In Re: Madison Guaranty Savings & Loan

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Filed March 3, 2006

Division No. 94-1

IN RE: MADISON GUARANTY SAVINGS & LOAN

(THOMASSON 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 Patsy

Thomasson 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 Patsy Thomasson 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 March 3, 2006

Division No. 94-1

IN RE: MADISON GUARANTY SAVINGS & LOAN

(THOMASSON 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: Patsy Thomasson petitions this Court under

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 $31,273.51 that she claims were incurred

during and as a result of the investigation conducted by

independent counsel. Because we conclude that Thomasson has

not carried her burden of showing that her fees would not have

been incurred “but for” the requirements of the Act, we deny the

petition in its entirety.

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Background1

In May of 1993, William David Watkins (“Watkins”), who

was Assistant to the President for Management and

Administration, fired seven employees of the White House

Travel Office. Because of allegations of wrongdoing

surrounding the firings, various entities, including the Congress

and the General Accounting Office (“GAO”), undertook

investigations of the matter. Then-First Lady Hillary Rodham

Clinton (“Clinton”) was reportedly questioned during these

investigations concerning her role in the firings. She asserted

that she had little if any involvement. When questioned by the

GAO, Watkins also stated that Clinton was minimally involved.

These statements were put into doubt when drafts of a 1993

memo, written by Watkins and arguably contradicting his and

Clinton’s testimony, were produced by the White House. Patsy

Thomasson, Watkins’ deputy and the fee petitioner here,

apparently had some involvement in the preparation of the

memo. The GAO subsequently filed a criminal referral with the

Department of Justice (“DOJ”), suggesting that Watkins may

have made false statements when interviewed by the GAO.

Because Watkins was a covered person under the Independent

Counsel Act, see 28 U.S.C. § 591(b), the Attorney General

(“AG”) initiated a preliminary investigation pursuant to 28

U.S.C. § 592, in order to determine whether further investigation

was warranted. After making this determination, the AG

requested that this Court expand the Independent Counsel’s

(“IC” or “OIC”) jurisdiction to investigate, among other things,

whether Watkins or Clinton had made false statements to the

GAO regarding the Travel Office firings. As necessary to

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Substantial portions of the Background and Analysis sections

have been adopted verbatim from In re Madison Guaranty Savings &

Loan (Watkins Fee Application), 375 F.3d 1211, 1212-13 (D.C. Cir.,

Spec. Div., 2004) (per curiam).

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resolve these matters, the IC also received jurisdiction to

investigate related felony allegations on the part of any other

person.

The IC then conducted an extensive investigation of the

matter. During this investigation, Thomasson was called

initially as a witness to testify before the grand jury, but during

her testimony was informed that her status had changed to that

of subject. Soon thereafter a warrant was executed to search her

apartment for relevant documents. Ultimately, however, the

OIC determined that no charges would be brought concerning

the matter. Pursuant to § 593(f)(1) of the Act, Thomasson now

petitions the court for reimbursement of attorneys’ fees in the

amount of $31,273.51 that she claims were incurred in defense

of the IC’s investigation. As directed by section 593(f)(2) of the

Act, we forwarded copies of Thomasson’s fee petition to the AG

and the IC and requested written evaluations of the petition. The

court expresses its appreciation to the IC and the AG for

submitting these evaluations, which we have given due

consideration in arriving at the decision announced herein.

Arguments

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.

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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

[her] entitlement.” In re North (Reagan Fee Application), 94

F.3d 685, 690 (D.C. Cir., Spec. Div., 1996) (per curiam). There

appears to be little dispute that Thomasson was a “subject” and

that her fees were incurred during the IC’s investigation. And

although the parties are in contention as to whether the

attorneys’ fees for which Thomasson seeks reimbursement are

adequately documented, we need not reach that issue as

Thomasson has not satisfied the “but for” requirement.

* * * * * * * * *

Thomasson argues that of the four circumstances under

which this court has previously found the “but for” requirement

to be satisfied, see, e.g., In re Pierce (Olivas Fee Application),

178 F.3d 1350 (D.C. Cir., Spec. Div., 1999) (per curiam), two

are present in her case. First, she claims that the IC’s

investigation duplicated that of prior investigations, in particular

those of the House of Representatives, the GAO, special counsel

Fiske, and the DOJ, in that her testimony before the “grand jury

was similar, in nature, to prior testimony that [she] gave before

various committees, etc.” Second, she claims that the firing of

the travel office employees was an employment decision and

that it is quite rare for an employment decision to be the subject

of a criminal investigation. It was only investigated, according

to Thomasson, because of the involvement of “two high ranking

officials,” Watkins and Clinton. Citing In re Nofziger, 925 F.2d

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428 (D.C. Cir., Spec. Div., 1991), she argues that she therefore

qualifies under the “but for” requirement because “as a high

public official, [she] was investigated in a circumstance where

a private citizen would not have been.”

In disputing Thomasson’s claim to “but for” status, the OIC

in its evaluation of her fee petition initially notes that as this

matter concerned allegations of obstruction of justice and

perjury, “given the facts disclosed in January 1996, [an

investigation] would have been conducted even in the absence

of the Act by the Department of Justice, or some other agency.”

The OIC then addresses Thomasson’s duplication-of-

investigations claim, noting that in fact the OIC never

investigated the Travel Office firings but rather investigated

possible false statements made by Watkins and Clinton during

the previous investigations. As such, asserts the OIC, the IC’s

investigation was not duplicative of the others. As for

Thomasson’s argument that she was investigated in a manner in

which a private citizen would not have been, the OIC notes that

she was deemed a subject of the investigation because she

provided inconsistent and doubtful testimony, and

“[i]nconsistent testimony under oath will attract the attention of

a prosecutor whether the source of the testimony is a high public

official or private citizen.”

As did the OIC, the DOJ in its evaluation begins by stating

that “the record indicates that the allegations here--concerning

alleged lies to Congress, the GAO, and other investigative

bodies--are clearly the sort of matters that would be investigated

in the normal course by the Department of Justice.” Turning to

Thomasson’s claim that she satisfies the “but for” requirement

because the OIC’s investigation was a duplication of those of

other federal agencies, the DOJ notes that under this court’s

prior decisions, the “but for” test is not met when an

investigation is duplicative of other federal criminal

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investigations but only when it duplicates that of the preliminary

investigation required by the Act. Thomasson has therefore

failed the test, asserts the DOJ, because she “does not claim that

the investigation as it pertained to her was duplicative of a

preliminary investigation required by the Independent Counsel

Act.”

As for Thomasson’s claim that she was investigated in a

manner in which a private citizen would not have been, the DOJ

cites this court’s decision in In re Babbitt (Babbitt Fee

Application), 290 F.3d 386, 391 (D.C. Cir., Spec. Div., 2002),

where it was noted that if the high profile identity of those

involved would have resulted in a similar investigation by the

DOJ, then the “but for” test is not met. The DOJ asserts that

Thomasson’s fee application makes only the general claim that

an employment decision would not normally be the subject of a

criminal investigation and “does not attempt to show that a

regular prosecutor, faced with these kinds of allegations in

similar circumstances, would not have looked into this matter.”

Analysis

Thomasson’s fee application does not pass the “but for”

test. In his fee application Watkins made claims very similar to

Thomasson’s in his bid to show that he fulfilled the “but for”

requirements. See Watkins, 375 F.3d at 1214. In rejecting his

claims, this court reasoned in similar fashion to that stated

below. Id. at 1215-16.

Thomasson’s argument that she fulfills the “but for” test

because the IC’s investigation duplicated prior inquiries is not

supported by this court’s prior decisions. Although in the past

we have awarded fees when the independent counsel’s

investigation constituted a substantial duplication of the

preliminary investigation of the DOJ, see In re Olson (Olson

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Fee Application), 884 F.2d 1415, 1420 (D.C. Cir., Spec. Div.,

1989) (per curiam) (IC’s investigation “necessarily duplicated

ground that had been covered by the preliminary investigation

of the Department of Justice” (emphasis omitted)); In re Olson

(Perry Fee Application), 892 F.2d 1073, 1074 (D.C. Cir., Spec.

Div., 1990) (per curiam) (fee applicant “was being subjected to

expenses for a duplicative investigation that he would not have

been subjected to in the absence of the Ethics in Government

Act”), we have specifically held that it is only duplication of the

preliminary investigation by the DOJ that merits fee

reimbursement, and duplication by the IC of other investigations

is not sufficient. In re Pierce (Sanders Fee Application), 198

F.3d 899, 904 (D.C. Cir., Spec. Div., 1999) (per curiam); In re

Pierce (Seligman Fee Application), 201 F.3d 473, 476 (D.C.

Cir., Spec. Div., 2000) (per curiam). As the DOJ points out,

Thomasson makes no claim to any such duplication.

Thomasson’s further argument that she passes the “but for”

test because an ordinary citizen would never have been

subjected to an investigation such as she was is also without

merit. In In re Madison Guaranty Savings & Loan (Clinton Fee

Application), 334 F.3d 1119, 1126 (D.C. Cir., Spec. Div., 2003)

(per curiam), we rejected a similar argument, noting that the test

is not what would have happened if the fee petitioners “were

private citizens, but rather what would have happened if there

had been no independent counsel statute.” As both the IC and

the DOJ argue, the allegations here of obstruction of justice and

perjury would have been investigated with or without the

Independent Counsel statute.

Conclusion

The petition of Patsy Thomasson for reimbursement of

attorneys’ fees is denied for failure to satisfy the “but for”

requirement of the Act.