USA. v. Eleven Vehicles

• Decision Date: 01 October 1999
• Docket Number: No. 99-1241,99-1241
• Citation: 200 F.3d 203
• Parties: (3rd Cir. 2000) UNITED STATES OF AMERICA, v. ELEVEN VEHICLES, THEIR EQUIPMENT AND ACCESSORIES; ALL MONIES AND/OR INTERESTS IN CERTAIN ACCOUNTS IN BANKS OR CERTAIN OTHER FINANCIAL INSTITUTIONS; ONE BUSINESS; ANY & ALL PROCEEDS, FROM THE SALES THEREOF ROBERT CLYDE IVY; WAYNE K. RADCLIFFE; TERRANCE P. FAULDS; IRENE IVY; KLEINBARD, BELL & BRECKER; MELLON BANK, N.A.; LEBANON VALLEY NATIONAL BANK; MARY E. IVY; GERALD SCHULER; CLYDE IVY; IRENE IVY; ELAINE K. RADCLIFFE; MICHELLE E. RADCLIFFE, Claimants in District Court Robert Clyde Ivy and Irene Ivy, Appellants Argued:
• Court: U.S. Court of Appeals — Third Circuit

Page 203

200 F.3d 203 (3rd Cir. 2000)

UNITED STATES OF AMERICA, v. ELEVEN VEHICLES, THEIR EQUIPMENT AND ACCESSORIES; ALL MONIES AND/OR INTERESTS IN CERTAIN ACCOUNTS IN BANKS OR CERTAIN OTHER FINANCIAL INSTITUTIONS; ONE BUSINESS; ANY & ALL PROCEEDS, FROM THE SALES THEREOF

ROBERT CLYDE IVY; WAYNE K. RADCLIFFE; TERRANCE P. FAULDS; IRENE IVY; KLEINBARD, BELL & BRECKER; MELLON BANK, N.A.; LEBANON VALLEY NATIONAL BANK; MARY E. IVY; GERALD SCHULER; CLYDE IVY; IRENE IVY; ELAINE K. RADCLIFFE; MICHELLE E. RADCLIFFE, Claimants in District Court

Robert Clyde Ivy and Irene Ivy, Appellants

No. 99-1241

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued: October 1, 1999

Decided January 7, 2000

On Appeal From the United States District Court For the Eastern District of Pennsylvania (D.C. Civ. No. 91-cv-06779) District Judge: Honorable Eduardo C. Robreno

[Copyrighted Material Omitted]

Charles H. Ivy, Esquire (Argued) Law Office of Charles H. Ivy 20 South Prado Street, N.E. Atlanta, GA 30309-3309, Counsel for Robert Clyde Ivy and Irene Ivy

Catherine L. Votaw, Esquire (Argued) J. Alvin Stout, III, Esquire Michael R. Stiles, Esquire Office of the United States Attorney 615 Chestnut Street Suite 1250 Philadelphia, PA 19106, Counsel for United States of America

Before: NYGAARD, ALITO and ROSENN, Circuit Judges.

OPINION ANNOUNCING THE JUDGMENT OF THE COURT

ROSENN, Circuit Judge.

This appeal presents a recurring problem concerning the amount of fees due counsel under a fee-shifting statute. The case also presents the grim reality feared by the Supreme Court of the United States when it warned that a "request for attorney's fees should not result in a second major litigation." Hensley v. Eckhart, 461 U.S. 424, 437 (1983). More specifically, we are presented with a challenge to the adequacy of a supplemental award of attorney fees and expenses for work performed in post-judgment fee litigation in a civil forfeiture proceeding initiated by the United States in 1991 in the District Court for the Eastern District of Pennsylvania. After securing the court-ordered release of property seized by the United States Government because it was thought to be involved in illegal money laundering activities, appellants sought attorney fees and expenses incurred in seeking the property's release pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. S 2412(d)(1)(A). In its fourth published opinion in this case, the district court awarded the appellant $142,643.26 in attorney fees and $7963.51 in expenses covering services through September 26, 1996. See United States v. Eleven Vehicles, 966 F. Supp. 361 (E.D. Pa. 1997) [hereinafter Eleven Vehicles IV]. ¹ Subsequently, the appellants filed a supplemental request for $23,333.81 in attorney fees and $560 in expenses incurred after September 26, 1996 in litigating their entitlement to fees and expenses for the underlying forfeiture litigation. The court awarded the appellants $5000 in attorney fees plus $560 in expenses. Disappointed, the appellants, Robert Clyde Ivy and Irene Ivy, timely appealed. We remand.

I.

In October 1991, the Government filed a complaint for forfeiture of the assets of numerous parties, including Appellants Robert Clyde Ivy and Irene Ivy ("the Ivys"). Over the next four-and-a-half-years, the trial court ordered the piece-by-piece release of all the Ivys' seized properties pursuant to partial grants of summary judgment in October 1993 and September 1995, and a final dismissal of the Government's forfeiture complaint, with prejudice, in March 1996.² In dismissing the case, the district court expressly retained jurisdiction for the purpose of considering the Ivys' request for attorney fees and expenses pursuant to the EAJA, and the Government's motion for a "certificate of reasonable cause" under 28 U.S.C. S 2465. The certificate of reasonable cause, if granted, would have protected the individuals who actually seized the property at issue from liability to the property owners, and would prevent the claimants from recovering costs from the Government, though not fees or expenses.

On August 30, 1996, the district court granted the requested certificate of reasonable cause. It held, however, that the Ivys were entitled to attorney fees at a rate of $112.28 per hour and to expenses. Eleven Vehicles III, 937 F. Supp. at 1149-56. In ruling on the Ivys' entitlement to fees and expenses, the court found that the Ivys were a "prevailing party" in the litigation, the Government's litigating position had not been "substantially justified," and no "special circumstances" existed that would render an attorney fee award unjust.³ Id. at 1150-55. The district court ordered the Ivys to submit an itemized statement of counsel's hours and rates by September 30, 1996. Id. at 1156. The Ivys submitted the required materials on that date. These materials covered work performed on the case through September 26, 1996. The Government filed objections to some of these requested fees.

The Government filed a motion for reconsideration of the award of attorney fees and expenses. The Ivys filed a motion for reconsideration of the grant of a certificate of reasonable cause and the failure to grant attorney fees at market rate. The Ivys also filed a motion requesting the court to adjust the hourly billing rate of $112.28, established by the court for calculating the amount of attorney fees owed to the Ivys, upward to reflect cost of living. The parties filed responses to each other's motions. In November 1996, the Ivys apparently gave the Government and the court notice that they intended at some future date to seek attorney fees and expenses for work performed after September 26, 1996.

On May 30, 1997, the district court denied the Government's motion for reconsideration as merely a "rehash" of earlier arguments in the litigation. As for the Ivys' motion for reconsideration of the grant of the certificate of reasonable cause and the court's denial of their entitlement to attorney fees at market rates, the court also, after careful consideration, denied it as essentially a restatement of their earlier arguments. Eleven Vehicles IV, 966 F. Supp. at 363-66. However, the court granted the Ivys' request for a cost of living adjustment, revising the compensable hourly billing rate upward to $120.68. Id. at 366-67. Finally, the court accepted one of the Government's narrow objections to the fees requested by the Ivys, rejected the remainder of the Government's objections, and granted attorney fees for 1182 hours of work in the amount of $142,643.76, and expenses in the amount of $7,963.81. Id. at 367-69.

On August 27, 1997, the Ivys submitted to the district court a supplemental request for attorney fees and expenses covering work performed after September 26, 1996. In this application, the Ivys requested $23,333.81 in fees as compensation for 190.9 additional hours work, and $560.00 in expenses. The Government opposed this supplemental request, arguing that the requested supplemental payment was not authorized by any law, and was in essence a motion under Federal Rule of Civil Procedure 59(a) to alter or amend the May 30, 1997 award. Because such a request must be filed within 10 days after judgment, the Government asserted that the request was untimely, and the court's March 30, 1997 award was sufficiently generous and adequate to cover additional fees and expenses accumulated between September 26, 1996 and May 30, 1997. Further, the Government argued that the Ivys were not entitled to receive fees and expenses for post-judgment work, particularly work related to the decision not to take an appeal. The Ivys responded to the Government's arguments, and in addition asserted that the Government's memorandum in opposition was untimely and therefore should not be considered by the district court.

After a telephone conference with counsel for the parties, the court issued its decision. Eleven Vehicles V, 36 F. Supp. 2d 237 (E.D. Pa. 1999). The court first held that the Ivys' supplemental fee application was not a Rule 59(a) motion, but instead arose under the EAJA. Id. at 238 n.1. It then addressed the merits of the application, considering the supplemental application as a whole along with the first application and fee award. Id. at 239. The court stated that it took into account all of the factors it had considered in determining the first fee award. In addition, the district court considered that "the supplemental request involves work performed on motions for reconsideration of doubtful validity filed by both parties," and that "the 190 hours spent by counsel appears `excessive, redundant and otherwise unnecessary.' " Id. (citation omitted). Based on these factors, the court awarded the Ivys an additional $5,000 in fees and $560.00 in expenses. The district court's opinion did not address the Ivys' argument that the Government's opposition to their request was untimely and should not be considered.

II.

On appeal, the Ivys make several substantive arguments in support of their assertion that the district court erred in awarding them less attorney fees than they requested. In addition, they contend that the court abused its discretion by entertaining the Government's late-filed memorandum opposing their supplemental request for attorney fees and expenses. The Government argues that the supplemental fee application is, in essence, a motion to alter or amend the district court's May 30, 1997 original fee award under Federal Rule of Civil Procedure 59(e).⁴ Accordingly, the Government contends that the Ivys were obliged to comply with that Rule's requirement that such motions be filed "no later than 10 days after the entry of the judgment." Fed. R. Civ. P. 59(e). Because the Ivys' supplemental fee request was filed approximately three months after entry of the May 30, 1997 award of attorney fees, the Government asserts that the request was untimely, and thus the court lacked subject...