cudahy.
Per Curiam: Catherine Baker Stetson petitions this court
under section 593(f) of the Ethics in Government Act of 1978,
as amended, 28 U.S.C. ss 591-599 (1994) (the "Act"), for
reimbursement of attorneys' fees in the amount of $4,777.09
that she incurred during and as a result of the investigation
conducted by Independent Counsel ("IC" or "OIC") Carol
Elder Bruce. Because we conclude that Stetson has not
carried her 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.
Background
The facts of the investigation conducted by IC Bruce are
set forth in detail in In re Babbitt (Babbitt Fee Application),
290 F.3d 386, 388-89 (D.C. Cir., Spec. Div., 2002) (per cu-
riam). For our purposes here, we briefly note that IC Bruce
was appointed to investigate allegations that the White House
had improperly influenced the 1995 decision of the U.S.
Department of the Interior ("DOI") to deny the application of
three Indian tribes to take off-reservation land into trust in
order to establish a casino on the property, and that Secre-
tary of the Interior Bruce Babbitt had lied about the decision
to Congress. The allegations concerned contributions of a
substantial amount of money to the Democratic National
Committee and other Democratic interests by certain Indian
tribes opposed to the casino and suggested that the DOI's
decision to deny the casino application was influenced by
these donations. Catherine Baker Stetson, the fee petitioner
here, was a volunteer active in soliciting contributions from
American Indians in support of the DNC in 1995 and 1996,
apparently including from the tribes that were central to the
allegations surrounding the casino application. As the IC's
jurisdictional mandate included investigation into any connec-
tion between political contributions of Indian tribes and the
decision on the casino application, Stetson's activities came to
the attention of the IC. The IC issued a subpoena for certain
documents to Stetson, who subsequently destroyed a number
of documents that she claimed were not responsive to the
subpoena. Consequently, the IC began an investigation of
the document destruction issue. Stetson eventually entered
into an immunity agreement with the IC.
Stetson, pursuant to section 593(f)(1) of the Act, has peti-
tioned this court for reimbursement of the attorneys' fees she
incurred during the IC's investigation. As directed by sec-
tion 593(f)(2) of the Act, we forwarded copies of Stetson'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 submit-
ting these evaluations, which we have given due consideration
in arriving at the decision announced herein.
Analysis
The Independent Counsel statute 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, in order to obtain an
attorneys' fees award under the statute, a petitioner must
show that all of 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). Because
we find that Stetson fails to satisfy the third requirement,
known as the "but for" test, we need not address the remain-
ing requirements.
* * * * * * * * * *
We have previously established that "[a]ll requests for
attorneys' fees under the Act must satisfy the 'but for'
requirement." In re Sealed Case, 890 F.2d 451, 452 (D.C.
Cir., Spec. Div., 1989) (per curiam). And we have repeatedly
held that "[t]he 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) (per curiam) (quoting Dutton, 11 F.3d at 1079).
In order to establish eligibility for an award, the fee applicant
must show that the amounts claimed are only those fees and
expenses above and beyond those she would have incurred as
a result of an investigation by the DOJ. In re Sealed Case,
890 F.2d at 452-53. As we stated in In Re Pierce (Olivas Fee
Application), 178 F.3d 1350, 1355 (D.C. Cir., Spec. Div., 1999)
(per curiam), "[i]f the investigative act generating the defen-
sive costs would, in the absence of the Act, have been pursued
by other authorities--'had the case been handled by the
Department of Justice or other executive authorities rather
than the Independent Counsel'--then Congress did not con-
template the award of counsel fees. In Re North (Dutton
Fee Application), 11 F.3d at 1080."
Stetson claims that she would not have incurred the attor-
neys' fees requested "but for" the "operation of the Indepen-
dent Counsel statute," noting that she was only a peripheral
figure in the OIC's investigation, that "the IC enjoyed wide
discretion and an unrestrained ability to explore all angles" of
Babbitt's testimony regarding the DOI's denial of the tribes'
application, and that her involvement in the investigation "is a
by-product of the unusually broad and thorough reach that is
not uncommon of IC investigations." But contrary to what
Stetson implies, simply because an investigation was conduct-
ed by an independent counsel under the Act does not auto-
matically mean that the "but for" test is met. If it did, then,
as we have noted elsewhere,"virtually every person investi-
gated by the Independent Counsel for potentially criminal
conduct would satisfy the 'but for' requirement of the Act."
Olivas at 1355 (citation and internal quotation marks omit-
ted); see also In re Pierce (Kisner Fee Application), 178 F.3d
1356, 1360 (D.C. Cir., Spec. Div., 1999) (per curiam). Such a
result was not the intent of the Congress. See In re Nofzig-
er, 925 F.2d 428, 445 (D.C. Cir., Spec. Div., 1991) (per
curiam).
In a similar vein, Stetson claims that absent the OIC's
"broad latitude in conducting its investigation," she would
have "not been contacted at all or had such contact occurred
it would have been minimally intrusive." Stetson compares
her situation to that of the fee applicant in In re Sealed Case,
arguing that that case recognizes the "but for" requirement
to be satisfied "when an investigation pursuant to the Act is
significantly more taxing than one that would otherwise oc-
cur." In In re Sealed Case, the Attorney General requested
the appointment of an independent counsel to investigate an
alleged minor tax violation by a government official. We
found the "but for" requirement fulfilled because the govern-
ment official (the fee applicant) had been subjected to a more
rigorous application of the criminal law than is applied to
other citizens. We made this finding because of two factors.
First, the Attorney General in his application for appointment
of an independent counsel represented that the Act's restric-
tions were a hindrance to his conducting an adequate prelimi-
nary investigation. We noted that if the AG had not been so
hindered then the government official "might have been
subjected to a lesser investigation, or perhaps exonerated at
this early stage." 890 F.2d at 453. Second, we found that
although the independent counsel had been appointed to
investigate the applicant's 1981, 1982, and/or 1984 tax returns,
he actually examined the applicant's tax returns for nine
years, from 1976 to 1984. We stated that the ordinary
examination of a taxpayer for a similar tax offense "would
have been substantially less probing." Id. at 454.
In the case before us, as we explained in Babbitt, the
Attorney General in her application for appointment of an
independent counsel made no representation that the Act's
limitations restricted her preliminary investigation. 290 F.3d
at 393. Furthermore, no such less probing examination
would have been made in the absence of the Act. As we
made clear in Babbitt, if IC Bruce had not investigated the
deep and widespread allegations surrounding the denial of the
casino application, then other prosecuting authorities would
have done so. For Stetson, this means that her conduct too
would have been investigated just as extensively in the ab-
sence of the Act. And although we have in the past found the
"but for" requirement satisfied where a professional prosecu-
tor would have conducted the same investigation as the IC
but where "an inquiry [occurred] not normally pursued in a
criminal investigation," In re Pierce (Abrams Fee Applica-
tion), 190 F.3d 586, 593 (D.C. Cir., Spec. Div., 1999) (per
curiam) (independent counsel investigated whether fee appli-
cant had properly complied with a provision of the HUD
handbook), that is not the situation here. Rather, Stetson
was investigated for document destruction, an offense we
addressed previously in the "but for" context in Olivas. We
concluded there, as we do here, that the fee applicant did not
satisfy the "but for" requirement since investigation and
potential prosecution for this type of activity was " 'not
uniquely related to the Act.' " Olivas, 178 F.3d at 1355
(quoting In re North (Corr Fee Application), 56 F.3d 261, 264
(D.C. Cir., Spec. Div., 1995) (per curiam)).
Conclusion
The petition of Catherine Baker Stetson 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).
Richard D. Cudahy, Senior Circuit Judge, dissenting:
The majority opinion makes no mention of the recommen-
dation by the Department of Justice that Ms. Stetson's
attorneys' fees be paid. The Department submitted a similar
recommendation with respect to Secretary Babbitt's fee peti-
tion, and that recommendation quoted the same passage as
does the present recommendation, from the Attorney Gener-
al's application for appointment of an independent counsel in
the Babbitt case. This quotation from the application of the
Attorney General referred specifically to the heightened crim-
inal intent requirements that attached to her preliminary
investigation. Notwithstanding this statement by the Attor-
ney General, the panel majority in In re Babbitt relied on it
version of the "but for" test to deny the major part of the fee
request over my dissent. For a more extensive discussion of
the "but for" test, and the increasing (and arguably unjusti-
fied) rigor of its application in recent years, I refer to my
dissent in In re Babbitt (Babbitt Fee Application), 290 F.3d
386, 395-403 (D.C. Cir., Spec. Div., 2002) (Cudahy, J., dissent-
ing).
It is a fallacy to try to make a "but for" analysis of Ms.
Stetson's fee petition in isolation from the analysis of Secre-
tary Babbitt's petition. The investigation of Ms. Stetson was
merely a part of the investigation of Secretary Babbitt. Had
Secretary Babbitt not been investigated, Ms. Stetson would
not have been, and the "but for" issue for Ms. Stetson is
necessarily the same as for Secretary Babbitt. As my dissent
in the case of Secretary Babbitt's fee petition made clear, the
Attorney General would never have referred the Babbitt
matter for investigation by an independent counsel unless
special provision of the Independent Counsel Act forbade her
to decline the reference unless there was clear and convincing
evidence that Secretary Babbitt lacked the requisite criminal
intent. See 28 U.S.C. s 592(a)(2)(B)(ii). The circumstance
that this special statutory provision on criminal intent had no
apparent direct impact on Ms. Stetson is of no consequence.
The investigation of Ms. Stetson was entirely a by-product of
a lengthy and exhaustive independent counsel inquiry into the
words and actions of Secretary Babbitt--an investigation that
in my judgment went forward on account of the special
criminal intent provision of the Independent Counsel Act.
Therefore, for the same reason that I believe Secretary
Babbitt's petition satisfies the "but for" test, I believe Ms.
Stetson satisfies this requirement as well.
The fact that part of the inquiry into the activities of Ms.
Stetson involved alleged document destruction is also of no
consequence. One is not entitled to look into and character-
ize the details of the investigation if the inquiry as a whole
meets the "but for" test as it certainly does here. One need
not make the dubious argument that an inquiry into alleged
document destruction is somehow unique to an investigation
by an independent counsel. As I see it, this is beside the
point.
Proper resolution of the present fee petition must turn on
the remaining three requirements of the case law, see ante at
2-3 (citing In re North (Dutton Fee Application), 11 F.3d
1077-83), which have been overlooked here because the ma-
jority found its "but for" analysis dispositive. Although there
might be some question about the documentation of reason-
ableness of hourly rates, I believe that Ms. Stetson's fee
petition meets the other requirements for reimbursement of
fees.
I therefore respectfully dissent.