United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed February 3, 2006
Division No. 94-1
IN RE: MADISON GUARANTY SAVINGS & LOAN
(CABE 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 petition of Gloria B.
Cabe 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 petition is not well taken,
it is hereby
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ORDERED, ADJUDGED, and DECREED that the
petition of Gloria B. Cabe for attorneys’ fees that she incurred
during the Independent Counsel’s investigation be denied.
PER CURIAM
For the Court:
Mark J. Langer, Clerk
By:
Marilyn R. Sargent
Chief Deputy Clerk
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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed February 3, 2006
Division No. 94-1
IN RE: MADISON GUARANTY SAVINGS & LOAN
(CABE 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: Gloria B. Cabe petitions this Court under the
Ethics in Government Act of 1978, as amended, 28 U.S.C. §
593(f) (the Act), for reimbursement of attorneys’ fees in the
amount of $28,135.57 that she claims were incurred during and
as a result of the investigation conducted by independent
counsel. Because we conclude that Cabe 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.
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Background
In 1990 William Jefferson Clinton was running for
reelection as Governor of Arkansas. To this end, the Clinton for
Governor campaign opened an account at the Perry County
Bank (“PCB”) in Perryville, Arkansas. One of the two
signatories for the account was Gloria B. Cabe, Clinton’s
gubernatorial campaign manager and the fee petitioner here.
During 1990 the campaign made two cash withdrawals from the
account in excess of $10,000; PCB, however, did not file
currency transaction reports with the Internal Revenue Service
for either withdrawal as required by law.
In 1994 this failure to file became known to regulatory
special counsel Robert Fiske, who was at that time conducting
a criminal investigation in Arkansas. Prosecutors assigned to
Fiske’s office began looking into the two transactions,
interviewing individuals involved, including Cabe. When the
investigation was turned over to Kenneth W. Starr after he was
appointed statutory independent counsel later in 1994, Cabe was
called on several occasions to testify before the grand jury. On
one of these occasions she refused to testify, asserting her right
against self-incrimination; consequently, she was given an
immunity order compelling her testimony. Although several
other individuals involved in the matter were indicted, Cabe was
not.
Pursuant to § 593(f)(1) of the Act, Cabe now petitions the
court for reimbursement of attorneys’ fees in the amount of
$28,135.57 that she claims were incurred during and as a result
of the Independent Counsel’s investigation.
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Discussion
Unique in the criminal law 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. § 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
immunity 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 reimbursement only for attorneys’ fees that
survive an elemental analysis determining whether the petitioner
is the “subject” of the independent counsel’s investigation,
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). Although
there are several minor areas of contention among the parties as
to Cabe’s eligibility for reimbursement, the one major issue is
whether or not she has satisfied the “but for” requirement.
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)
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(per curiam). The purpose of awarding only fees that would not
have been incurred “but for” the Act is to ensure that “officials
who are investigated by independent counsels will be subject
only to paying those attorneys’ 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. 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, “[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 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–one with a high component of
speculation. In part, though, it is difficult because the law
contemplates that it should be difficult and that such fees will
not be a common thing. In re Olson, 884 F.2d 1415, 1420 (D.C.
Cir., Spec. Div., 1989) (“The court is admonished to award
reimbursement for attorneys’ fees ‘in only rare instances’ for
‘extraordinary expenses,’ ‘sparingly’. . . . ”) (quoting S. Rep. 97-
496, 97th Cong., 2d Sess. 19 (1982), reprinted in 1982
U.S.C.C.A.N. 3537, 3555). As we stated above, the
contemplation 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.
Cabe argues that in the absence of the Act, the investigation
of her by the Office of Independent Counsel Kenneth Starr
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(hereinafter “IC” or “OIC”) would have been terminated much
sooner, see, e.g., In re Pierce (Abrams Fee Application), 190
F.3d 586, 592 (D.C. Cir., Spec. Div., 1999), and consequently
her need for legal counsel would have been significantly
diminished. In support of this argument, Cabe claims that the
OIC refused to provide to her attorney specific details about the
information sought from her, refused to interview her in the
presence of her attorney, and refused to interview her subject to
a “no direct use” letter. According to Cabe, “[s]uch
arrangements are a common DOJ [Department of Justice] tool
for gaining witness information, working with potential
cooperating individuals, and revising or confirming status
determinations,” but the OIC had informed Cabe’s attorney that
it was their “policy not to engage such tactics.” Cabe further
claims that the OIC attorneys conducting the grand jury
proceedings “bellowed at her, derided her answers . . . and
asserted that she was lying,” and “subjected [her] to repeated
intemperate outbursts.” She asserts that this “was not conduct
one would or should expect of DOJ prosecutors,” and that “[i]n
an ordinary DOJ investigation . . ., prosecutors likely would
have pursued any one of a number of means of eliciting her
knowledge, refreshing her recollection and employing her to the
limits of her utility as a witness . . . .” Instead, the OIC
prosecutors “chose to antagonize and alienate” her and elicited
answers from her in the grand jury only for “the predominant
purpose of challenging her veracity.”
The Independent Counsel, in evaluating Cabe’s fee
application, takes issue with her argument that if the DOJ had
handled the matter the investigation would have been conducted
differently. First, the IC argues that not only would the DOJ
have investigated the matter, but that in fact it did investigate, as
it was the original investigating agency under regulatory counsel
Fiske. Second, the IC notes that Cabe’s first two interviews
were conducted in the summer of 1994, during the time when
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Fiske, and thus the DOJ, was conducting the investigation. And
the IC goes on to note that the prosecutors who conducted the
investigation of this matter under IC Starr were in fact the same
DOJ prosecutors who had conducted the investigation under
regulatory counsel Fiske. The IC maintains that in light of these
facts Cabe cannot plausibly contend that, had the investigation
remained within the jurisdiction of the Department of Justice,
the prosecutors would have behaved any differently.
In its evaluation the DOJ also asserts that Cabe does not
pass the “but for” test. To begin, the DOJ notes that when IC
Starr assumed jurisdiction of this matter there was in fact an
ongoing Justice Department investigation of the failure of the
1990 Clinton gubernatorial campaign to file currency transaction
reports. And the DOJ further notes that this investigation led to
indictments of several individuals. With respect to Cabe’s
specific arguments, the DOJ contends that “[e]ssentially, she
claims that because she was treated antagonistically as a
potential subject rather than cooperatively as a witness, the ‘but
for’ test is met.” According to the DOJ, “[t]his claim is
meritless, as the status of an applicant as a subject or a witness
is not and has never been relevant to the ‘but for’ inquiry,” and
under Cabe’s reasoning any subject would by necessity meet the
“but for” test.
Analysis
In her petition, Cabe is apparently claiming that she fulfills
the “but for” requirement because an investigation of the matter
by the Department of Justice instead of an independent counsel
would have resulted in a different outcome for her. But as both
the IC and the DOJ argue, in all probability the DOJ in the
absence of the Act would have conducted an investigation very
similar to the one actually conducted by the IC. And even if
Cabe could show that the DOJ would have conducted a different
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investigation, this is of no consequence concerning the “but for”
requirement. In In re Espy (Kearney Fee Application), 319 F.3d
526 (D.C. Cir., Spec. Div., 2003)(per curiam), the fee applicant
argued in a similar fashion that she fulfilled the “but for”
requirement because only an independent counsel would have
repeatedly questioned her and only an independent counsel
would have made her a subject. In rejecting that argument, we
cited In re Pierce (Kisner Fee Application), 178 F.3d 1356, 1360
(D.C. Cir., Spec. Div., 1999)(per curiam), in which it was noted
that “[w]e have repeatedly held . . . that subjects of an
independent counsel investigation do not automatically meet the
‘but for’ test simply because the investigation was conducted by
an independent counsel under the Act.” Kearney, 319 F.3d at
530-31. Indeed, this Court instead has noted elsewhere that
attorneys’ fees are to be awarded to those who have
incurred the fees not because of the Act itself (and
therefore the appointment of the independent counsel
per se), but because of the requirements of the Act. In
re Nofziger, 925 F.2d 428, 445 (D.C. Cir., Spec. Div.,
1991). And requirements “refers to the special
limitations and procedures established by the Act,”
e.g., the two-step investigatory procedure by the
Attorney General and the restrictions on the Attorney
General in complying with that procedure, id. . . . .
In re Pierce (Olivas Fee Application), 178 F.3d 1350, 1355
(D.C. Cir., Spec. Div., 1999) (per curiam)(emphases in original).
Cabe is therefore not eligible for reimbursement of attorneys’
fees as she has made no claim that any of the special limitations
or procedures established by the Act caused her to incur the
attorneys’ fees sought.
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Conclusion
The petition of Gloria Cabe for reimbursement of attorneys’
fees is denied for failure to satisfy the “but for” requirement of
the Act.