U.S. v. Moser

• Decision Date: 18 November 2009
• Docket Number: No. 08-2909.,08-2909.
• Citation: 586 F.3d 1089
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Bobby Keith MOSER, Defendant, Barry J. Jewell, Petitioner-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

586 F.3d 1089

UNITED STATES of America, Plaintiff-Appellee, v. Bobby Keith MOSER, Defendant Barry J. Jewell, Petitioner-Appellant.

No. 08-2909.

United States Court of Appeals, Eighth Circuit.

Submitted: April 17, 2009.

Filed: November 18, 2009.

Shelly H. Koehler, argued, Samuel A. Perroni, Barry, Jewell, on the brief, Little Rock, AR, for appellant.

Stefan Dante Cassella, Special AUSA, argued, Alexandria, VA, Clarence Daniel Stripling, AUSA, on the brief, Little Rock, AR, for appellee.

Before WOLLMAN, MELLOY, and GRUENDER, Circuit Judges.

MELLOY, Circuit Judge.

Barry J. Jewell sought attorneys' fees pursuant to the Civil Asset Forfeiture Reform Act ("CAFRA"), codified in part at 28 U.S.C. § 2465(b), after he prevailed in an ancillary proceeding pursuant to 21 U.S.C. § 853(n). The § 853(n) proceeding was ancillary to a criminal case against Jewell's former law partner, Bobby Keith Moser. In Moser's criminal case, the government had seized Jewell's pension and retirement account funds, and in the § 853(n) proceeding, the district court¹ concluded that the funds were beyond the reach of the government's forfeiture efforts. Ultimately, even though Jewell prevailed in the ancillary proceeding, the district court denied his fee request, finding that the ancillary proceeding did not qualify as "any civil proceeding to forfeit property under any provision of Federal law." 28 U.S.C. § 2465(b)(1).

We find many of Jewell's arguments regarding the characterization of § 853(n) ancillary proceedings persuasive. Ultimately, however, we are called upon in this case to interpret the breadth of 28 U.S.C. § 2465(b), a federal statute waiving sovereign immunity and authorizing the payment of attorneys' fees in limited situations. The arguments for and against permitting a prevailing § 853(n) petitioner to receive attorneys' fees from the government are too closely balanced for us to conclude that Congress's waiver of sovereign immunity clearly and unequivocally applies in this situation. See Arneson v. Callahan, 128 F.3d 1243, 1247 (8th Cir. 1997). Accordingly, we affirm the judgment of the district court denying Jewell's petition for fees.

I. Background

The government indicted Moser for acts of fraud involving client trust accounts. Moser eventually pleaded guilty to mail fraud, money laundering, interstate transportation of stolen property, tax fraud, and conspiracy. In this case, the criminal case against Moser, the court entered an order of forfeiture. Shortly after the court entered the order, the government filed an application under seal for warrants to seize approximately $160,000 that Jewell held in pension and retirement accounts. In support of the application, the government provided an affidavit from an IRS agent who alleged that the funds in Jewell's accounts could be traced to Moser's criminal activities. The court relied on the affidavit and granted the seizure warrants. The government then moved to include these seized assets in the order of forfeiture, and the court granted the motion.

On July 14, 2006, Jewell filed a petition pursuant to 21 U.S.C. § 853(n)(2) initiating ancillary proceedings and seeking an amendment to the forfeiture order. Jewell asserted a right to the $160,000 from the pension and retirement accounts and alleged that his right was superior to that of the government.

In December 2006, Jewell filed a motion for summary judgment in these ancillary proceedings asserting that the government had not established the requisite connection between the seized funds and Moser's criminal activity. The government then filed a stay of discovery in relation to Jewell's pending motions. The government stated that it had discovered that a different group of federal prosecutors were considering criminal charges against Jewell. The government argued that a criminal case against Jewell should proceed before resolution of the ancillary proceedings in Moser's case and before resolution of Jewell's summary judgment motion regarding forfeiture.

The government and Jewell filed several additional competing motions in the § 853(n) proceedings, and eventually, the government indicted Jewell in a separate criminal case. In the criminal case against Jewell, the government asserted that the same funds it seized under the seizure warrants and order of forfeiture in Moser's criminal case were subject to forfeiture in Jewell's own criminal case. Accordingly, upon filing the indictment against Jewell, the government asserted rights to the same property through two channels: this criminal case against Moser (as contested by Jewell in the § 853(n) proceedings) and the separate criminal case against Jewell.

Eventually, the court in the criminal case against Jewell entered a protective order authorizing the pretrial retention of the funds already seized through Moser's case. The government then filed yet another case involving the same funds, this time an in rem action against the already-seized funds asserting rights to civil forfeiture. Jewell intervened as a claimant in the in rem action, asserting rights as the owner of the property.

The court in the ancillary proceedings under § 853(n) denied Jewell's motion for summary judgment and granted a joint motion to stay the ancillary proceedings pending resolution of the criminal case against Jewell and resolution of the separate, in rem, civil-forfeiture case.

Jewell then filed a motion for summary judgment in the in rem action and a motion to vacate the protective order in his own criminal case. He asserted arguments based on ERISA, stating that the funds at issue were protected from forfeiture. The district court² accepted Jewell's arguments and granted summary judgment denying forfeiture in the in rem, civil action. That same court vacated the protective order in Jewell's criminal case and ordered the government to return the funds to Jewell.³

After that district court entered those orders, the government refused to release the funds to Jewell, arguing that the funds were still subject to the original forfeiture order and seizure warrant in this case, Moser's criminal case. The parties then moved to lift the stay as to the § 853(n) ancillary proceedings. Subsequently, the district court in the present case held that the ERISA-based decision from the in rem action governed the treatment of the funds. Accordingly, the court vacated the remaining seizure warrant and ordered the funds returned to Jewell.

Jewell then moved for attorneys' fees in this case under 28 U.S.C. § 2465(b). The district court determined that § 2465(b) did not make attorneys' fees available to a successful § 853(n) claimant such as Jewell. Jewell appeals the fee decision.

II. Discussion

The only question at issue in this appeal is whether the ancillary proceeding triggered by Jewell's § 853(n) motion in Moser's criminal case is "any civil proceeding to forfeit property under any provision of Federal law" in accordance with 28 U.S.C. § 2465(b)(1). If so, Jewell may recover attorneys' fees. If it is not, i.e., if (1) the proceeding is not civil, or (2) if it is not a "proceeding to forfeit property under any provision of federal law," then § 2465(b)(1) does not permit a fee recovery. In addressing this question, we must construe § 2465(b)(1) narrowly and find a waiver of sovereign immunity only where Congress clearly and unequivocally expressed its intention to make public funds available. Arneson, 128 F.3d at 1247 ("The Court has instructed us to construe the scope of such waivers in the sovereign's favor; to limit such waivers to their plain language; and to construe ambiguities in favor of immunity.") (internal citations omitted). Because the present question is a question of statutory interpretation to determine the applicability of sovereign immunity, our review of the district court is de novo. Riley v. United States, 486 F.3d 1030, 1031 (8th Cir.2007).

A. Nature of the Proceedings

"Twenty-one United States Code § 853 addresses criminal forfeitures." United States v. Timley, 507 F.3d 1125, 1129 (8th Cir.2007). Without parsing § 853(n) finely, then, there is an immediate and legitimate textual argument to support the view that § 853(n) proceedings are not civil, but rather are criminal, in nature—subsection (n) appears within a larger Code section dealing with the standards and procedures applicable to criminal forfeiture. Section 853(n) specifically, however, is the exclusive mechanism for third parties—persons other than the underlying criminal defendants—to petition courts and assert claims to property the government has seized in relation to underlying criminal cases.

Jewell argues that these limited proceedings are civil or civil in nature even though the proceedings take place in the larger context of a criminal case. Several courts have adopted his view, comparing the proceedings to quiet title actions, or viewing the procedural framework, the parties involved, the burdens of proof, or the issues involved as establishing that § 853(n) proceedings are civil in nature. See, e.g., United States v. MacInnes, 223 Fed.Appx. 549, 552 (9th Cir.2007) (unpublished) (stating that a § 853(n) petition by a person who is not the criminal defendant is civil in nature because the determination should be governed by "the nature of the petitioner, rather than the statute governing the proceeding"); United States v. McHan, 345 F.3d 262, 275-76 (4th Cir. 2003) (comparing § 853(n) proceedings to quiet title actions); United States v. Alcaraz-Garcia, 79 F.3d 769, 772 n. 4 (9th Cir. 1996) (holding that, under Fed. R.App. P. 4(a)(1), a § 853(n) petitioner has sixty days to appeal a district court's decision, as opposed to the ten-day time limit applied in criminal cases, because a § 853(n) proceeding is civil in nature); United States v. Douglas, 55 F.3d 584, 586 (11th Cir.1995) ("Congress . . . viewed a § 853(n) hearing as a species of an `action at law or equity'—a substitute for separate ci...