MEMORANDUM OPINION [*]
DABNEY
L. FRIEDRICH UNITED STATES DISTRICT JUDGE
Concord
Management and Consulting LLC moves to dismiss the indictment
on the ground that Special Counsel Robert Mueller was
appointed unlawfully by Acting Attorney General Rod
Rosenstein. Dkt. 36. The Court will deny Concord's
motion. The Special Counsel's appointment complies with
the Constitution's Appointments Clause because (1) the
Special Counsel is an “inferior Officer”; and (2)
Congress “by Law vest[ed]” the Acting Attorney
General with the power to make the appointment. U.S. Const.
art. II, § 2, cl. 2.
First,
the Special Counsel is an inferior officer because he is
directed and supervised by the Acting Attorney General.
Although the Special Counsel regulations may not permit the
Acting Attorney General to countermand certain decisions made
by the Special Counsel, the Special Counsel remains subject
to the Acting Attorney General's plenary supervision: the
Acting Attorney General has the discretionary power to
rescind or revise the regulations; moreover, the Acting
Attorney General effectively has the power to remove the
Special Counsel at will, either via the regulations or by
rescinding or revising the regulations. Second, Congress
vested the Acting Attorney General with the power to appoint
the Special Counsel. Even though no statute explicitly
authorizes the Acting Attorney General to make the
appointment, Supreme Court and D.C. Circuit precedent make
clear that the Acting Attorney General has the necessary
statutory authority.
Concord's
secondary arguments also fail. The appointment does not
violate core separation-of-powers principles. Nor has the
Special Counsel exceeded his authority under the appointment
order by investigating and prosecuting Concord. Accordingly,
and for the reasons stated below, the Court will deny
Concord's motion to dismiss the indictment.
I.
BACKGROUND
A.
The Office of the Special Counsel
During
the Watergate era, special prosecutors were appointed through
executive-branch regulations. In 1978, Congress enacted the
Ethics in Government Act, which allowed for the appointment
of a special prosecutor later renamed the “independent
counsel.” See Pub. L. No. 95-521, §
601(a) (1978); see also Ethics in Government Act
Amendments of 1982, Pub. L. No. 97-409, § 2 (1983).
Under the Act, if the Attorney General determined that
certain investigations or prosecutions were warranted, the
Attorney General applied to a special three-judge court,
which then selected and appointed an independent counsel.
Pub. L. No. 95-521, § 601(a). In the face of a
constitutional challenge, the independent counsel provisions
of the Ethics in Government Act were upheld in Morrison
v. Olson, 487 U.S. 654 (1988). The provisions expired in
1999, and Congress declined to renew them. Then-Attorney
General Janet Reno testified before the Senate, “The
Independent Counsel Act is structurally flawed and . . .
those flaws cannot be corrected within our constitutional
framework. . . . [T]he independent counsel is vested with the
full gamut of prosecutorial powers, but with little of its
accountability. He has not been confirmed by the Senate . . .
. Accountability is no small matter. It goes to the very
heart of our constitutional scheme.” The Future of the
Independent Counsel Act: Hearing Before the S. Comm. on
Governmental Affairs, 106th Cong. (March 17, 1999) (statement
of Janet Reno, Att'y Gen. of the United States).
As the
independent counsel provisions of the Ethics in Government
Act expired in 1999, the Attorney General promulgated the
Office of the Special Counsel regulations to
“replace” the Act. See Office of Special
Counsel, 64 Fed. Reg. 37, 038, 37, 038 (July 9, 1999)
(published at 28 C.F.R. §§ 600.1-600.10). Under the
regulations, the Attorney General “appoint[s] a Special
Counsel when he or she determines that criminal investigation
of a person or matter is warranted and-
(a) That investigation or prosecution of that person or
matter by a United States Attorney's Office or litigating
Division of the Department of Justice would present a
conflict of interest for the Department or other
extraordinary circumstances; and
(b) That under the circumstances, it would be in the public
interest to appoint an outside Special Counsel to assume
responsibility for the matter.”
Id. The regulations govern the Special Counsel's
jurisdiction, powers, and duties. They “seek to strike
a balance between independence and accountability in certain
sensitive investigations.” Id. According to
the regulations' preamble, the Special Counsel is
“free to structure the investigation as he or she
wishes and to exercise independent prosecutorial discretion
to decide whether charges should be brought, within the
context of the established procedures of the
Department.” Id. “Nevertheless, it is
intended that ultimate responsibility for the matter and how
it is handled continue[s] to rest with the Attorney General
(or the Acting Attorney General if the Attorney General is
personally recused in the matter).” Id.
B.
Appointment of Special Counsel Robert Mueller
On
April 26, 2017, Rod Rosenstein was sworn in as the Deputy
Attorney General. Dep't of Justice, Meet the Deputy
Attorney General (last visited August 13, 2018),
https://www.justice
.gov/dag/staff-profile/meet-deputy-attorney-general. As a
result, he became the Acting Attorney General for matters
from which the Attorney General was recused, see 28
U.S.C. § 508; 28 C.F.R. § 0.15(a), which included
“existing or future investigations of any matters
related in any way to the campaigns for President of the
United States, ” Dep't of Justice, Office of Public
Affairs, Attorney General Sessions Statement on Recusal (Mar.
2, 2017), Dkt. 36-5. On May 17, 2017, Rosenstein appointed a
Special Counsel. His appointment order states: “By
virtue of the authority vested in me as Acting Attorney
General, including 28 U.S.C. §§ 509, 510, and 515,
. . . Robert S. Mueller III is appointed to serve as Special
Counsel for the U.S. Department of Justice.” Dep't
of Justice, Office of the Deputy Attorney General, Order No.
3915-2017, Appointment of Special Counsel to Investigate
Russian Interference with the 2016 Presidential Election and
Related Matters (“Appointment Order”) (May 17,
2017), Dkt. 36-1. Per the appointment order, the Special
Counsel is “authorized to conduct the investigation
confirmed by then-FBI Director James B. Comey in testimony
before the House Permanent Select Committee on Intelligence
on March 20, 2017, including:
(i) any links and/or coordination between the Russian
government and individuals associated with the campaign of
President Donald Trump; and
(ii) any matters that arose or may arise directly from the
investigation; and
(iii) any other matters within the scope of 28 C.F.R. §
600.4(a).”
Id. ¶ (b).[1] And “[i]f the Special Counsel
believes it is necessary and appropriate, the Special Counsel
is authorized to prosecute federal crimes arising from the
investigation of these matters.” Id. ¶
(c). Finally, the appointment order stated that 28 C.F.R.
§§ 600.4 through 600.10 “are applicable to
the Special Counsel.” Id. ¶ (d).
C.
United States v. Internet Research Agency, et
al.
Nine
months later, on February 16, 2018, the grand jury returned
an eight-count indictment against thirteen individuals and
three corporate entities: Internet Research Agency LLC,
Concord Management and Consulting LLC, and Concord Catering.
Indictment ¶¶ 10-24, Dkt. 1. Under 18 U.S.C. §
371, the indictment charges that the defendants conspired to
defraud the United States by impeding the lawful functions of
the Federal Election Commission, the Department of Justice,
and the Department of State. Id. ¶ 9. Also,
under 18 U.S.C. §§ 1343 and 1344, the indictment
charges that the Internet Research Agency and two individual
defendants conspired to commit wire and bank fraud.
Id. ¶ 87. And under 18 U.S.C. § 1028A, the
indictment charges that the Internet Research Agency and four
individual defendants committed aggravated identity theft.
Id. ¶ 97.
On the
day the grand jury returned the indictment, the magistrate
issued summonses for the defendants to appear on March 20.
The Special Counsel was unable to effectuate service, so the
magistrate continued the initial appearance and arraignment
until May 9. See Minute Order of Mar. 19, 2018. In
the interim, defense counsel entered an appearance on April
11 for Concord Management and Consulting LLC. Dkt. 2; Dkt. 3.
On May 4, the Special Counsel moved to continue the initial
appearance and arraignment scheduled for May 9 until the
Court resolved whether Concord had been properly served. Dkt.
7 at 1, 3-5. The Special Counsel also requested that the
Court set a schedule for the parties to brief service-related
issues by June 15. Dkt. 7 at 1, 5; Dkt. 7-5. Concord,
however, responded that it intended to voluntarily appear
through counsel consistent with Rule 43(b) of the Federal
Rules of Criminal Procedure and it intended to plead not
guilty. Dkt. 8 at 2. The Court therefore denied the Special
Counsel's motion. Minute Order of May 5, 2018. At the
ensuing initial appearance and arraignment on May 9, defense
counsel stated that Concord was not properly served under
Rule 4, but nonetheless, Concord authorized defense counsel
to enter a voluntary appearance, subject Concord to the
Court's jurisdiction, and plead not guilty, which defense
counsel did. Dkt. 9 at 4-5, 9.
One
week later, at a status conference on May 16, the Court
directed the parties to confer regarding a protective order
and a briefing schedule for pretrial motions. Dkt. 18 at 5,
7-8. Because the parties did not reach agreement on a
protective order, discovery was delayed. At a hearing on June
15, the Court ordered the parties to propose a joint interim
protective order that same day, Dkt. 41 at 29, which the
Court then issued, Dkt. 30. After further briefing,
see Dkt. 37; Dkt. 39; Dkt. 40, the Court issued a
more comprehensive protective order and later approved a
firewall counsel to facilitate discovery, see Dkt.
42-1; Minute Entry of Aug. 6, 2018.
Contemporaneously,
on June 25, Concord filed a motion to dismiss the indictment
“based on the Special Counsel's unlawful
appointment and lack of authority.” Dkt. 36 at 1.
Concord's motion argues that (1) the appointment of the
Special Counsel violates the Appointments Clause of the
Constitution; (2) the regulations governing the Special
Counsel violate core separation-of-powers principles; and (3)
even if the regulations are valid and binding, the order
appointing the Special Counsel is inconsistent with the
regulations and does not authorize the prosecution of
Concord. Id.
D.
Related Cases
Three
recent opinions address similar issues. In May and June 2018,
respectively, Judge Berman-Jackson and Judge Ellis resolved
motions to dismiss filed by defendant Paul Manafort. Manafort
argued that the Special Counsel's appointment is invalid
because it conflicts with the Special Counsel regulations
and, even if the appointment is valid, the Special Counsel
exceeded his authority by prosecuting the particular charges
against Manafort. See United States v. Manafort, No.
17-cr-0201, 2018 WL 2223656, at *1 (D.D.C. May 15, 2018);
United States v. Manafort, No. 18-cr-0083, 2018 WL
3126380, at *1 (E.D. Va. June 26, 2018). Judge Berman-Jackson
and Judge Ellis denied the motions. Manafort, 2018
WL 2223656, at *18; Manafort, 2018 WL 3126380, at
*8, *14. Judge Ellis also noted that Manafort did not argue
that the appointment of the Special Counsel violates the
Appointments Clause and the parties did not dispute the
issue, but he observed that “such an objection would
likely fail.” Manafort, 2018 WL 3126380, at *3
n.5, *12.
On July
31, Chief Judge Howell resolved a motion to quash filed by a
witness ordered to appear before the grand jury. The witness
argued that the appointment of the Special Counsel violates
the Appointments Clause, and the witness “adopt[ed] and
incorporate[d] by reference th[e] same arguments”
advanced by Concord. Redacted Mem. Op., In re Grand Jury
Investigation, No. 18-gj-0034, 2018 WL 3688461, at *10
(D.D.C. July 31, 2018) (alterations in original) (quoting
Witness's Second Motion to Quash). Chief Judge Howell
concluded that “the Special Counsel's power falls
well within the boundaries the Constitution permits, ”
and she denied the motion to quash. Id. at *2, *42.
Chief Judge Howell also granted the Special Counsel's
motion to unseal the redacted opinion. See Mem.
& Order at 1, 7, In re Grand Jury Investigation,
No. 18-gj-0034 (D.D.C. Aug. 2, 2018) (Dkt. 26); see
also Order, In re Grand Jury
Investigation, No. 18-gj-0034 (D.D.C. Aug. 8, 2018)
(Dkt. 32) (unsealing the docket and certain filings).
On
August 3, this Court held a hearing on Concord's motion
to dismiss, which the Court now resolves.
II.
LEGAL STANDARDS
Under
Rule 12(b)(1) of the Federal Rules of Criminal Procedure, a
party “may raise by pretrial motion any defense,
objection, or request that the court can determine without a
trial on the merits.” Fed. R. Crim. P. 12(b)(1).
Relevant here, a defendant may raise a “defect in the
indictment” by challenging the constitutionality of the
Special Counsel's appointment and his authority to bring
an indictment. Fed. R. Crim. P. 12(b)(3); see also United
States v. Park, 297 F.Supp.3d 170, 174 (D.D.C. 2018).
“When considering a motion to dismiss an indictment, a
court assumes the truth of [the indictment's] factual
allegations.” United States v. Ballestas, 795
F.3d 138, 149 (D.C. Cir. 2015).
III.
THE APPOINTMENTS CLAUSE
The
Appointments Clause states:
[The President] shall nominate, and by and with the Advice
and Consent of the Senate, shall appoint Ambassadors, other
public Ministers and Consuls, Judges of the supreme Court,
and all other Officers of the United States, whose
Appointments are not herein otherwise provided for, and which
shall be established by Law: but the Congress may by Law vest
the Appointment of such inferior Officers, as they think
proper, in the President alone, in the Courts of Law, or in
the Heads of Departments.
U.S. Const. art. II, § 2, cl. 2. The clause “is
more than a matter of etiquette or protocol; it is among the
significant structural safeguards of the constitutional
scheme.” Edmond v. United States, 520
U.S. 651, 659 (1997) (internal quotation marks omitted). The
clause prescribes the manner of appointment for
“Officers of the United States.” In contrast to
“mere employees, ” officers are persons who
“exercis[e] significant authority pursuant to the laws
of the United States.” Id. (quoting
Buckley v. Valeo, 424 U.S. 1, 126 (1976) (per
curiam)).[2]
By
default under the Appointments Clause, officers are nominated
by the President and confirmed by the Senate. The
President's nomination power “prevents
congressional encroachment upon the Executive and Judicial
Branches, ” and confirmation by the Senate
“serves . . . to curb Executive abuses of the
appointment power.” Edmond, 520 U.S. at 659.
“By requiring the joint participation of the President
and the Senate, the Appointments Clause was designed to
ensure public accountability for both the making of a bad
appointment and the rejection of a good one.”
Id. at 660. But for “inferior Officers,
” unlike principal officers, Congress may deviate from
the default: it “may by Law vest” their
appointments in the President alone, courts, or “Heads
of Departments.” U.S. Const. art. II, § 2, cl. 2.
The purpose of this provision is “administrative
convenience, ” but “that convenience was deemed
to outweigh the benefits of the more cumbersome procedure
only with respect to the appointment of ‘inferior
Officers.'” Edmond, 520 U.S. at 660.
“These limitations on the appointment power
‘ensure that those who wield it are accountable to
political force and the will of the people.'”
Ass'n of Am. Railroads v. Dep't of Transp.,
821 F.3d 19, 36 (D.C. Cir. 2016) (alterations omitted)
(quoting Freytag v. CIR, 501 U.S. 868, 884 (1991)).
Concord
argues that the appointment of the Special Counsel violates
the Appointments Clause in two ways. First, the Special
Counsel is not an inferior officer. See Concord Mem.
at 39-52, Dkt. 36. Second, even if the Special Counsel is an
inferior officer, Congress has not “by Law
vested” his appointment in the Acting Attorney General.
See Id. at 20-39.
A.
The Special Counsel as an “inferior
Officer”
Consistent
with the Appointments Clause, the Acting Attorney General may
not appoint a Special Counsel outside of the
nomination-and-confirmation process unless the Special
Counsel is an “inferior Officer.” U.S. Const.
art. II, § 2, cl. 2. “Generally speaking, the term
‘inferior officer' connotes a relationship with
some higher ranking officer or officers below the
President.” Edmond, 520 U.S. at 662. That is,
“[w]hether one is an ‘inferior' officer
depends on whether he has a superior.” Free Enter.
Fund v. PCAOB, 561 U.S. 477, 510 (2010) (quoting
Edmond, 520 U.S. at 662). “It is not enough
that other officers may be identified who formally maintain a
higher rank, or possess responsibilities of a greater
magnitude.” Edmond, 520 U.S. at 662-63;
see also Id. at 662 (observing that the exercise of
significant authority “marks, not the line between
principal and inferior officer for Appointments Clause
purposes, but rather, as we said in Buckley, the
line between officer and nonofficer”). Rather,
“‘inferior officers are officers whose work is
directed and supervised at some level' by other officers
appointed by the President with the Senate's
consent.” PCAOB, 561 U.S. at 510 (quoting
Edmond, 520 U.S. at 663).
For
evaluating direction and supervision, Edmond
“emphasized three factors”: whether an officer is
(1) “subject to the substantial supervision and
oversight of” another executive officer who is a
principal officer or is “subordinate” to a
principal officer, (2) subject to “revers[al]” by
“another executive branch entity” so that the
officer has “no power to render a final decision on
behalf of the United States unless permitted to do so by
other Executive Officers, ” and (3) “removable .
. . without cause.” Intercollegiate Broad. Sys. v.
Copyright Royalty Bd., 684 F.3d 1332, 1338 (D.C. Cir.
2012) (citing Edmond, 520 U.S. at 664-65). Of these
factors, the third-the removal power-is likely “the
most important to a Court's determination of
principal-inferior status.” In re Grand Jury
Investigation, 2018 WL 3688461, at *12; see
PCAOB, 561 U.S. at 501 (noting that the power to appoint
and control executive officers is “perhaps the
key means” for protecting the constitutional
prerogatives of the executive branch, and stating that
“[t]he power to remove officers at will and without
cause is a powerful tool for control of an inferior”);
Edmond, 520 U.S. at 661-62.
Statutes
and regulations provide the framework for evaluating the
direction and supervision of the Special Counsel. See
Estes v. Dep't of the Treasury, 219 F.Supp.3d 17, 38
(D.D.C. 2016) (“Appointments Clause challenges are
properly structural.”). The Special Counsel regulations
matter because they have the “force of law” so
long as “extant.” Nixon v. United
States, 418 U.S. 683, 695 (1974). Thus they bind the
Department of Justice and the Acting Attorney General.
Id. (“So long as this regulation remains in
force the Executive Branch is bound by it . . . .”);
Accardi v. Shaughnessy, 347 U.S. 260, 266-68 (1954)
(holding that when the Attorney General delegated
discretionary powers via regulations, he denied himself the
authority to exercise the delegated powers as long as the
regulations remained operative, even though the original
authority was his and he could reassert it by amending the
regulations); Erie Blvd. Hydropower v. FERC, 878
F.3d 258, 269 (D.C. Cir. 2017) (“It is axiomatic that
an agency is bound by its own regulations.” (alteration
omitted)). The Special Counsel's principal argument is
that, despite the constraints imposed by the regulations, the
Acting Attorney General retains control of the Special
Counsel. Therefore, the Court does not begin its analysis by
“looking solely to statutes.” In re Grand
Jury Investigation, 2018 WL 3688461, at *13. Instead,
the Court first examines the Acting Attorney General's
ability to direct and supervise the Special Counsel under the
presently binding statutes and ...