Meese, In re

• Decision Date: 12 July 1990
• Docket Number: No. 87-1,87-1
• Citation: 907 F.2d 1192
• Parties: In re Edwin MEESE III. Division . (Division for the purpose of Appointing Independent Counsel, Ethics in Government Act of 1978, as Amended)
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1192

907 F.2d 1192

285 U.S.App.D.C. 186

In re Edwin MEESE III.

Division No. 87-1.

United States Court of Appeals, District of Columbia Circuit.

(Division for the purpose of Appointing Independent Counsel,

Ethics in Government Act of 1978, as Amended).

July 12, 1990.

Before MacKINNON, Presiding, BUTZNER and PELL, Senior circuit judges.

PER CURIAM:

On May 11, 1987 the Acting Attorney General, by letter, referred the matter of Attorney General Edwin Meese III and his association with several individuals involved in "Welbilt Electronic Die Corporation," also known as Wedtech Corporation, to Independent Counsel James C. McKay, Esquire for investigation (hereafter "the referral"). The referral followed immediately upon a letter request by Meese dated the same date as the referral. At the time of the referral Mr. McKay was conducting an investigation into Franklyn C. Nofziger's representation of Wedtech Corporation At the outset the independent counsel investigation centered on whether Meese as Counselor to the President violated the conflict of interest laws in assisting the minority-owned Wedtech Corporation in its efforts to obtain a government defense contract. Independent Counsel later requested the Special Division to define his prosecutorial jurisdiction with respect to Meese, and the court complied. ³ The resulting investigation inquired into the Wedtech matter and then expanded extensively into six non-Wedtech matters. ⁴ It became very intensive and eventually continued for fourteen months. Upon the completion of the investigation, "no indictment [was] brought" against Mr. Meese. Now, as authorized by Sec. 593(f)(1) of the Independent Counsel Reauthorization Act of 1987, ⁵ Meese applies to the court for an award of $575,598.01 in attorneys' fees and costs incurred as a result of the investigation to which he was subjected. The court approves an award of $460,509.07.

                and Comet Rice, Inc. 1   Giving rise to the referral for investigation of Mr. Meese were the circumstances of his official and "personal and/or financial relationships with ... [Wedtech Corporation, Franklyn C. Nofziger,] E. Robert Wallach, and W. Franklyn Chinn ..." 2 during the time that Meese had been serving as Counselor to the President.  The referral did not request a focused investigation into any specific criminal offense but rather requested a generalized investigation into possible violations of all eleven of the federal conflict of interest laws, i.e., 18 U.S.C. Secs. 201-211
                

I.

Independent Counsel McKay began his investigation of Meese on May 11, 1987 under the terms of the Ethics in Government Act Amendments of 1982 as approved January 3, 1983 (96 Stat. 2039) (hereafter "the 1982 Act"). The 1982 Act was followed by the enactment on December 15, 1987 of the Independent Counsel Reauthorization Act of 1987 (hereafter "the 1987 Act" and "the Act") (101 Stat. 1293). It is the terms of Section 593(f)(1) of the 1987 Act that determine whether "reasonable" attorneys' fees are to be awarded in this case: ⁶

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 28 U.S.C. Sec. 593(f)(1) (emphasis added).

which would not have been incurred but for the requirements of this chapter.

We have recently outlined the standards for awarding attorneys' fees in independent counsel investigations. These standards require proof that the fees are "reasonable," adequately documented, and would not have been incurred "but for" the Act. See In re Donovan, 877 F.2d 982, 994 (D.C.Cir.1989); In re Olson, 884 F.2d 1415, 1428 (D.C.Cir.1989); In re Sealed Case, 890 F.2d 451 (D.C.Cir.1989); In re Olson/Perry, 892 F.2d 1073 (D.C.Cir.1990). Satisfying the "but for" requirement is the most difficult. The right to recover attorneys' fees in such cases against the Government is based on a waiver of the sovereign immunity of the United States and that standard must be strictly construed against the application and in favor of the sovereign. Ruckelshaus v. Sierra Club, 463 U.S. 680, 685, 103 S.Ct. 3274, 3277, 77 L.Ed.2d 938 (1983); McMahon v. United States, 342 U.S. 25, 27, 72 S.Ct. 17, 19, 96 L.Ed. 26 (1951); In re Donovan, supra, at 994; In re Olson, supra, at 1428; In re Jordan, 745 F.2d 1574, 1576 (D.C.Cir.1984).

A. The "But For" Requirement

The Ethics in Government Act of 1978 ⁷ was amended by the 1982 Act to provide that subjects of independent counsel investigations, who are not indicted, may be reimbursed for all or part of their attorneys' fees that "would not have been incurred in the absence of the special prosecutor [now independent counsel] law." S.Rep. No. 496, 97th Cong., 2d Sess. 18 (1982), U.S.Code Cong. & Admin.News 1982, pp. 3537, 3554; 28 U.S.C. Sec. 593(g) (1982). This provision for reimbursement was included because:

Congress learned that certain government officials ... had been subjected to investigations by independent counsels that the Department of Justice would not have conducted had these officials been private citizens.... Thus, these officials were subjected to a harsher standard than ordinary citizens and incurred legal expenses no ordinary citizen would have incurred, but for the independent counsel statute. In such cases, reasonable attorney fees should be awarded.

H.R.Conf.Rep. No. 452, 100th Cong., 1st Sess. 31 (1987), U.S.Code Cong. & Admin.News 1987, pp. 2150, 2197 (emphasis added).

In addition to adding the provision for the reimbursement of attorneys' fees, Congress in the same Act raised the standards required for applications by the Attorney General to the Special Division for the appointment of independent counsels.

Prior to the 1982 Act, following a preliminary investigation, the Attorney General was required to request the appointment of an independent counsel unless the allegations were "so unsubstantiated that no further investigation or prosecution is warranted." 28 U.S.C. Sec. 592(b)(1) (Supp. II 1978). The amendments brought by the 1982 Act, however, raised that standard to provide:

If the Attorney General, upon completion of the preliminary investigation, finds reasonable grounds to believe that further investigation or prosecution is warranted, ... then the Attorney General shall apply to the division of the court for the appointment of a [sic] independent counsel....

28 U.S.C. Sec. 592(c)(1) (1982) (emphasis added). ⁸ Requiring a finding of reasonable grounds substantially changed the nature and amount of evidence required to support a request for the appointment of an independent counsel.

In adding such change, Congress further directed the Attorney General to exercise This brought into play the policies of the Department of Justice, insofar as they relate to "further investigation[s]," including the following:

                the "reasonable discretion [that] is regularly practiced by the Department of Justice, U.S. Attorneys, and prosecutors throughout the federal system," and to "comply with the written or other established policies of the Department of Justice with respect to the enforcement of criminal laws."    S.Rep. No. 496, supra, at 14, 15, U.S.Code Cong. & Admin.News 1982, pp. 3550, 3551;  see also 28 U.S.C. Sec. 592(c)(1) (1982)
                

1. If the attorney for the government has probable cause to believe that a person has committed a federal offense within his jurisdiction, he should consider whether to:

(a) request or conduct further investigation; ...

DEPARTMENT OF JUSTICE, PRINCIPLES OF FEDERAL PROSECUTION, p. 5 (1980) (emphasis added).

Joining the "reasonable grounds" standard of the 1982 Act, with the Departmental policy of "probable cause" as the standard that must be satisfied before considering whether to "request or conduct [a] further [criminal] investigation," according to the latest interpretation of probable cause by the Supreme Court, requires a determination that "reasonable grounds" exist to believe that there is a "fair probability ... or substantial chance of criminal activity...." Illinois v. Gates, 462 U.S. 213, 238, 244 n. 13, 103 S.Ct. 2317, 2332, 2335 n. 13, 76 L.Ed.2d 527 (1983) (emphasis added). The "reasonable grounds" need not be as strong as the showing required to support an arrest or search, but traditionally cannot be based on mere association, casual rumor, speculation or mere suspicion. It appears to the court that, taking all the applicable requirements into consideration, before an independent counsel investigation could be initiated, Congress was requiring a showing that there was a fair probability or substantial chance that the subject engaged in some criminal activity.

The Meese fee application in substance contends that the "but for" requirement is satisfied because the referral of his investigation to the Independent Counsel, in asserted compliance with 28 U.S.C. Sec. 592(e) and Sec. 594(e) (1982), did not fully comply with the statutory standards that Congress had prescribed. The authorization of the investigation did not follow the normal procedure; it did not originally begin following an application to, and order by the Special Division of the court. And there is nothing in the court record to indicate that the normal preliminary investigation had been completed from which it was concluded that there were "reasonable grounds to believe that further investigation or prosecution is warranted." 28 U.S.C. Sec. 592(c)(1) (1982).

Rather, the addition of Edwin Meese III as a new targeted subject of an existing independent counsel investigation began as a result of a referral by letter to Independent Counsel McKay who was already investigating Nofziger's role in Wedtech. That investigative jurisdiction over an additional targeted individual subject was being...