167 F.3d 552 (D.C. Cir. 1999), 98-3080, United States v. Hubbell

Docket Nº:98-3080.
Citation:167 F.3d 552
Party Name:99-632, UNITED STATES of America, Appellant, v. Webster L. HUBBELL, Suzanna W. Hubbell, Michael C. Schaufele and Charles C. Owen, Appellees.
Case Date:January 26, 1999
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

Page 552

167 F.3d 552 (D.C. Cir. 1999)


UNITED STATES of America, Appellant,


Webster L. HUBBELL, Suzanna W. Hubbell, Michael C. Schaufele

and Charles C. Owen, Appellees.

No. 98-3080.

United States Court of Appeals, District of Columbia Circuit

January 26, 1999

Argued Oct. 21, 1998.

Page 553

[Copyrighted Material Omitted]

Page 554

Appeal from the United States District Court for the District of Columbia (No. 98cr00151-01).

Kenneth W. Starr, Independent Counsel, argued the cause for appellant. With him on the briefs were David G. Barger, Joseph M. Ditkoff, and Darrell M. Joseph, Associate Independent Counsels. Stephen J. Binhak, Associate Independent Counsel, entered an appearance.

John W. Nields, Jr. argued the cause for appellees Webster L. Hubbell and Suzanna W. Hubbell. K. Chris Todd argued the cause for appellee Michael C. Schaufele. With them on the brief were Laura S. Shores, Wan J. Kim and Drake Mann, counsel for appellee Charles C. Owen.

J. Douglas Wilson, Attorney, U.S. Department of Justice, argued the cause for amicus curiae United States acting through the Attorney General.

Before: WALD, WILLIAMS and TATEL, Circuit Judges.

Opinion for the Court filed PER CURIAM. [*]

Separate opinion concurring in Part I filed by Circuit Judge WALD.

Separate opinion dissenting from Part I filed by Circuit Judge TATEL.

Separate opinion dissenting from Part II filed by Circuit Judge WILLIAMS.


All defendants--Webster L. and Suzanna W. Hubbell, Michael C. Schaufele, and Charles C. Owen--moved in the district court to dismiss an indictment charging tax evasion and related crimes on the ground that the indictment was beyond the prosecutorial jurisdiction of Independent Counsel Kenneth W. Starr. In addition, Webster Hubbell moved for dismissal on the theory that prosecution necessarily would depend on evidence produced under compulsion and used in violation of the Fifth Amendment and the immunity granted him under 18 U.S.C. § 6002. The court granted both motions. 11 F.Supp.2d 25 (D.D.C.1998). We reverse both decisions and remand for proceedings consistent with this opinion.


On August 5, 1994 this court's Special Division for the Purpose of Appointing Independent Counsels ("Special Division"), upon request from the Attorney General, appointed Kenneth W. Starr as Independent Counsel. It gave Independent Counsel Starr jurisdiction to investigate

whether any individuals or entities have committed a violation of any federal criminal law, other than a Class B or C misdemeanor or infraction, relating in any way to James B. McDougal's, President William

Page 555

Jefferson Clinton's, or Mrs. Hillary Rodham Clinton's relationships with Madison Guaranty Savings & Loan Association, Whitewater Development Corporation, or Capital Management Services, Inc.

as well as

other allegations or evidence of violation of any federal criminal law, other than a Class B or C misdemeanor or infraction, by any person or entity developed during the Independent Counsel's investigation referred to above and connected with or arising out of that investigation

and, more specifically,

any violation of 28 U.S.C. § 1826, or any obstruction of the due administration of justice, or any material false testimony or statement in violation of federal criminal law, in connection with any investigation of the matters described above.

The Special Division also gave the Independent Counsel jurisdiction to seek indictments against and to prosecute

any persons or entities involved in any of the matters described above, who are reasonably believed to have committed a violation of any federal criminal law arising out of such matters, including persons or entities who have engaged in an unlawful conspiracy or who have aided or abetted any federal offense.

Finally, apparently summarizing the above grants, the Special Division ordered that the Independent Counsel have

prosecutorial jurisdiction to fully investigate and prosecute the subject matter with respect to which the Attorney General requested the appointment of independent counsel, as hereinbefore set forth, and all matters and individuals whose acts may be related to that subject matter, inclusive of authority to investigate and prosecute federal crimes (other than those classified as Class B or C misdemeanors or infractions) that may arise out of the above described matter, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses.

These grants of authority were under 28 U.S.C. § 593(b)(1), a provision of the Ethics in Government Act, which calls on the Special Division, on application of the Attorney General, to "appoint an appropriate independent counsel and ... define that independent counsel's prosecutorial jurisdiction." Besides that authority--and authority to expand an independent counsel's jurisdiction on application of the Attorney General, see id.; see also id. at § 592(c)(2) (directing Attorney General to follow same procedure as to new information)--the Act authorizes an independent counsel to ask the Special Division to "refer" to him "matters related to the independent counsel's prosecutorial jurisdiction." 28 U.S.C. § 594(e). As a result of such a request, the Special Division on September 1, 1994 made a referral of matters concerning Webster L. Hubbell's billing and expense practices while a member of the Rose Law Firm. Hubbell pled guilty to two felony counts concerning these matters in October of that year; in the plea agreement Hubbell promised to cooperate "by providing full, complete, accurate and truthful information" to the Independent Counsel about Madison, Whitewater, and Capital Management (hereinafter collectively "Whitewater").

The Independent Counsel discovered in 1996 that Hubbell apparently had begun to receive substantial payments as consulting fees in 1994. According to the present indictment, these payments included $100,000 from Hong Kong China Limited (controlled by the Riady family through the Lippo Group) and $62,775 from Revlon. 1 Not satisfied that Hubbell had been fully cooperating, the Independent Counsel sought, as he says in his brief, "to determine whether a relationship

Page 556

existed between those payments and Mr. Hubbell's testimony with respect to Whitewater and Madison-related matters."

After the investigation had progressed considerably, the Independent Counsel sought another § 594(e) referral from the Special Division. It granted the referral on January 6, 1998, encompassing prosecutorial jurisdiction over:

(i) whether Webster L. Hubbell or any individual or entity violated any criminal law, including but not limited to criminal tax violations and mail and wire fraud, regarding Mr. Hubbell's income since January 1, 1994, and his tax and other debts to the United States, the State of Arkansas, the District of Columbia, the Rose Law Firm, and others; and

(ii) whether Webster L. Hubbell or any individual or entity violated any criminal law, including but not limited to obstruction of justice, perjury, false statements, and mail and wire fraud, related to payments that Mr. Hubbell has received from various individuals and entities since January 1, 1994.

A federal grand jury indicted Hubbell and the other defendants on April 30, 1998. The indictment alleged conspiracy, mail and wire fraud, and various tax offenses, all concerning attempts to keep Hubbell's income--including, in material part, the consulting fees--from creditors and the IRS.

On July 1, 1998 the district court granted defendants' motion to dismiss the indictment in its entirety as beyond the authority of the Independent Counsel. 11 F.Supp.2d at 27.

* * *

The threshold issue before us is the effect, if any, of the Special Division's January 6, 1998 referral order ("the referral"). The Independent Counsel argues that the referral is either unreviewable or is entitled to deference from this court; defendants--and the Department of Justice in its amicus brief--argue that it is irrelevant. No one suggests that the indictment is beyond the scope of the referral.

Referrals from the Special Division are authorized by 28 U.S.C. § 594(e), which provides: "An independent counsel may ask the Attorney General or the division of the court to refer to the independent counsel matters related to the independent counsel's prosecutorial jurisdiction, and the Attorney General or the division of the court, as the case may be, may refer such matters." The Supreme Court said in Morrison v. Olson, 487 U.S. 654, 108 S.Ct. 2597, 101 L.Ed.2d 569 (1988), that "this provision does not empower the court to expand the original scope of the counsel's jurisdiction ... [but] simply to refer matters that are 'relate[d] to the independent counsel's prosecutorial jurisdiction' as already defined." Id. at 680 n. 18, 108 S.Ct. 2597.

The referral here, then, is simply an explicit determination by the Special Division that the original grant of jurisdiction implicitly included the matters referred. See In re Espy, 80 F.3d 501, 507 (D.C.Cir.1996); see also Morrison, 487 U.S. at 685 n. 22, 108 S.Ct. 2597. The Independent Counsel argues for unreviewability of this determination by analogy to what he regards as comparable decisions of the Attorney General. For such unreviewable counterparts he points first to the decisions of the Attorney General and her subordinates to have "Main Justice" prosecute certain cases rather than a local U.S. Attorney's Office and second to the Attorney General's own referral authority under § 594(e). In United States v. Tucker, 78 F.3d 1313 (8th Cir.1996), the Eighth Circuit found the latter unreviewable, relying in part on the analogy to the Main Justice/U.S. Attorney...

To continue reading