Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-01-07092/USCOURTS-caDC-01-07092-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 7, 2002 Decided July 12, 2002

No. 01-7092

Keith Winston Watters,

Appellee

v.

Washington Metropolitan Area Transit Authority,

Appellant

Brenda Blocker,

Third-Party Defendant-Appellee

Appeal from the United States District Court

for the District of Columbia

(No. 93cv01434)

Vincent A. Jankoski argued the cause and filed the briefs

for appellant. With him on the briefs were Cheryl C. Burke,

Robert J. Kniaz, and Gerard J. Stief.

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Nathaniel H. Speights argued the cause for appellee Keith

Winston Watters.

Thomas W. Beimers filed the brief for third-party defendant-appellee Brenda Blocker.

Before: Tatel and Garland, Circuit Judges, and Williams,

Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge Garland.

Garland, Circuit Judge: Keith Watters, an attorney,

brought suit against the Washington Metropolitan Area Transit Authority (WMATA) for failing to honor an attorney's lien

on the proceeds of a settlement between WMATA and Watters' former client. We hold that WMATA's sovereign immunity bars Watters' lawsuit.

I

Approximately ten years ago, Watters represented Brenda

Blocker in a personal injury action against WMATA in the

District of Columbia. Under the retainer agreement signed

by Blocker, Watters was entitled to 33.3% of any recovery

obtained in the case. After three and a half years of investigation and settlement negotiations, Blocker, apparently dissatisfied with the $55,000 compromise then under discussion

between Watters and WMATA, discharged Watters. That

same day, February 19, 1992, Blocker retained Bonita Rudd

as her new attorney. On February 26, Watters sent

WMATA a letter asserting an attorney's lien, in the amount

of one-third of $55,000, on any recovery Blocker might obtain

from the Authority. WMATA did not respond. Rudd settled

Blocker's case for $60,000 on April 3, 1992, and WMATA,

disregarding Watters' purported lien, paid the full amount to

Blocker and Rudd.

Watters brought the instant suit against WMATA for

breach of contract and "breach of duty to enforce equitable

lien." Compl. at 5. The district court dismissed Watters'

breach of contract claim, but after a trial found WMATA

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liable for failing to honor Watters' lien. WMATA appeals

from the judgment against it.1

II

On appeal, WMATA contends that sovereign immunity

precludes Watters from asserting or enforcing an attorney's

lien against funds in its possession.2 WMATA was created by

an interstate compact entered into by the District of Columbia and the states of Maryland and Virginia.3 As we have

repeatedly held, the three signatories conferred each of their

respective sovereign immunities, including the Eleventh

Amendment immunity of the two states, upon the Authority.4

There is no question that the three signatories' sovereign

immunity extends to suits for breach of attorney's liens. The

Eleventh Amendment gives the two states immunity from

suit in federal court, see California v. Deep Sea Research,

Inc., 523 U.S. 491, 501-02 (1998), and judicial decisions in all

__________

1 WMATA also filed a third-party complaint against Blocker and

Rudd, which the district court dismissed. WMATA appeals that

dismissal as well, but our determination that WMATA is immune

from liability to Watters moots the Authority's third-party claim.

2 WMATA did not raise this defense in its answer to Watters'

complaint, but did raise it both in subsequent filings in the district

court and in its opening brief in this court. Sovereign immunity is

a jurisdictional issue that may be raised at any time during the

course of litigation. Burkhart v. Washington Metro. Area Transit

Auth., 112 F.3d 1207, 1216 (D.C. Cir. 1997).

3 On November 6, 1966, Congress consented to the WMATA

Compact and enacted it for the District of Columbia. Washington

Metro. Area Transit Auth. Compact, Pub. L. No. 89-774, 80 Stat.

1324 (1966). The Compact is codified at D.C. Code s 9-1107.01;

Md. Code, Transp. s 10-204; and Va. Code ss 56-529,-530.

4 See, e.g., Jones v. Washington Metro. Area Transit Auth., 205

F.3d 428, 432 (D.C. Cir. 2000); Beebe v. Washington Metro. Area

Transit Auth., 129 F.3d 1283, 1287 (D.C. Cir. 1997); Sanders v.

Washington Metro. Area Transit Auth., 819 F.2d 1151, 1154 (D.C.

Cir. 1987); Morris v. Washington Metro. Area Transit Auth., 781

F.2d 218, 224-25 (D.C. Cir. 1986).

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three jurisdictions indicate that each has sovereign immunity

against the imposition and enforcement of equitable liens (and

against related devices like garnishment5) in their own courts

as well.6 Thus, unless WMATA's sovereign immunity has

been waived, the district court lacks jurisdiction to enter a

judgment against the Authority. See Burkhart v. Washington Metro. Area Transit Auth., 112 F.3d 1207, 1216 (D.C. Cir.

1997) (noting that "sovereign immunity claims are jurisdictional").

We may find a waiver of sovereign immunity "only where

stated by the most express language or by such overwhelming implications from the text as will leave no room for any

other reasonable construction." Morris v. Washington Metro. Area Transit Auth., 781 F.2d 218, 221 (D.C. Cir. 1986)

__________

5 To "garnish" is to attach property (often wages) of a debtor that

is in the possession of a third party in order to satisfy a debt.

Black's Law Dictionary 689 (7th ed. 1999). See Knight v. United

States, 982 F.2d 1573, 1578 (Fed. Cir. 1993) (holding that "unless

the United States has submitted itself to such state law, an attorney

lien statute, like a state garnishment statute, has no force or effect

against it and places no restraints on the government's payment of

its obligations to another, including the payment of wages").

6 See Grunley Constr. Co. v. District of Columbia, 704 A.2d 288,

290 (D.C. 1997) (garnishment); Chewning v. District of Columbia,

119 F.2d 459, 460 (D.C. Cir. 1941) (garnishment); Mayor of Baltimore v. Hooper, 539 A.2d 1130, 1132 (Md. 1988) (holding, "upon

considerations of public policy" rather than sovereign immunity,

that municipal corporations are not amenable to garnishment);

Kator, Scott, & Heller, PC v. Landsidle, 35 Va. Cir. 107, 1994 WL

1031399, at *2 (Va. Cir. Ct. 1994) (attorney's equitable claim against

settlement fund); Slaughter v. Winston, 347 F. Supp. 1221, 1222-23

(E.D. Va. 1972) (garnishment); Phillips v. Rector of Univ. of Va., 34

S.E. 66 (Va. 1899) (mechanic's lien); see also Department of the

Army v. Blue Fox, Inc., 525 U.S. 255, 264 (1999) (noting that

"sovereign immunity bars creditors from attaching or garnishing

funds in the Treasury, or enforcing liens against property owned by

the United States" (citations omitted)); Knight v. United States,

982 F.2d 1573, 1578-79 (Fed. Cir. 1993) (holding that sovereign

immunity bars an attorney's lien against the United States).

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(quoting Edelman v. Jordan, 415 U.S. 651, 673 (1974) (internal quotation marks and alteration omitted)); see Lizzi v.

Alexander, 255 F.3d 128, 133 (4th Cir. 2001) (requiring "clear

and unequivocal" waiver of WMATA's immunity). We find

nothing to indicate such a waiver of WMATA's immunity

against a suit for breach of duty to enforce an attorney's lien.

Although the WMATA Compact provides that WMATA

may "[s]ue and be sued," Compact s 12(a), we have held that

provision to extend only as far as the more specific (and

partial) waiver of sovereign immunity contained in section 80

of the Compact. Morris, 781 F.2d at 221 n.3; accord Lizzi,

255 F.3d at 133-34. Section 80 provides, in relevant part, as

follows:

The Authority shall be liable for its contracts and for its

torts and those of its Directors, officers, employees and

agent[s] committed in the conduct of any proprietary

function, in accordance with the law of the applicable

signatory (including rules on conflict of laws), but shall

not be liable for any torts occurring in the performance

of a governmental function.

Compact s 80 (emphasis added). This section falls far short

of a clear and unequivocal waiver of WMATA's immunity

against attorney's charging liens. On its face, section 80

makes no reference to liens or their enforcement, nor is there

any implication in its text that the Authority's funds may be

made subject to equitable liens of any sort. In the District of

Columbia,7 an attorney's lien against funds held by a third

party (like WMATA) is not a contract with, or tort of, the

third party, but rather is a "qualified right of property which

a creditor has in or over specific property of his debtor, as

security for the debt." Wolf v. Sherman, 682 A.2d 194, 196-

__________

7 We look to District of Columbia law to define the nature of

Watters' claim, because the District is where the obligation (to pay

attorney's fees) that generated the lien arose, and section 80 of the

Compact provides that WMATA is liable "in accordance with the

law of the applicable signatory." See Belton v. Washington Metro.

Area Transit Auth., 20 F.3d 1197, 1199 n.1 (D.C. Cir. 1994).

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97 (internal quotation marks and alteration omitted).8 The

District does not have a statute that authorizes the imposition

of an attorney's lien; such a lien is an equitable device that

"arises when an attorney obtains a judgment [or settlement]

for a client, and ... [is] merely a claim to ... equitable

interference by the court to have that judgment [or settlement] held as security for ... the attorney's charges against

the client." Id. at 197 (internal quotation marks and alteration omitted); see Elam v. Monarch Life Ins. Co., 598 A.2d

1168, 1171 (D.C. 1991).

Watters contended at oral argument that the breach of an

attorney's lien constitutes a tort, and is thus covered by

section 80's waiver of sovereign immunity for torts committed

by the Authority.9 But even if that contention were correct,10

it begs the question of whether Watters could have placed a

lien on WMATA's property in the first place. As we have

noted above, the case law of the three signatories indicates

__________

8 See also Blue Fox, 525 U.S. at 262-63 ("An equitable lien ...

merely grants a plaintiff 'a security interest in the property, which

[the plaintiff] can then use to satisfy a money claim' " (quoting Dan

B. Dobbs, Law of Remedies s 4.3(3), at 601 (2d ed. 1993))); Black's

Law Dictionary 933 (7th ed. 1999) (defining "attorney's lien" as

"[t]he right of an attorney ... to encumber money payable to the

client ... until the attorney's fees have been properly determined

and paid"). In Grunley Construction Co., the District of Columbia

Court of Appeals held that the District was immune from garnishment notwithstanding a statute that expressly waived sovereign

immunity as a defense to a suit on a contract. 704 A.2d at 290.

9 Although Watters failed to file a brief in this court, we permitted his counsel to address the sovereign immunity issue at oral

argument. See Fed. R. App. P. 31(c).

10 In Blue Fox, the Supreme Court suggested that a suit to

enforce an equitable lien does not come within the Federal Tort

Claims Act, which waives the federal government's immunity for

"tort claims, in the same manner and to the same extent as a

private individual under like circumstances." 28 U.S.C. s 2674; see

Blue Fox, 525 U.S. at 260 n.3. We have not found a District of

Columbia case that discusses the proper classification of an attorney's claim against a third party for breach of an attorney's lien.

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that he could not have. See supra note 6 and accompanying

text.

Our conclusion that WMATA is immune from the imposition or enforcement of an attorney's lien is bolstered by the

same considerations that have led the courts to hold that

public funds are generally immune from equitable liens and

garnishments unless expressly permitted by statute. As the

District of Columbia Court of Appeals declared in Grunley

Construction Co. v. District of Columbia, "The policy behind

the rule is manifest: the day-to-day fiscal integrity of local

government could not be maintained if judgment creditors

could seize funds that have been earmarked for other purposes." 704 A.2d 288, 290 (D.C. 1997).11 A lien of the kind

Watters seeks to enforce would have the same impact on the

public fisc.12 Accordingly, we will not assume that the Compact's signatories intended to waive WMATA's immunity

from the imposition or enforcement of such liens absent a

clear and unequivocal expression of their intent to waive.

Finding no such expression, we conclude that Watters' action

is barred by WMATA's sovereign immunity.13

__________

11 See Buchanan v. Alexander, 45 U.S. 20, 20 (1846) (noting that

"[t]he funds of the government are specifically appropriated to

certain national objects, and if such appropriations may be diverted

and defeated by state process or otherwise, the functions of the

government may be suspended," and holding that the United States

is therefore immune from writs of attachment against seamen's

wages); Hooper, 539 A.2d at 1132 ("The policy of the law which

prevents the laying of attachments in the hands of public officials

seeks to prevent inconvenience and the disruption of public affairs."

(internal quotation marks omitted)).

12 As the Supreme Court noted in Hess v. Port Authority TransHudson Corp., WMATA is "an enterprise constantly dependent on

funds from the participating governments to meet its sizable operating deficits." 513 U.S. 30, 49 (1994) (citing Morris, 781 F.2d at 225-

27). The " 'agency is so structured that, as a practical matter, if the

agency is to survive, a judgment must expend itself against state

treasuries.' " Id. (quoting Morris, 781 F.2d at 27).

13 This case was originally filed by Watters in the Superior Court

of the District of Columbia, and then removed to federal court by

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III

For the foregoing reasons, we conclude that WMATA is

shielded by sovereign immunity from Watters' suit for breach

of duty to enforce an attorney's lien. As a consequence, the

district court is without jurisdiction to grant him the recovery

he seeks. We therefore vacate the judgment of the district

court, and remand with instructions to dismiss this case for

lack of jurisdiction.

Vacated and remanded.

__________

WMATA. After we heard oral argument, the Supreme Court held,

in Lapides v. Board of Regents, 122 S. Ct. 1640 (2002), that when a

state has waived sovereign immunity on a state-law claim in its own

courts, it waives its Eleventh Amendment immunity by removing

that claim to federal court. As the WMATA signatories have not

waived immunity from attorney's liens in their own courts, the

narrow holding of Lapides does not apply to this case. Even if it

did, it would not be controlling because WMATA's immunity does

not arise solely from the Eleventh Amendment. In any event,

Watters has never argued that WMATA waived its immunity

(Eleventh Amendment or otherwise) by removing this case to

federal court. Unlike the defense of sovereign immunity, which is

jurisdictional and may be raised at any time, the claim that

WMATA waived its immunity is an argument that must be raised in

a timely fashion. Cf. Whelan v. Abell, 48 F.3d 1247, 1250-51 (D.C.

Cir. 1995) (holding that appellant waived its claim that its opponent

had waived the protections of the Noerr-Pennington doctrine by

failing to assert the opponent's waiver); Belton, 20 F.3d at 1202

(holding that a party may waive its opponent's waiver of an argument by not raising it on appeal). And we see no reason to

consider, sua sponte, an issue upon which neither this circuit nor

the Supreme Court has yet opined.

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