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Ninth Circuit Holds CAFRA Attorney Fees Should be Paid to Claimant, not Attorney

In a case brought under the Civil Asset Forfeiture Reform Act (CAFRA), the Ninth Circuit Court of Appeals held on April 26, 2011 that “attorneys fees awarded under CAFRA are payable to the claimant, not the attorney,” but left the total amount of the fees to be decided by the Appellate Commissioner utilizing the “lodestar” method.

The claimant, UMC Clinic (UMCC), had prevailed in a civil forfeiture proceeding initiated by the U.S. government, and thereafter invoked the fee provisions of CAFRA. The appellate court noted that it had not yet decided the method of determining a fee award under CAFRA. UMCC had proposed “that its fees be determined [using the lodestar method], but the government argues that the lodestar approach should not be used and that the fee should primarily be based on the actual agreement between UMCC and its attorney.”

The Ninth Circuit held that the lodestar method “is the method customarily used to determine attorney fees under fee-shifting statutes,” and “should be used in calculating fees in this case.” However, as UMCC’s attorney agreement may be relevant, UMCC was “required to disclose its agreement with its attorney.”

Further, the Court of Appeals followed Astrue v. Ratliff, 130 S.Ct. 2521 (2010) [PLN, Sept. 2010, p.33] in holding that CAFRA fees should go directly to the prevailing litigant instead of the attorney, and thus “attorney fees and litigation costs awarded in this case are payable to UMCC as the successful claimant.” The Court noted that its ruling was contrary to an amicus brief filed by the National Association of Criminal Defense Lawyers, which argued that “if fee awards are paid to the claimant ... attorneys may not be paid for their work, thus reducing the likelihood of competent representation and defeating congressional intent.”

The dissent noted that Ratliff did not necessarily dictate that fees must go to the successful litigant since CAFRA contains no such language, and argued that the statute’s stated purpose “is best interpreted by leaving that question up to district courts on a case-by-case basis,” largely due to the varying tax consequences of such a decision.
A petition for writ of certiorari to the U.S. Supreme Court was filed on May 3, 2012 and remains pending. See: United States v. $186,416.00 in U.S. Currency, 642 F.3d 753 (9th Cir. 2011), petition for certiorari filed.

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Related legal case

United States v. $186,416.00 in U.S. Currency