The opinion
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 February 14, 2003
Division No. 94-2
IN RE: ALPHONSO MICHAEL (MIKE) ESPY
(KEARNEY 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 Patricia
Kearney for reimbursement of attorneys’ fees and costs pur-
suant 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 Kearney for attorneys’ fees that she incurred
2
during the investigation by Independent Counsel Donald C.
Smaltz be denied.
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 February 14, 2003
Division No. 94-2
IN RE: ALPHONSO MICHAEL (MIKE) ESPY
(KEARNEY 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 of the Special Court filed Per Curiam.
PER CURIAM: Patricia Kearney 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 $61,331.21 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 Kearney has not carried
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
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
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
to USDA officials, the concealment of gratuities from federal
investigators, and election law violations. Ultimately, the
IC’s investigation resulted in the indictment of nineteen indi-
viduals and business entities, thirteen of whom were convict-
ed of criminal misconduct. One of those individuals was
Richard Douglas, an executive and lobbyist for Sun–Diamond
Growers of California. The IC obtained a conviction of
Douglas for giving Espy gratuities, which was later over-
turned on venue grounds. Douglas subsequently pled guilty
to false statements offenses involving the gratuities.
Patricia Kearney, the fee applicant here, is a former senior
employee of the USDA who subsequently opened her own
consulting company. She was also the girlfriend of Richard
Douglas during the time period under investigation by the IC.
As such, she was apparently present with Douglas and Espy
during many of the incidents investigated by the IC. Kear-
ney was questioned by the IC on her knowledge of these
events and subsequently became a subject of the IC’s investi-
gation after the IC became aware of two questionable events:
a sole-source contract that her consulting firm had with the
USDA and her lobbying of the USDA with Douglas on a land
swap transaction. Kearney was informed of her subject
status in October 1996. She was not indicted, and in July
1997 was granted use immunity. She seeks reimbursement
of $61,331.21 for fees incurred from September 1995 to July
1998.
3
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 Kearney fails
to satisfy the third requirement, known as the ‘‘but for’’ test,
we need not address the remaining requirements.
**********
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 that she would have in-
4
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
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.
Kearney argues that in effect her case falls into categories
(3) and (4). As to category (3), Kearney claims that her case
5
could have been disposed of at an early stage of the investiga-
tion in that ‘‘she was subjected to relentless interrogations
and grand jury appearances, which appear unnecessary TTTT
She should have been considered a witness and remained so,
from the very outset in September 1995, at an early stage of
the investigation, and not have been investigated as a sub-
ject.’’ Furthermore, Kearney contends that ‘‘the interroga-
tion and investigation of [her] expanded, and she was continu-
ally interrogated about the same subjects TTTT Therefore
there are ‘unique special factual features’ that ‘but for’ the
Act would have resulted in a quicker termination of the
investigation as to her.’’
With respect to category (4), Kearney contends that in the
Espy investigation high public officials or derivative subjects
were investigated under the Act in circumstances where
private citizens would not have been investigated. She claims
that ‘‘[t]he U.S. Attorneys’ office would not have consumed
the time and attention to investigate Ms. Kearney, but rather
TTT would have made her a witness from the outset. She
would not have been made a subject, but for her intimate and
personal relationships with Mr. Douglas and Mr. Espy.’’
Citing to In re Meese, she argues that ‘‘[l]ike Meese, in which
there was an extra rigorous application of the law by the OIC,
the continual intensive investigation of Ms. Kearney over a
period exceeding three years was likewise an extraordinary,
rigorous treatment and investigation by the OIC.’’
Additionally, Kearney argues strongly that she should be
reimbursed for her attorneys’ fees because her status was
changed from witness to subject. She states that she ‘‘should
only have been a witness, and that absent the zeal and
unlimited funding of the OIC, she would have been inter-
viewed as a witness once or twice and appeared before the
grand jury only once.’’ She likens her case to In re North
(Schultz Fee Application), 8 F.3d 847, 851 (D.C. Cir., Spec.
Div., 1993) (per curiam), where the Court found that ‘‘it is not
reasonable to expect that a professional prosecutor, as op-
posed to an independent 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
6
an investigation.’’ Kearney claims that ‘‘[s]imilarly, [she]
could well have been justified in thinking that she was merely
a witness in September 1995 when first contacted by OIC
investigators. And like Mr. Schultz TTT she was transformed
into a subject over two years after the OIC began its investi-
gation.’’ She states in conclusion that ‘‘[w]ith the OIC, Ms.
Kearney became a subject, and but for the reach and zeal of
the OIC should not have been one. Thus she incurred legal
fees of an extraordinary amount, for which she should be
reimbursed.’’
In their evaluations of her fee application, both the Inde-
pendent Counsel and the Department of Justice question
whether Kearney satisfies the ‘‘but for’’ requirement. The IC
contends that Kearney argues only that she was investigated
more vigorously than she would have been by a U.S. Attorney
and that this is not sufficient; she instead has to show that
the special limitations and procedures of the Act forced her to
incur legal costs that she otherwise would not have incurred.
The IC cites to In re North (Regan Fee Application), 72 F.3d
891 (D.C. Cir., Spec. Div., 1995) (per curiam), and Reagan, 94
F.3d at 685, for the proposition that just because the allega-
tions in question would not have been investigated in the
specific fashion of the independent counsel does not mean
that the ‘‘but for’’ requirement is satisfied.
Additionally, the IC states that ‘‘[a]s a result of her proxim-
ity to the events under investigation, Kearney almost certain-
ly would have been a witness, regardless of the degree to
which the investigating authority was interested in her activi-
ties and regardless of who was doing the investigating.’’ The
IC notes that Kearney had been awarded a sole-source USDA
contract in possible violation of federal contracting laws or
regulations, and that Kearney along with Douglas had direct
involvement in lobbying Espy concerning a questionable
transaction known as the Elsmere land swap.
After considering Kearney’s fee application and the IC’s
and the DOJ’s evaluations, we find that Kearney does not
fulfill the ‘‘but for’’ requirement. In the course of arguing
otherwise, Kearney substantially relies on the rigor of the
7
investigation conducted by the Independent Counsel. She
states that only an independent counsel would have repeated-
ly questioned her and that only an independent counsel would
have made her a subject. But as this Court stated in In re
Pierce (Kisner Fee Application), 178 F.3d 1356, 1360 (D.C.
Cir., Spec. Div., 1999) (per curiam), ‘‘[w]e have repeatedly
held TTT 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.’’ In In re North (Garrett Fee Application), 46
F.3d 1192, 1194 (D.C. Cir., Spec. Div., 1995) (per curiam), the
fee petitioner also argued that he was eligible for reimburse-
ment of attorneys’ fees because he was caught in an indepen-
dent counsel investigation that was ‘‘unprecedented both in
terms of its scope and intensity.’’ The Court stated that it
could not ‘‘accept this as a basis for awarding attorneys’ fees.
The purpose of the Act is to promote a vigorous and thorough
investigation of criminal allegations by the independent coun-
sel.’’ Id. And the Court has noted elsewhere that such a
vigorous and thorough investigation may indeed increase the
costs to subjects of independent counsel investigations in
contrast to the costs that would have been incurred in a
similar investigation conducted outside the Act, but that
Congress had not made allowance for reimbursement of such
inherent costs of independent counsel investigations. See
Nofziger, 925 F.2d at 445.
Furthermore, it does not appear to be the case that, as
claimed by Kearney, ‘‘only the OIC would have been so
relentless in its investigation of [her].’’ Kearney asks the
question, ‘‘would a prosecutor, not an OIC, have made the
same exhaustive repeated investigations of Ms. Kearney?’’
In this particular, Kearney’s application is analogous to the
various fee applicants in the independent counsel proceeding
directed toward former Secretary of Housing and Urban
Development Samuel Pierce. See In re Pierce, 213 F.3d 713
(D.C. Cir., Spec. Div., 2000) (per curiam). In dealing with
those applications, we noted that ‘‘evidence of fundamental
corruption of a federal housing program and such crimes as
perjury, bribery, and obstruction of justice TTT would have
8
been investigated for a significant period of time by any
professional or politically appointed public prosecutor.’’ Id.
at 718. Just so here.
The independent counsel was appointed to investigate cred-
ible allegations of corruption. The investigation 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 Douglas for allegedly giving them. And there
appears to be no reason why the DOJ would not have
investigated Kearney in the same manner as the IC. She
herself states that she had ‘‘intimate and personal relation-
ships with Douglas and Mr. Espy,’’ and ‘‘was present with
Douglas and Espy at many of the incidences investigated.’’
To paraphrase Nofziger, there appears to be nothing in the
record or in the circumstances of Kearney’s alleged offenses
that indicates that the Department of Justice, if freed of the
restrictions of the Act, would have subjected her to a lesser
investigation. See Nofziger, 925 F.2d at 439.
CONCLUSION
The petition of Patricia Kearney for reimbursement of
attorneys’ fees is denied for failure to comply with the ‘‘but
for’’ requirement of 28 U.S.C. § 593(f)(1).