Americans for Forfeiture Reform is pleased to announce the filing of our second amicus curiae brief with the U.S. Supreme Court this term: Brief of Amicus Curiae Americans for Forfeiture Reform in Support of Petitioner, CRST Van Expedited, Inc. v. EEOC, No. 14-1375 (U.S. Jan. 25, 2016) (formatted copy below).

AFR owes an enormous amount of gratitude to Mahesha P. Subbaraman, of Subbaraman PLLC, our counselor for this brief, among others.

We also owe substantial thanks to those of you who have contributed time, money, effort, or any combination thereof to AFR. So, thanks!

Enjoy!

 

No. 14-1375

================================================================

In The

Supreme Court of the United States

---------------------------------  ---------------------------------

CRST VAN EXPEDITED, INC.,

Petitioner,        

v.

EQUAL EMPLOYMENT 

OPPORTUNITY COMMISSION,

Respondent.        

---------------------------------  ---------------------------------

On Writ of Certiorari to the 

United States Court of Appeals for the Eighth Circuit

---------------------------------  ---------------------------------

BRIEF OF AMICUS CURIAE

AMERICANS FOR FORFEITURE REFORM IN SUPPORT OF PETITIONER

---------------------------------  ---------------------------------

INTEREST OF THE AMICUS CURIAE

 Americans for Forfeiture Reform^[1] (“AFR”) is a non-profit, non-partisan civic group concerned with the government’s fearsome power to forfeit private property, which “can be devastating when used unjustly.” Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 634 (1989). To this end, AFR is especially focused on the problem of civil forfeiture abuse. Civil forfeiture lets the government profit by seizing property allegedly linked to crime without ever having to prove the owner’s guilt. This power thus raises the “serious risk that an innocent person will be deprived of his property.” United States v. $191,910, 16 F.3d 1051, 1069 (9th Cir. 1994). 

 Given this reality, AFR works to increase public awareness of civil forfeiture abuse and the urgent need for legal reform. AFR advances this goal in a variety of ways, including the filing of amicus curiae briefs and helping property owners find effective legal counsel in civil forfeiture cases.^[2] 

                                                                                  

 AFR is accordingly interested in the present case. This case requires the Court to answer a legal question that could affect the willingness of property owners to resist wrongful government civil forfeiture actions despite Congress’s enactment of a fee-shifting law meant to enable such resistance.^[3] That question, in short, is whether the court-ordered dismissal of a government suit for failure to comply with statutory preconditions to filing suit renders the defendant a “prevailing party” eligible to seek a fee award. 

 AFR believes the Court should answer this question with a resounding “yes.” By doing so, the Court will clarify its fee-award jurisprudence in a manner that “permits meaningful judicial review and produces reasonably predictable results.” Perdue v. Kenny A., 130 S. Ct. 1662, 1672 (2010). The Court will also vindicate the “interest of citizens in some minimum standard of decency, honor, and reliability in their dealings with their Government.” Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S.

51, 61 (1984); see id. at 61 n.13 (collecting cases). 

---------------------------------  ---------------------------------

              

                                                                                  

SUMMARY OF THE ARGUMENT

 In his 2015 Year-End Report the Chief Justice reminded all lawyers of their duty to avoid “antagonistic tactics, wasteful procedural maneuvers, and teetering brinksmanship.”^[4] Yet, when it comes to government civil suits against private defendants, the government too often engages in just such brinksmanship. Consider the present case. The district court found that the “EEOC’s failure to investigate the [Title VII] claims of . . . 67 allegedly aggrieved persons . . . foreclosed any possibility that the parties might settle all or some of this dispute without the expense of a federal lawsuit.” Pet. App. 211a.

 But so long as this kind of conduct enables the government to “pound an opponent into submission,” the government has every incentive to engage in it. Freeport-McMoRan Oil & Gas Co. v. FERC, 962 F.2d 45, 48 (D.C. Cir. 1992). Thus, to level the playing field, Congress has enacted a host of fee-shifting laws granting private defendants who prevail in court the ability to recover their attorney’s fees from the government. These laws include 42 U.S.C. § 2000e-5(k), which holds the government liable for fees in Title VII suits, and 28 U.S.C. § 2465(b)(1)(A), which does the same in federal civil forfeiture actions.

                                                                                  

 For these laws to serve their purpose, however, it must be recognized that private defendants do not need a merits judgment or a court-ordered consent decree in order to “prevail” against the government and qualify for a fee award. Cf. Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 600 (2001). Private defendants also serve to prevail when the court orders dismissal of the government’s claims. See Angel v. Bullington, 330 U.S. 183, 190 (1947) (“The ‘merits’ of a claim are disposed of when it is refused enforcement.”). 

 The Eighth Circuit failed to realize that here. It held that the district court’s dismissal of sixty-seven government claims did not make Petitioner a “prevailing party” eligible to receive fees under § 2000e5(k). See Pet. App. 23a–24a. The Eighth Circuit based this conclusion on the legal ground for the dismissal: the government’s failure to satisfy Title VII’s preconditions for filing suit. See id. The Eighth Circuit held that because this ground was “not . . . a ruling on the merits,” Petitioner lacked any basis to claim prevailing-party status. Id.; see Buckhannon, 532 U.S. at 603–04 (a “prevailing party” is usually a litigant who has received “some relief on the merits”). 

 What the Eighth Circuit’s analysis did not take into account, however, is the effect of Federal Rule of Civil Procedure 41 on the “dismissal of actions.” In particular, Rule 41(b) provides that for “involuntary dismissals”—like the dismissal here—“[u]nless the dismissal order states otherwise . . . any dismissal not under this rule—except one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19—operates as an adjudication on the merits.” This means the Eighth Circuit had to treat the district court’s dismissal order in this case as a ruling “on the merits” given that this order: (1) did not “state otherwise”; and (2) did not concern “lack of jurisdiction, improper venue, or failure to join a party under Rule 19.” See Pet. App. 202a–217a.

 The Eighth Circuit should thus be reversed for failing to follow Rule 41. At the same time, the Court should observe that Rule 41 clarifies three further aspects of prevailing-party status for defendants. First, court-ordered dismissals will often confer prevailing-party status on defendants. Second, courtordered dismissals for failure to meet statutory preconditions to filing suit are as much “on the merits” as dismissals for failure to establish a claim element. Third, court-ordered dismissals “without prejudice” can still alter the parties’ legal relationship in ways that make defendants into prevailing parties. 

 Taken together, these observations reconcile the Court’s fee-shifting jurisprudence with the main goal of defendants in court: to avoid an adverse judgment and end the litigation. Defendants should be eligible for fee awards regardless of how they achieve this goal—be it through a merits judgment in their favor, a consent decree, or a court-ordered dismissal. The Court now has the chance to clarify this point of law  and, in the process, incentivize the government to litigate its suits in a far more level manner.

---------------------------------  ---------------------------------

Read more

A three-judge panel from the U.S. Court of Appeals for the Ninth Circuit will hear oral arguments today, March 2nd, 2015, in three disputes over attorney fee awards in civil asset forfeiture cases. Each of the appeals could affect the future availability of and pricing for private forfeiture defense.

Arguments will be broadcast live, here, at 9:30 a.m. PST (10:30 a.m. MST, 11:30 a.m. CST, 12:30 p.m. EST). Update: A rebroadcast of today's oral arguments is currently available here; Moser starts about 15 minutes in.

The panel will consist of Circuit Judges Stephen R. Reinhardt, N. Randy Smith, and Andrew D. Hurwitz.

The first appeal, U.S. v. Moser, asks 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 will participate in today's oral arguments. Ben Steinberg of Robins Kaplan LLP will be arguing on behalf of AFR.

Moser filed an opening brief, available here. The United States responded with its own brief, available here. Moser filed a final reply, available here.

I blogged about the case in February of 2013:

Claimants who substantially prevail in [adjudicated] 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 Currency, Order 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 Currency, Order 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 order denying its motion for attorneys' fees arising out of a civil forfeiture action. The district Court did not construe Optional Capital, Inc. as a prevailing party entitled to an award of attorney fees under 28 U.S.C. § 2465. The appellate panel could thus clarify or reshape what it means to be a prevailing party under 28 U.S.C. § 2465.

In the third appeal, the U.S. Government appeals an assignment of awarded attorney fees to noted 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.