Case Name: UNITED STATES of America, Plaintiff, v. CERTAIN REAL PROPERTY, et al., Defendants
Court: United States District Court for the Northern District of Alabama
Jurisdiction: United States
Decision Date: 2008-05-29
Citations: 566 F. Supp. 2d 1252
Docket Number: No. CV06-J-1102-NE
Parties: UNITED STATES of America, Plaintiff, v. CERTAIN REAL PROPERTY, et al., Defendants.
Judges: 
Reporter: Federal Supplement 2d
Volume: 566
Pages: 1252–1334

Head Matter:
UNITED STATES of America, Plaintiff, v. CERTAIN REAL PROPERTY, et al., Defendants.
No. CV06-J-1102-NE.
United States District Court, N.D. Alabama, Northeastern Division.
May 29, 2008.
James D. Ingram, William C. Athanas, Alice H. Martin, Jenny L. Smith, W. Sander Callahan, US Attorney’s Office, Birmingham, AL, for Plaintiff.
Henry Frohsin, James F. Barger, Jr., Catherine C. Long, J. Elliott Walthall, Baker Donelson Bearman Caldwell & Ber-kowitz PC, Birmingham, AL, for Defendants.

Opinion:
ORDER
INGE PRYTZ JOHNSON, District Judge.
By order of this court on April 2, 2008, the claimants to the defendant properties were awarded attorneys' fees under the provisions of the Civil Asset Forfeiture Reform Act, 28 U.S.C. § 2465(b) ("CAF-RA") (doc. 72). The claimants have since filed evidence of the attorneys' fees that they incurred in defending this case (doc. 73) and the parties have both filed briefs on the relevant issues raised by the claimants' submission (docs. 74 & 75). The claimants assert that they are entitled to recover at least $414,198.50 (doc. 73). This amount includes attorneys' fees incurred defending this civil forfeiture case and the related criminal case. Id. Having considered the parties' submissions, the court finds that the claimants are entitled to recover attorneys's fees in the amount of $363,259.92 plus interest.
Factual Background
On June 8, 2006, the United States filed a verified complaint for forfeiture in rem against one piece of real property located in Huntsville, Alabama and two Colonial Bank deposit accounts with account numbers XXXXXX2644 and XXXXXX3417 (doc. 1). The complaint alleged that Alex Latifi and his company, Axion Corporation ("Axion"), had violated various federal statutes in connection with Axion's production of a part for the Blackhawk helicopter (doc. 1). Specifically, the complaint stated that in August of 2003 Axion was awarded a $3.7 million contract by the U.S. Army to supply bifilar weight assemblies for the Army's Blackhawk helicopter (doc. 1). The bifilar weight assembly is a tungsten alloy part that is placed on the transmission head of a helicopter's rotor blade to dampen the vibration on the main rotor head. Id. The complaint alleged that in producing the bifilar weight assembly, La-tifi disclosed classified drawings to tungsten suppliers in China in violation of the Arms Export Control Act, 22 U.S.C. § 2778. Id. The complaint further alleged that Axion produced the bifilar weight assemblies using tungsten from China, which contradicted prior statements made by Ax-ion to the government in violation of 18 U.S.C. § 38 (fraud involving aircraft parts). Id. Finally, the complaint alleged that Axion had not properly tested the parts that it sent to the government in violation of 18 U.S.C. § 287 (false claims to the United States). Id. The following day, a warrant was issued and executed for the in rem arrest of the named properties (doc. 2).
Pursuant to Federal Rule of Civil Procedure C(6), verified statements of interest were filed by Alex and Beth Latifi and Axion Corporation (the "claimants") stating that they had an interest in the real property named in the complaint (docs. 3 & 4). Alex and Beth Latifi stated that they were the sole owners of the piece of real property named in the complaint (doc. 4). Axion stated that it had a leasehold interest in the piece of real property named in the complaint and that it was the sole owner of all funds deposited in the two accounts named in the complaint (doc. 3).
On June 20, 2006, the government filed a Notice of Stipulation for Release of Funds, which authorized a one time release of $76,000.00 for the purpose of allowing Ax-ion to meet its short term operating expenses (doc. 8). As part of the stipulation, the claimants agreed to maintain a minimum amount of $15,000.00 in account number XXXXXX3417 through the duration of the civil forfeiture case. Id. On July 6, 2006, the government filed a second Notice of Stipulation for Release authorizing a release of $1,275,000.00 from the two bank accounts for the purpose of alleviating the hardship imposed on Axion by the civil forfeiture case. (doc. 12). As part of the agreement, the claimants pledged as security 8.77 acres of land valued at $1,275,000.00. Id.
On July 28, 2006, the claimants filed a notice of deposition seeking to depose Marcus W. Mills, one of the primary agents in the ongoing criminal investigation of the claimants (doc. 14). In response the government filed a motion to stay this case pursuant to 18 U.S.C. § 981(g)(1), which directs the district court to "stay the civil forfeiture proceeding if the court determines that civil discovery will adversely affect the ability of the Government to conduct a related criminal investigation or the prosecution of a related criminal case" (doc. 15). The district court granted the government's motion and stayed the civil forfeiture case finding that the ongoing criminal investigation was related to the civil forfeiture case and that discovery would have an adverse affect on the investigation (doc. 17).
On October 3, 2006, the claimants filed a Petition for Release of Funds, which moved the court to release all funds in both accounts pursuant to 18 U.S.C. § 983(f)(1) so that Axion could pay more than $850,000.00 in outstanding taxes (doc. 20). The court denied the claimants' petition finding that the claimants had not made the requisite showing under 18 U.S.C. § 983(f)(1) (docs. 23 & 27).
On December 22, 2006, the claimants filed an emergency motion requesting that the stay be lifted and that the case be immediately set for trial (doc. 28). As grounds for the motion, the claimants asserted that the investigation had remained dormant for months and that Axion had suffered severe and irreparable harm. Id. In its response, the government denied the claimants' allegations stating that the investigation was still ongoing and that the government had agreed to release funds to the claimants so that the claimants could meet their short term business obligations (doc. 29). The court denied the claimants' motion finding that there was no "emergency" requiring the trial date be set and the stay be lifted (doc. 32).
On March 28, 2007, more than nine months after the civil forfeiture complaint was filed, Alex Latifi and Axion were indicted on five counts all relating to the production of the bifilar weight assembly (Case no. 07-CV-98-NE, doc. 1). On May 2, 2007, a superseding indictment was filed adding a sixth count relating to the production of the bifilar weight assembly (doc. 9). Following several orders delaying the trial setting, a bench trial was held beginning on October 22, 2007, and concluding on October 30, 2007 (See Docket Report for 07-CV-98-NE, Minute entries for October 22-30, 2007). On October 30 the court dismissed all charges against the defendants finding that the evidence was insufficient to sustain a conviction (doc. 61). On December 12, 2007, the defendants filed a motion to recover attorneys' fees incurred in defending the criminal case pursuant to the Hyde Amendment, 18 U.S.C. § 3006A statutory notes (doc. 62). That motion is still pending at this time.
Following dismissal of the criminal charges against Latifi and Axion, the government filed a motion to dismiss the civil forfeiture case with prejudice (Case no. 06-1102, doc. 39). As grounds for its motion, the government stated that "continued litigation concerning the defendant properties is no longer in the best interests of the United States." (doc. 39). The motion further asserted that at the time the property was seized, the government had reasonable cause for the in rem arrest of the properties and requested that a certificate of reasonable cause be entered on behalf of the government under the provisions of 28 U.S.C. § 2465(a) (doc. 39). The claimants filed a response to the government's motion to dismiss agreeing that the case should be dismissed with prejudice and asserting that a dismissal with prejudice entitled them to attorney's fees under the provisions of CAFRA (doc. 41). The claimants also objected to the government's request for a certificate of reasonable cause. Id.
A week after filing its motion to dismiss, the government, apparently realizing that a dismissal with prejudice would entitle the claimants to attorneys' fees under CAFRA, filed a motion to withdraw its motion to dismiss with prejudice or, in the alternative, to convert it to a motion to dismiss without prejudice (doc. 45). On February 13, 2008, the government's motion to withdraw was granted and a hearing was set for the government's pending motion for a certificate of reasonable cause and the claimants' pending motion for attorneys' fees (doc. 52).
On February 21, 2008, the government filed a motion to dismiss without prejudice stating that it no longer intended to pursue the civil forfeiture case (doc. 53). The following day the claimants filed a response to the government's motion agreeing that the case should be dismissed, but arguing that the dismissal should be with prejudice (doc. 54). On February 29, 2008, the claimants filed a motion requesting that the stay be lifted so that the claimants could conduct discovery on their claim for attorneys' fees (doc. 57). The court granted the claimants' motion thereby lifting the stay that was entered in the case on August 28, 2006 (doc. 58).
On March 13, 2008, the government, apparently realizing that its pursuit of a certificate of reasonable cause potentially entitled the claimants to extensive discovery, filed a notice informing the court that it was withdrawing its request for a certificate of reasonable cause (doc. 61). On April 2, 2008, the court entered an order dismissing the case with prejudice and holding that the claimants were entitled to recover the attorneys' fees they incurred defending the civil forfeiture case under the provisions of CAFRA (doc. 72).
Discussion
CAFRA provides in pertinent part:
[I]n any civil proceeding to forfeit property under any provision of Federal law in which the claimant substantially prevails, the United States shall be liable for -
(A) reasonable attorney fees and other litigation costs reasonably incurred by the claimant;
(B) post-judgment interest, as set forth in Section 1961 of this title.
28 U.S.C. § 2465(b)(1). As the substantially prevailing party, the claimants assert that they are entitled to recover $414,198.50 (doc. 73). This amount includes fees incurred defending the civil forfeiture case AND the criminal case up until the acquittal of Latifi and Axion. Id. The claimants argue that they are entitled to recover the fees incurred in defending the criminal case because those fees were "reasonably incurred" as part of defending the civil forfeiture case. Id.
To determine if an award is reasonable, a court must first calculate a "lodestar" figure — the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. United States v. $23,400 in United States Currency, 2007 WL 1080292, *3 (W.D.N.C. Apr. 9, 2007); citing Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). In calculating the lodestar figure, a court must take into account the twelve factors identified in Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir.1974). The twelve Johnson factors are: (1) the time and labor required to litigate the suit; (2) the novelty and difficulty of the questions presented by the lawsuit; (3) the skill required to properly perform the legal service; (4) the preclusion of other employment opportunities for the attorney due to the attorney's acceptance of the case; (5) the customary fee for such services; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount in controversy involved and the results obtained; (9) the experience, reputation, and ability of the attorney; (10) the "undesirability" of the case; (11) the nature and length of the attorney's professional relationship with the client; and (12) awards in similar cases. Id. at 717-20.
In its brief, the government identifies seven different categories of hours that should be deducted from the claimants' requested total of $414,198.50 in determining the lodestar (doc. 74). The first and by far the largest category is the hours incurred defending the criminal case. Indeed the hours spent defending the criminal case represent at least $292,929.50 of the $414,198.50. The issue of whether fees incurred in a related criminal case are recoverable under CAFRA appears to be an issue of first impression as the court has been unable to find any cases addressing the issue.
I. Whether hours that were spent litigating the criminal case are recoverable.
CAFRA allows claimants to recover all fees which were "reasonably in- curred" in any "civil proceeding to forfeit property." 28 U.S.C. § 2465(b)(1). Other courts have interpreted the attorneys' fee provision of CAFRA broadly noting that when CAFRA's language is compared to that of its predecessor, it suggests that "Congress intended to liberalize the award of attorneys' fees rather than restrict them." $23,400.00 in United States Currency, 2007 WL 1080292 at *2. Prior to 2000, claimants in civil forfeiture actions typically based petitions for attorneys' fees on the Equal Access to Justice Act ("EAJA"). Under EAJA, the "prevailing party" in a case is entitled to recover attorneys' fees. 28 U.S.C. § 2412(b). CAFRA, however, "broadens the class that can receive fees in forfeiture actions to claimants who 'substantially prevail." ' $28,4-00.00 in United States Currency, 2007 WL 1080292 at *2.
In addition, unlike EAJA, CAFRA also does not have a statutory cap on the hourly attorney rates upon which the award may be based. See, e.g., United States v. United States Currency in the Sum of Six Hundred and Sixty Thousand, Two Hundred Dollars, 438 F.Supp.2d 67, 72 (E.D.N.Y.2006) ("CAFRA clarified that in circumstances where claimants were eligible for attorneys' fees and costs, the EAJA cap no longer applied, yielding to the lodestar analysis instead"). Moreover, courts have held that an award granted pursuant to CAFRA should be determined by an examination of the rates and fees under the lodestar method. See id.; see also $28,400.00 in United States Currency, 2007 WL 1080292 at *3. Thus, a comparison of CAFRA fee provisions to EAJA fee provisions reveals that CAFRA not only broadened the class of persons entitled to recover attorneys' fees, but also provided for a greater award.
The broad interpretation that other courts have given to CAFRA's fee provisions is justified given the stated purpose of CAFRA is "to make federal civil forfeiture procedures fair to property owners and to give owners innocent of any wrongdoing the means to recover their property and make themselves whole after wrongful government seizures." P.L. 106-185, Civil Asset Forfeiture Reform Act, H.R. Rep. No. 106-192, at 11 (1999). Here, the only way the claimants can be made whole is to award them the attorneys' fees that were incurred in defending the criminal case because the claimants could only recover the seized property in the civil forfeiture case by obtaining an acquittal in the criminal case.
The Supreme Court has held in the context of section 1983 lawsuits, that work done in a separate administrative proceeding is recoverable if it was "useful and of a type ordinarily necessary to secure the final result obtained from the litigation." Webb v. Board of Education of Dyer County, Tennessee, 471 U.S. 234, 243, 105 S.Ct. 1923, 85 L.Ed.2d 233. (1985). In Webb, the plaintiff was represented by counsel in local administrative proceedings and in a subsequent section 1983 action challenging the termination of his employment as a public school teacher. Id. at 236,105 S.Ct. 1923. The plaintiff ultimately prevailed and was awarded attorneys' fees for the time spent on the judicial proceedings, but denied fees for the time spent in proceedings before the local school board. Id. The Supreme Court affirmed holding that the attorney's work in front of the local school board would not be compensable unless the entire work or any discrete portion of it was " 'useful and of a type ordinarily necessary' to secure the final result obtained from the litigation." Id. at 243, 105 S.Ct. 1923; see also Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 561, 106 S.Ct. 3088, 92 L.Ed.2d 439 (1986). Thus, attorneys' fees incurred in a related proceeding are recoverable if the work is "useful and of a type ordinarily necessary to secure the final result obtained from the litigation." See Webb, 471 U.S. at 243, 105 S.Ct. 1923.
Here, the work done by the claimants' attorneys in the criminal case was clearly useful as it directly resulted in the dismissal of the civil forfeiture case. In fact, the claimants were required to litigate the civil forfeiture case through the criminal case because of the stay imposed on the civil forfeiture case. If Latifi and Axion had been convicted in the criminal case, then the property would have been immediately subject to forfeiture. 28 U.S.C. § 2461(c) ("If a person is charged in a criminal case with a violation of an Act of Congress for which the civil or criminal forfeiture of property is authorized, the Government may include notice of the forfeiture in the indictment or information pursuant to the Federal Rules of Criminal Procedure. If the defendant is convicted of the offense giving rise to the forfeiture, the court shall order the forfeiture of the property as part of the sentence in the criminal case pursuant to the Federal Rules of Criminal Procedure and section 3554 of title 18, United States Code."). If the defendants were acquitted, as they were, then that result would not have had res judicata effect on this civil forfeiture case. However, in this case the court found that the evidence in the criminal case was insufficient to sustain a conviction (Case no. 07-CV-98-NE, doc. 61.) As the government's subsequent motion to dismiss the civil forfeiture case demonstrates, the government had no intention of pursuing the civil forfeiture case after Latifi and Axion were acquitted. Thus, the acquittal in the criminal case directly led to the dismissal of the civil forfeiture ease. Indeed, the only way for the claimants to obtain a dismissal of the civil forfeiture case was by obtaining an acquittal in the criminal case.
The work was also of a type ordinarily necessary to secure the final result obtained from the litigation since the civil proceeding was stayed pursuant to CAF-RA and, as discussed above, the only way for the claimants to succeed was to gain an acquittal in the criminal trial. Therefore, the requirements of Webb are satisfied and the claimants are entitled to recover fees incurred in defending the related criminal case.
Awarding the claimants fees for work done in the criminal case clearly allows the claimants to avoid the stricter requirements for recovering attorneys' fees under the Hyde Amendment, 18 U.S.C. § 3006A statutory notes. The Hyde Amendment allows for the defendant to recover fees only if he can show that "the position of the United States was vexatious, frivolous, or in bad faith." 18 U.S.C. § 3006A statutory notes. Thus, any award in this case which includes fees incurred in the criminal case would allow the claimants to recover those fees without proving "that the position of the United States was vexatious, frivolous, or in bad faith." See id. However, if the court were to find that fees incurred defending the criminal case were not recoverable under CAFRA, then the government would be allowed to avoid CAFRA, as it has tried to do in this case, by moving for a stay in the civil case and prosecuting the criminal case.
In this case, the less objectionable of the two options is to allow the claimants to recover the fees incurred defending the criminal case. To find otherwise would provide the government with a roadmap to avoiding liability under CAFRA in every instance by staying the civil case and prosecuting the criminal case. The potential for abuse of this scenario is illustrated by the facts of this case. The verified complaint for forfeiture in rem was filed on June 7, 2006 (Case no. 06-CV-1102-VEH, doc. 1). The criminal indictment was not filed until March 27, 2007, more than nine months later (Case no. 07-CV-98-IPJ, doc. l). For those nine plus months, Ax-ion was effectively shut down as all of its assets were frozen. For eight of those months, the civil forfeiture case was under a stay so the claimants were unable to conduct discovery or file potentially dispos-itive motions. Thus, the claimants were forced to wait an indeterminate amount of time until the government completed its investigation and pursued an indictment before the claimants could even litigate the civil forfeiture case.
In criminal cases, the Speedy Trial Act ensures that once a defendant is indicted, he will be tried promptly. See 18 U.S.C. § 3161 et seq. There is no such equivalent on the civil side. Therefore, the government is free, as long as it has reasonable cause, to initiate a civil forfeiture action long before it intends to indict someone for the underlying offenses. This framework allows the government to effectively shut down an accused business regardless of whether that business is later acquitted in a criminal trial. This result is unfair to potential defendants and in this case, as a practical matter, ruined Axion's business. The court will not stand aside and allow the government to abuse the provisions of CAFRA as has been done in this case.
For the foregoing reasons the court finds that the claimants are entitled to recover the fees from the criminal case which total $292,929.50 for 1327.7 hours of work, subject to the deductions discussed below. Thus, at this stage of the analysis, the claimants are entitled to recover $414,198.50. See Appendix A.
II. Whether claimants' unbilled hours are recoverable.
The second category identified by the government that should be deducted from the claimants' asserted total of $414,198.50 is the hours that were not actually billed to the client in the civil case. See Appendix B. The government argues that these hours should be deducted because the claimants should seek no more than the hours that were actually billed to the client. The claimants' response is that these are hours that simply have not yet been billed and, thus, are recoverable.
Fee applicants must exercise what the Supreme Court has termed "billing judgment." Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). "That means they must exclude from their fee applications hours 'that would be unreasonable to bill to a client and therefore to one's adversary irrespective of the skill, reputation or experience of counsel.' " ACLU of Georgia v. Barnes, 168 F.3d 423, 428 (11th Cir.1999) (quoting Norman v. Housing Auth. of Montgomery, 836 F.2d 1292, 1301 (11th Cir.1988)(emphasis in original)).
The court finds it is clear from the time sheets that the claimants' attorneys have no intention of billing their clients for the difference between the base amount and the billed amount. This intent is evidenced by the fact that those differences appear throughout entries in the civil case and date back to the first entry on June 8, 2006. See Appendix B. Surely, the claimants' attorneys do not intend to bill their clients for fees charged almost two years ago. The only exception is the last three attorney entries on the claimants' civil time sheet, which show a billed amount of $0 for each entry. See Appendix B. Since these entries each have an April 2008 date and the claimants' submission was filed on April 23, 2008, the court assumes that these hours will be billed to the client during the next billing cycle. These amounts are recoverable if the entire amount or part of the amount is actually billed to the claimants. The claimants' attorneys are ORDERED to provide proof to the court of the amount that they actually bill their clients for the last three attorney time entries dated 4/3/2008, 4/3/2008, and 4/9/2008. Upon such showing, the claimants will be entitled to recover the amount proven. Until that time, the court shall deduct the entire $6,816.42. See Appendix B.
III. Whether hours not spent litigating the civil forfeiture case are recoverable.
The government next asserts that the claimants have included hours that were not spent litigating the civil forfeiture case in their requested total. Specifically, the government asserts that the claimants have included hours for work done on behalf of Latifi and Axion in (1) private litigation in state court, (2) administrative proceedings with the Army on suspension and debarment issues, (3) potential False Claims Act proceedings, and (4) tax matters. The government argues that none of these hours are compensable under CAE-RA.
In an affidavit submitted with the claimants' brief, the claimants' attorney, Henry I. Frohsin, denies performing any services for the claimants in the state court case referenced by the government (exhibit A to doc. 75, at ¶ 4). Frohsin further submits to the extent that claimants seek fees incurred for conferences with attorneys S. Dagnal Rowe, Richard Raleigh, and Marcus Allen Huff, such fees were reasonably incurred in the investigation of this case. Id. at ¶ 3. Claimants were referred to their Baker Donelson attorneys by their primary attorney of many years, S. Dagnal Rowe of the law firm Wilmer & Lee, P.A., in Huntsville, Alabama. Id. Throughout this litigation, Frohsin and James Barger, the claimants' lead attorneys consulted with Rowe, Raleigh, and Huff about facts and strategy directly related to this case. Id. The government has offered nothing beyond mere speculation to show that these consultations did not further the investigation of this case.
Similarly, the work performed concerning administrative proceedings with the Army, the potential False Claims Act proceedings, and tax matters are recoverable as they were reasonably incurred in defending the civil forfeiture action. First, the claimants' attorneys assert that they performed this work in anticipation that the government would attempt to present evidence of alleged "other wrongs" pursuant to Federal Rules of Evidence 404(b) in the criminal case (exhibit A to doc. 75, at ¶ 5). Accordingly, the claimants were required to prepare to defend against such claims. Id. Second, claimants sought a release of funds during the course of this suit in order to pay federal taxes. (Case no. 06-CV-1102-NE, doc. 20). Since the government opposed this request, the claimants were required to research whether there were alternate means of paying the outstanding taxes (exhibit A to doc. 75, at ¶ 6). The court finds that hours for work done on these matters is recoverable as the work was necessary to defend against the claim of civil forfeiture.
TV. Whether hours of unidentified attorneys and paralegals are recoverable.
The fourth category identified by the government is 576 hours that were billed for unidentified attorneys and paralegals. In its initial filing, the claimants identify several attorneys whose services were billed on the civil and criminal time-sheets. The claimants state that the services of Henry I. Frohsin (identified in the timesheets as "HIF") were billed at hourly rates between $375.00 and $395.00 (exhibit C to doc. 73, at ¶ 5). The services of James F. Barger, Jr. ("JFB") were billed at hourly rates of $155.00 and $200.00. Id. The services of attorneys Elliot Walthall ("JEW") and Catherine Long ("CCL") were billed at $170.00 per hour. Id. at ¶ 6. In addition, the services of "experienced paralegals" were billed at an hourly rate of $140.00 and other experienced attorneys provided limited services at hourly rates between $345.00 and $525.00. Id.
The government does not object to the rates for Frohsin, Barger, Walthall, or Long. However, the government does object to the rates for the unidentified attorneys and paralegals who provided services for the claimants. In their response to the government's objections, the claimants identified Harriet Ivey ("HTI") as an experienced Birmingham attorney whose services were billed at $230.00 per hour; Richard Newcomb ("RRN") as an attorney in Baker Donelson's Washington D.C. office whose services were billed at $525.00 per hour; and Doreen Edelman ("DME"), another attorney in the Washington D.C. office whose services were billed at $345.00 per hour (exhibit A to doc. 75, at ¶ 7). The claimants, however, failed to identify the paralegals who billed at $140.00 per hour and several other people who provided services at various rates. Those people are identified on the time sheets as CJB, CRJ, KRG, RAP, SKP, CCH, Nelan, AMG, LAH, LAB, DFR, DGC, Fortson, and MAD.
From its own experience conducting the criminal trial, the court knows that "CJB" is Carolyn Black, a paralegal who has done extensive work on both the civil and criminal cases. The court cannot determine from the claimants' submissions who CRJ, KRG, RAP, SKP, CCH, Nelan, AMG, LAH, LAB, DFR, DGC, Fortson, and MAD are or what service they performed. Some of these unidentified individuals are likely paralegals as their services are billed at an hourly rate of $140.00 per hour. See Appendix C. However, the hours of many of these unidentified individuals are billed at rates other than $140.00 per hour. Id. The court will not engage in pure speculation and attempt to decipher who these unidentified individuals are and what job title they hold. Since the court has no information on these individuals, it is impossible for the court to determine whether their rates are reasonable. Thus, the court finds that the claimants cannot recover for the services of these unidentified individuals other than Carolyn Black. Accordingly, $14,933.14 shall be deducted for fees charged by unidentified individuals other than Carolyn Black. Id.
With regard to Carolyn Black's hours, the court finds that $140.00 per hour is an excessive rate even for the most experienced paralegal. The court finds, based on its own experience and knowledge of the Birmingham market that a reasonable rate for an experienced paralegal is $75.00 per hour. Accordingly, $26,967.16 shall be deducted for work completed by Carolyn Black. See Appendix D.
The next issue is whether the claimants can recover non-local rates for the two attorneys, Newcomb and Edelman, who practice in Washington D.C. New-comb's services were billed at a rate of $525.00 per hour and Edelman's services were billed at a rate of $345.00 per hour. The general rule is that the "relevant market" for purposes of determining the reasonable hourly rate for an attorney's services is "the place where the case is filed." Cullens v. Georgia Dep't. of Transp., 29 F.3d 1489, 1494 (11th Cir.1994). If a fee applicant desires to recover the non-local rates of an attorney who is not from the place in which the case was filed, he must show a lack of attorneys practicing in that place who are willing and able to handle his claims. See id. The claimants have provided no evidence concerning the availability of a local attorney to provide the same services that were provided by New-comb and Edelman. Regardless of the expertise of Newcomb and Edelman, they cannot receive non-local rates because the claimants have failed to make the requisite showing. Since Edelman's rate is within a reasonable rate for the Birmingham market it does not have to be reduced. New-comb's on the other hand, must be reduced to $395.00 per hour, the top rate billed for Frohsin. That requires a deduction of $1,647.46. See Appendix E.
V. Whether hours billed for secretarial work performed by paralegals are recoverable.
Claimants are entitled to attorneys' fees for work by paralegals only to the extent that the paralegals perform work traditionally done by an attorney. Allen v. U.S. Steel Corp., 665 F.2d 689, 697 (5th Cir.1982). Hours spent on purely clerical or secretarial tasks are unrecoverable overhead expenses. Id.
The court finds that $574.40 should be deducted for secretarial work performed by Carolyn Black. See Appendix F.
VI. Whether hours that are inadequately documented are recoverable.
Contrary to the government's assertion, none of thé hours billed by the claimants' attorneys are inadequately documented. In Hensley, the Supreme Court stated that "[p]laintiff s counsel, of course, is not required to record in great detail how each minute of his time was expended. But at least counsel should identify the general subject matter of his time expenditures." 461 U.S. at 437, 103 S.Ct. 1933 n. 12, 76 L.Ed.2d 40 (1983). The court finds that the entries alluded to by the government are documented in such a manner that the general subject matter of the time expenditure is clear. Therefore, no hours shall be deducted because of inadequate documentation.
VII. Whether time spent upon discrete, unsuccessful claims is recoverable.
The government argues that hours spent filing unsuccessful motions while the case was stayed should be deducted from the total. In support of this argument, the government relies on precedent of the United States Court of Appeals for the Eleventh Circuit which directs the court to deduct "time spent upon 'discrete and unsuccessful claims' from the calculations." Duckworth v. Whisenant, 97 F.3d 1393, 1397 (11th Cir.1996). The government's reliance on this line of cases is misplaced, however, because these cases address situations where "a plaintiff may present in one lawsuit distinctly different claims for relief that are based on different facts and legal theories." Hensley, 461 U.S. at 434, 103 S.Ct. 1933. Here, there is only one claim, the government's claim for civil forfeiture, and the party seeking the fees is not a plaintiff. Therefore, the cases relied on by the government are distinguishable from the present situation and, thus, inapplicable.
Furthermore, the government mis-char-aeterizes the claimants' action as discrete and unsuccessful. The government identifies as discrete unsuccessful claims the claimants' attempts to obtain release of funds in order to pay taxes and employees. The court finds that these were legitimate and essential actions undertaken in furtherance of the claimants' interest. These actions do not represent discrete unsuccessful claims, but instead attempts to keep the claimants' business afloat. Therefore, they are fully recoverable under CAERA, as they were reasonably incurred in defending the civil forfeiture case.
Discrete and unsuccessful claims is the final category identified by' the government as deductible from the total asserted by the claimants. Having made the appropriate deductions from the claimants' asserted total, the court finds that the claimants are entitled to recover $363,259.92 at this point in the analysis. See Appendix G.
VIII. Whether the claimants' award should be enhanced.
The claimants assert that the court should enhance the fee award because of the unusual circumstances of this case and the result obtained. Having concluded that the claimants are entitled to recover a fee of $363,259.92, the court does not reach the issue of enhancement.
IX. ' The reasonableness of the fee award.
The court must now consider whether an award of $363,259.92 in attorneys' fees is reasonable. In doing so, the court is guided by the twelve factors enunciated in Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir.1974). Although the Johnson factors are stated above, the court finds it necessary to state them again for purposes of this analysis. Thus, the factors are: (1) the time and labor required to litigate the suit; (2) the novelty and difficulty of the questions presented by the lawsuit; (3) the skill required to properly perform the legal service; (4) the preclusion of other employment opportunities for the attorney due to the attorney's acceptance of the case; (5) the customary fee for such services; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount in controversy involved and the results obtained; (9) the experience, reputation, and ability of the attorney; (10) the "undesirability" of the case; (11) the nature and length of the attorney's professional relationship with the client; and (12) awards in similar cases. Id. at 717-20.
As for the first factor, this case required the claimants' attorneys to expend a large amount of time and labor in order to obtain the dismissal. In total, the claimants' attorneys billed their clients for 531.4 hours for work done on the civil case. See Appendix B. In addition, the claimants attorneys billed their clients for 1327.7 hours of work in the criminal case. See Appendix A. Thus, the total hours spent in obtaining the dismissal of the civil forfeiture case is 1859.1 hours. The court finds that the first factor weighs in favor of finding the fee award reasonable as $363,259.92 is a reasonable fee for 1859.1 hours of work.
The second factor also weighs in favor of finding the fee award reasonable since the civil forfeiture case and the criminal case involved several complex statutory and regulatory schemes, including the Arms Export Control Act, the International Trafficking in Arms Regulations, the President's Munitions List, the federal wire fraud statute, and CAFRA. The legal questions presented in this case were made even more complex by the confusion created by the government concerning what statutes Latifi and Axion were actually accused of violating. Given the complexity of the case, great skill and expertise were required in order to successfully defend the claimants' rights. Thus, the third factor also weighs in favor of finding the fee award reasonable.
The fourth factor weighs neither for nor against the reasonableness of the fee award since the court is unaware of the claimants' attorneys being precluded from pursuing other cases as a result of this case.
With regard to the fifth factor, the claimants have provided evidence in the form of affidavits of two highly respected Birmingham criminal defense attorneys, G. Douglass Jones and J. Mark White, who both state that the fees and costs of defending the underlying criminal case can be reasonably attributed to defending the civil forfeiture case (exhibit D to doc. 73, at ¶ 8-9) ("Based upon my experience as a white collar criminal attorney in complex cases against the Government, it is my opinion that it would be impossible to defend this civil forfeiture action without defending and obtaining an acquittal in the underlying criminal action"); (exhibit E to doc. 73 at ¶9-10) (same). Jones and White further state that a fee award of $414,198.50 represents an overall fee in the low range, given the complexity of this case (exhibit D to doc. 73, at ¶ 13); (exhibit E to doc. 73, at ¶ 14). Thus, the court finds that the fifth factor weighs in favor of finding an award of $363,259.92 reasonable.
The sixth factor asks whether the fee is fixed or contingent. The fee in this case was presumably fixed. The court finds that this factor does not weigh in favor or against the reasonableness of the fee award.
The seventh factor weighs heavily in favor of the reasonableness of the award as all of Axion's assets were seized and its business, as a practical matter, was shut down. Thus, time was of the essence during the pendency of the civil forfeiture case and the criminal case.
Similarly, the eighth factor weighs heavily in favor of finding the fee award reasonable. First, the allegations involved a $3.7 million government contract and the government estimated the cash value of the defendant properties at issue was $2,500,000.00 (Case no. 06-CV-1102-NE, doc. 1). Moreover, the value of the defendant properties to the claimants greatly exceeded its estimated cash value. The defendant properties constituted all of the funding and property associated with Ax-ion that took the claimants more than two decades to build, and was worth an estimated $50,000,000.00 at the time the complaint was filed (exhibit C to doc. 73, at ¶ 2). Second, the claimants' attorneys obtained the best possible result for the claimants — a dismissal of the case and a return of the seized property.
The ninth factor also weighs in favor of finding the fee award reasonable as the experience of the claimants' attorneys is without question. The claimants' lead counsel, Henry Frohsin, is a former First Assistant United States Attorney and a practicing attorney for forty years (exhibit C to doc. 73).
The tenth factor weighs neither in favor nor against the reasonableness of the award as the court makes no finding concerning the undesirability of the case. Likewise, the eleventh factor weighs neither in favor nor against the reasonableness of the award as the claimants' relationship with their Baker Donelson attorneys dates back to the time of the filing of the civil forfeiture complaint.
Finally, with regard to the twelfth factor, the court finds that it weighs in favor of finding the award reasonable. As this is the first case in which a claimant has been awarded fees in the civil forfeiture case and the related criminal case, there are no similar cases to which the court can compare this award. However, the affidavits of Douglass Jones and Mark White submitted by the claimants state that a fee award of $414,198.50 represents an overall fee in the low range given the complexity of the case (exhibit D to doc. 73, at ¶ 14); (exhibit E to doc. 73, at ¶ 15). Based on these statements and the court's own experience, the court finds that the twelfth factor also weighs in favor of finding a fee award of $363,259.92 reasonable.
Having considered each of the twelve Johnson factors, the court finds that a fee award of $363,259.92 is reasonable.
X. Whether the claimants' are entitled to recover interest.
CAFRA provides that the United States is liable for "post-judgment interest, as set forth in Section 1961 of this title." 28 U.S.C. § 2465(b)(1)(B). 28 U.S.C. § 1961 provides that
[interest shall be allowed on any money judgment in a civil case recovered in a district court.... Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment.
Therefore, the claimants are entitled to interest as provided above.
Conclusion
For the foregoing reasons, it is hereby ORDERED that the claimants are entitled to recover attorneys' fees in the amount of $363,259.92 plus interest as provided in 28 U.S.C. § 1961 from the government. The court reserves the option of increasing the amount if the claimants attorneys provide proof to the court that they have charged the claimants for the last three attorney entries on the civil time sheet.
Appendix A
Appendix B
Appendix C
Appendix D
Revfew/download court docket, recently received pleadings and updata filas. prepare/flinaKze correspondence to Laura Badley. James Ingram. Alice Martin re: deposltion/djsoovery continuance Receipt and review of Government objections to order entered by Magistrate Armstrong concerning discovery issues; meeting with team re: deposition preparation for Ingram, Badfey, Martin, attend telephone conference hearing etth Judge Hopkins re: discovery disputes; review draft order to submit to court staging proceedings untt the return of Judge Johnson Assist with hearing preparation for motion to reconsider fifed by Government; review ordar denying sama; conference re: hearing_ Receipt end review of several pfeedngs, orders re: discovery disputes, hearing on foe issues: [conference re: same Work on supplementation of witness folders for hearing: review order re: motion to quash subpoenas, order on motion to dismiss: work on research on additional subpoena service issues for Marcus Milis, Laura Badfey_ Reviaw order Hfbng stay of prooeedings; review of draft discovery requests with Catherine Long; work on hearing preparation _ _ Revfew/orgsnize recently filed pleadings; review files for correspondsnce with U.S. Attorney's office, outstanding discovery re: preparation for 4/1S hearing_ Review of seized property and bank accounts concerning refease of property/funds from government _ Work on redacting of exhfoHs concerning motion for attorney foes; organization of exhibits for same; finalize exhibits; e-fife same iRevfewrtedect privilege information for exhibits to motion in support of attorney fees [Review orders concerning release of funds: review/down io ad/organize all recently received [pleadings; update ptoedings fifes for same _ Addrtionil rsvww/organizaboo of documents from criminal proceedings re: civil forfeiture issues: conference with Jim Barger re- sams_ Review documents pertaining to indictment conference re: strategy |Woik with Jim Barger oo hearing preparation re: motion to stay discovery Review recently fifed pleadings and updata pleadings fife and index: reviewfdowntoad current court docket; revfew/organize additional fife documents and prepare fife fix hearing on motion to Review pleadings, court docket re* status concerning motion to stay proceedings; review/organize additional documents from witness interviews Review recently fifed pleading*- update ptoedings fries and index, review notice from court re: hearing on motion to stay _ Review criminal warrant, affidavit of Marcus Mills; legal research re: application statutes cried by Marcus MiHs; compkationforeparationforgantzabon of documents for Henry Frohsin interview binder; prepare index for binder documents; work with Jim Berger re: edditional documents and organization for same: edtt/finafee binder Index re: witness interviews_ 0.70 0.30] [020 $609.00 0078$ $188.50 $162.87 $196.00 $364.00 $154.00 $42 00 $24.61 $526.50 90 $217.50 $60900 $101.50 $174.00 $18850 $203.00 $306.00 $154.00 $54.00 $40.50 0072$ $52650 CJB CJB [CJB 3/20/2008 3/18/2008) 3/5/2008) 2/21/2008 11/26/2007 11/2/20071 8/26/20061 7/18/2006
Appendix E
Appendix F
Appendix G
. The court notes that each and every time that the Latifi parties have sought discovery, whether in the civil forfeiture case or in the attorneys' fee disputes in both cases, the government has vigorously resisted whether or not such resistance was warranted.
. This case was assigned to another district judge at the time the stay was entered. At that time there was no criminal case pending. On March 28, 2007, an indictment was filed in the related criminal case (Case no. 07-CV-98-NE, doc. 1). The criminal case was assigned to the undersigned. Following the disposition of the criminal case, on January 29, 2008, this case was transferred to the undersigned as well (Case no. 06-CV-1102-NE, doc. 51).
. 18 U.S.C. § 983(f)(1) provides that a claimant is entitled to immediate release of seized property if—
(A) the claimant has a possessory interest in the property;
(B) the claimant has sufficient ties to the community to provide assurance that the property will be available at the time of the trial;
(C) the continued possession by the Government pending the final disposition of forfeiture proceedings will cause substantial hardship to the claimant, such as preventing the functioning of a business, preventing an individual from working, or leaving an individual homeless;
(D) the claimant's likely hardship from the continued possession by the Government of the seized property outweighs the risk that the property will be destroyed, damaged, lost, concealed, or transferred if it is returned to the claimant during the pendency of the proceeding; and
(E) none of the conditions set forth in paragraph (8) applies.
. The Hyde Amendment allows criminal defendants to recover attorneys' fees upon a showing that "the position of the United States was vexatious, frivolous, or in bad faith." 18 U.S.C. § 3006A statutory notes.
. 28 U.S.C. § 2465(a) provides that a certificate of reasonable cause should be issued by the court if "[u]pon the entry of a judgment for the claimant in any proceeding to condemn or forfeit property seized or arrested under any provision of Federal law . it appears that there was reasonable cause for the seizure or arrest." A certificate of reasonable cause protects the person who made the seizure or arrest and the prosecutor from liability arising from the seizure or arrest. Id.
. The government also asserts that $9,743.40 of criminal work was included in the civil case itemization.
.For at least part of the investigation of Latifi and Axion, the government was under the impression that Latifi and Axion were violating the Buy American Act, 41 U.S.C. § 10a. See, e.g., doc. 97 at 25-28 (Mills' testimony at trial). In fact, the original search warrant authorizing the raid of Axion was premised on an affidavit prepared by the lead investigator Marcus Mills which stated that the Buy American Act had been violated (doc. 97 at 26). The Buy American Act, with certain exceptions, requires .that articles, materials, and supplies that have been mined, produced, or manufactured in the United States be utilized in fulfilling federal government procurement and construction contracts. 41 U.S.C. § 10a(a). It was not until after the investigation was underway that the government realized that Latifi and Axion were not in violation of the Buy American Act (doc. 97 at 26).
. The remaining categories identified by the government only concern hours from the civil forfeiture case time sheet. Because the court has determined that hours incurred in the criminal case are also compensable, the court will consider the government's arguments as they apply to both the civil time sheets and the criminal time sheets.
. In the criminal case, the base amount and amount actually billed are the same.
. Rowe, Raleigh, and Huff are the claimants' state court attorneys.
. Axion and Latifi correctly anticipated that the government would attempt to introduce evidence of other crimes, wrongs or acts under 404(b) as the government filed a motion notifying the court and the defendant of its intent to introduce such evidence four days before the criminal trial (doc. 55).
. KRG, RAP, SKP, Fortson, and MAD appear to be summer law clerks who performed work in the criminal case. The claimants are not entitled to recover these amounts as they are ordinarily absorbed in the firm's overhead.
Similarly, CCH and CRT appear to be attorneys because of the rates charged for their services. However, since the claimants have provided no information about who these attorneys are or where they work, the court cannot determine whether the amount billed for their services constitutes a reasonable amount.
. The hours billed in the criminal case must be considered in determining the reasonableness of the fee since they are included in the total fee award.
. Mr. Jones is a former United States Attorney himself. Jones aff. at ¶ 2.
. Mr. White is the president-elect of the Alabama Bar Association and past president of the Birmingham Bar Association. White aff. at ¶ 3.