In re Madison Guaranty Savings & Loan

439 F.3d 718, 2006 WL 250237
CourtCourt of Appeals for the D.C. Circuit
DecidedFebruary 3, 2006
DocketNo. 94-1
StatusPublished

This text of 439 F.3d 718 (In re Madison Guaranty Savings & Loan) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Madison Guaranty Savings & Loan, 439 F.3d 718, 2006 WL 250237 (D.C. Cir. 2006).

Opinion

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

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.

Opinion for the Special Court filed PER CURIAM.

ON APPLICATION FOR ATTORNEYS’ FEES

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.

[720]*720Background

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.

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.

[1-3] 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) (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 [721]*721being 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 (hereinafter “IC” or “OIC”) would have been terminated much sooner,

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Related

Samuel R. Pierce
178 F.3d 1350 (D.C. Circuit, 1999)
In Re Theodore B. OLSON
884 F.2d 1415 (D.C. Circuit, 1989)
In Re Sealed Case
890 F.2d 451 (D.C. Circuit, 1989)
In Re Franklyn C. NOFZIGER
925 F.2d 428 (D.C. Circuit, 1991)
In Re Oliver L. North (Dutton Fee Application)
11 F.3d 1075 (D.C. Circuit, 1993)
In Re Oliver L. North (Bush Fee Application)
59 F.3d 184 (D.C. Circuit, 1995)
In Re Oliver L. North (Reagan Fee Application)
94 F.3d 685 (D.C. Circuit, 1996)
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319 F.3d 526 (D.C. Circuit, 2003)

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Bluebook (online)
439 F.3d 718, 2006 WL 250237, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-madison-guaranty-savings-loan-cadc-2006.