Circuit Court of Appeals, June 30, 2008
v. Harrell, No. 07-10238
In a case involving unauthorized viewing of satellite television and
the government's seizure of certain digital satellite television
receivers and other hardware and software, partial denial of
defendant's motion for return of property filed pursuant to Federal
Rule of Criminal Procedure 41(g) is affirmed in part and reversed in
part where: 1) there must be a change to either the hardware or
software of a telecommunications instrument that makes it more capable
of obtaining unauthorized signals in order for it to be "modified or
altered" under 18 U.S.C. section 1029(a)(7); 2) under such standard,
certain receivers at issue were not modified or altered so as to
constitute contraband per se; and 3) some other hardware and software
was also not shown to constitute contraband per se. Read more...
This is an excellent decision! Third parties whose property is
seized in criminal forfeiture cases have few procedural rights.
When the government opts to process the case as a criminal
forfeiture, third parties have to just sit and wait until the criminal
prosecution is over before being given any due process at all.
on precedents holding that third party proceedings under 21 U.S.C.
§853(n) are civil in nature, this district court opinion held that
such proceedings qualify for CAFRA attorney's fees.
541 F. Supp. 2d
794; 2008 U.S. Dist. LEXIS 25068, *
STATES OF AMERICA, v. BRUNO CAVELIER D'ESCLAVELLES, Defendant, PETR
CASE NO. 1:06cr235
DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA, ALEXANDRIA DIVISION
541 F. Supp. 2d
794; 2008 U.S. Dist. LEXIS 25068
March 25, 2008,
March 25, 2008,
For Gov't: Karen Ledbetter Taylor , Assistant United States Attorney.
For Defense: Daniel
T. McNamara, Steven J. McCool , Mallon & McCool, LLC, Washington,
Bruce Lee , United States District Judge.
OPINION BY: Gerald
THIS MATTER is
before the Court on Petitioner Petr Buk's Motion for Attorneys' Fees.
This motion follows a successful suit by the Petitioner to recover
funds from a bank account the government seized from third parties in a
criminal forfeiture proceeding. There are two issues before the Court:
(1) whether the attorneys' fees provisions of the Civil Asset
Forfeiture Reform Act ("CAFRA") granting attorneys' fees and costs to a
prevailing claimant in "any civil proceeding to forfeit property under
any provision of Federal law" applies to the Petitioner where he has
prevailed in an action under 21 U.S.C. § 853(n), a section of a
criminal forfeiture statute that allows innocent owners to petition for
the return of assets seized from third parties; and (2) if the Court
determines CAFRA's attorneys' fees provision is applicable, whether $
17,322.50 is a reasonable award. The Court grants Plaintiff's Motion
for Attorneys' Fees and awards Petitioner attorneys' [*2] fees in
the amount of $ 17,222.50, because he has prevailed in a civil
proceeding to forfeit property and thus is entitled to fees and costs
under the plain language of CAFRA, and the requested fees are not
In April, 2006,
Petitioner Petr Buk gave $ 125,000 to Adrien Pruvot as an investment in
a proposed film production. Mr. Pruvot then deposited that money, and
funds from other sources, into a bank account. Soon thereafter, Mr.
Pruvot and others pled guilty to drug conspiracy and money laundering
charges, and agreed to forfeit the account containing Petitioner's
investment. Following those criminal forfeiture proceedings, Petitioner
filed a petition under 21 U.S.C. § 853(n) n1 asking the government
to return that portion of the account representing his investment. On
August 13, 2007, this Court held, under a theory of constructive trust,
that Petitioner retained equitable title to the money he had invested
with Mr. Pruvot. This Court ordered the United States to return $
125,000 of the seized funds to Petitioner.
n1 21 U.S.C. §
853(n)(2) reads: "Any person, other than the defendant, asserting a
legal interest in property which has been ordered forfeited to the
[*3] United States pursuant to this section may, within thirty
days of the final publication of notice or his receipt of notice under
paragraph (1), whichever is earlier, petition the court for a hearing
to adjudicate the validity of his alleged interest in the property. The
hearing shall be held before the court alone, without a jury."
moves for an award of $ 17,322.50 in attorneys' fees under §
2465(b)(1)(A) of CAFRA. The relevant portion of the statute reads:
HN1"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 . . . reasonable attorney fees and other
litigation costs reasonably incurred by the claimant." 28 U.S.C. §
The parties offer
two competing interpretations of the phrase "any civil proceeding to
forfeit property under any provision of Federal law." The government
argues that Petitioner's petition is not covered by this language, as
"any civil proceeding to forfeit property" is essentially a convoluted
way of saying "civil forfeiture proceeding." Therefore, because the
property in this case was seized under a criminal forfeiture statute,
and [*4] not a civil forfeiture statute, § 2465(b)(1) does
not apply. (Government's Opp'n 2.) Petitioner argues that he is
eligible for fees under the literal text of the statute, because even
though his petition was ancillary to a criminal forfeiture, the hearing
that followed was a civil proceeding in which one party attempted to
forfeit the assets of the another. (Pl.'s Reply 1-2).
A. Standard of
interpreting a statute such as CAFRA, the Court's primary purpose is to
"ascertain and implement the intent of Congress." Scott v. United
States, 328 F.3d 132, 138-39 (4th Cir. 2003) (citing Brown
& Williamson Tobacco Corp. v. FDA, 153 F.3d 155, 161-62 (4th Cir. 1998)). The first step
involves determining whether the text has a plain and unambiguous
meaning as applied to the dispute before the Court. Robinson v. Shell
Oil Co., 519 U.S. 337, 340-41, 117 S. Ct. 843, 136 L. Ed. 2d 808
(1997); Scott, 328 F.3d at 139. The individual words in the text are
given their "ordinary, contemporary and common meaning[s]". Scott, 328
F.3d at 139. If this analysis resolves any apparent ambiguity, the
Court's only duty is to "enforce [the statute] according to its terms."
Discover Bank v. Vaden, 396 F.3d 366, 369 (4th Cir. 2005) [*5] (internal
HN3Where a claimant
is eligible, CAFRA authorizes a court to award "reasonable" attorneys'
fees. 28 U.S.C. § 2465(b)(1)(A). To determine if an award is
reasonable, a court must first calculate a "lodestar" figure - the
number of hours reasonably expended on the litigation multiplied by a
reasonable hourly rate. United States v. $ 23,400 in United States
Currency, 2007 WL 1080292 (W.D.N.C. Apr., 2007). A court may then
adjust this number up or down to account for unusual circumstances. Id.
In calculating the lodestar figure, a court must take into account the
twelve factors identified by the Fourth Circuit in Daly v. Hill, 790
F.2d 1071, 1077 (4th Cir. 1986). n2
n2 HN4The lodestar
factors include: (1) the time and labor required; (2) the novelty and
difficulty of the questions; (3) the skill requisite to properly
perform the legal service; (4) the preclusion of other employment by
the attorney due to acceptance of the case; (5) the customary fee; (6)
whether the fee is fixed or contingent; (7) time limitations imposed by
the client or circumstances; (8) the amount involved and the results
obtained; (9) the experience, reputation, and ability of the attorneys;
(10) [*6] the 'undesirability' of the case; (11) the nature and
length of the professional relationship with the client; and (12)
awards in similar cases.
The Court grants
Petitioner's Motion for Attorneys' Fees, because he has substantially
prevailed in a civil proceeding to forfeit property. The hearing that
followed Mr Buk's § 853(n) petition was a "civil proceeding to
forfeit property" as required by 28 U.S.C. § 2465(b)(1); because
he prevailed in that suit, the government is liable for Mr. Buk's
reasonable costs and attorneys' fees. 28 U.S.C. § 2465(b)(1)(A).
As there is no
binding authority in the Fourth Circuit regarding the applicability of
CAFRA to forfeiture proceedings brought pursuant to 853(n), the Court's
analysis is guided by the text of the statute. Conn. Nat'l Bank v.
Germain, 503 U.S. 249, 112 S. Ct. 1146, 117 L. Ed. 2d 391 (1992). The
relevant portion of CAFRA reads: "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 . . .
reasonable attorney fees and other litigation costs reasonably incurred
by the claimant." 28 U.S.C. § 2465(b)(1)(A) (emphasis added).
HN5It looks to (1) "the language itself," [*7] (2) "the specific
context in which that language is used," and (3) "the broader context
of the statute as a whole" to determine whether the text has a plain
and unambiguous meaning as applied to the dispute before the Court.
Robinson v. Shell Oil Co., 519 U.S. 337, 340-41, 117 S. Ct. 843, 136 L.
Ed. 2d 808 (1997); Scott, 328 F.3d at 139.
The plain text of
the attorneys' fees provision, 28 U.S.C. § 2465(b)(1), provides
that it is applicable to "any civil proceeding to forfeit property",
under "any provision of Federal law." HN6The Court presumes that the
"legislature says in a statute what it means, and means in a statute
what it says there." Conn. Nat'l Bank v. Germain 503 U.S. at 253-54,
and under the plain terms of the statute an ancillary proceeding under
21 U.S.C. § 853(n) is such a proceeding. HN7A third-party claimant
to assets seized in a criminal forfeiture may not intervene in the
criminal proceeding, FED. R. CRIM. P. 32.2(b)(2), but must instead file
a petition under 21 U.S.C. § 853(n). The hearing that follows is
civil in nature. See United States v. Douglas, 55 F.3d 584 (11th Cir. 1995) (holding that an
ancillary § 853(n) proceeding to recover property seized from
third parties in a criminal forfeiture is a 'civil [*8] action' under
the Equal Access to Justice Act). Because the purpose of the §
853(n) proceeding is to determine if the claimant's property is subject
to government forfeiture, n3 it is literally a "civil proceeding to
forfeit property under [a] provision of Federal law" as described in
n3 When a
third-party asserts an interest in property under § 853(n), the
attempted forfeiture is not perfected until the conclusion of that
proceeding. See 21 U.S.C. § 853(n)(7) ("Following disposition of
all petitions filed under this section, or . . . expiration of the
period provided . . . the United States shall have clear title to
property that is the subject of the order of forfeiture . . .")
interpretation of section 2465(b)(1) is supported by reference to the
language used elsewhere in CAFRA. If the phrase "civil proceeding to
forfeit property" were interchangeable with "civil forfeiture
proceeding," one would expect to see it used repeatedly in CAFRA. But
it appears only once - in section 2465(b)(1). Throughout the statute,
Congress refers explicitly to "civil forfeiture proceedings," and the
exact phrase "civil forfeiture proceeding under a civil forfeiture
[*9] statute" appears at least six times. Compare, e.g., 18
U.S.C. § 983(a)(1)(A)(i); 18 U.S.C. § 983(a)(2)(A); 18 U.S.C.
§ 983(b)(1)(A); 18 U.S.C. § 983(b)(2)(A); 18 U.S.C. §
983(e)(1); 18 U.S.C. § 983(h)(1) ("any civil forfeiture proceeding
under a civil forfeiture statute"); with 28 U.S.C. § 2465(b)(1)
("any civil proceeding to forfeit property under any provision of
federal law") (emphasis added). Congress's decision to use different
terminology in this single provision, section 2465(b)(1), strongly
suggests that the phrase "civil proceeding to forfeit property" is not
interchangeable with "civil forfeiture proceeding", and that Congress
intended the language in § 2465(b)(1) to convey some different
meaning. See BFP v. Resolution Trust Corp., 511 U.S. 531, 531, 114 S.
Ct. 1757, 128 L. Ed. 2d 556 (1994) (HN8"It is generally presumed that
Congress acts intentionally and purposely when it includes particular
language in one section of a statute but omits it in another.")
(internal quotation omitted); Barmes v. United States, 199 F.3d 386,
389 (7th Cir. 1999) ("Different
language in separate clauses in a statute indicates Congress intended
distinct meanings.") (citation omitted).
argument to the contrary is summarized [*10] concisely in its
brief - "[b]ecause the forfeiture in this case was brought pursuant to
a criminal forfeiture statute and not a civil forfeiture statute, by
its terms, the CAFRA attorneys' fee provision does not apply."
(Government's Opp'n 2.) However, applicability of the attorneys' fees
provision of CAFRA turns on the status of the claimant and the nature
of the proceeding for which attorneys' fees are sought, not on how the
government chose to initiate the seizure - thus the phrase "under any
provision of Federal law." 28 U.S.C. § 2465(b)(1) (emphasis
added). There is simply nothing in the language of § 2465(b)(1)
that conditions eligibility on how the government chose to seize the
property. While Congress clearly did not intend to provide attorneys'
fees for defendants to criminal forfeiture proceedings, n4 the text of
the statute does not exclude these defendants based on the nature of
the forfeiture; rather, defendants are ineligible for attorneys' fees
because they were not parties to a civil proceeding as required by
n4 The Court's
interpretation does not conflict with this policy or create a loophole
in the law. Under principles of res judicata, a defendant whose
[*11] property claims have already been adjudicated in a criminal
forfeiture proceeding would not be able to re-litigate them in a civil
proceeding, and thus could not meet the requirements of §
Moreover, the two cases the government cites in support of its argument
are unpersuasive. (See Government's Brief at 2-3) (citing United States
v. Gardiner, 512 F. Supp. 2d 1270, 2007 WL 2462635 (S.D. Fla. 2007);
Synagogue v. United States, 482 F.3d 1058 (9th Cir.
2006)). Gardiner simply echoes the government's construction of CAFRA,
interpreting the phrase "any civil proceeding to forfeit property" as
"any civil forfeiture proceeding" with no further elaboration or
description of its analysis. 512 F. Supp. 2d 1270, 2007 WL 2462635 at
2. Similarly, Synagogue has no bearing on the applicability of CAFRA in
this case. The government cites Synagogue for the proposition that
CAFRA "does not apply where claimant's property is subject to criminal
forfeiture." (Government's Opp'n at 3). However, Petitioner's property
was never subject to criminal forfeiture; his property was subjected to seizure, not
forfeiture. Buk v. United States, No. 1:06cr235 (D. Va. Aug. 13, 2007);
See also United States v. Kahn, 497 F.3d 204, 209 note 6 (2d Cir. 2007) [*12]
(distinguishing literal forfeiture from the legal status of being
"subject to" forfeiture). Accordingly, the Court concludes that the
government's argument is without merit.
Because the Court finds that the plain language of 28 U.S.C. §
2465(b)(1)(A) applies to Petitioner's proceeding under § 853(n),
and is not persuaded by the governments' arguments, the Court grants
Petitioner's Motion for Attorneys' Fees. Although the assets in
question were originally seized in connection with a criminal
forfeiture, Petitioner was not a party to those proceedings and has not
been accused of any criminal activity. It was only after the conclusion
of the criminal forfeiture that Petitioner filed a petition, pursuant
to 21 U.S.C. § 853(n), to recover the funds he invested in a
proposed film production. As the hearing that followed was a "civil
proceeding to forfeit property under [a] provision of Federal law," and
Petitioner substantially prevailed, the government is liable for his
attorneys' fees under the plain language of the statute. 28 U.S.C.
Having determined that Petitioner is entitled to attorneys' fees under
CAFRA, the Court concludes that $ 17,222.50 is a reasonable fee for
[*13] this case. Petitioner has submitted detailed time sheets
requesting $ 15,437.50 in fees for Partner Stephen J. McCool (47.5
hours at $ 325), $ 1,785.00 for associate Dan McNamara (10.2 hours at $
175), and $ 100 for Westlaw research costs - a total of $ 17,322.50.
(PX1.) The government has not opposed the amount of fees requested. The
Petitioner's attorneys have also submitted an affidavit from a
nationally known forfeiture expert who practices in the Washington
area, attesting to the reasonableness of the rates sought and the hours
expended for this type of litigation. (PX2; Smith Aff. at P 6.) The
Court has reviewed this affidavit and the time sheets for each attorney
and finds an award of $ 17,222.50 reasonable for this litigation. The $
100 requested for Westlaw research will not be permitted, because
research costs are already represented in an attorneys' hourly rate.
The Court grants Petitioner's Motion for Attorneys' Fees in the amount
of $ 17,222.50. The hearing that followed Petitioner's § 853(n)
petition constituted a "civil proceeding to forfeit property" under 28
U.S.C. § 2465(b)(1). Because Petitioner substantially prevailed in
that proceeding, the government [*14] is liable for his
reasonable attorneys' fees and costs under the plain language of the
CAFRA attorneys' fees provision. 28 U.S.C. § 2465(b)(1)(A).
Accordingly, it is hereby
ORDERED that Petitioner Petr Buk's Motion for Attorneys' Fees is
GRANTED. The Clerk is directed to enter judgment, pursuant to Federal
Rule of Civil Procedure 58, in favor of Petitioner Petr Buk, and
against Defendant United States of America in the amount of $
17,222.50. It is further
ORDERED that Defendant United States of America pay Petitioner Petr Buk
attorneys' fees in the amount of $ 17,222.50.
The Clerk is directed to forward a copy of this Order to counsel of
ENTERED this 25th day of March, 2008.
/s/ Gerald Bruce Lee
Gerald Bruce Lee
United States District Judge