2273
Payment of Costs and Attorneys' Fees From the
Assets Forfeiture FundLimited Authority
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BACKGROUND: Generally, the Assets Forfeiture Fund (Fund) is not
available to pay judgments arising from asset forfeiture cases,
including costs and attorneys fees. The following addresses the narrow
legal question of whether the Fund is available to pay judgments of
expenses and attorney's fees under 28 U.S.C. § 2412(d). The relevant
portions of 28 U.S.C. § 2412 follow:
(d)(1)(A) Except as otherwise specifically provided by statute, a
court shall award to a prevailing party other than the United States
fees and other expenses, in addition to costs awarded pursuant to
subsection (a), incurred by that party in any civil action (other than
cases sounding in tort), including proceedings for judicial review of
agency action, brought by or against the United States in any court
having jurisdiction of that action, unless the court finds that the
position of the United States was substantially justified or that
special circumstances make an award unjust.
* * *
(4) Fees and other expenses awarded under this subsection to a party
shall be paid by any agency over which the party prevails from any funds
made available to the agency by appropriation or otherwise.
This provision is commonly referred to as the Equal Access to Justice
Act (EAJA). The Department of Justice has the legal authority pursuant
to 28 U.S.C. § 524(c)(1)(A) to permit the use of Fund monies to pay
EAJA awards arising from actions related to the forfeiture, attempted
forfeiture or seizure for forfeiture of property.
The history of the EAJA indicates it was enacted to encourage
private parties to pursue their legitimate claims against the
government, and to deter inadvisable or inappropriate official action,
including legal action, by the government, with its high cost
ramifications for the non-government party. Prior to enactment of the
EAJA, it was believed that many small businesses and individuals with
legitimate claims or defenses failed to defend themselves against the
government due to the high cost involved. Since the permanent judgment
appropriation of the Treasury was available if the government ever
suffered an adverse judgment, there did not appear to be any deterrent
to overreaching by Executive Branch agencies. This imbalance in power
was largely unavoidable. However, Congress concluded that certain
changes could be made to mitigate this imbalance.
In the EAJA, Congress provided that the non-government party could
seek reimbursement of costs and legal fees if the government's position
was not substantially justified. In addition, Congress decided that if
the presiding court determined that the government position was not
substantially justified, then requiring the agency that took the
official action to pay the costs and legal fees from its own operating
funds would serve as an effective deterrent to government overreaching.
Thus, 28 U.S.C. § 2412(d)(4) states that the award will be paid
"from any funds made available to the agency by appropriation or
otherwise." (Emphasis added). The Assets Forfeiture Fund allocations
represent funds that are "otherwise" available to an agency.
When the EAJA was enacted, the primary source of funds to pay
judgments against the United States was the permanent judgment
appropriation. Agency appropriations, and other funds available to each
agency, were generally not available to pay these costs. As noted above,
the EAJA expressly shifted responsibility for these costs from the
permanent judgment appropriation to operating funds available to the
individual agencies. In other words, payment of the EAJA awards arising
from agency program operations was a part of the operating costs with
which each agency had to cope. This practice was well established by
October 1984.
The legislative history of the Comprehensive Crime Control Act of
1984 lists several reasons for the various forfeiture provisions
included in the Act. That history cites as a significant problem the
financial burden an aggressive pursuit of forfeiture cases places on our
law enforcement agencies. Where the sale of property does not realize
more than the total expenses incurred in storing, maintaining, and
selling the property, the net loss was carried by the law enforcement
agency's budget. The solution proposed was the creation of the Assets
Forfeiture Fund from which moneys could be appropriated to defray the
mounting costs associated with forfeiture actions. While the legislative
history does not mention the EAJA awards, it is clear that:
- Congress wanted a more aggressive use of forfeiture;
- the Fund was created to defray the costs associated with forfeiture
actions that formerly were borne by law enforcement agency budgets; and
- the occasional EAJA award was a known potential cost of forfeiture
actions that would be borne by agency budgets.
Further, Congress crafted the Assets Forfeiture Fund statute to
reach very widely with respect to agency costs associated with the
forfeiture program. It not only permitted the payment of any expenses
necessary to seize, maintain, sell, or dispose of property but also
permitted payment of any other necessary expenses incident to the
seizure, detention, forfeiture, or disposal of the property. 28 U.S.C.
§ 524(c)(1)(A). Payment of an EAJA award is a predictable expense
that is incident to an aggressive forfeiture program. Moreover, an EAJA
award may be considered a necessary expense in that it is ordered by a
court. Therefore, the Fund is legally available to pay the EAJA awards
in forfeiture cases.
[cited in USAM 9-117.200] | |