Opinion ID: 2827109
Heading Depth: 2
Heading Rank: 1

Heading: The Anti-Assignment Act

Text: Congress enacted the Anti-Assignment Act in its original form in 1853, primarily as a means “to prevent persons of influence from buying up claims against the United States, which might then be improperly urged upon officers of the Government.” United States v. Aetna Cas. & Sur. Co., 338 U.S. 366, 373 (1949). The Act was later recodified as 31 U.S.C. § 3727. The Act prohibits the “assignment of any part of a claim against the United States Government or of an interest in that claim; or the authorization to receive payment 4 Because we conclude that estoppel is not warranted, we decline to reach the Government’s argument that it cannot be estopped from collecting taxes under the Anti-Injunction Act, 26 U.S.C. § 7421. 16 UNITED STATES V. KIM for any part of the claim,” unless certain conditions are met. 31 U.S.C. § 3727(a)(1)–(2). Those conditions provide that: An assignment may be made only after a claim is allowed, the amount of the claim is decided, and a warrant for payment of the claim has been issued. The assignment shall specify the warrant, must be made freely, and must be attested to by 2 witnesses. The person making the assignment shall acknowledge it before an official who may acknowledge a deed, and the official shall certify the assignment. The certificate shall state that the official completely explained the assignment when it was acknowledged. Id. § 3727(b). Under the plain terms of the Act, a claim against the United States may not be assigned to a third party unless these technical requirements are met. “In effect, the [Anti-Assignment Act] serves as a defense that the Government can raise against a claim.” Murkledove v. Astrue, 635 F.3d 784, 794 (5th Cir. 2011). Indeed, the Government concedes that it is all but impossible for any assignment to comply with the strictures of the AntiAssignment Act, because the Treasury no longer uses warrants. Nevertheless, “[i]t is well established . . . that the Government can waive coverage of the Anti-Assignment Acts.” Riviera Fin. of Tex., Inc. v. United States, 58 Fed. Cl. 528, 530 (Fed. Cl. 2003).5 Thus, in modern practice, the 5 Because the Government has the broad power to waive the Act, we reject Honig’s and the Kim Claimants’s contention that the Government waived the Anti-Assignment Act as to all of the Kim Claimants when it waived the Act towards Se Young Kim and Young Ai Kim. To determine UNITED STATES V. KIM 17 obsolete language of the Anti-Assignment Act means that the Government has the power to pick and choose which assignments it will accept and which it will not. Although this state of affairs may diverge sharply from what Congress intended when it enacted the Anti-Assignment Act, it is not for us to rewrite the statute or decline to enforce it (as Honig urges) simply because circumstances have changed since it was passed.6 See Xi v. INS, 298 F.3d 832, 839 (9th Cir. 2002) (“[A] decision to rear-range [sic] or rewrite the statute falls within the legislative, not the judicial, prerogative.”). Despite the Anti-Assignment Act’s plain language, the Supreme Court has carved out equitable exceptions to its application, noting that the Act “must be interpreted in the light of its purpose to give protection to the Government. . . . [A]ssignments may be heeded, at all events in equity, if they will not frustrate the ends to which the prohibition was whether the Government has waived the Anti-Assignment Act, we look to the Government’s “course of conduct” to determine whether “the Government was aware of, assented to, and recognized the assignments.” Tuftco Corp. v. United States, 614 F.2d 740, 745 (Ct. Cl. 1980). The Government must waive the Act in its entirety; it cannot choose to waive some of its requirements and not others. See Schwartz v. United States, 16 Cl. Ct. 182, 188 (1989). Honig and the Kim Claimants provide no authority to suggest that the Government must waive the Anti-Assignment Act towards all claimants in an action, and we have found none. Accordingly, we reject Honig’s and the Kim Claimant’s assertion that the Government may not assert the Anti-Assignment Act. 6 We also reject Honig’s contention that the Anti-Assignment Act offends the separation of powers. Nothing in the Anti-Assignment Act can be construed as setting conditions on when a court may render a judgment or when that judgment may be considered final. It is solely a prohibition on the right of a claimant to assign a claim against the United States to another. 18 UNITED STATES V. KIM directed.” Martin v. Nat’l Sur. Co., 300 U.S. 588, 596–97 (1937). For instance, the Anti-Assignment Act will not void assignments that arise by operation of law, voluntary transfers by will, or “general assignments for the benefit of creditors.” United States v. Shannon, 342 U.S. 288, 292 (1952). We have already noted that the Act’s primary purpose, when it was originally enacted in the 1850s, was to prevent powerful persons from buying up faulty claims against the government and using their sway to get them paid. Aetna Cas. & Sur. Co., 338 U.S. at 373. Another purpose, more relevant to the modern context, 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 (quoting Grace v. United States, 76 F. Supp. 174, 175 (D. Md. 1948)). Because neither Honig nor the Kim Claimants contend that the representation agreement satisfies the AntiAssignment Act’s requirements, the sole question is whether the Act applies to an award of attorney’s fees under CAFRA at all. To determine whether the Anti-Assignment Act voids the assignment, we must determine (1) whether an award of attorney’s fees under CAFRA is “a claim against the United States”; and, if so, (2) whether the claim “belongs” to Honig or the Kim Claimants. If the Act does apply and the assignment is voided, we must then determine what interest, if any, Honig retains in the awards. UNITED STATES V. KIM 19