Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify
the Clerk of any formal errors in order that corrections may be made
before the bound volumes go to press.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed October 21, 2003
Division No. 94-2
IN RE: ALPHONSO MICHAEL ‘‘MIKE’’ ESPY
(TOWNSEND 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 Wardell
C. Townsend, Jr., 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 motion
is in part well taken, it is hereby
ORDERED, ADJUDGED, and DECREED that the Unit-
ed States reimburse Wardell C. Townsend, Jr., for attorneys’
fees and expenses that he incurred during the investigation
2
by Independent Counsel Donald C. Smaltz in the amount of
$7,221.50.
PER CURIAM
For the Court:
Mark J. Langer, Clerk
By:
Marilyn R. Sargent
Chief Deputy Clerk
Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify
the Clerk of any formal errors in order that corrections may be made
before the bound volumes go to press.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed October 21, 2003
Division No. 94-2
IN RE: ALPHONSO MICHAEL ‘‘MIKE’’ ESPY
(TOWNSEND 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
PER CURIAM: Wardell C. Townsend, Jr. 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
reimbursement of attorneys’ fees in the amount of $16,649.21
that he incurred during and as a result of the investigation
conducted by Independent Counsel Donald C. Smaltz (here-
inafter IC or OIC). Because we find that Townsend has es-
tablished his entitlement under the statutory criteria for re-
imbursement of a portion of the fees we will, for the reasons
set forth more fully below, allow recovery of $7,221.50.
2
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
(USDA). The investigation lasted several years and pur-
sued, inter alia, allegations of illegal gifts and gratuities to
USDA officials, the concealment of gratuities from federal in-
vestigators, 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 mis-
conduct. Espy was indicted on 39 counts for, inter alia, ac-
cepting gifts in violation of his obligations as a public official,
but was acquitted on all counts.
Immediately prior to becoming Secretary of Agriculture,
Espy served in the Congress. During that time his brother
Thomas was his campaign manager and acting campaign
treasurer. Between 1990 and 1992 Thomas Espy allegedly
embezzled approximately $95,000 of Espy’s campaign funds.
Upon becoming aware of this situation in March 1992, Espy
informed his brother that these funds had to be replaced.
Thomas Espy then set up a sham real estate deal with his
brother-in-law as a way to replace the funds. Wardell C.
Townsend, Jr., the fee petitioner here, was Espy’s chief of
staff in Congress. Espy appointed him as assistant campaign
treasurer to monitor the progress of the sham real estate
deal. Over the next two years, the Espy for Congress
campaign filed 12 separate reports with the Federal Election
Commission. These reports allegedly concealed the missing
funds, with Townsend participating in their preparation and
filing.
The OIC uncovered the foregoing events during its investi-
gation of Espy for alleged gratuities violations and wanted to
present to the grand jury several possible criminal charges
against Espy, his brother Thomas, and Townsend. The DOJ,
however, took the position that these alleged crimes were not
within the OIC’s original jurisdictional grant, i.e., acceptance
3
of gratuities by Espy, and opposed the OIC’s petition to this
court to refer the allegations to the OIC as matters related to
its jurisdiction. We agreed and denied the OIC’s petition.
In re Espy, 145 F.3d 1365 (D.C. Cir., Spec. Div., 1998) (per
curiam). Although the OIC then referred the matter to the
DOJ for prosecution, no further action was forthcoming.
Pursuant to section 593(f)(1) of the Act, Townsend has now
petitioned this court for reimbursement of the attorneys’ fees
in the amount of $16,649.21 that he incurred during the IC’s
investigation. As directed by section 593(f)(2) of the Act, we
forwarded copies of Townsend’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.
Discussion
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, 1077–82 (D.C. Cir., Spec.
Div., 1993) (per curiam). 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.
4
Div., 1996) (per curiam). There appears to be little dispute
that Townsend was a ‘‘subject’’ of the investigation or that his
fees were incurred ‘‘during’’ the investigation. We will there-
fore limit our discussion to the ‘‘but for’’ and ‘‘reasonable’’
requirements.
* * * * * * * * * *
‘‘But for’’
We have previously held 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 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 he 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 (D.C. Cir., Spec. Div., 1999) (per
curiam), ‘‘[i]f 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 Depart-
ment 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).
In arguing that he fulfills the ‘‘but for’’ test, Townsend cites
to In re Nofziger, 925 F.2d 428, 438 (D.C. Cir., Spec. Div.,
1991), for the proposition that the ‘‘but for’’ test is satisfied
when ‘‘the subject is prejudiced by the Department of Jus-
tice’s failure to comply with the substantial protective fea-
tures of the ActTTTT’’ He implies that this occurred in his
case because ‘‘a matter is investigated by an Independent
Counsel only when there has been a determination by the
5
Attorney General ‘that there are reasonable grounds to be-
lieve that further investigation is warranted TTT ,’ ’’ and that
no such conclusion was made with respect to the IC’s investi-
gation of him. He cites In re Mullins (Berry Fee Applica-
tion), 91 F.3d 1516 (D.C. Cir., Spec. Div., 1996) (per curiam);
In re Meese, 907 F.2d 1192 (D.C. Cir., Spec. Div., 1990) (per
curiam); and In re Sealed Case as instances where the ‘‘but
for’’ test was satisfied because ‘‘the Attorney General ha[d]
not made a determination of ‘reasonable grounds.’ ’’ Town-
send sums up this argument by claiming that ‘‘he did not
receive the protections of the statute that would have ensured
the existence of reasonable grounds to warrant an investiga-
tion before he had to engage counselTTTT’’
Townsend further argues that he passes the ‘‘but for’’ test
because the IC investigated this particular matter only to
pressure Espy with respect to a previous indictment of him.
According to Townsend, ‘‘the principal reason for investigat-
ing this matter and doing so without jurisdiction was to affect
Mr. Espy’s deliberations with respect to a pre-trial disposi-
tion of a pending case’’ and that as such Townsend ‘‘was part
of a pre-trial strategy of the sort not typically engaged in by
the Department of Justice.’’
In his evaluation the IC asserts that the ‘‘but for’’ element
is not satisfied in this situation. He argues that in each of
the three cases relied on by Townsend ‘‘the Attorney General
launched an independent counsel investigation of the fee
applicant in circumstances in which the record clearly indicat-
ed that the DOJ would not have proceeded with an investiga-
tion of its own.’’ The IC posits that under these cases ‘‘there
must be affirmative evidence that the DOJ would not investi-
gate the individual’’ and that there is no such evidence in
Townsend’s case.
The IC acknowledges that the Attorney General in fact did
not make a ‘‘reasonable grounds’’ determination of possible
allegations against Townsend before the IC investigated him,
but argues that the Attorney General could not make such a
determination ‘‘because the facts behind [the allegations]
were unknown to her when the Espy matter was before her.’’
Citing In re North (Dutton Fee Application), 11 F.3d at 1080,
6
and In re Nofziger, 938 F.3d 1397, 1401 (D.C. Cir., Spec. Div.,
1991) (per curiam), the IC avers that ‘‘[t]he question before
this Court is whether the DOJ would have investigated
Townsend if it had been acting in place of the Independent
Counsel.’’ The IC argues that the answer to this question is
‘‘yes’’ because there was a large and suspicious cash payment
to Espy’s campaign fund after he became Secretary of Agri-
culture and Townsend was assistant treasurer of that fund.
The IC claims that ‘‘[i]t is extremely unlikely that the DOJ,
had it been acting in the place of the Independent Counsel,
would have deemed these matters unworthy of investigation.’’
The IC also claims that there is ‘‘no merit’’ to Townsend’s
argument that the investigation of him was part of a pre-trial
strategy by the IC. The IC argues that it was his duty, and
that it would have been the DOJ’s duty had it been charged
with this investigation, to look into the cash donation to
Espy’s campaign fund while he was Secretary of Agriculture.
For its part, the DOJ somewhat agrees with Townsend,
stating in its evaluation that Townsend’s argument that he
satisfies the ‘‘but for’’ requirement because the IC’s investiga-
tion of him was unrelated to the IC’s core jurisdiction ‘‘may
have some merit’’ as the DOJ urged this Court not to agree
to the IC’s referral request.
‘‘Reasonable’’
Both the IC and the DOJ point out that the attorneys’
billing entries accompanying Townsend’s fee petition are not
sufficiently detailed for a full award. The IC asserts that the
billing summaries do ‘‘not, in most instances, identify the
subject matter of the various conversations and activities
undertaken by counsel.’’ He notes that in the past the court
has reduced fee awards by various percentages for inade-
quate documentation of the billing records. See In re Pierce
(Abrams Fee Application), 190 F.3d 586, 594 (D.C. Cir., Spec.
Div., 1999) (per curiam) (10% reduction); In re North (Gard-
ner Fee Application), 30 F.3d 143, 147–48 (D.C. Cir., Spec.
Div., 1994) (per curiam) (10% reduction); In re North (Gadd
Fee Application), 12 F.3d at 257 (30% reduction). Because of
the degree of inadequacy of the billing entries here, the IC
submits ‘‘that a reduction at some level greater than 10% may
7
be appropriate.’’ Likewise, the DOJ argues that ‘‘[n]early
all’’ of the billing entries are insufficiently detailed ‘‘to allow a
full and proper assessment of the claimed reasonableness of
counsel’s representation.’’
Analysis
In considering the above ‘‘but for’’ arguments of the par-
ties, we note that we have previously held that the suspicious
circumstances that gave rise to the investigation of Espy and
his ultimate indictment for receiving gratuities would have
resulted in investigation and prosecution even in the absence
of the Act. See, e.g., In re Espy (Blackley Fee Application),
338 F.3d 1036 (D.C. Cir., Spec. Div., 2003) (per curiam); In re
Espy (Kearney Fee Application), 319 F.3d 526 (D.C. Cir.,
Spec. Div., 2003) (per curiam). It would further appear to be
the case that a professional or politically appointed prosecutor
would have uncovered the evidence concerning Townsend’s
probable involvement in what appeared to be a possible
further gratuity (and turned out to be concealment of embez-
zlement). Such a prosecutor, therefore, would have proceed-
ed with the investigation so that Townsend would have in-
curred counsel fees even in the absence of the Act.
Nevertheless, it is also the case that the IC wanted to
investigate this matter further and therefore applied to us for
authority to do so. See In re Espy, 145 F.3d at 1366–67.
While this does not refute our prior conclusion that there
would have been an investigation of this matter even in the
absence of the Act, it would appear to support a conclusion
that the investigation would have been less extensive, and
possibly of shorter duration, resulting in less burdensome
attorneys’ fees for Townsend than was the case in the pres-
ence of the Act. To this limited extent Townsend has satis-
fied the ‘‘but for’’ element.
As for the ‘‘reasonable’’ requirement, we agree with the IC
and the DOJ that the vast majority of the billing entries
inadequately describe the work performed. As we have held
previously, adequate documentation of legal work performed
is a necessary ingredient for the reimbursement of attorneys’
fees, see In re Meese, 907 F.2d 1192, 1204 (D.C. Cir., Spec.
8
Div., 1990) (per curiam), and inadequate documentation
‘‘makes it impossible for the court to verify the reasonable-
ness of the billings, either as to the necessity of the particular
service or the amount of time expended on a given legal
task.’’ In re Sealed Case, 890 F.2d at 455. In prior cases we
have imposed reductions of the final fee award for similar
insufficiencies, see, e.g., In re North (Gardner Fee Applica-
tion), 30 F.3d at 147–48; In re Meese, 907 F.2d at 1204, and
we will likewise impose a reduction here.
We will also make a deduction for the total amount of
$2,206.21 in expenses that Townsend seeks for reimburse-
ment. As Townsend points out, this amount is principally
associated with the production of thousands of pages of
documents in response to a grand jury subpoena. As the
subpoena was issued at the very beginning of the IC’s investi-
gation of Townsend, when the circumstances seemed to sug-
gest that this matter involved another gratuity to Espy, it
would appear that these expenses would have been incurred
even in the event of a less extensive investigation.
Taking all of the above into consideration, we will make a
partial award of attorneys’ fees to Townsend. We first
deduct all of the requested expenses, and then make a
reduction of 50% on the remainder to reflect the limited
extent to which Townsend has satisfied the ‘‘but for’’ require-
ment as well as the inadequacy of the billing records.
Conclusion
Townsend seeks reimbursement for attorneys’ fees in the
amount of $16,649.21. In accordance with the analysis set
forth above, we will make the following deductions from this
amount:
1. $2,206.21 for expenses.
2. 50% reduction reflecting the limited fulfillment of the
‘‘but for’’ requirement as well as the inadequacy of
the billing records.
For the reason set forth above, it is ordered that Townsend
be awarded $7,221.50 in reasonable attorneys’ fees and ex-
penses.