9th Circuit Court of Appeals calendars oral arguments in three forfeiture attorney fee-shifting cases

The U.S. Court of Appeals for the Ninth Circuit has scheduled oral arguments for three appeals that could shape the future availability of fee-shifting awards in civil asset forfeiture cases. Arguments for each will be heard on March 2nd, 2015, in Pasadena, California.

The first appeal, U.S. v. Moser, concerns whether a federal district court abused its discretion in the low attorney fee award it set for the prevailing forfeiture claimant, slashing the hours claimed by the claimant's counsel, and further reducing the attorney's fee pursuant to the so-called Kerr/Johnson factors

Americans for Forfeiture Reform filed an amicus curiae brief in Moser, available here, and is seeking time to participate in the oral arguments.

I blogged about the case in February of 2013:

Claimants who substantially prevail in federal civil asset forfeiture cases and seek costs are generally eligible to receive awards of reasonable attorney fees and other litigation costs reasonably incurred by the claimant pursuant to the fee-shifting provision of the Civil Asset Forfeiture Reform Act of 2000 (CAFRA)[1][2]

The dispute over what constitutes a proper award of attorney fees stems from the government’s unsuccessful attempt to forfeit $28,000.00 from claimant Robert J. Moser. In March of 2012, U.S. District Judge Larry Alan Burns issued a ruling granting claimant Moser’s motion to suppress evidence and granting Moser’s motion for Summary Judgment after finding purposeful and flagrant constitutional violations:

“…Moser’s consent in this case followed closely on the heels of serial constitutional violations including ignoring the requirement to advise him of Miranda rights before questioning him about the marijuana and illegally entering and reentering Moser’s home without a search warrant.

The Court also finds the constitutional violations that preceded Moser’s consent were purposeful and flagrant. There is no suggestion here that either Deputy Bloomberg or Officer Reed believed that they were acting under the authority of a search warrant when they entered Moser’s home. And even if they were uninformed or confused about the existence of a search warrant, the federal agents were present during both of their searches (even accompanying Deputy Bloomberg on the first occasion) and did not inform their state counterparts that no search warrant had been obtained. Moser’s earlier limited consent to enter the home for the purpose of escorting him to retrieve his medication did not authorize the subsequent entries to search for marijuana and evidence of other crimes.

There is really nothing, then, to purge or attenuate the taint of the initial illegal searches of Moser’s home. Moser’s consent to search was tainted by those initial constitutional violations. The Court concludes that the $28,000 must therefore be suppressed.” United States of America v. $28,000.00 in United States CurrencyOrder Granting Defendant-Claimant’s Motions to Suppress and for Summary Judgment and Denying Plaintiff’s Motion for Summary Judgment, and Denying Plaintiff’s Motion to Strike the Claim as Moot, 2012 U.S. Dist. (S.D. Cal. March 29, 2012).

On February 11th, 2013, United States District Judge Larry Alan Burns issued another order granting an award of $14,000.00 of the $50,775.00 in attorney fees sought by Claimant Moser and his attorney Richard M. Barnett.[3] The latter order is as problematic as the former was commendable. Judge Burns’ opinion first reduced Barnett’s requested-for-fee from $500.00/hour to $300.00/hour and then accepted only 60 hours of Barnett’s reported 100+ work hours, reasoning that “Barnett gave the government’s litigation work more respect than it deserved.” After arriving at a lodestar[4] figure of $18,000.00,[5] Judge Burns proceeded to downgrade the $18,000.00, in part, because Barnett was willing to take the case on a contingency basis set at 1/3 of the $28,000.00 and because, in Judge Burns’ apparent reasoning, Barnett would have been aware that CAFRA fee-shifting awards are rare and not intended to produce a bounty for attorneys. Judge Burns then made a small allowance for risk and arrived at the $14,000.00 sum:

“The remaining relevant factors are the customary fee, whether the fee is fixed or contingent, the amount involved, and the “undesirability” of the case. These all boil down to a limited set of facts, namely that Barnett knew Moser could not recover more than $28,000, and he agreed in a contingent fee agreement to accept 1/3 of the total recovery as his fee.

Civil forfeiture cases involve a variety of types of property and a wide range of property values. Within this range, a claim for $28,000 is not as lucrative as some, but a contingency fee agreement would be enough to attract competent counsel. See Blanchard, 489 U.S. at 92 n.6 . It is not such an undesirable case that a higher fee award is merited in order to encourage attorneys to undertake the representation. The Court finds very significant the fact that Barnett was willing to undertake the representation for no more than $9,333.33 plus costs. He might have expected it to settle quickly, based on the strength of Moser’s suppression argument. But there was no assurance of that. He might also have hoped for an award of fees under CAFRA. But he would have been aware that fee awards are not common, and also that they are not intended to produce a bounty for attorneys. See Blanchard, 489 U.S. at 92 n.6. The logical and reasonable inference here is that Barnett and Moser agreed to a fee of no more than about $9300.

It is also significant that this was a contingent fee agreement. The fraction of the recovery that goes to the attorney under such agreements typically compensates the attorney not only for work done in cases where his client prevails, but also covers the attorney’s losses in cases where the client recovers little or nothing. In other words, it is adjusted upwards to account for risk. The $9,333 figure can be presumed to be higher than what Barnett would charge if there were no risk, i.e., if Moser had guaranteed payment regardless of the outcome.

While the Court recognizes that this figure is not a cap on the award, it is nevertheless relevant. See $186,416.00 in U.S. Currency, 642 F.3d at 755 (court may consider fee agreement when determining reasonable fee award). Bearing in mind the relevant Johnson factors, the Court determines that a fee award of $18,000 is excessive, but an award of $14,000 is reasonable.” United States of America v. $28,000.00 in United States CurrencyOrder Granting In Part Motion For Attorney’s Fees, 2013 U.S. Dist. (S.D. Cal. February 11th, 2013).

What Judge Burns’ formulations seem to ignore is that CAFRA’s fee-shifting provisions were meant by Congress to induce private attorneys to take civil forfeiture cases. The awards were never meant to be mere happenstance or afterthought. Rather, the cost-shifting provisions were intended as a solution. They were supposed to create and drive a market. They were supposed to address that asset forfeiture law is highly specialized, unlikely to be handled well by those lacking significant experience in asset forfeiture law, frequently expensive to litigate, and that innocent property owners were understood to be conceding cases or going bankrupt defending against federal forfeiture actions. Moreover, an assessment that “fee awards are not common” would demand an upward determination from lodestar to sufficiently induce the availability of attorneys willing to take cases looking for such awards.

Furthermore, treating CAFRA’s fee-shifting provision as mere afterthought ignores the power of the provision to persuade public interest groups to assume the costs of litigating gross injustices in civil asset forfeiture. The availability of compelling fee-shifting awards makes it feasible for public interest groups to take more cases and argue them with added vigor. It should be reiterated that the government only pays when claimants substantially prevail–that is, only in cases of genuine merit and precisely when we would most want attorneys or public interest groups to step in and offer to take cases for the lure of CAFRA’s fee-shifting awards.

In the second appeal, Optional Capital, Inc. asks for review of a federal district court's order denying its motion for attorneys' fees, arising out of a civil forfeiture action, because the court did not construe Optional Capital, Inc. as a prevailing party entitled to an award of attorney fees under 28 U.S.C. § 2465.

In the third appeal, the U.S. Government appeals an assignment of awarded attorney fees to renowned forfeiture attorney Eric Honig, arguing that attorney fee assignments are not “final” under 28 U.S.C. §2414, until the government approves them, pursuant to the Anti-Assignment Act, codified at 31 U.S.C. §3727. Were the Government to prevail, attorneys would be on notice that they may never receive fee-shift awards, despite winning their cases. The NACDL filed an amicus curiae brief, available here; the Government's first appellant brief is available here; and Honig's response is available here. I'll be blogging more on this case as we get closer to oral arguments.

[1] CAFRA’s fee-shifting provision is codified at 28 U.S.C. § 2465. For discussions of the meaning of substantially prevails and the availability of EAJA and CAFRA fee-shifting provisions, see Eric Honig, GETTING EVEN: The Government’s Liability for Payment of Property Owners’ Attorney Fees in Federal Asset Forfeiture Casesretrieved on 24 Feb. 2013 from http://www.forfeituredefender.com/uploads/Attorney_Fees.pdf; c.f., David B. Smith, Prosecution and Defense of Forfeiture Cases (Matthew Bender 2012); United States v. $186,416.00 in U.S. Currency642 F.3d 753 (9th Cir. 2011); United States v. 2007 BMW 335I Convertible648 F. Supp. 2d 944 (N.D. Ohio 2009); United States v. 115-98 Park Lane SouthNo. 10 Civ. 3748 (BMC) (E.D.N.Y. Sept. 4, 2012); and United States v. United States Currency in the Sum of Six Hundred Sixty Thousand, Two Hundred Dollars, 438 F. Supp. 2d 67 (E.D.N.Y. 2006), Retrieved on 24 Feb. 2013 from http://www.kessleronforfeiture.com/asset-forfeiture-cases/ 

[2] The fee-shifting provisions of the Equal Access to Justice Act (EAJA) continue to provide an alternative vehicle for collecting litigation costs, c.f.,  5 U.S.C. § 504 and 28 U.S.C. § 2412(d).

[3] Richard M. Barnett is a highly respected attorney and considered an expert in asset forfeiture law. 

[4] For a general discussion of lodestar calculations and adjustments see Brooks Magratten; Robert D. Phillips Jr.; Thomas Connolly; Renee Feldman; and Isaac Mamaysky, Calculating Attorney Fee Awards, GPSOLO, 27:2 (2010), Retrieved February 24, 2013. 

[5] $300.00/hour x 60 hours=$18,000.00.

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