Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-56922/USCOURTS-ca9-12-56922-0/pdf.json

Nature of Suit Code: 690
Nature of Suit: Other Forfeiture and Penalty Suits
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, AKA

Seal A,

Plaintiff-Appellant,

v.

CHRISTOPHER KIM, AKA Chris Kim,

AKA KJ Kim, AKA Kyung Joon

Kim; BORA LEE; OPTIONAL

CAPITAL, INC., AKA Optional

Ventures; FIRST STEPHORA AVENUE,

INC.; ERICA M. KIM; ALEXANDRIA

INVESTMENT, LLC; SE YOUNG KIM;

YOUNG AI KIM,

Claimants-Appellees,

LAW OFFICE OF ERIC HONIG,

Intervenor-Appellee,

and

475 MARTIN LANE, BEVERLY HILLS,

CALIFORNIA, Real Property Located

at, AKA Seal A,

Defendant.

No. 12-56922

D.C. No.

2:04-cv-02788-

ABC-PLA

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2 UNITED STATES V. KIM

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

v.

CHRISTOPHER KIM, AKA Chris Kim,

AKA KJ Kim, AKA Kyung Joon

Kim; BORA LEE; OPTIONAL

CAPITAL, INC., AKA Optional

Ventures; FIRST STEPHORA AVENUE,

INC.; ERICA M. KIM; ALEXANDRIA

INVESTMENT, LLC; SE YOUNG KIM;

YOUNG AI KIM,

Claimants-Appellees,

LAW OFFICE OF ERIC HONIG; ERIC

HONIG,

Intervenors-Appellees,

and

475 MARTIN LANE, BEVERLY HILLS,

CALIFORNIA, Real Property Located

at, AKA Seal A,

Defendant.

No. 13-55555

D.C. No.

2:04-cv-02788-

ABC-PLA

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UNITED STATES V. KIM 3

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

v.

CHRISTOPHER KIM, AKA Chris Kim,

AKA KJ Kim, AKA Kyung Joon

Kim; BORA LEE; OPTIONAL

CAPITAL, INC., AKA Optional

Ventures; FIRST STEPHORA AVENUE,

INC.; ERICA M. KIM; ALEXANDRIA

INVESTMENT, LLC; SE YOUNG KIM;

YOUNG AI KIM,

Claimants-Appellees,

LAW OFFICE OF ERIC HONIG; ERIC

HONIG,

Intervenors-Appellees,

and

475 MARTIN LANE, BEVERLY HILLS,

CALIFORNIA, Real Property Located

at,

Defendant.

No. 13-55556

D.C. No.

2:04-cv-02788-

ABC-PLA

OPINION

Appeal from the United States District Court

for the Central District of California

Audrey B. Collins, District Judge, Presiding

Argued and Submitted

March 2, 2015—Pasadena, California

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4 UNITED STATES V. KIM

Filed August 13, 2015

Before: Stephen Reinhardt, N. Randy Smith,

and Andrew D. Hurwitz, Circuit Judges.

Opinion by Judge N.R. Smith

SUMMARY*

Anti-Assignment Act

The panel vacated the district court’s order awarding

attorneys’ fees, pursuant to the Civil Asset Forfeiture Reform

Act (“CAFRA”), directly to the Law Office of Eric Honig

because the Anti-Assignment Act applied to void an

assignment in the parties’ representation agreement; vacated

the district court’s post-judgment orders awarding additional

fees; and remanded for further proceedings.

In the underlying action, Honig represented claimants

who sought properties that were seized by the United States

government, and the district court entered summary

judgments in favor of the claimants. The district court found

that the claimants were prevailing parties under CAFRA, and

awarded attorneys’ fees against the government.

The panel held that the government was not estopped

from asserting the Anti-Assignment Act. 

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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UNITED STATES V. KIM 5

The panel held that the Anti-Assignment Act prohibited

a claimant from assigning an award of attorneys’ fees under

CAFRA to his attorney. The panel concluded that the AntiAssignment Act invalidated the assignment of the award of

attorneys’ fees against the United States from the claimant to

his attorney. The panel further held that the Act does not

prevent an attorney from taking an interest in the fees that is

effective against the government; it merely forbids an

assignment of the right to be paid directly from the United

States Treasury.

COUNSEL

Melissa Briggs, (argued), John E. Lee, Monica E. Tait,

Assistant United States Attorneys, Thomas J. Clark,

Supervisory Attorney, Gilbert S. Rothenberg, Deputy

Assistant Attorney General, Kathryn Keneally, Assistant

Attorney General, for Plaintiff-Appellant United States of

America.

Eric Honig (argued), Law Offices of Eric S. Honig, Marina

Del Rey, California, for Intervenors-Appellees.

John D. Cline, San Francisco, California, for Amicus Curiae

National Association of Criminal Defense Lawyers.

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6 UNITED STATES V. KIM

OPINION

N.R. SMITH, Circuit Judge:

Christopher Kim and members of his family defeated the

Government’s attempts to forfeit property seized in

connection with a criminal investigation. Thereafter, Kim

received several significant awards of attorney’s fees. Eric

Honig, Kim’s lawyer, asked the district court that he be paid

those fees directly, pursuant to an assignment in their

representation agreement. The Government asserts that the

Anti-Assignment Act, 31 U.S.C. § 3727, voids such an

assignment.

We agree that the Anti-Assignment Act invalidates an

assignment of an award of statutory attorney’s fees against

the United States from the claimant to his attorney. However,

the Anti-Assignment Act goes no further. The Act does not

prevent an attorney from taking an interest in the fees that is

effective against the Government; it merely forbids an

assignment of the right to be paid directly from the United

States Treasury. We have jurisdiction under 28 U.S.C.

§ 1291, and we vacate and remand for further proceedings.

BACKGROUND

Pursuant to a request for extradition from the Republic of

Korea, where Kim was charged with fraudulently obtaining

funds from companies that he controlled (DAS Corp. and

Optional Capital), the Government seized the properties at

issue in this case. See United States v. Real Prop. Located at

475 Martin Lane, 545 F.3d 1134, 1139 (9th Cir. 2008). Kim,

Erica Kim, Bora Lee, Se Young Kim, and Young Ai Kim (the

“Kim Claimants”) each filed claims to the seized properties. 

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UNITED STATES V. KIM 7

The district court granted summary judgment to the Kim

Claimants. We affirmed in part, holding that “the

government failed to present admissible evidence sufficient

to demonstrate a triable issue of fact as to whether Kim

obtained DAS’s money in a fraudulent manner or whether his

dealings with Optional Capital were fraudulent.” United

States v. Real Prop. Located at 475 Martin Lane, 298 F.

App’x 545, 549 (9th Cir. 2008). However, we remanded for

further proceedings regarding certain other properties. Real

Prop. Located at 475 Martin Lane, 545 F.3d at 1146. On

remand, the district court entered summary judgment,

dismissing the Government’s claims on the remaining

properties.1

Throughout the proceedings, the Kim Claimants were

represented by the Law Office of Eric Honig (“Honig”). The

representation agreement between Honig and the Kim

Claimants provided that “[a]ny fees the Court orders the

government to pay for the work that I perform belongs to me

and not to the clients, however I will provide a credit to the

clients towards my fee agreed upon above for any part of my

fee that is paid to me by the government.” After the district

court’s first summary judgment order, the Kim Claimants

moved for an award of attorney’s fees pursuant to the Civil

Asset Forfeiture Reform Act (“CAFRA”). The district court

found that the Kim Claimants were the prevailing parties and

1 With the Government’s claims dismissed, the Kim Claimants litigated

primarily against Optional Capital for ownership of the properties seized

pursuant to the fraud investigation. Ultimately, the Kim Claimants

released their claims to the property to Optional Capital, and the district

court imposed a constructive trust over the seized properties on the

grounds that they had been purchased with funds illegally obtained from

Optional Capital.

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8 UNITED STATES V. KIM

entered a substantial award of attorney’s fees against the

Government.

Thereafter, the Government filed tax liens against all of

the Kim Claimants except Se Young Kim and Young Ai Kim. 

After the Government filed the tax liens, Honig moved to

intervene in the forfeiture action to protect his interest in the

award. The district court denied the motion. Subsequently,

the Kim Claimants moved for an additional award of

attorney’s fees for the second summary judgment order and

asked that the fees be paid directly to Honig. The district

court granted the award, but declined to award the fees

directly to Honig, because he was not a party to the forfeiture

action.

Honig also filed a wrongful levy action against the

Government. The Government moved to dismiss the

wrongful levy action, arguing that Honig should instead have

intervened in the forfeiture action. Honig then filed a second

motion to intervene in that action, which the district court

granted. The district court also ordered that the attorney’s

fees be paid directly to Honig. The Government appealed the

order. While that appeal was pending, we decided United

States v. $186,416.00, 642 F.3d 753 (9th Cir. 2011)

(“$186,416.00 I”), in which we held that “attorney fees

awarded under CAFRA are payable to the claimant, not to

claimant’s attorney.” Id. at 754. The parties agreed to

remand the case for further proceedings in light of

$186,416.00 I.

In order to protect his contractual interest in the attorney’s

fees, Honig filed a lien against the properties seized by the

Government. In litigation regarding priority of interests in

the seized properties, the district court held that the

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UNITED STATES V. KIM 9

Government admitted that Honig’s lien had priority over the

tax liens. However, with regard to the award of attorney’s

fees, the Government maintained that the fees belonged to the

Kim Claimants, and therefore its tax liens would take priority

over any interest that Honig had in the attorney’s fees awards. 

The Government also invoked the Anti-Assignment Act,

31 U.S.C. § 3727, to argue that the assignment of the awards

from the Kim Claimants to Honig was ineffective as against

the United States.2

The district court held that the attorney’s fees awards

could be paid directly to Honig. The district court interpreted

$186,416.00 I to allow for the Kim Claimants to assign an

award of attorney’s fees to Honig. With regard to the AntiAssignment Act, the district court held that it did not prevent

the assignment of the attorney’s fees award. The district

court also held that the Government had, effectively, waived

its statutory right to set off the Kim Claimants’ tax liabilities

with the fee awards. The Government was therefore left with

only its tax liens, which it had previously admitted were

inferior in priority to Honig’s interest. The district court

relied on 26 U.S.C. § 6323(b)(8) to hold that an attorney’s

lien had priority over a tax lien. Accordingly, there was no

reason not to pay the fees directly to Honig.

Following the district court’s order, Honig and the Kim

Claimants moved for an additional award for fees incurred in

litigating the ownership of the fees. The Government failed

to respond in the time provided for by the local rules, and the

district court entered an order granting the requested fees. 

2 The Government did not invoke the Anti-Assignment Act with respect

to Kim’s parents, Se Young Kim and Young Ai Kim, because no tax liens

were filed against them.

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10 UNITED STATES V. KIM

The Government filed a Fed. R. Civ. P. 60(b)(1) motion

contesting the last award, which the district court denied.

The Government now appeals the district court’s order

that the attorney’s fee awards are payable directly to Honig

and the district court’s denial of its Rule 60(b)(1) motion.

DISCUSSION

We review a district court order granting an award of

attorney’s fees for abuse of discretion. See Childress v.

Darby Lumber, Inc., 357 F.3d 1000, 1011 (9th Cir. 2004). 

The district court’s “[u]nderlying factual findings are

reviewed for clear error.” Native Vill. of Quinhagak v. United

States, 307 F.3d 1075, 1079 (9th Cir. 2002). “The legal

analysis underlying a fee decision is reviewed de novo.” 

Childress, 357 F.3d at 1011.

I. The Government is not Estopped from Asserting the

Anti-Assignment Act

Before reaching the merits of the appeal, we address

Honig’s and the Kim Claimants’ contention that the

Government should be estopped from asserting the AntiAssignment Act. We disagree.

Honig and the Kim Claimants argue that the

Government’s shifting litigation positions in the district court

warrant application of the doctrines of equitable and judicial

estoppel. They identify two acts by the Government

warranting judicial estoppel: (1) placing tax liens on the

seized assets after it lost the forfeiture actions; and

(2) opposing Honig’s intervention in the forfeiture

proceedings, only to reverse course on the eve of summary

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UNITED STATES V. KIM 11

judgment in the wrongful levy action and insist that Honig

should have intervened in the forfeiture proceedings.

“Judicial estoppel is an equitable doctrine that precludes

a party from gaining an advantage by asserting one position,

and then later seeking an advantage by taking a clearly

inconsistent position.” Hamilton v. State Farm Fire & Cas.

Co., 270 F.3d 778, 782 (9th Cir. 2001). The doctrine is

intended “to protect against a litigant playing ‘fast and loose

with the courts’ by asserting inconsistent positions.” 

Rockwell Int’l Corp. v. Hanford Atomic Metal Trades

Council, 851 F.2d 1208, 1210 (9th Cir. 1988). When

determining whether judicial estoppel is warranted, we look

to three factors: (1) “a party’s later position must be ‘clearly

inconsistent’ with its earlier position”; (2) whether the party

succeeded in its prior position, because “[a]bsent success in

a prior proceeding, a party’s later inconsistent position

introduces no ‘risk ofinconsistent court determinations’”; and

(3) “whether the party seeking to assert an inconsistent

position would derive an unfair advantage or impose an

unfair detriment on the opposing party if not estopped.” New

Hampshire v. Maine, 532 U.S. 742, 750–51 (2001) (citations

omitted).

The Government’s decision to pursue tax liens after

losing the forfeiture action is not inconsistent with its initial

decision to seek civil forfeiture of the Kim Claimants’ assets. 

Even if the positions were inconsistent, the Government

failed to forfeit the seized assets, so there is no risk of

inconsistent court determinations.

Whether the Government’s shifting positions with regard

to Honig’s right to intervene merit judicial estoppel presents

a closer question. The Government’s positions were clearly

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12 UNITED STATES V. KIM

inconsistent, and the Government initially succeeded in

convincing the district court that Honig should not be allowed

to intervene. Honig incurred additional costs from the

Government’s shifting positions, as he was forced to litigate

the wrongful levy action up to summary judgment. Indeed,

the district court strongly chastised the Government for its

actions.3 However, the judicial estoppel doctrine only

prevents the offending party from gaining an unfair advantage

by his litigation tactics. See Hamilton, 270 F.3d at 782. The

propriety of Honig’s intervention is not relevant to the issues

before us, and Honig is in no worse position now than he

would have been had he been allowed to intervene originally

or if he had continued to litigate the wrongful levy action. It

is not clear what benefit the Government has obtained aside

from imposing cost and delay. To the extent that Honig seeks

a general sanction against the Government, we decline to

grant it.

Next, Honig and the Kim Claimants contend that the

Government should be judiciallyestopped from asserting that

Christopher Kim and Erica Kim are separate entities from

their corporations, because the Government had already

3 The district court noted that the dispute between the Government and

Honig “has been marred by an ever-changing set of arguments advanced

by the Government both on the merits and procedural aspects of Honig’s

request for relief. For example, the Government’s initial response to

Honig’s request for an order establishing his priority was an unequivocal

statement that lien priority is not properly resolved in this Forfeiture

Action. . . . Not surprisingly, that led to more motion work and to the

filing ofthe separate Wrongful LevyAction. The Government maintained

this position until the Court was on the brink of deciding cross-motions for

summary judgment in the Wrongful Levy Action, at which time it

reversed its position, arguing that the priority issues should be resolved in

the Forfeiture Action instead.”

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UNITED STATES V. KIM 13

proven that the corporations were alter egos of the Kims. The

effect of estopping the Government would be (if all else fails

and only Se Young Kim and Young Ai Kim may receive the

attorney’s fees awards) to increase Honig’s recovery from

two-sevenths to two-fifths of the total award. Honig’s and

the Kim Claimants’ contention is flawed under California

law. They cite to no California authority for the proposition

that, once the veil is pierced, the corporation disappears and

becomes the same entity as its owner. Indeed, California has

rejected “reverse-piercing” actions that hold an alter ego

corporation liable for the actions of its shareholders. See

Postal Instant Press, Inc. v. Kaswa Corp., 77 Cal. Rptr. 3d

96, 102–06 (Cal. Ct. App. 2008). California also allows

corporations to bring alter ego actions against their

shareholders in limited circumstances. See Ahcom, Ltd. v.

Smeding, 623 F.3d 1248, 1251 (9th Cir. 2010) (permitting

alter ego suits by corporations against shareholders in certain

bankruptcy situations). In the absence of California

precedent demonstrating that an alter ego corporation and its

owner are to be treated the same in all respects once the veil

is pierced, the Government’s positions were not inconsistent

and judicial estoppel was not warranted.

Lastly, Honig and the Kim Claimants contend that the

Government’s assertion of the Anti-Assignment Act should

be subject to equitable estoppel based on the Government’s

filing tax liens against the Kim Claimants. To demonstrate

that equitable estoppel is warranted, a party must show:

(1) the party to be estopped knows the facts,

(2) he or she intends that his or her conduct

will be acted on or must so act that the party

invoking estoppel has a right to believe it is so

intended, (3) the party invoking estoppel must

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14 UNITED STATES V. KIM

be ignorant of the true facts, and (4) he or she

must detrimentally rely on the former’s

conduct.

United States v. Hemmen, 51 F.3d 883, 892 (9th Cir. 1995). 

Additionally, “[w]hen a party seeks to invoke equitable

estoppel against the government [he must show] that the

agency engaged in affirmative conduct going beyond mere

negligence and that the public’s interest will not suffer undue

damage.” Id. (internal quotation marks omitted).

Honig and the Kim Claimaints argue that they litigated

the forfeiture action in reliance on the Government not filing

tax liens, which they assert the Government knew it could

have filed all along. Again, Honig and the Kim Claimants

rely on an “abrupt change of position” from the Government. 

United States v. Gamboa-Cardenas, 508 F.3d 491, 504 (9th

Cir. 2007). We are unpersuaded. There is no indication in

the record that Honig and the Kim Claimants relied on any

representation that the Government would not file tax liens

against the Kim Claimants. Even if Honig and the Kim

Claimants had some basis to believe that the Government

would not file tax liens, it is not clear what action they took

in reliance on that belief. The Government brought its civil

forfeiture action, and the Kim Claimants defended it. Honig

and the Kim Claimants cannot even allege that the

Government intended to file tax liens against the Kim

Claimants before or during the time that it pursued the

forfeiture action; they can allege only that the Government

was aware of the possibility that such liens might be filed. 

Given that the Kim Claimants were accused of embezzling

tens of millions of dollars into the United States, Honig had

just as much knowledge as the Government that a tax issue

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UNITED STATES V. KIM 15

might arise in the case. Honig’s and the Kim Claimant’s

reliance theory simply does not add up.

We decline to apply judicial or equitable estoppel against

the Government.4 Accordingly, we proceed to the merits of

the appeal.

II. The Anti-Assignment Act Applies to and Voids an

Award of Attorney’s Fees Pursuant to CAFRA

The Government’s primary contention on appeal is that

the Anti-Assignment Act bars the Kim Claimants from

assigning the attorney’s fees awards to Honig. Therefore, the

primary question before us is whether the Anti-Assignment

Act prohibits a claimant from assigning an award of

attorney’s fees under CAFRA to his attorney. We conclude

that it does.

A. The Anti-Assignment Act

Congress enacted the Anti-Assignment Act in its original

form in 1853, primarily as a means “to prevent persons of

influence from buying up claims against the United States,

which might then be improperly urged upon officers of the

Government.” United States v. Aetna Cas. & Sur. Co.,

338 U.S. 366, 373 (1949). The Act was later recodified as

31 U.S.C. § 3727. The Act prohibits the “assignment of any

part of a claim against the United States Government or of an

interest in that claim; or the authorization to receive payment

4 Because we conclude that estoppel is not warranted, we decline to

reach the Government’s argument that it cannot be estopped from

collecting taxes under the Anti-Injunction Act, 26 U.S.C. § 7421.

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16 UNITED STATES V. KIM

for any part of the claim,” unless certain conditions are met. 

31 U.S.C. § 3727(a)(1)–(2). Those conditions provide that:

An assignment may be made only after a

claim is allowed, the amount of the claim is

decided, and a warrant for payment of the

claim has been issued. The assignment shall

specify the warrant, must be made freely, and

must be attested to by 2 witnesses. The

person making the assignment shall

acknowledge it before an official who may

acknowledge a deed, and the official shall

certify the assignment. The certificate shall

state that the official completely explained the

assignment when it was acknowledged.

Id. § 3727(b). Under the plain terms of the Act, a claim

against the United States may not be assigned to a third party

unless these technical requirements are met. “In effect, the

[Anti-Assignment Act] serves as a defense that the

Government can raise against a claim.” Murkledove v.

Astrue, 635 F.3d 784, 794 (5th Cir. 2011). Indeed, the

Government concedes that it is all but impossible for any

assignment to comply with the strictures of the AntiAssignment Act, because the Treasury no longer uses

warrants. Nevertheless, “[i]t is well established . . . that the

Government can waive coverage of the Anti-Assignment

Acts.” Riviera Fin. of Tex., Inc. v. United States, 58 Fed. Cl.

528, 530 (Fed. Cl. 2003).5 Thus, in modern practice, the

5 Because the Government has the broad power to waive the Act, we

reject Honig’s and the Kim Claimants’s contention that the Government

waived the Anti-Assignment Act as to all of the Kim Claimants when it

waived the Act towards Se Young Kim and Young Ai Kim. To determine

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UNITED STATES V. KIM 17

obsolete language of the Anti-Assignment Act means that the

Government has the power to pick and choose which

assignments it will accept and which it will not. Although

this state of affairs may diverge sharply from what Congress

intended when it enacted the Anti-Assignment Act, it is not

for us to rewrite the statute or decline to enforce it (as Honig

urges) simply because circumstances have changed since it

was passed.6See Xi v. INS, 298 F.3d 832, 839 (9th Cir. 2002)

(“[A] decision to rear-range [sic] or rewrite the statute falls

within the legislative, not the judicial, prerogative.”).

Despite the Anti-Assignment Act’s plain language, the

Supreme Court has carved out equitable exceptions to its

application, noting that the Act “must be interpreted in the

light of its purpose to give protection to the Government. . . .

[A]ssignments may be heeded, at all events in equity, if they

will not frustrate the ends to which the prohibition was

whether the Government has waived the Anti-Assignment Act, we look

to the Government’s “course of conduct” to determine whether “the

Government was aware of, assented to, and recognized the assignments.” 

Tuftco Corp. v. United States, 614 F.2d 740, 745 (Ct. Cl. 1980). The

Government must waive the Act in its entirety; it cannot choose to waive

some of its requirements and not others. See Schwartz v. United States,

16 Cl. Ct. 182, 188 (1989). Honig and the Kim Claimants provide no

authority to suggest that the Government must waive the Anti-Assignment

Act towards all claimants in an action, and we have found none. 

Accordingly, we reject Honig’s and the Kim Claimant’s assertion that the

Government may not assert the Anti-Assignment Act.

6 We also reject Honig’s contention that the Anti-Assignment Act

offends the separation of powers. Nothing in the Anti-Assignment Act

can be construed as setting conditions on when a court may render a

judgment or when that judgment may be considered final. It is solely a

prohibition on the right of a claimant to assign a claim against the United

States to another.

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18 UNITED STATES V. KIM

directed.” Martin v. Nat’l Sur. Co., 300 U.S. 588, 596–97

(1937). For instance, the Anti-Assignment Act will not void

assignments that arise by operation of law, voluntarytransfers

by will, or “general assignments for the benefit of creditors.” 

United States v. Shannon, 342 U.S. 288, 292 (1952). We

have already noted that the Act’s primary purpose, when it

was originally enacted in the 1850s, was to prevent powerful

persons from buying up faulty claims against the government

and using their sway to get them paid. Aetna Cas. & Sur.

Co., 338 U.S. at 373. Another purpose, more relevant to the

modern context, is “to save to the United States ‘defenses

which it has to claims by an assignor by way of set-off,

counter claim, etc., which might not be applicable to an

assignee.’” Shannon, 342 U.S. at 291–92 (quoting Grace v.

United States, 76 F. Supp. 174, 175 (D. Md. 1948)).

Because neither Honig nor the Kim Claimants contend

that the representation agreement satisfies the AntiAssignment Act’s requirements, the sole question is whether

the Act applies to an award of attorney’s fees under CAFRA

at all. To determine whether the Anti-Assignment Act voids

the assignment, we must determine (1) whether an award of

attorney’s fees under CAFRA is “a claim against the United

States”; and, if so, (2) whether the claim “belongs” to Honig

or the Kim Claimants. If the Act does apply and the

assignment is voided, we must then determine what interest,

if any, Honig retains in the awards.

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UNITED STATES V. KIM 19

B. An Award of Attorney’s Fees under CAFRA is a

Claim Against the United States to which the AntiAssignment Act Applies

1. A CAFRA Fee Award is a Claim Against the

United States

“What is a claim against the United States is well

understood. It is a right to demand money from the United

States.” Hobbs v. McLean, 117 U.S. 567, 575 (1886). In

determining whether a statutory award of attorney’s fees is “a

claim against the United States,” we note the Supreme

Court’s broad interpretation of the Anti-Assignment Act: “No

language could be broader or more emphatic than these

enactments. The words embrace every claim against the

United States, however arising, of whatever nature it may be,

and wherever and whenever presented.” United States v.

Gillis, 95 U.S. 407, 413 (1877). Consistent with Hobbs, a

claim is defined as “[t]he aggregate of operative facts giving

rise to a right enforceable by a court . . . [t]he assertion of an

existing right; any right to payment or to an equitable remedy,

even if contingent or provisional . . . [a] demand for money,

property, or a legal remedy to which one asserts a right.” 

Black’s Law Dictionary 281–82 (9th ed. 2009).

An award of statutory attorney’s fees is, at base, a right to

demand money from the United States. Given the broad

construction we are required to give to the Anti-Assignment

Act, we see no reason to place statutory attorney’s fees

awards beyond the reach of the Act.

Honig and the Kim Claimants urge us to make an

exception to the applicability of the Anti-Assignment Act for

fees awarded under CAFRA. Honig first argues that

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20 UNITED STATES V. KIM

forfeiture actions are unique, in that property owners

defending civil forfeiture actions from the government are not

making claims, they are in essence defending a prosecution. 

Second, Honig contends that CAFRA is a remedial statute

specifically designed to make property owners whole after a

wrongful forfeiture, and therefore a request for attorney’s fees

should not be considered a claim.

We begin with a discussion of CAFRA. The statute was

enacted in 2000 as remedial legislation after “widespread

criticism” of the previous civil asset forfeiture regime. 

United States v. $80,180.00, 303 F.3d 1182, 1184 (9th Cir.

2002). One element of CAFRA’s reforms was to include a

fee-shifting provision which, unlike its predecessor the Equal

Access to Justice Act (“EAJA”), would be mandatory. 

28 U.S.C. § 2465(b)(1). CAFRA states, in relevant part, that

“in any civil proceeding to forfeit property . . . in which the

claimant substantially prevails, the United States shall be

liable for reasonable attorney fees and other litigation costs

reasonably incurred by the claimant.” Id. § 2465(b)(1)(A).

To support their assertion that the Anti-Assignment Act

does not reach CAFRA, Honig and the Kim Claimants cite to

several civil asset forfeiture cases in which the court rejected

the government’s assertion of the Anti-Assignment Act. In

United States v. 37.29 Pounds of Semi-Precious Stones, the

district court invalidated a claimant’s assignment of its

interest in various gemstones seized by the government to a

third party, holding that the Anti-Assignment Act barred the

assignment. 7 F.3d 480, 483 (6th Cir. 1993), abrogated on

other grounds by United States v. James Daniel Good Real

Property, 510 U.S. 43 (1993). The Sixth Circuit reversed,

holding that “the Assignment of Claims Act is not applicable

to an assignment of a claim in an in rem forfeiture action. . . .

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UNITED STATES V. KIM 21

The claim assigned to Newport was not a ‘claim upon the

United States, but of an interest in property adverse to the

interest held by the United States.’” Id. at 483–84 (quoting

United States v. Currency Totalling $48,318.08, 609 F.2d

210, 213 (5th Cir. 1980)). The other cases that Honig cites

are substantially similar: in every case the court concluded

that the Anti-Assignment Act does not apply to a purported

assignment of an interest in the assets subject to the forfeiture

proceedings. The Eighth Circuit stated the reasoning behind

this conclusion in United States v. Thirteen Thousand Dollars

in U.S. Currency: the assignor “did not assign a claim against

the United States . . . but rather assigned his ‘interest in the

property adverse to the interest held by the United States.’” 

733 F.2d 581, 584 (8th Cir. 1984), (citation omitted)

superseded by statute on other grounds by 21 U.S.C.

§ 881(h); see also Currency Totalling $48,318.08, 609 F.2d

at 213; United States v. $22,993.00, 332 F. Supp. 1277, 1279

(E.D. La. 1971).

The claim asserted here is distinguishable. In this case,

we address the assignment, not of the seized properties

themselves, but of the right to receive an award of attorney’s

fees to be paid out by the United States. The United States

does not, as in Thirteen Thousand Dollars in U.S. Currency,

hold an adverse interest in that award. Thus, a claimant’s

attempt to retrieve their wrongfully seized property is not a

claim against the United States. In contrast, an award of

attorney’s fees represents a right to be paid the United

States’s money, wholly consistent with the definition of a

“claim” in Hobbs.

Honig and the Kim Claimants next argue that the purpose

of CAFRA will be frustrated if an award of attorney’s fees is

considered a claim against the United States or if we do not

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22 UNITED STATES V. KIM

find an equitable exception to the Anti-Assignment Act. 

Given that the purpose of CAFRA is “to give innocent

property owners the means to recover their property and

make themselves whole,” H.R. Rep. No. 105-358(I), at 27

(1997), Honig and the Kim Claimants argue that applying the

Anti-Assignment Act would prevent claimants from hiring

counsel to contest the wrongful seizure of their assets. This

concern is overstated. If the Anti-Assignment Act applies to

an award of attorney’s fees under CAFRA, it would bar only

the assignment (and thus the right to be paid directly by the

United States) of the award from the claimant to their

counsel. The Anti-Assignment Act does not, and cannot,

prohibit the district court from awarding attorney’s fees to a

prevailing claimant under Section 2465(b)(1)(A).

Nevertheless, the Supreme Court cautions us that, before

we apply the Anti-Assignment Act to CAFRA fee awards, we

should consider whether applying the Act in this context is

consistent with its purposes. Martin, 300 U.S. at 596–97. 

We conclude that applying the Anti-Assignment Act to

CAFRA awards is consistent with the purpose of the Act

identified by the Supreme Court in Shannon, which is “to

save to the United States ‘defenses which it has to claims by

an assignor by way of set-off, counter claim, etc., which

might not be applicable to an assignee.’” Shannon, 342 U.S.

at 291–92 (citation omitted). The Supreme Court has

recognized that the Government has the right to offset

statutory attorney’s fees awards against preexisting debts

owed to the United States. See Astrue v. Ratliff, 560 U.S.

586, 589 (2010). Here, the parties ultimately dispute the

Government’s right to offset the Kim Claimants’ tax

liabilities against the CAFRA awards. Therefore, applying

the Anti-Assignment Act to attorney’s fees awards under

CAFRA would further the purposes of the Act.

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UNITED STATES V. KIM 23

The purpose of the Anti-Assignment Act, to preserve

defenses to the United States, does not conflict with CAFRA. 

The right of a claimant to be made whole under CAFRA

cannot be taken to mean that the government is forbidden to

offset preexisting debts before it pays out a sum of money to

a claimant. The government has a right to be made whole as

well, and the Anti-Assignment Act allows the government to

balance its obligation to make a CAFRA claimant whole

against that claimant’s debts to the United States. Because

CAFRA attorney’s fees awards are payable to the client, not

to the attorney, as detailed below, the Anti-Assignment Act

ensures that the Government preserves its defenses even

when an attorney is the beneficiary of the fee award.

2. Attorney’s Fees Under CAFRA Belong to the

Client

In determining whether the Anti-Assignment Act applies

in this case, we must decide whether the attorney’s fees

awards “belong” to the Kim Claimants or to Honig. If the

awards belong to and are directly payable to Honig, then the

Anti-Assignment Act will not apply, as no assignment will

have been necessary to place the awards in Honig’s hands. 

Honig contends that his right to the fee award arose from the

representation agreement and vested the moment that the Kim

Claimants prevailed against the Government. Honig

interprets our precedent to mean that fee awards are an asset

of the attorney, not the client. Again, the question before us

is not who is ultimately entitled to the fee awards, but

whether that award can be paid directly to the attorney from

the United States.

In Astrue v. Ratliff, the Supreme Court confronted a

similar question: whether an award of attorney’s fees under

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24 UNITED STATES V. KIM

the EAJA could be paid directly to the attorney. 560 U.S. at

589. The attorney in Ratliff sought direct payment, because

the government asserted a right to offset the judgment against

the litigant’s preexisting debt. Id. Within the EAJA context,

the Supreme Court held that a “fees award is payable to the

litigant and is therefore subject to a Government offset to

satisfy a pre-existing debt that the litigant owes the United

States.” Id. The Supreme Court so held, even though it

recognized “the practical reality that attorneys are the

beneficiaries and, almost always, the ultimate recipients of

the fees that the statute awards to prevailing parties.” Id. at

598 (alteration and internal quotation marks omitted). We

extended Ratliff to the CAFRA context in $186,416.00 I,

holding that “attorney fees awarded under CAFRA are

payable to the claimant, not to claimant’s attorney.” 642 F.3d

at 754. We further observed that “[d]irect payment to the

attorney is the exception, not the rule. . . . Unless the statute

specifies payment to the litigant’s attorney, payment to the

attorney is not assumed.” Id. at 756. There is no language in

CAFRA providing for direct payment of a fee award to the

attorney.

Honig and the Kim Claimants rely on pre-Ratliff cases to

argue that the fee awards should be paid directly to Honig. 

The primary case they rely upon is U.S. ex rel Virani v. Jerry

M. Lewis Truck Parts & Equip., Inc., 89 F.3d 574 (9th Cir.

1996). In that case (a qui tam action where fees were

awarded under the False Claims Act), we determined that

“the fee is for the attorney and the attorney should receive it,”

that is, the fees should be paid directly to the attorney. Id. at

578. We left no doubt there: a fee award “must be directed to

the attorney. Were the rule otherwise, plaintiffs would obtain

possession of fee awards, and attorneys would be left to

attempt to obtain the money paid for their services as best

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UNITED STATES V. KIM 25

they could.” Id. at 579. Honig also cites to Marre v. United

States, where the Fifth Circuit squarely held that the

government could not set off an award of fees to the client’s

attorney against the client’s tax liability, because the fee

belongs to the attorney.

7

 117 F.3d 297, 304 (5th Cir. 1997).

However, the reasoning in these cases does not survive

Ratliff. In Virani, we recognized that the language of the

False Claims Act provided that attorney’s fees awards were

to be paid to the clients, but interpreted this language to mean

that a client had only the “power” to decide whether to seek

fees or not. 89 F.3d at 576–79. In Ratliff, the Supreme Court

interpreted the text of the EAJA, providing that fees are to be

awarded to the prevailing party, to mean that an award of

attorney’s fees was to be paid directly to the party and not to

the attorney. 560 U.S. at 592–93. Ratliff arrived at this

holding in the same posture as Marre: whether the fee was

paid directly to the attorney or not affected the government’s

right to use the fee award to offset a preexisting liability. Id.

at 590–91. The Supreme Court in Ratliff recognized that it

was overturning circuit precedent that provided for direct

payment of fee awards under the EAJA to attorneys. Id.

Accordingly, Ratliff abrogated Virani,

8

and we are bound by

7 Notably, the Fifth Circuit’s reasoning was motivated in part by a

recognition that, if the attorney’s ownership of the fees derived from an

assignment, that interest would be voided by the Anti-Assignment Act. 

Marre, 117 F.3d at 305.

8

“As a three-judge panel of this circuit, we are bound by prior panel

decisions . . . and can only reexamine them when their ‘reasoning or

theory’ of that authority is ‘clearly irreconciliable’ with the reasoning or

theory of intervening higher authority.” Rodriguez v. AT&T Mobility

Servs. LLC, 728 F.3d 975, 979 (9thCir. 2013) (quoting Miller v. Gammie,

335 F.3d 889, 893 (9th Cir. 2003) (en banc)). “It is not enough for there

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26 UNITED STATES V. KIM

our holding in $186,416.00 I that “attorney fees awarded

under CAFRA are payable to the claimant, not to claimant’s

attorney.” 642 F.3d at 754.

Honig and the Kim Claimants’ final argument that the

fees should be paid directly to Honig depends upon language

in United States v. $186,416.00 that “fees may be directed to

an attorney on account of a contractual assignment, even

when the attorney has no statutory right to collect fees

directly.” 722 F.3d 1173, 1175 (9th Cir. 2013) (“$186,416.00

II”). However, in that case, the government had waived its

rights under the Anti-Assignment Act. Id. at 1176 n.1.

$186,416.00 II did not reach this question: whether a

contractual assignment of an attorney’s fees award can

survive after the government invokes its rights under the

Anti-Assignment Act. Because an award of attorney’s fees

under CAFRA is “a claim against the United States” and the

fees are payable directly to the Kim Claimants, the AntiAssignment Act applies to the assignment in this case. The

remaining question is the scope of the Anti-Assignment Act

and what rights, if any, Honig retains in the fee awards.

to be ‘some tension’ between the intervening higher authority and prior

circuit precedent, or for the intervening higher authority to ‘cast doubt’ on

prior circuit precedent. The intervening higher precedent must be ‘clearly

inconsistent’ with the prior circuit precedent.” Lair v. Bullock, 697 F.3d

1200, 1207 (9th Cir. 2012) (citations omitted) (quoting United States v.

Delgado-Ramos, 635 F.3d 1237, 1239 (9th Cir. 2011) and United States

v. Orm Hieng, 679 F.3d 1131, 1140–41 (9th Cir. 2012)). We are unable

to reconcile Virani with Ratliff under even this demanding standard.

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UNITED STATES V. KIM 27

C. The Anti-Assignment Act Voids the Assignment of

the Fee Awards, but Honig Retains an Attorney’s

Lien in the Proceeds

The plain language of the Anti-Assignment Act compels

the conclusion that the purported assignment of the Kim

Claimants’ attorney’s fees awards to Honig is void. The Act

states that “[a]n assignment may be made only after” the

laundry list of requirements has been met. 31 U.S.C.

§ 3727(b). It is undisputed that the Kim Claimants and Honig

failed to abide by the Anti-Assignment Act. Because it

applies to the assignment at issue in this case, that assignment

is void. Therefore, the award of attorney’s fees must be paid

to the Kim Claimants, and not to Honig.

Cases interpreting the Anti-Assignment Act over its long

history have been unequivocal: the Act, where it applies, is a

total bar on the assignment of claims against the United

States. In United States v. Gillis, the Supreme Court held that

assignments that ran afoul of the Anti-Assignment Act “were

made void by the statute.” 95 U.S. at 415. Failure to comply

with the Act renders an “assignment ‘null and void as against

the United States.’” Northrop Grumman Computing Sys.,

Inc. v. United States, 709 F.3d 1107, 1113 (Fed. Cir. 2013). 

However, voiding the assignment is the extent of the Act’s

reach; applying the Act “leaves the claim where it was before

the purported assignment.” Colonial Navigation Co. v.

United States, 181 F. Supp. 237, 240 (Ct. Cl. 1960). The

underlying agreement is untouched, only the assignment is

voided. See Murkledove, 635 F.3d at 794. Thus, although the

assignment is voided by the Anti-Assignment Act, there is

nothing in the Act to prevent Honig from obtaining an interest

in the attorney’s fees awards through another mechanism.

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28 UNITED STATES V. KIM

Under California law, Honig obtained an attorney’s lien

against the CAFRA attorney’s fees awards. “InCalifornia, an

attorney’s lien is created only by contract—either by an

express provision in the attorney fee contract or by

implication where the retainer agreement provides that the

attorney is to look to the judgment for payment for legal

services rendered.” Carroll v. Interstate Brands Corp.,

121 Cal. Rptr. 2d 532, 534 (Ct. App. 2002) (citations

omitted). “An attorney’s contractual lien is created and takes

effect when the fee agreement is executed.” Waltrip v.

Kimberlin, 79 Cal. Rptr. 3d 460, 465 (Ct. App. 2008). “A

contractual lien for attorney fees is a secret lien; no notice is

required before it is effective against a judgment creditor who

levies on the judgment.” Id. The language of the fee

agreement in this case states that a fee award under CAFRA

belongs to Honig. This language is likely sufficient under

California law to give rise to a lien in the attorney’s fees

awards for Honig’s benefit. The Government concedes that

Honig likely obtained a lien in the fee awards as a matter of

California law. The Government argues, however, that the

Anti-Assignment Act reaches beyond the assignments at issue

and voids any interest that Honig might have in the awards,

at least as against the United States, leaving the

Government’s tax liens with priority over all other interests.

The Government relies primarily on two Supreme Court

cases for its expansive view of the Anti-Assignment Act’s

scope. In Nutt v. Knut, the Supreme Court held that a clause

in a contract “making the payment of the attorney’s

compensation a lien upon the claim asserted against the

government” was “null and void upon its face.” 200 U.S. 12,

20 (1906). However, the Supreme Court declined to reverse

the state court judgment in favor of the attorney, holding that

the contract “created a legal obligation upon the part of the

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UNITED STATES V. KIM 29

[client] which, if not recognized after collection of the

money, could have been enforced by suit for the benefit of the

attorney, without doing violence to the statute or to the public

policy established by its provisions.” Id. at 21. At most,

voiding the clause in the contract meant that the “agreement

did not give the attorney any interest or share in the claim

itself, nor any interest in the particular money paid over to the

claimant by the government.” Id. That said, the Supreme

Court in Nutt did not confront the issue here: the contract “did

not assume to give [the attorney] any lien upon the claim, or

any priority in the distribution of the money . . . . Indeed, no

lien is asserted by the plaintiff in his pleadings.” Id.

Nutt was followed by the second Supreme Court case

relied upon by the Government, Calhoun v. Massie, 253 U.S.

170 (1920). In Calhoun, the Supreme Court held that the

Anti-Assignment Act voided “[t]he provision in the contract

sued on purporting to give a lien upon any warrant issued.” 

Id. at 175. This was the only line in Calhoun that pertained

to the Anti-Assignment Act, the rest of the case was devoted

to a statute limiting contingency fee agreements for Civil War

claims. Id. Other cases have followed Nutt and Calhoun to

hold that attorneys may not take a contingency interest in or

a lien against claims against the United States. See United

States v. Transocean Air Lines, Inc., 386 F.2d 79, 82 (5th Cir.

1967) (“A contingent fee in a judgment against the United

States is an assignment subject to the Anti-assignment Act.”);

Kearney v. United States, 285 F.2d 797, 800 (Ct. Cl. 1961)

(“[A] contract between an attorney and a client which gives

the attorney an interest in the client’s claim against the

Government is exactly what the anti-assignment statute

forbids.”); Pittman v. United States, 116 F. Supp. 576, 580

(Ct. Cl. 1953) (holding that Nutt “stands for the broad

principle that any attempt to impress a lien upon the proceeds

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30 UNITED STATES V. KIM

of a claim against the United States as security for the

payment of an attorney’s fee is within the ends to which the

prohibition of [the Act] was aimed.”).

However, Honig is not asserting a right akin to a

contingency fee in the awards, which could be voided by

operation of the Anti-Assignment Act. His lien against the

awards arose from the representation agreement by operation

of California law. The Government’s cited precedents stand

for a narrow proposition: an assignee may not stand in the

shoes of the assignor and seek payment directly from the

United States. In all of the cases cited, the attorney was

seeking direct payment from the United States, and thus stood

in the shoes of the assignor. See Transocean Air Lines, Inc.,

386 F.2d at 81; Kearney, 285 F.2d at 799; Pittman, 116 F.

Supp. at 577; see also Shannon, 342 U.S. at 290–91; Aetna

Cas. & Sur. Co., 338 U.S. at 369; Gillis, 95 U.S. at 411. 

Calhoun reinforces this interpretation of the Anti-Assignment

Act. Calhoun stated only that the Anti-Assignment Act

prohibited the creation of a lien on the warrant. 253 U.S. at

175. The warrant, at that time, was not the proceeds of a

claim against the United States but the right to be paid

directly from the Treasury. See Black’s Law Dictionary 1724

(9th ed. 2009) (defining “treasury warrant” as “[a]n order in

the form of a check on which government disbursements are

paid”). Notably, the predecessor to the Anti-Assignment Act

stated only that a claim allowed by Congress “shall not . . . be

paid to any person or persons other than the claimant or

claimants.” Act of July 29, 1846, ch. 66, 9 Stat. 41. From the

beginning, then, the Anti-Assignment Act has been concerned

with direct payment of claims.

Subsequent to Nutt and Calhoun, the Supreme Court

relaxed the harsh strictures of the Anti-Assignment Act. In

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UNITED STATES V. KIM 31

Martin, the Court confirmed that the Anti-Assignment Act

reaches only the initial payment from the Treasury, holding

that “[a]n assignment ineffective at law may none the less

amount to the creation of an equitable lien when the subject

matter of the assignment has been reduced to possession and

is in the hands of the assignor.” Martin, 300 U.S. at 597. 

This interpretation is consistent with the Act’s purposes. The

United States has no need to worry about fraud or any of the

other evils associated with the assignment of claims against

it once the proceeds of the claim have been reduced to the

possession of the purported assignor. The key purpose of the

act in this case, “to save to the United States ‘defenses which

it has to claims by an assignor . . . which might not be

applicable to an assignee,’” Shannon, 342 U.S. at 291–92

(citation omitted), is not implicated when the proceeds of the

claim have already been paid out. By the time the CAFRA

awards have been paid to the Kim Claimants, as they must,

the Government has had every opportunity to assert any

defenses that it had against the Kim Claimants. Adopting the

Government’s position would transform theAnti-Assignment

Act from its core purpose as a defense that the Government

may assert to claims against the United States, see

Murkledove, 635 F.3d at 794, to a far reaching mechanism

that the Government can use to interfere with the private

arrangements of a claimant solely because the claimant has

come into possession of federal moneys.

The circumstances of this case illustrate why the AntiAssignment Act should be so circumscribed. The

Government urges us to extend the Anti-Assignment Act to

invalidate all interests that Honig has in the attorney’s fees

awards that he earned, because such an interpretation is

necessaryto protect the Government’s ability to collect taxes. 

However, the Government had an opportunity to protect its

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32 UNITED STATES V. KIM

ability to collect taxes in this case and will have that ability in

the future. Nothing in our opinion today impinges upon the

Government’s statutory right to offset an award of attorney’s

fees against a claimant’s tax liabilities. The Government in

this case simply waived its right to do so, and now seeks to

stretch the Anti-Assignment Act beyond all recognition to

rescue it from its litigation decision. Having waived the right

to set off the attorney’s fees awards, the Government must

rely on its tax liens against the Kim Claimants, and it is free

to enforce them. But in doing so, the Government will have

to contend with Honig’s attorney’s lien.

Because the Anti-Assignment Act applies to void the

assignment in the representation agreement between the Kim

Claimants and Honig, we vacate the district court’s order

awarding attorney’s fees directly to Honig. We remand for

further proceedings, including determining the priority of

liens in the awards.9

CONCLUSION

The Government also appeals the district court’s order

denying its Rule 60(b)(1) motion. “A district court’s denial

of relief from a final judgment, order, or proceeding under

9 The Government’s position as to lien priority if the Anti-Assignment

Act does not apply is not clear. In a footnote in its brief, the Government

concedes that, if the Anti-Assignment Act does not bar the assignment,

Honig’s interest is superior to the Government’stax lien. However, in the

same footnote the Government cites to a later page in its brief asserting

that its admission with regard to lien priority in the properties does not

carry over to the attorney’s fees awards. We remand for further

proceedings, because the Government’s position is unclear, and the

Government did not anticipate our holding that Honig’s interest in the fee

awards could survive the Anti-Assignment Act.

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UNITED STATES V. KIM 33

Federal Rule of Procedure 60(b) is reviewed for abuse of

discretion.” Lemoge v. United States, 587 F.3d 1188,

1191–92 (9th Cir. 2009). Honig and the Kim Claimants agree

that, if we were to conclude that the Anti-Assignment Act

applies, that the additional awards at issue in the Rule

60(b)(1) motion must also be vacated. In light of our

conclusion that the Anti-Assignment Act applies to an award

of attorney’s fees under CAFRA, we vacate the district

court’s post-judgment orders awarding additional fees and

remand for further proceedings.

The parties are to bear their own costs on appeal.

VACATED AND REMANDED.

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