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08/20/87 In Re Sealed Case

August 20, 1987

IN RE SEALED CASE 1987.CDC.363


UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

Appeal from the United States District Court for the District of Columbia, Misc. No. 87-00139.

APPELLATE PANEL:

Ruth B. Ginsburg, Williams and D. H. Ginsburg, Circuit Judges. Opinion for the Court filed by Circuit Judge D.H. Ginsburg. Opinion concurring in part and dissenting in part filed by Circuit Judge Williams.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE GINSBURG

Lt. Col. Oliver North appeals an order of the district court holding him in contempt for refusing to comply with a grand jury subpoena. North challenges the contempt order on the ground that it was issued by a grand jury presided over by Independent Counsel Lawrence Walsh and his associate counsel who, North contends, lack the legal authority to conduct that grand jury proceeding. North can prevail only if we find that Walsh's investigation cannot rely on either of two claimed sources of authority: (1) the December 19, 1986, appointment of Walsh as an independent counsel under the Ethics in Government Act *fn1 (Ethics Act), or (2) the Attorney General's March 5, 1987, delegation of investigative and prosecutorial authority of his own to Walsh. North raises constitutional challenges to both sources of authority as well as statutory challenges to the Attorney General's delegation.

On remand from the previous appeal to this court, the district court upheld the authority of Walsh and his associate counsel under the Attorney General's appointment. *fn2 The district court also held that it was unnecessary to address the question of the constitutionality vel non of the independent counsel provisions of the Ethics Act. We affirm each holding as well as the district court's order of July 10, 1987, directing North to comply with the subpoena. I. BACKGROUND

A. Appointment by the Special Division

Pursuant to the Ethics Act, 28 U.S.C. § 592(c)(1), the Attorney General on December 4, 1986, filed an application with the Independent Counsel Division of this court (the "Special Division") seeking the appointment of an independent counsel with jurisdiction

to investigate whether violations of U.S. federal criminal law were committed by Lieutenant Colonel Oliver L. North, other United States Government officials, or other individuals acting in concert with Lieutenant Colonel North or with other United States Government officials, whether or not covered by the Independent Counsel provisions of the Ethics in Government Act, from in or around January 1985 (the exact date being unknown) to the present, in connection with the sale or shipment of military arms to Iran and the transfer or diversion of funds realized in connection with such sale or shipment. The independent counsel should have jurisdiction sufficiently broad to investigate and prosecute any and all violations of U.S. federal criminal law which his or her investigation may establish in this matter, and any related matters over which the independent counsel may request or accept jurisdiction pursuant to 28 U.S.C. § 594(e).

On December 19, 1986, the Special Division filed an order, pursuant to its authority under 28 U.S.C. § 593 (b), appointing Walsh as independent counsel, thereby conferring upon him, within the jurisdiction it prescribed, "all investigative and prosecutorial functions and powers of the Department of Justice, the Attorney General, and any other officer or employee of the Department," with exceptions not here relevant, pursuant to 28 U.S.C. § 594(a). *fn3 In exercising its authority under 28 U.S.C. § 593(b) to define the prosecutorial jurisdiction of the independent counsel, the Special Division granted Walsh jurisdiction beyond that requested by the Attorney General. Most significantly, the Special Division expanded the time frame of the inquiry into arms sales to Iran to include the period "since in or about 1984," rather than "from in or around January 1985," and the Special Division granted Walsh the additional jurisdiction to investigate "the provision or coordination of support for persons or entities engaged as military insurgents in armed conflict with the Government of Nicaragua since 1984." Soon after the Special Division announced Walsh's appointment, the President issued a statement saying that "Mr. Walsh has my promise of complete cooperation, and I have instructed all members of my administration to cooperate fully with the investigation in order to ensure full and prompt disclosure." *fn4

B. Appointment by The Attorney General

Exercising his authority under 28 U.S.C. § 594(a)(1), Walsh empaneled a grand jury in this district on January 28, 1987. On February 24, 1987, North filed a complaint claiming that the independent counsel provisions of the Ethics Act are unconstitutional, and seeking to enjoin the grand jury proceedings. *fn5 In response to this constitutional challenge to Walsh's authority, the Attorney General on March 5, 1987, promulgated a regulation designed "to assure the courts, Congress, and the American people that [Walsh's] investigation will proceed in a clearly authorized and constitutionally valid form regardless of the eventual outcome of [North's] litigation." *fn6

In accordance with the Attorney General's expressed intent "to make certain that the necessary investigation and appropriate legal proceedings can proceed in a timely manner," *fn7 the regulation established the "Office of Independent Counsel: Iran/Contra" -- under the direction of an Independent Counsel to be appointed by the Attorney General -- and delegated to that Counsel authority identical to that provided to an independent counsel by the Ethics Act. *fn8 The regulation also sets forth the jurisdiction of the "Independent Counsel: Iran/Contra" *fn9 in exactly the same terms employed by the Special Division in establishing the jurisdiction of Independent Counsel Walsh. The regulations' provisions relating to the removal of the "Independent Counsel: Iran/Contra" also largely parallel those found in the Ethics Act. *fn10 In particular, the regulation sets forth the same grounds for removal as does the Ethics Act, *fn11 and it provides that "an Independent Counsel originally appointed by court order shall have such rights of review as provided by said order and by section 596(a)(3) of Title 28 of the United States Code." *fn12 The provisions of the regulation concerning "reporting and congressional oversight" and "relationship with components of the Department of Justice" are also virtually identical with parallel provisions in the Ethics Act. *fn13 The regulation also includes provisions that state:

(a) Nothing in this chapter is intended to modify or impair any of the provisions of the Ethics in Government Act relating to Independent Counsel (sections 591-598 of Title 28 of the United States Code), or any order issued thereunder.

(b) If any provision of the Ethics in Government Act relating to Independent Counsel (sections 591-598 of Title 28 of the United States Code) or any provision of this chapter is held invalid for any reason, such invalidity shall not affect any other provision of this chapter, it being intended that each provision of this chapter shall be severable from the Act and from each other provision. *fn14

On March 5, 1987, the date the Attorney General's regulation was promulgated, Independent Counsel Walsh signed an Appointment Affidavit naming him Independent Counsel: Iran/Contra.

C. North's Challenges to Walsh's Authority

In response to the Attorney General's regulation of March 5, 1987, North filed on the following day a new complaint in district court, *fn15 which was later consolidated with his previously filed petition for injunctive relief. On March 12, 1987, the district court rendered its decision in both actions. *fn16 Citing Younger v. Harris, 401 U.S. 37, 46, 27 L. Ed. 2d 669, 91 S. Ct. 746 (1970), for the proposition that "a party who seeks to enjoin a criminal investigation has a particularly heavy burden," *fn17 the district court denied North's request that it enjoin the on-going grand jury investigation, stating that "Colonel North, like any other potential criminal defendant, can raise his objections by appropriate motions, if and when an indictment is entered." *fn18

Subsequent to the district court's dismissal of his complaint seeking injunctive relief, the grand jury issued a subpoena to North, with which he refused to comply. The district court having thereupon held him in contempt, North appealed to this court. In support of the contempt order, Walsh and the Attorney General argued that North's challenge to the prosecutor's legal authority was no more ripe for review then than it had been when he sought civil injunctive relief raising the same challenge. We disagreed, *fn19 concluding that a recalcitrant witness' "claim that a subpoena was applied for and issued under the signature of unauthorized persons" *fn20 was ripe for review under United States v. Ryan, 402 U.S. 530, 29 L. Ed. 2d 85, 91 S. Ct. 1580 (1971), which stated:

If, as he claims, the subpoena is unduly burdensome or otherwise unlawful, he may refuse to comply and litigate those questions in the event that contempt or similar proceedings are brought against him. Should his contentions be rejected at that time by the trial court, they will then be ripe for appellate review.

Id. at 532 (footnote omitted). *fn21 The factual record was inadequate, however, for us to determine whether Walsh and his associate counsel could rely solely on the grant of authority under the Attorney General's March 5, 1987, regulation as the legal basis for the subpoena issued to North. If the regulation provided such authority -- and if that authority had been exercised by Walsh and his counsel -- it appeared that we might not need to reach the question of whether the Ethics Act provided an independent source of authority, a question that would have required us to address the constitutionality vel non of the appointment of an independent counsel by the Special Division pursuant to the provisions of the Ethics Act.

We therefore remanded the case to the district court for it to determine "whether the Attorney General had legal authority to delegate the powers which he purported to convey in the [March 5, 1987] regulation . . ., and if so, whether appropriate authority has been properly vested in Mr. Walsh and his associates." *fn22 In addition, because of our uncertainty about the precise application for this case of certain language in the Supreme Court's decision in Bowsher v. Synar, 478 U.S. 714 728, 106 S. Ct. 3181, 3189 n.5, 92 L. Ed. 2d 583 (1986), we also directed the district court to determine "whether any aspect of the relationship between the special division of this court and the Independent Counsel requires consideration of the constitutionality of the statute even if the Attorney General's appointment is otherwise valid." *fn23

After taking evidence, the district court "determined that the parallel appointment of Mr. Walsh under the Attorney General's regulation was factually and legally valid and that appropriate authority has been vested in him and his associates." *fn24 In response to our second question, the district court "also determined that the limited relationship between the Special Division . . . and the Office of Independent Counsel does not require consideration of the constitutionality of the [Ethics] Act." *fn25 This appeal followed. II. ANALYSIS

A. Appointment by the Attorney General

As we indicated when remanding the case to the district court, North in effect claims that the subpoena was "unduly burdensome or otherwise unlawful" because it had been "applied for and issued under the signature of unauthorized persons." *fn26 In accordance with the "well-established principle . . . that normally [a] court will not decide a constitutional question if there is some other ground upon which to dispose of the case," *fn27 we address first North's contention that Walsh and his associate counsel did not derive the requisite authority from the Attorney General's parallel appointment of March 5, 1987. Because the "investigative and prosecutorial functions and powers" purportedly conveyed to the Office of Independent Counsel: Iran/Contra by the Attorney General's regulation include the power to conduct grand jury proceedings and to issue the type of subpoena in dispute here, *fn28 the only questions raised by this contention are whether the Attorney General's delegation is lawful and, if so, whether that delegated authority has in fact been exercised by Walsh and his associate counsel.

i. Is the Attorney General's Delegation Lawful?

We have no difficulty concluding that the Attorney General possessed the statutory authority to create the Office of Independent Counsel: Iran/Contra and to convey to it the "investigative and prosecutorial functions and powers" described in 28 C.F.R. § 600.1(a) of the regulation. The statutory provisions relied upon by the Attorney General in promulgating the regulation are 5 U.S.C. § 301 and 28 U.S.C. §§ 509, 510, and 515. *fn29 While these provisions do not explicitly authorize the Attorney General to create an ...


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