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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
–————
Filed May 9, 2003
Division No. 94-2
IN RE: ALPHONSO MICHAEL ‘‘MIKE’’ ESPY
(DEMPSEY FEE APPLICATION)
–————
Division for the Purpose of
Appointing Independent Counsels
Ethics in Government Act of 1978, As Amended
–————
Before: SENTELLE, Presiding, FAY and REAVLEY, Senior
Circuit Judges.
ORDER
This matter coming to be heard and being heard before the
Special Division of the Court upon the application of Patricia
Dempsey 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. § 591 et seq. (2000), 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
ORDERED, ADJUDGED, and DECREED that the peti-
tion of Patricia Dempsey for attorneys’ fees she incurred
2
during the investigation by Independent Counsel Donald C.
Smaltz be denied, save for a single unique item.
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 May 9, 2003
Division No. 94–2
IN RE: ALPHONSO MICHAEL ‘‘MIKE’’ ESPY
(Dempsey Fee Application)
–————
Division for the Purpose of
Appointing Independent Counsels
Ethics in Government Act of 1978, As Amended
–————
Before: SENTELLE, Presiding, FAY and REAVLEY, Senior
Circuit Judges.
ON APPLICATION FOR ATTORNEYS’ FEES
Opinion for the Special Court filed PER CURIAM.
PER CURIAM: Patricia Dempsey petitions this Court under
section 593(f) of the Ethics in Government Act of 1978, as
amended, 28 U.S.C. §§ 591–599 (2000) (the Act), for reim-
bursement of attorneys’ fees in the amount of $96,863.23 that
she incurred during and as a result of the investigation
conducted by Independent Counsel (IC or OIC) Donald C.
Smaltz. Because we conclude that Dempsey 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, save for a single unique item.
BACKGROUND
Donald C. Smaltz was appointed independent counsel in
September 1994 to investigate allegations of improper gratui-
ties received by Secretary of Agriculture Mike Espy from
Tyson Foods, Inc. and other organizations and individuals
having business before the U.S. Department of Agriculture.
The investigation lasted several years and looked into, inter
alia, violations regarding the provision of gifts and gratuities
2
to USDA officials, the concealment of gratuities from federal
investigators, and election law violations. Ultimately, the
IC’s investigation resulted in the indictment of 19 individuals
and business entities, 13 of whom were convicted of criminal
misconduct. Patricia Dempsey, the fee applicant here, was
Espy’s girlfriend during the time period for which he was
under investigation. As such, according to the IC, ‘‘Dempsey
was, at a minimum, a percipient witness to many of the events
under investigation by the OIC.’’ It also appears that she
was a subject of the IC’s investigation from early on because
many of the gifts at issue in the investigation were given, in
whole or in part, to her. She was not indicted, and in July
1997 was granted use immunity. She seeks reimbursement
of $96,863.23 for fees incurred from October 1994 to April
2001.
ANALYSIS
The Independent Counsel statute provides:
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. § 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, 1077–81 (D.C. Cir., Spec.
Div., 1993) (per curiam). The petitioner ‘‘bears the burden of
establishing all elements of [her] entitlement.’’ In re North
(Reagan Fee Application), 94 F.3d 685, 690 (D.C. Cir., Spec.
Div., 1996) (per curiam). Because we find that Dempsey fails
to satisfy the third requirement, known as the ‘‘but for’’ test,
3
we need not address the remaining requirements.
* * * * * * * * * *
We have previously stated that ‘‘[a]ll requests for attor-
neys’ fees under the Act must satisfy the ‘but for’ require-
ment.’’ In re Sealed Case, 890 F.2d 451, 452 (D.C. Cir., Spec.
Div., 1989) (per curiam). And we have repeatedly observed
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 that she would have in-
curred as a result of an investigation by the Department of
Justice. In re Sealed Case, 890 F.2d at 452–53. As we
stated in In re Pierce (Olivas Fee Application), 178 F.3d 1350
(D.C. Cir., Spec. Div., 1999) (per curiam), ‘‘[i]f the investiga-
tive act generating the defensive 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 contemplate the award of counsel
fees.’’ Id. at 1355 (quoting Dutton, 11 F.3d at 1080).
Nonetheless, we have found that petitioners qualify for an
award of fees in the face of the but-for test in at least four
circumstances:
1. When the independent counsel’s investigation sub-
stantially constituted duplication of the preliminary in-
vestigation conducted by the Department of Justice.
Dutton, 11 F.3d at 1080; In re Olson, 884 F.2d 1415,
1420 (D.C. Cir., Spec. Div., 1989) (per curiam).
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 428, 438 (D.C. Cir., Spec. Div., 1991) (per
curiam).
3. When in the absence of the requirements of the Act
‘‘ ‘the case could have been disposed of at an early stage
4
of the investigation,’ ’’ without subjecting the petitioner
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) (per curiam) (quoting
In re Nofziger, 925 F.2d at 438).
4. Not wholly distinct from category (3), supra, when
‘‘high public officials [or derivative subjects] were investi-
gated under the Act in circumstances where private
citizens would not [have been] investigated.’’ In re Nof-
ziger, 925 F.2d at 442; accord Dutton, 11 F.3d at 1080.
Dempsey argues in effect that her case falls into categories
(3) and (4), i.e., that she would not have been investigated in
the absence of the Act, and that she was subjected to a more
rigorous application of the criminal law than she would have
been in the absence of the Act.
First, Dempsey claims that she satisfies the ‘‘but for’’
requirement in that she would not have been investigated in
the absence of the Act because DOJ’s Public Integrity Section
had concluded that no investigation was necessary. She
notes that Public Integrity began an initial investigation after
receiving information about alleged gratuities given to Espy,
and that at the time of Public Integrity’s investigation the
independent counsel statute had lapsed and was not in effect.
Dempsey claims that Public Integrity ‘‘according to published
reports, had determined that the matter was not worthy of
further investigation under normal Department of Justice
standards,’’ but that shortly before this determination could
be finalized by the DOJ, the independent counsel statute was
reauthorized, leading to a determination by DOJ ‘‘that it had
to apply the very strict standards of the Independent Counsel
Act instead of normal Department of Justice standards.’’
Dempsey further claims that ‘‘the main issue in dispute in the
allegations against Secretary Espy was his intent,’’ that the
preliminary investigation had revealed no evidence of illegal
intent by Espy, and that therefore ‘‘in the absence of the Act,
it appears clear that the Department of Justice was ready to
close this matter without further investigation.’’
5
Dempsey consequently rests her argument for passing the
‘‘but for’’ test ‘‘on the established precedent of this Court that
where an independent counsel is appointed to investigate a
subject despite the Public Integrity Section’s recommendation
to the contrary, the ‘but for’ requirement is, a fortiori,
satisfied.’’ For authority, she cites to In re Olson (Perry Fee
Application), 892 F.2d 1073, 1074 (D.C. Cir., Spec. Div., 1990)
(per curiam), in which the court found the ‘‘but for’’ require-
ment satisfied because Public Integrity had recommended
that the case not be prosecuted and therefore ‘‘Perry was
being subjected to expenses that he would not have been
subjected to in the absence of the [Act].’’ Dempsey also
relies on In re Segal (Sagawa Fee Application), 151 F.3d at
1089, where the ‘‘but for’’ requirement was satisfied because
the AG had stated in her application requesting appointment
of an IC that ‘‘the Department of Justice would in all likeli-
hood exercise its discretion to decline to prosecute this case
as a criminal matter.’’ Dempsey concludes that in her case
‘‘[it] was only because of the operation of the strictures of the
Act, in particular the restriction exercising prosecutorial dis-
cretion and evaluating intent, that further investigation had to
be sought.’’
Dempsey further argues that she satisfies the ‘‘but for’’
requirement because the IC’s investigation went far beyond
the originally intended scope, lasting for almost seven years,
and ‘‘examined in detail Ms. Dempsey’s business and personal
relations.’’ She analogizes her case to both In re Meese, 907
F.2d 1192, 1201 (D.C. Cir., Spec. Div., 1990) (per curiam), in
which the court held the ‘‘but for’’ test satisfied, stating that
‘‘[t]he investigation continued for 14 months and was broad-
ened far beyond any investigation contemplated by the initial
referral,’’ and In re Sealed Case, 890 F.2d at 453–54, where
the ‘‘but for’’ element was also satisfied because the appli-
cant’s tax returns were examined for a period of nine years
thus subjecting him to a more rigorous application of the
criminal law than is applied to other citizens. Dempsey
concludes that in her case ‘‘[i]t is improbable that an investi-
gation of such breadth and scope would have been undertaken
‘but for’ the Act.’’
6
As for Dempsey’s first ‘‘but for’’ argument that she would
not have been investigated in the absence of the Act, the
Independent Counsel contends that the present case differs
from both Perry and Sagawa, the two cases Dempsey relies
on, in that in those cases the Attorney General, in the
application for the appointment of an independent counsel,
specifically mentioned misgivings about requesting the ap-
pointment. Here, notes the IC, ‘‘unlike in Perry, the Attor-
ney General did not state in her application that the Public
Integrity Section had fully investigated the matter and decid-
ed not to recommend prosecution.’’ Instead, the Assistant
Attorney General for the Criminal Division rejected Public
Integrity’s initial recommendation, and directed that the in-
vestigation be handled pursuant to the Act, after which the
AG applied to the Court for the appointment of an indepen-
dent counsel. The IC also notes that in Sagawa the Attorney
General specifically stated in her application to the Court that
‘‘the Department of Justice would in all likelihood exercise its
discretion to decline to prosecute this case,’’ 151 F.3d at 1089,
whereas here the Attorney General specifically noted in her
application that the investigation had uncovered ‘‘potential
violations by Secretary Espy.’’
In further contrast to Perry and Sagawa, the IC points out
that those independent counsel investigations ‘‘involved in-
stances where the independent counsel ultimately joined in
the DOJ’s conclusion and declined the matter,’’ but in this
case the independent counsel ultimately obtained a number of
indictments and convictions.
The IC goes on to note that the Public Integrity Section’s
recommendation not to pursue the matter was in part based
upon false information that Dempsey herself had given to
federal investigators. The IC avers that ‘‘[t]he purpose of the
Act’s fee provision is to buffer innocent individuals from
extraordinary expense attributable to the Act’s arcane mecha-
nism, not to reward parties involved in the matters under
investigation for misleading law enforcement officials.’’
As for Dempsey’s claim that she was subjected to a more
rigorous application of the law, the IC argues that Dempsey
7
offers no proof of this claim but only the conclusory, and
inadequate, assertion that the length of the investigation
demonstrated its unreasonableness. The IC contends that
Dempsey’s receipt of substantial gifts from persons attempt-
ing to influence the Secretary of Agriculture’s decision-
making fully warranted investigation, and that moreover the
IC’s investigation of her ‘‘did not arise solely from her
relationship with Espy, but also directly from her false state-
ments to the FBI in an effort to conceal Espy’s wrongdoing,’’
and that such a crime ‘‘is not uniquely related to the Act.’’
The Department of Justice also questions whether Demp-
sey satisfies the ‘‘but for’’ requirement. Concerning the
initial recommendation by Public Integrity not to pursue the
matter, the DOJ states that ‘‘only a portion of the facts that
were ultimately uncovered was known at the time,’’ and that
fuller disclosure ‘‘revealed a more substantial pattern of gift-
giving than was initially apparent.’’ The DOJ points out (as
did the IC) that Public Integrity investigators could not make
a full assessment of the facts because of false and misleading
statements made to them.
The DOJ is also in agreement with the IC that Dempsey
cannot favorably compare her case to Sagawa, because in that
case the AG had stated that if left to the DOJ that agency
would have declined prosecution, and that ‘‘[h]ere, in contrast,
there was no such representation by the Attorney General,
and the investigation ultimately resulted in a number of
indictments and criminal convictions.’’ Given that the IC’s
investigation ultimately uncovered significant criminal mis-
conduct, the DOJ argues that this case is more like the
investigation of former HUD Secretary Samuel R. Pierce, in
which some of the attorneys’ fees applicants also argued that
the Public Integrity Section had initially recommended
against prosecution. The DOJ notes that in rejecting that
argument the Court explained that the suggestion that Public
Integrity’s view would have prevailed was speculative in that
in the end the Independent Counsel uncovered pervasive and
high level corruption. See, e.g., In re Pierce (Pierce Fee
Application), 213 F.3d 713, 718 (D.C. Cir. Spec. Div., 2000)
(per curiam).
8
After consideration of Dempsey’s fee application and the
IC’s and DOJ’s evaluations, we find that Dempsey does not
fulfill the ‘‘but for’’ requirement. In claiming that she satis-
fies the ‘‘but for’’ test, Dempsey first argues in effect that
there was no substance to the initial allegations of gratuities
being given to Espy, that this is supported by Public Integri-
ty’s initial determination of no further investigation, and that
it was only because of the independent counsel statute that
further investigation was undertaken. Taking the last point
first, in In re Pierce (Olivas Fee Application), 178 F.3d at
1355, this Court noted that ‘‘[w]e have repeatedly held that
subjects of an independent counsel investigation do not auto-
matically meet the but for test simply because the investiga-
tion was conducted by an independent counsel under the Act.
If the investigative act generating the defensive 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 Inde-
pendent Counsel—then Congress did not contemplate the
award of counsel fees. In Re North (Dutton Fee Applica-
tion), 11 F.3d at 1080.’’
Citing to Perry, Dempsey nevertheless argues that Public
Integrity’s initial recommendation shows that this investiga-
tion would not have been handled by the DOJ or other
executive authority. In Perry, the Court noted that Public
Integrity’s ‘‘no prosecution’’ decision was sufficient evidence
to show that the fee applicant was being subjected to an
investigation that would not have occurred in the absence of
the independent counsel act. 892 F.2d at 1074. But here, as
both the IC and the DOJ point out, Public Integrity’s deter-
mination was based in part on false information given by
Dempsey, and it is highly probable, given the seriousness of
the allegations, that once these falsehoods were uncovered, a
full investigation would have been undertaken by the DOJ
absent the independent counsel statute.
Regarding Dempsey’s second ‘‘but for’’ argument that the
IC’s investigation was lengthy, went far beyond its original
scope, and examined her life in detail, this Court was faced
with a similar argument in In re Herman (Weaver Fee
9
Application), 301 F.3d 648 (D.C. Cir., Spec. Div., 2002) (per
curiam). In that case the fee petitioner also relied on Meese
and In re Sealed Case in arguing that she passed the ‘‘but
for’’ test because the independent counsel’s investigation was
lengthy and probing. We noted there that Meese was not
germane because in that case the fee petitioner was subjected
to a rigorous investigation as the original investigation had
been expanded in the extreme and no preliminary investiga-
tion had been conducted prior to referral of the Meese matter
to the independent counsel, whereas in Weaver neither of
these conditions were present. Id. at 653. And they are not
present here either.
We further noted in Weaver that In re Sealed Case was
also not germane because in that case the Court stated that
the ‘‘but for’’ element was satisfied because an ordinary
investigation would have been less probing, whereas in Weav-
er the seriousness of the allegations would have been just as
thoroughly investigated by the DOJ absent the Act. Id. at
654. We are confronted with the same situation here. As we
noted in a fee petition case involving this same investigation,
see In re Espy (Kearney Fee Application), 319 F.3d 526 (D.C.
Cir., Spec. Div., 2003) (per curiam), and as we reemphasize
now, Independent Counsel Smaltz ‘‘produced evidence, and
indeed probable cause, to believe that a cabinet secretary had
received, and a businessman had paid, illegal gratuities. In
the absence of the Act, the DOJ would in all probability have
investigated Espy for allegedly receiving gratuities and [the
businessman] for allegedly giving them.’’ Id. at 531.
But although Dempsey was not investigated by the IC
differently than she would have been otherwise, in the ab-
sence of the Act she would not have incurred fees for review
and response to the IC’s final report. Section 594 of the Act
requires that the independent counsel ‘‘file a final report with
the division of the court, setting forth fully and completely a
description of the work of the independent counselTTTT’’ 28
U.S.C. § 594(h)(1)(B). Absent the Act, federal ‘‘prosecutors
do not issue reports.’’ In re North, 16 F.3d 1234, 1238 (D.C.
Cir., Spec. Div., 1994) (per curiam). Indeed, as we have
observed before, ‘‘[t]he filing of reports by Independent
10
Counsels is ‘a complete departure from the authority of a
United States Attorney’ and is ‘contrary to the practice in
federal grand jury investigations.’ ’’ Id. (quoting In re Sealed
Motion, 880 F.2d 1367, 1369–70 (D.C. Cir., Spec. Div., 1989)
(per curiam)). Therefore, we hold that the amount of
$3,371.25 in reasonable attorneys’ fees that Dempsey incurred
for reviewing and responding to the IC’s final report is
reimbursable.
CONCLUSION
For the reasons set forth above, we allow in part the
petition of Patricia Dempsey to the extent of ordering reim-
bursement for attorneys’ fees in the amount of $3,371.25. We
deny the balance of the petition as not meeting the ‘‘but for’’
requirement of the Act, 28 U.S.C. § 593(f)(1).