What we really need in a forfeiture reform bill – part 2A: CAFRA’s attorney’s fees provisions

(c) 2014 Brenda Grantland
from Truth and Justice Blog, 11/19/2014

CAFRA’s attorney’s fees provisions have been eviscerated by the courts; this must be fixed

In my last few blogs about forfeiture reform I told you about CAFRA’s court appointed counsel provisions, allowing some indigent claimants to be appointed lawyers at the government’s expense.

Congress also created “fee shifting” provisions in CAFRA, created to encourage defense attorneys to take on civil forfeiture cases where the claimant was not completely indigent but probably lacks enough money to litigate the case to completion. CAFRA’s fee shifting provisions require the court to order the government to reimburse the claimant for their reasonable attorneys fees if the claimant “substantially prevails.” This sounded like a great provision when the law was first passed, but after a few years it was gutted by court decisions and prosecutor shenanigans.

As a general rule, litigants in the United States must pay for their own attorneys whether they win or lose the case. This is called the “American Rule” – as opposed to the “English rule,” where the losing party pays the winning party’s attorney’s fees as well as his own. There are exceptions to this rule. Congress has enacted over 100 “fee shifting statutes” which create exceptions to the American Rule,  requiring the losing party to pay attorney’s fees of the adversary – several of which apply to forfeiture claimants. Under fee-shifting statutes, the court can – or in some situations, must (though they often don’t) – make the loser pay the winner’s attorney’s fees.

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CAFRA included a fee-shifting provision which enables claimants who “substantially prevail” to have their attorney’s fees reimbursed by the federal government.  Here is what we said about it in FEAR’s Asset Forfeiture Reform Manual:

Forfeiture victims who can afford counsel can count on getting their attorney’s fees reimbursed if they win. CAFRA’s new 28 U.S.C. § 2465(b)(1)(A) allows claimants who substantially prevail to get their attorney’s fees and litigation costs reimbursed by the government. (Attorney’s fee awards were previously available under the Equal Access to Justice Act – but only if the claimant substantially prevailed, and the court finds the government’s position in the litigation was not substantially justified.) Under CAFRA claimants only have to show that they “substantially prevailed” to be entitled to attorney’s fees – they don’t have to show the government’s position was not substantially justified. If the claimant prevails on some claims and not others, the attorneys fee award will be adjusted accordingly.

CAFRA’s attorney’s fee provisions apply across the board to all civil forfeiture cases – Customs cases included – but not to claimants who are charged and convicted of the underlying offense (even if they win the forfeiture case). Such a claimant, however, could still apply for attorney’s fees under the Equal Access to Justice Act.

The statutory provisions seemed sound and we thought attorneys fees would really be reimbursed for successful claimants, as Congress intended. That didn’t turn out to be the case.

CAFRA’s provisions for fee-shifting are very straight-forward:

(b) (1) Except as provided in paragraph (2), in 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;…
… (2) …(B) The provisions of paragraph (1) shall not apply if the claimant is convicted of a crime for which the interest of the claimant in the property was subject to forfeiture under a Federal criminal forfeiture law.
(C) If there are multiple claims to the same property, the United States shall not be liable for costs and attorneys fees associated with any such claim if the United States–
(i) promptly recognizes such claim;
(ii) promptly returns the interest of the claimant in the property to the claimant, if the property can be divided without difficulty and there are no competing claims to that portion of the property;
(iii) does not cause the claimant to incur additional, reasonable costs or fees; and
(iv) prevails in obtaining forfeiture with respect to one or more of the other claims.
(D) If the court enters judgment in part for the claimant and in part for the Government, the court shall reduce the award of costs and attorney fees accordingly.

28 USCS § 2465

Congress clearly intended that the government would have to pay the attorneys fees of forfeiture litigants who won their cases, as I show below.

Congress’s motivation in adding these two fee-shifting statutes to CAFRA were three-fold:

• (1) if a forfeiture claimant has to spent lots of money defending a case to get his property back and wins, it would be a Phyrric victory if they still have debts from attorneys fes.
• (2) Many forfeiture claimants have cases that would cost more to litigate than the case might be worth, but the client has a great case on the facts and law and should win. In such a case if the client doesn’t have enough money to pay the attorneys fees it would likely entail to handle the case to completion, why would an attorney take on the case?
• (3) Prosecutors who know that the government will end up having to pay for defense attorneys fees if they lose would theoretically be more likely to not file frivolous cases, and to be reasonable in how they prosecute them.

The CAFRA attorney fee provision in real life

Knowing that the facts and law showed my client was going to win, if the proceedings were fair, and that I would qualify for an attorneys fees award against the government — was enough to motivate me to pursue the Kennedy Sailboat case through the two appeals it took to achieve the “victory” – even though my client fell far behind in paying me.

Congress intended the fee-shifting provisions to give attorneys willing to gamble on the outcome assurance they would be reasonably paid if they won.

Unfortunately, in the long run, I was only paid for a fraction of my work on the case because of the loopholes the courts have created since CAFRA was enacted.

To make matters worse, the government was able to delay paying me for several years after the judgment became final – by saying they were seizing my attorneys fee award to offset debts my client allegedly (and suddenly) owed the federal government. It took several years and finally intervention by U.S. Rep. Lynne Woolsey to get them to cough up my — already trimmed to the bone by the court — attorney fee award. The DOJ was making a test case out of me for having the audacity to seek attorneys fees under CAFRA.  While the case was pending they began targeting other successful forfeiture defense attorneys on this issue (maybe the reason they were willing to finally release the bogus lien).  This is another issue I will talk about in later blogs on the subject.

 

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For further reading, here are some excerpts from the legislative history of CAFRA, explaining what Congress was thinking when they created CAFRA’s attorney’s fees provisions.

Excerpts from the Congressional Record, on 4/11/2000, the day CAFRA passed, beginning at p. H.2046:

Rep. Henry Hyde:

The bill provides that property owners who substantially prevail in court proceedings challenging the seizure of their property will receive reasonable attorney’s fees.

The Congressional Budget Office Estimate states:

In addition, H.R. 1658 would make the federal government liable for any property damage, attorney fees, and pre-judgment and post-judgment interested payments on certain assets to prevailing parties in civil forfeiture proceedings. CBO cannot estimate either the likelihood or the magnitude of such awards because there is no basis for predicting either the outcome of possible litigation or the amount of compensation….

Establish the federal government’s liability for payment of attorney fees and pre-judgment and post-judgment interest…

At H.2049:

Additional potential budgetary impacts
In addition, this act would make the federal government liable for any property damage, attorney fees, and pre-judgment and post-judgment interest payments on certain assets to prevailing parties in civil forfeiture proceedings. However, CBO cannot estimate either the likelihood or the magnitude of such awards because there is no basis for predicting either the outcome of possible litigation or the amount of compensation. Compensation payments could come from appropriated funds or occur without further appropriation from the Judgment Fund, or from both sources.

To highlight a few examples,… H.R. 1658 also permits the awarding of attorney’s fees if the claimant substantially prevails, … Is that not justice for Americans? These reforms simply balance the scales so that innocent people have a level playing field on which to challenge improper seizures.

Ms. Jackson-Lee of Texas:

The property owner may exhaust his or her financial assets in attorney’s fees to fight for the return of property. If the financial burden of attorney’s fees is not crushing enough…