United States Court of Appeals

For the First Circuit 

No. 16-1010 

LAW OFFICES OF DAVID EFRON, P.C. 

Appellant, 

v. 

MADELEINE CANDELARIO, 

Appellee. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO 

[Hon. José A. Fusté, U.S. District Judge] 

Before 

Howard, Torruella, and Dyk,*

Circuit Judges. 

 Charles A. Cuprill-Hernández on brief for appellant. 

Michelle Pirallo-Di Cristina on brief for appellee. 

December 2, 2016 

 * Of the Federal Circuit, sitting by designation. 
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DYK, Circuit Judge. The Law Offices of David Efron, 

P.C. (“Efron Firm”) appeals from an order of the United States 

District Court for the District of Puerto Rico directing that 

“the moneys for legal fees to Mr. Efron, which we ordered 

retained by our Clerk, be disbursed to the Court of First 

Instance, Superior Part of San Juan.” ECF No. 55. We conclude 

that Puerto Rico courts cannot garnish funds deposited in a 

federal district court’s registry, and that the district court 

cannot transfer registry funds without transferring the 

concomitant case. Because the appellee, Madeleine Candelario, 

has no right to intervene in the federal action, we reverse and 

direct that the funds be paid pursuant to the provisions 

originally governing the funds’ disposition. 

I. 

David Efron (“Efron”) and Madeleine Candelario were 

involved in two proceedings before the Superior Court of Puerto 

Rico: a divorce proceeding that concluded in 2000, and a pending 

marital property division proceeding. David Efron is the sole 

owner of the Efron Firm. In the divorce proceeding, the Superior 

Court of Puerto Rico ordered payment of $5,473,627.98 plus 

interest from Efron to Candelario. Candelario alleges that Efron 

has refused to pay as ordered by the Superior Court, which has 

forced her to resort to garnishing funds owned by Efron. 
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The present controversy concerns funds allegedly owned 

by Efron1 and deposited in the federal district court registry. 

In the case of Juan Carlos Torres Rivera v. Hospital Menonita 

Caguas, Inc., No. 15-1231 (D.P.R. Aug. 31, 2015), in the 

district court, the Efron Firm represented the plaintiffs and 

secured a settlement for its clients. In accordance with the 

settlement agreement, the defendants deposited the Efron Firm’s 

attorney’s fees with the district court clerk. Meanwhile, in the 

divorce proceeding in Puerto Rico Superior Court, the court 

issued an order garnishing amounts owed to Efron (not specific 

to these funds) to satisfy the Superior Court judgment. 

On September 14, 2015, Candelario served the district 

court clerk with a certified translation of the Superior Court’s 

garnishment order and requested that the district court transfer 

the amounts deposited in the district court registry pursuant to 

the Rivera settlement. On December 8, 2015, the district court 

ordered that “the moneys for legal fees to Mr. Efron, which we 

ordered retained by our Clerk, be disbursed to the Court of 

First Instance, Superior Part of San Juan, . . . for that court 

to decide to who, when, and how to disburse those moneys 

 

1 The parties dispute whether Efron, the individual, can be 

treated as owning funds belonging to the Efron Firm. For the 

purposes of this opinion, we treat the funds in the district 

court registry as belonging to Efron, the individual, without 

deciding the question of their ownership. 
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[because the] Superior Court is in the best position to consider 

all the equities, rights, and obligations arising from its 

judgment and orders for execution of judgment.” ECF No. 55. 

Efron appealed. The district court order is a final order, see 

Alstom Caribe, Inc. v. Geo. P. Reintjes Co., 484 F.3d 106, 113 

(1st Cir. 2007), over which we have jurisdiction under 28 U.S.C. 

§ 1291. We stayed the district court transfer order pending 

appeal. 

II. 

The first issue is whether the Superior Court of 

Puerto Rico could garnish funds deposited in the registry of the 

federal district court. Supreme Court authority establishes 

that it cannot: funds in federal court registries are protected 

under the doctrine of custodia legis from garnishment or 

attachment by a state court. 

In The Lottawanna, 87 U.S. (20 Wall.) 201 (1873), 

owners of a steamship were sued in a federal district court 

sitting in admiralty for failure to pay wages. The owners sold 

the steamship in order to pay the claims, and deposited the sale 

proceeds in the federal court registry for disbursement to the 

wage claimants. Id. at 211. After the deposit occurred, 

additional parties attempted to garnish the funds based on state 

court judgments relating to expenses incurred by the ship 
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owners. Id. at 214. The district court ordered the funds in the 

registry to be paid over to these state court judgment 

claimants. Id. at 215-16. On appeal, the Supreme Court held that 

the federal court registry “fund, from its very nature, is not 

subject to attachment either by the process of foreign 

attachment or of garnishment, as it is held in trust by the 

court to be delivered to whom it may belong.” Id. at 224. The 

Court thus ordered the return of the incorrectly disbursed funds 

from the state court judgment claimants. Id. at 225-26. This 

doctrine of custodia legis is “based on the desirability of 

avoiding a clash between judicial jurisdictions which would 

result from any attempt to use the process of one to seize 

assets in the control of another judicial authority . . . 

[especially] where the judicial departments belong to different 

sovereignties.” In re Quakertown Shopping Ctr., Inc., 366 F.2d 

95, 97 (3d Cir. 1966). 

The custodia legis principle has been reaffirmed in 

subsequent cases. In Osborn v. United States, 91 U.S. 474 

(1875), the Supreme Court held that the “power of the [district] 

court over moneys belonging to its registry continues until they 

are distributed pursuant to final decrees in the cases in which 

the moneys are paid.” Id. at 479 (emphasis added). And Motlow v. 

Missouri ex rel. Koeln, 295 U.S. 97 (1935), noted that a state 
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would be “without jurisdiction to enforce [its] liens . . . [if] 

the property was in custodia legis . . . [because of] 

interference with the custody of the federal court.” Id. at 99-

100. 

While this circuit has not had occasion to address the 

question of whether state courts can garnish funds deposited in 

a federal court registry, other circuits have followed 

Lottawanna to reach the same result. In Bucher v. Vance, 36 F.2d 

774 (7th Cir. 1929), the Seventh Circuit, citing Lottawanna, 

held that the “fund, in the registry of the District Court, and 

under its control, could not be subjected to seizure on behalf 

of” a state court judgment. Id. at 776. In White v. FDIC, 19 

F.3d 249 (5th Cir. 1994), the Fifth Circuit, also citing 

Lottawanna, held that 

[a]ny attempt to attach funds deposited in the 

registry of a federal district court is subject to the 

doctrine of custodia legis. Under the doctrine of 

custodia legis, funds deposited in the registries of 

federal courts may not be attached except by order of 

the judge or judges of said courts. 

Id. at 253 n.12 (internal citations and quotation marks 

omitted). In Garrick v. Weaver, 888 F.2d 687 (10th Cir. 1989), 

the Tenth Circuit, quoting Lottawanna, held that because 

“fund[s] in registry [are] not subject to attachment either by 

foreign attachment or garnishment and no money deposited . . . 

shall be withdrawn except by the order of the judge[, the 
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appellant] must obtain court approval before she can access the 

funds in the court registry.” Id. at 695 (internal quotation 

marks omitted). In Landau v. Vallen, 895 F.2d 888 (2d Cir. 

1990), the Second Circuit cited Lottawanna to explain that 

custodia legis serves to bar garnishment that would “prevent the 

court from disposing of the funds in accordance with the purpose 

for which they were deposited.” Id. at 893-94. And in United 

States v. Van Cauwenberghe, 934 F.2d 1048 (9th Cir. 1991), the 

Ninth Circuit cited Lottawanna for the proposition that “[i]t 

has long been asserted that property and funds in the registries 

of federal courts are not, as a general rule, subject to writs 

of attachment or garnishment.” Id. at 1062. Like the other 

circuits, we agree that Lottawanna prevents a state court, such 

as the Puerto Rico Superior Court, from garnishing funds in a 

federal court registry. 

III. 

We next turn to the issue of whether the federal 

district court had authority to transfer the funds to the 

Superior Court. Case law from this circuit bans such transfers 

unless accompanied by the concomitant transfer of the case. 

In Alstom Caribe, Inc. v. Geo. P. Reintjes Co., 484 

F.3d 106, 110 (1st Cir. 2007), Alstom Inc. sued Reintjes Co. and 

St. Paul Co. in the District of Puerto Rico for breach of 
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contract. The parties settled, and Reintjes and St. Paul 

disputed whether Reintjes owed monies to St. Paul in connection 

with the settlement expenses. Thereafter, St. Paul sued Reintjes 

in the Western District of Missouri to recover these amounts. 

Meanwhile, in the Puerto Rico district court, Reintjes had 

asserted counterclaims against Alstom. These were also settled, 

and Alstom deposited the funds to be paid to Reintjes with the 

Puerto Rico district court registry pursuant to the settlement. 

Id. at 110-11. The district court of Puerto Rico transferred 

these settlement funds deposited in its registry to the Western 

District of Missouri for it to “determine what to do with the 

funds.” Id. at 115. 

On appeal, the Alstom court noted that “[t]he most 

glaring defect in the order is the transmittal of the deposited 

funds to the Western District of Missouri without a concomitant 

transfer of any case or cause of action.” Id. at 114. “[T]here 

is no statute, rule, or legal precedent that authorizes a court 

to effect a non-consensual transfer of [court-deposited] funds 

to a different court without a concomitant transfer of the 

entire case (or, at least, some cause of action). Because the 

monetary transfer here was unaccompanied by a shifting of either 

the case or a cause of action within it, that transfer was 

legally insupportable.” Id. at 115. Here too, the district court 
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improperly ordered precisely such a “naked transfer” of the 

Efron Firm’s funds in its registry without the accompanying 

transfer of any of the claims. See id. at 114. 

IV. 

We finally consider the question of further 

proceedings. The Alstom court ultimately remanded the case and 

“direct[ed] the Puerto Rico district court to consider . . . the 

question[] of intervention.” Id. at 116. No such remand is 

appropriate here because Candelario never sought to intervene 

and has no right to intervene. 

Rule 24(b)(1) provides that “[o]n timely motion, the 

court may permit anyone to intervene who . . . has a claim or 

defense that shares with the main action a common question of 

law or fact.” Whether federal courts have ancillary jurisdiction 

over intervenor claims “will depend on whether the claim of the 

would-be intervenor is so related to the original action that it 

may properly be regarded as ancillary to it.” 7C Charles Alan 

Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and 

Procedure § 1917, at 586 (3d ed. 2007) (emphasis added). This 

circuit has found that ancillary jurisdiction exists only when 

the issues “are so inextricably entangled with one another that 

full justice cannot be done in [the] original suit without 
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adjudication of the matters raised” in the ancillary claim. 

Walmac Co. v. Isaacs, 220 F.2d 108, 114 (1st Cir. 1955). 

Here, Candelario concedes that she has no right to 

intervene to assert a right to the funds in the federal 

registry. She states that she “could not seek intervention as of 

right because she had no interest in the underlying case, and 

[could not seek] . . . permissive intervention . . . because the 

underlying case was over.” Appellee Br. At 8-9. But even if she 

had made a request to intervene, it is clear that Candelario’s 

claim does not share with the underlying Rivera litigation any 

“common question of law or fact.” Moreover, all of the questions 

of law or fact in the Rivera litigation have already been 

settled. Candelario’s claim is a post-judgment claim unrelated 

to the original dispute. There is no right to intervene. 

V. 

We conclude that the Superior Court of Puerto Rico 

cannot garnish funds deposited in the registry of a federal 

district court, that the district court cannot transfer registry 

funds without transferring the concomitant case, and that 

Candelario has no right to intervene to assert a claim to the 

funds. We reverse and remand with directions to pay the 

deposited funds pursuant to the provisions originally governing 

the funds’ disposition. 
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REVERSED AND REMANDED. Costs to appellant.