Opinion ID: 597516
Heading Depth: 2
Heading Rank: 1

Heading: Alaska Attorney Fee Lien

Text: 17 The district court awarded attorney fees based upon enforcement of Alaska's attorney's lien statute, which provides that: 18 An attorney has a lien for compensation, whether specially agreed upon or implied ... upon money in the possession of the adverse party in an action or proceeding in which the attorney is employed, from the giving of notice of the lien to that party. 19 Alaska Statutes § 34.35.430(a)(3) (1990). Per Foster Pepper, this Alaska statute imposed a lien (to the extent of the 25 percent of recovery specified in its fee agreements) against undisbursed back pay that had been held by the government; its September 19, 1989, letter to Interior was notice perfecting this lien; and Interior is liable for failure to honor the lien when it distributed back pay without making the required 25 percent fee deduction. The district court agreed and entered judgment on this claim in Foster Pepper's favor to the extent of the amount owed by its four clients. 5 20 The government asserts sovereign immunity from this suit. It argues that a state lien statute has no effect against the United States absent the government's consent and the government has not waived sovereign immunity respecting the Alaska statute. Further, the state lien law, if applied, would impermissibly regulate the operations of the federal government and compel the disbursement of federal funds for purposes not authorized by federal law. And finally, per the government, the state statute does not apply against a mere debt or obligation. While there is merit in each of these positions, we rest our decision on the jurisdictional ground that the government has not waived its sovereign immunity so as to permit a state law lien to be effective against the amounts of back pay due to its employees. Thus, there can be no government liability for failure to honor the purported lien rights. 21 Until the COLA back pay was actually distributed by Interior, it was government property. Buchanan v. Alexander, 45 U.S. (4 How.) 20, 11 L.Ed. 857 (1845). Absent consent, state process to reach government property, even where there is a monetary obligation owed by the government to another, is not cognizable. [O]bvious reasons of public policy foreclose the enforcement of state law claims against such property without the Government's consent. United States v. Ansonia Brass & Co., 218 U.S. 452, 471, 31 S.Ct. 49, 54, 54 L.Ed. 1107 (1910) (materialman's lien against vessel unenforceable where title had passed to the United States); United States v. Munsey Trust Co., 332 U.S. 234, 67 S.Ct. 1599, 91 L.Ed. 2022 (1947) (no lien for wages against construction progress payments withheld by government; therefore, surety has no rights of subrogation against such payments by reason of payment of wages owed by contractors). 22 The Supreme Court, in Buchanan v. Alexander, supra, held wages in the hands of the government not subject to state law garnishment, reasoning that if such appropriations may be diverted and defeated by state process or otherwise, the functions of the government may be suspended. 45 U.S. at 20. Similar concerns were expressed in the McCarty case which precluded state courts from dividing military retirement pay in divorce settlements under community property laws. McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981). 6 Under the Appropriations Clause of the Constitution, Art. I § 9, cl. 7, [m]oney may be paid out only through an appropriation made by law. Office of Personnel Management v. Richmond, 496 U.S. 414, 424, 110 S.Ct. 2465, 2471, 110 L.Ed.2d 387 (1990). From this precedent, we conclude 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. 7 23 Foster Pepper contends that a waiver of sovereign immunity for its fee lien is effected by the underlying cause of action against the government under the Back Pay Act with respect to which sovereign immunity has been waived. Thus, per Foster Pepper, its claim is distinguishable from the garnishments, materialman's liens, and other processes discussed in the Supreme Court case law in that it: 1) embroils the government in no dispute to which it is not already party; and 2) encumbers no government property or assets that are not otherwise entangled in the underlying litigation. 24 While there is some authority that arguably supports this contention, 8 the contention is irrelevant in this case. This is not a suit for back pay. Obviously, this is not a claim by the individual plaintiff Knight against the government to compel the government to withhold from his wages the attorney fees he owes to Foster Pepper. This is a claim solely by Foster Pepper against the government to enforce asserted lien rights. As such, there must be a waiver of sovereign immunity specifically applicable to the Alaska fee lien statute permitting the action to be brought. In other words, Foster Pepper's independent claim in the suit must have its own consensual base. It is not sufficient that the government is before the court on a different claim to which it has consented. 25 In sum, this naked claim of Foster Pepper for fee collection, premised entirely upon the Alaska fee lien statute, is controlled by the principles of Buchanan, Ansonia, Richmond, and McCarty. Absent a specific waiver of sovereign immunity, we must assign this claim for enforcement of an attorney's lien against the government to the general category of lien actions barred by sovereign immunity and the Supremacy Clause. 9