United States v. Kim, s. 12–56922
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
| Writing for the Court | N.R. SMITH, Circuit Judge |
| Citation | 797 F.3d 696 |
| Parties | UNITED STATES of America, aka Seal A, Plaintiff–Appellant, v. Christopher KIM, aka Chris Kim, aka KJ Kim, aka Kyung Joon Kim; Bora Lee; Optional Capital, Inc., aka Optional Ventures ; First Stephora Avenue, Inc.; Erica M. Kim ; Alexandria Investment, LLC; Se Young Kim; Young Ai Kim, Claimants–Appellees, Law Office of Eric Honig, Intervenor–Appellee, and 475 Martin Lane, Beverly Hills, California, Real Property Located at, aka Seal A, Defendant. United States of America, aka Seal A, Plaintiff–Appellant, v. Christopher Kim, aka Chris Kim, aka KJ Kim, aka Kyung Joon Kim; Bora Lee; Optional Capital, Inc., aka Optional Ventures ; First Stephora Avenue, Inc.; Erica M. Kim ; Alexandria Investment, LLC; Se Young Kim; Young Ai Kim, Claimants–Appellees, Law Office of Eric Honig, Intervenor–Appellee, and 475 Martin Lane, Beverly Hills, California, Real Property Located at, aka Seal A, Defendant. United States of America, aka Seal A, Plaintiff–Appellant, v. Christopher Kim, aka Chris Kim, aka KJ Kim, aka Kyung Joon Kim; Bora Lee; Optional Capital, Inc., aka Optional Ventures ; First Stephora Avenue, Inc.; Erica M. Kim ; Alexandria Investment, LLC; Se Young Kim; Young Ai Kim, Claimants–Appellees, Law Office of Eric Honig, Intervenor–Appellee, and 475 Martin Lane, Beverly Hills, California, Real Property Located at, aka Seal A, Defendant. |
| Docket Number | Nos. 12–56922,13–55555,13–55556.,s. 12–56922 |
| Decision Date | 13 August 2015 |
797 F.3d 696
UNITED STATES of America, aka Seal A, Plaintiff–Appellant
v.
Christopher KIM, aka Chris Kim, aka KJ Kim, aka Kyung Joon Kim;
Bora Lee;
Optional Capital, Inc., aka Optional Ventures ;
First Stephora Avenue, Inc.;
Erica M. Kim ;
Alexandria Investment, LLC;
Se Young Kim;
Young Ai Kim, Claimants–Appellees
Law Office of Eric Honig, Intervenor–Appellee
and
475 Martin Lane, Beverly Hills, California, Real Property Located at, aka Seal A, Defendant.
United States of America, aka Seal A, Plaintiff–Appellant
v.
Christopher Kim, aka Chris Kim, aka KJ Kim, aka Kyung Joon Kim;
Bora Lee;
Optional Capital, Inc., aka Optional Ventures ;
First Stephora Avenue, Inc.;
Erica M. Kim ;
Alexandria Investment, LLC;
Se Young Kim;
Young Ai Kim, Claimants–Appellees
Law Office of Eric Honig, Intervenor–Appellee
and
475 Martin Lane, Beverly Hills, California, Real Property Located at, aka Seal A, Defendant.
United States of America, aka Seal A, Plaintiff–Appellant
v.
Christopher Kim, aka Chris Kim, aka KJ Kim, aka Kyung Joon Kim;
Bora Lee;
Optional Capital, Inc., aka Optional Ventures ;
First Stephora Avenue, Inc.;
Erica M. Kim ;
Alexandria Investment, LLC;
Se Young Kim;
Young Ai Kim, Claimants–Appellees
Law Office of Eric Honig, Intervenor–Appellee
and
475 Martin Lane, Beverly Hills, California, Real Property Located at, aka Seal A, Defendant.
Nos. 12–56922
13–55555
13–55556.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted March 2, 2015.
Filed Aug. 13, 2015.
Editor's Note: Republished to include footnote added by the Court. For Republsihed Opinion, see2015 WL 7739871.
Melissa Briggs, (argued), John E. Lee, Monica E. Tait, Assistant United States Attorneys, Thomas J. Clark, Supervisory Attorney, Gilbert S. Rothenberg, Deputy Assistant Attorney General, Kathryn Keneally, Assistant Attorney General, for Plaintiff–Appellant United States of America.
Eric Honig (argued), Law Offices of Eric S. Honig, Marina Del Rey, CA, for Intervenors–Appellees.
John D. Cline, San Francisco, CA, for Amicus Curiae National Association of Criminal Defense Lawyers.
Appeal from the United States District Court for the Central District of California, Audrey B. Collins, District Judge, Presiding. D.C. No. 2:04–cv–02788–ABC–PLA.
Before: STEPHEN REINHARDT, N. RANDY SMITH, and ANDREW D. HURWITZ, Circuit Judges.
OPINION
N.R. SMITH, Circuit Judge:
Christopher Kim and members of his family defeated the Government's attempts to forfeit property seized in connection with a criminal investigation. Thereafter, Kim received several significant awards of attorney's fees. Eric Honig, Kim's lawyer, asked the district court that he be paid those fees directly, pursuant to an assignment in their representation agreement. The Government asserts that the Anti–Assignment Act, 31 U.S.C. § 3727, voids such an assignment.
We agree that the Anti–Assignment Act invalidates an assignment of an award of statutory attorney's fees against the United States from the claimant to his attorney. However, the Anti–Assignment Act goes no further. The Act does not prevent an attorney from taking an interest in the fees that is effective against the Government;
it merely forbids an assignment of the right to be paid directly from the United States Treasury. We have jurisdiction under 28 U.S.C. § 1291, and we vacate and remand for further proceedings.
BACKGROUND
Pursuant to a request for extradition from the Republic of Korea, where Kim was charged with fraudulently obtaining funds from companies that he controlled (DAS Corp. and Optional Capital), the Government seized the properties at issue in this case. See United States v. Real Prop. Located at 475 Martin Lane, 545 F.3d 1134, 1139 (9th Cir.2008). Kim, Erica Kim, Bora Lee, Se Young Kim, and Young Ai Kim (the “Kim Claimants”) each filed claims to the seized properties. The district court granted summary judgment to the Kim Claimants. We affirmed in part, holding that “the government failed to present admissible evidence sufficient to demonstrate a triable issue of fact as to whether Kim obtained DAS's money in a fraudulent manner or whether his dealings with Optional Capital were fraudulent.” United States v. Real Prop. Located at 475 Martin Lane, 298 Fed.Appx. 545, 549 (9th Cir.2008). However, we remanded for further proceedings regarding certain other properties. Real Prop. Located at 475 Martin Lane, 545 F.3d at 1146. On remand, the district court entered summary judgment, dismissing the Government's claims on the remaining properties.1
Throughout the proceedings, the Kim Claimants were represented by the Law Office of Eric Honig (“Honig”). The representation agreement between Honig and the Kim Claimants provided that “[a]ny fees the Court orders the government to pay for the work that I perform belongs to me and not to the clients, however I will provide a credit to the clients towards my fee agreed upon above for any part of my fee that is paid to me by the government.” After the district court's first summary judgment order, the Kim Claimants moved for an award of attorney's fees pursuant to the Civil Asset Forfeiture Reform Act (“CAFRA”). The district court found that the Kim Claimants were the prevailing parties and entered a substantial award of attorney's fees against the Government.
Thereafter, the Government filed tax liens against all of the Kim Claimants except Se Young Kim and Young Ai Kim. After the Government filed the tax liens, Honig moved to intervene in the forfeiture action to protect his interest in the award. The district court denied the motion. Subsequently, the Kim Claimants moved for an additional award of attorney's fees for the second summary judgment order and asked that the fees be paid directly to Honig. The district court granted the award, but declined to award the fees directly to Honig, because he was not a party to the forfeiture action.
Honig also filed a wrongful levy action against the Government. The Government moved to dismiss the wrongful levy action, arguing that Honig should instead have intervened in the forfeiture action. Honig then filed a second motion to intervene in that action, which the district court granted. The district court also ordered that
the attorney's fees be paid directly to Honig. The Government appealed the order. While that appeal was pending, we decided United States v. $186,416.00, 642 F.3d 753 (9th Cir.2011) ( “$186,416.00 I ”), in which we held that “attorney fees awarded under CAFRA are payable to the claimant, not to claimant's attorney.” Id. at 754. The parties agreed to remand the case for further proceedings in light of $186,416.00 I.
In order to protect his contractual interest in the attorney's fees, Honig filed a lien against the properties seized by the Government. In litigation regarding priority of interests in the seized properties, the district court held that the Government admitted that Honig's lien had priority over the tax liens. However, with regard to the award of attorney's fees, the Government maintained that the fees belonged to the Kim Claimants, and therefore its tax liens would take priority over any interest that Honig had in the attorney's fees awards. The Government also invoked the Anti–Assignment Act, 31 U.S.C. § 3727, to argue that the assignment of the awards from the Kim Claimants to Honig was ineffective as against the United States.2
The district court held that the attorney's fees awards could be paid directly to Honig. The district court interpreted $186,416.00 I to allow for the Kim Claimants to assign an award of attorney's fees to Honig. With regard to the Anti–Assignment Act, the district court held that it did not prevent the assignment of the attorney's fees award. The district court also held that the Government had, effectively, waived its statutory right to set off the Kim Claimants' tax liabilities with the fee awards. The Government was therefore left with only its tax liens, which it had previously admitted were inferior in priority to Honig's interest. The district court relied on 26 U.S.C. § 6323(b)(8) to hold that an attorney's lien had priority over a tax lien. Accordingly, there was no reason not to pay the fees directly to Honig.
Following the district court's order, Honig and the Kim Claimants moved for an additional award for fees incurred in litigating the ownership of the fees. The Government failed to respond in the time provided for by the local rules, and the district court entered an order granting the requested fees. The Government filed a Fed.R.Civ.P. 60(b)(1) motion contesting the last award, which the district court denied.
The Government now appeals the district court's order that the attorney's fee awards are payable directly to Honig and the district court's denial of its Rule 60(b)(1) motion.
DISCUSSION
We review a district court order granting an award of attorney's fees for abuse of discretion. See Childress v. Darby Lumber, Inc., 357 F.3d 1000, 1011 (9th Cir.2004). The district court's “[u]nderlying factual findings are reviewed for clear error.” Native Vill. of Quinhagak v. United States, 307 F.3d 1075, 1079 (9th Cir.2002). “The...
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