Opinion ID: 2827109
Heading Depth: 3
Heading Rank: 1

Heading: A CAFRA Fee Award is a Claim Against the

Text: 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 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. . . . 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 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. 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.