USA v. 85668 Dollars in US Currency

Filing 130

MEMORANDUM DECISION and Order-For the reasons set forth above, Plaintiff United States shall pay Claimants reasonable attorney fees in the amount of $195,797.50 and costs in the amount of $2491.26. Signed by Judge David Sam on 2/4/15. (jmr)

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
_____________________________________________________________________
UNITED STATES OF AMERICA, )
Case No. 2:09CV00029 DS
Plaintiff,

)

vs.

)

MEMORANDUM DECISION
AND ORDER

)
$85,668.00 in United Sates
Currency,
Defendant,

)

)
______________________________
)
ANDREW C. WILEY,
)
Claimant.
_____________________________________________________________________

I. INTRODUCTION
Claimant Andrew C. Wiley, pursuant to 28 U.S.C. § 2465(b)(1)(A), moves the
Court for an award of attorney fees and costs incurred in this civil forfeiture action. The
United States concedes that Claimant substantially prevailed and is entitled to his
reasonable fees and costs, but takes issue with the reasonableness of the claimed fees
and the lack of documentary support for the claimed costs. Mr. Wiley initially sought
$194,525.00 in fees for attorneys David Michael, Edward Burch and Rick Van
Wagoner, and $2,487.66 in costs. The updated and revised fee amount now sought is
$224,048.25.
This case arose from a traffic stop on Interstate 80. Claimant was pulled over by
a Utah Highway Patrol Trooper because there was no registration on file with law
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enforcement for the Missouri license plate on Claimant’s vehicle. The stop resulted in a
seizure of $85,668. The United States filed a forfeiture action, alleging that the cash
represented proceeds of drug trafficking. Claimant Mr. Wiley filed a claim to the money.
Pretrial litigation ensued which included a government motion to strike Claimant’s
claim, Claimant’s motion to suppress evidence, and Claimant’s motion for summary
judgment . Ultimately, the government and Claimant stipulated to a conditional
judgment of forfeiture preserving Claimant’s right to appeal the denial of his motion to
suppress. Claimant appealed, and in a decision with each panel member writing
separately, this Court was reversed and the matter remanded. As a result, the
government returned the money to Claimant and the action was dismissed. This
motion for fees and costs followed.
II. DISCUSSION
The Civil Asset Forfeiture Reform Act allows a claimant who “substantially
prevails” in a civil forfeiture case to recover “reasonable attorney fees and other
litigation costs reasonably incurred....” 28 U.S.C. § 2465(b)(1)(A). “‘A court will
generally determine what fee is reasonable by first calculating the lodestar -the total
number of hours reasonably expended multiplied by a reasonable hourly rate- and then
adjust the lodestar upward or downward to account for the particularities of the suit and
its outcome.’” Zinna v. Congrove, 680 F.3d 1236, 1242 (10th Cir. 2012)(quoting Phelps
v. Hamilton, 120 F.3d 1126, 1131 (10th Cir. 1997)).
A. Reasonable Hourly Rate
In his initial fee request, Claimant requested fees for Michael billed at $575/hr.,

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$600/hr. and $625/hr. for 2008-2010, 2011-2012, and 2013-2014 respectively.
Claimant requested fees for Burch billed successively at $225/hr., $300/hr., and
$325/hr. for the same time periods as Michael. Claimant requested fees for Van
Wagoner billed at $300/hr. for work performed in 2008 and 2009. In his Reply,
Claimant asserts that because of the delay in payment factor, counsel should be
compensated at their current rate as to all hours billed during the course of the
litigation.
“To determine what constitutes a reasonable rate, the district court considers the
‘prevailing market rate in the relevant community.’” Lippoldt v. Cole, 468 F.3d 1204,
1224 (10th Cir.2006)(quoting Malloy v. Monahan, 73 F.3d 1012, 1018 (10th Cir. 1996)).
“Unless the subject of the litigation is so unusual or requires such special skills that only
an out-of-state attorney possess, the fee rates of the local area should be applied even
when the lawyers seeking fees are from another area.” Id. at 2225 (citations and
internal quotations marks omitted).
1. prevailing market rate in the relevant community
The government contends that the rates charged by Michael and Burch are
unreasonable for the Utah market, which it asserts is the relevant community. It further
asserts that the case did not present such exceptional circumstances that a local
attorney could not have handled the matter. On the other hand, Claimant’s counsel
assert that civil forfeiture is a specialized area of law and that no Utah counsel could
have sufficiently provided the skills to handle the case.
The uncontroverted evidence of record suggests that civil forfeiture is a practice

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specialty. Attorney Eric Honig, a former federal civil forfeiture prosecutor, states:
Representing clients in federal civil in rem forfeitures is an identifiable
practice specialty. Civil forfeitures are prosecuted by specialized
departments of all federal law enforcement agencies and are prosecuted
by special forfeiture sections of U.S. Attorney’s offices across the country
.... The creation of these special forfeiture units ... is strong evidence of
the specialized nature of these cases.
Honig Decl. at ¶6. Mr. Honig further states that he is “one of very few attorneys in the
country” that has successfully prevailed in a civil forfeiture action and thereby obtained
an attorney fee award against the government. Id. at ¶10. See also Smith Decl., ¶¶3-4
(“Representing clients/claimants in federal civil in rem forfeiture actions is a highly
specialized practice area. Such specialized knowledge and experience in this area is
rare.”). Claimant’s local counsel, Mr. Van Wagoner, states that he refers cases to ,
Claimant’s lead counsel Mr. Michael, Van Wagoner Decl. at ¶6, and Michael in turn
states that the “vast majority” of his civil forfeiture cases are referrals from criminal
defense attorneys from around the country. Michael Decl. at ¶8. Claimant has also
presented evidence which suggest that there are not any private Utah attorneys who
are specialist or expert in defending civil in rem forfeiture actions. See Smith Decl. at
¶5. And Claimant’s counsel asserts that research has revealed no case where a Utah
attorney prevailed in a civil forfeiture action. The record also contains abundant
information as to the experience and expertise of Claimant’s California counsel with civil
forfeiture matters.
Accordingly, the Court concludes, for purposes of Claimant’s Motion for Attorney
Fees and Costs, that civil in rem forfeiture is a specialized practice area requiring
special skills and that when Claimant’s California counsel were retained, no Utah
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attorney with the requisite specialized skill was available.1 Therefore, the Court finds
the relevant community for purposes of determining a reasonable attorney rate to be
out of state/national experienced forfeiture attorneys, such as Claimant’s California
counsel.

Based on the record the Court is persuaded that the rates claimed for work

performed by Michael and Burch are reasonable and in line with attorneys of similar
experience. The rate claimed for work performed by Van Wagoner is not disputed,
and the Court finds that rate to be reasonable and in line with attorneys of similar
experience in Utah.
B. Reasonable Hours
The government also asserts, for a variety of reasons, that the total hours for
which Claimant’s counsel seek to be paid should be reduced because it represents time
that cannot reasonably be charged in this case. The Court addresses each of the
government’s challenges in turn.

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The Court is not persuaded otherwise by the assertion of the government that
the underlying nature of the issues presented did not require expertise in forfeiture
practice. As Claimant’s counsel note, they
successfully withstood a dispositve, forfeiture specific, government motion
to strike, proceeded through full civil discovery including depositions and a
motion to compel by the government, and that they litigated a forfeiture
specific motion for summary judgment which, though denied, preserved
an important issue for appeal that could have proven necessary to prevail.
Perhaps most importantly here, there was no guarantee that upon
prevailing on the suppression issue, that the government would not still
attempt to pursue forfeiture on the merits.
Reply at 9 (emphasis in original).
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1. block billing
The government first contends that Claimant’s counsel’s block billing, which it
claims makes it difficult to access reasonableness, warrants a ten percent reduction in
the hours claimed for work performed by Michael and Burch. See Opp’n at 11-12
(listing alleged examples of block billing). After reviewing the billing entries, the Court is
satisfied that the entries adequately describe the work for which time was billed and are
sufficient to allow a determination of reasonableness.
2. billings for related criminal case
Next, the government contends that $1,222.50 for 4.6 hours billed by Van
Wagoner (and it appears an associate) in 2008, pertains to a related criminal case and
is not recoverable. See United States v. Certain Real Property, Located at 317 Nick
Fitchard Road, N.W., Huntsville, AL, 579 F.3d 1315 (11th Cir. 2009) reversing award of
attorney fees under § 2465 where fee was earned in obtaining acquittal in a related
criminal case). The Court agrees. The sum of $1,222.50 is excluded from the total of
fees claimed by Claimant for work performed by Van Wagoner.
3. vague/indefinite billing entries
The government also challenges $1,620 (4.5 hr. x $360) for October 2014 work
billed by Van Wagoner because it does not appear on an invoice spent on the case, but
only appears as a summary. Claimant has supplied an invoice, and the Court finds the
amount claimed reasonable.
4. clerical tasks
The government challenges $10,268.75 in fees for work relating to resolving

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video exhibit playback issues during appeal as being both exorbitant and as being part
of attorney overhead which is not billable. It seeks a 90 percent reduction in the
amount claimed. The government similarly challenges other entries amounting to
$3,987.00, contending that the work billed involves clerical issues which is part of
attorney overhead and not billable. See Opp’n at 15-17 (listing challenged entries).
For the reasons stated by Claimant, the Court finds that time billed for resolving
video exhibit issues and for such work as e-filing of documents and the drafting of
required sections of legal documents is reasonable and no reduction is warranted. See
Reply at 19-20 & 22-23.
5. excessive, redundant, & unnecessary entries
a. discussions about attorney fees
The government urges that $2,356.25 in fees, billed by Michael and Burch in
August 2013, should be deducted or reduced because activities related to a fee
agreement are not billable tasks. See Opp’n at 18-19 (listing challenged entries).
A review of the relevant entries reflects that at least part of the time billed by both
Michael and Burch was devoted to the issue of appeal. The Court finds 1 hour billed by
Michael and 1 hour billed by Burch reasonable in this regard. The Court deducts
$1406.25 (2.25 hr. x $625) billed by Michael related to fee discussions as not
reasonable.
b. motion to suppress hours
The government contends that 93.25 total hours billed related to the 2009 motion
to suppress is excessive and must be reduced. See Opp’n at 19-20 (listing challenged

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entries). It also asserts that Michael’s unproductive travel time to attend the motion
hearing is unreasonable and should be excluded or reduced.
The challenged entries reflect that the claimed hours include time related to the
research and writing of 2 briefs, analysis of the government’s opposition brief, travel
time between San Francisco and Salt Lake City, communications with the Claimant,
plus other misc. related matters. As Claimant’s counsel suggest, of the hours claimed
approximately 50 were devoted to briefing the motion to suppress and the reply brief.
The Court agrees with Claimant that spending significant time on what ultimately was
fatal to the government’s forfeiture action was reasonable. See Moreno v. City of
Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008) (“[b]y and large, the court should defer
to the winning lawyer’s professional judgment as to how much time he was required to
spend on the case; after all, he won, and might not have, had he been more of a
slacker”).
Regarding travel time, the entries reflect that at least some of the travel time was
used to prepare for the evidentiary hearing, and therefore, can not properly be
characterized as unproductive. Claimant’s counsel Mr. Michael states that it takes at
most 6 hours round-trip to travel to Salt Lake City or Denver, and that he worked part of
the airplane ride on each of his trips. The Court concludes that a reduction of $1725.00
(3 hr. x $575), billed by Michael for travel related to the motion to suppress hearing, and
which represents an estimate of his return travel to San Francisco, is warranted.
c. travel time for deposition and appellate argument
The government similarly contends that time billed by Michael for travel related
to his attendance at a deposition in Salt Lake City on August 20-21, 2012, and for
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appellate oral argument in Denver on January 18-21, 2014, should be eliminated or
reduced as unproductive travel time. See Opp’n at 22 (listing challenged entries).
As noted above, the entries reflect that at least some of the travel time billed
included preparation time. The Court believes a reduction of $1800.00 (3 hr. x $600)
billed by Michael for travel to and from Salt Lake City to defend Claimant’s deposition,
and $1875.00 (3 hr. x $625) billed for travel to and from Denver for appellate argument
is warranted.
d. time drafting special interrogatories
The government also contends that 7 hours billed by Michael for drafting
boilerplate responses to special interrogatories on April 23-24, 2009, is excessive given
his experience. The Court believes a reduction of $1775 (3 x $575) is warranted.
e. appellate decision review
Finally, the government urges that 3.25 hours billed by Burch related to reviewing
and discussing the 10th Circuit Order/Judgment should be reduced or eliminated. The
Court disagrees for essentially the same reasons set for by Claimant. See Reply at 2526.
C. Lodestar Adjustment
Both the government and Claimant urge that the Court further adjust the
lodestar amount. See Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 554
(2010)(“there is a ‘strong presumption’ that the lodestar figure is reasonable, but that
presumption may be overcome in those rare circumstances in which the lodestar does
not adequately take into account a factor that may properly be considered in

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determining a reasonable fee”). Neither party has overcome the presumption of
reasonableness of the lodestar amount and the Court declines to make any further
adjustments. The reasons for denying the government’s request are set forth herein.
The Court also denies Claimant’s request that his counsel be billed at their current rate
for all hours due to the delay in payment factor. Claimant has cited no authority
controlling on this Court for his request. Undue delay, if any, cannot reasonably be
attributed to the United States or the courts. Additionally, when they agreed to
represent him, Claimant’s experienced counsel had to be aware of the pace at which
civil litigation proceeds, as well as the possibility of protracted litigation including appeal.
D. Final Lodestar Amount
Based on the record and for the reasons stated, the Court finds that a
reasonable attorney fee for each of Claimant’s counsel is as follows:
David Michael2
years
2008-2010
2011-2012
2013-2014

hours
89.75
35.5
70.35

rate
$575
$600
$625

amount
$51,606.25
$21,300.00
$43,968.75
$116,875.00

Edward Burch
2008-2010
2011-2012
2013-2014

107
41.5
113.70

$225
$300
$325

$24,075.00
$12,450.00
$36,952.50
$73,477.50

R. Van Wagoner
2008-2009
2014

12.75
4.5

$300
$360

$3,825.00
$1,620.00
$5,445.00

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Fees awarded to Mr. Michael reflect deductions of 6 hr. for 2008-2009, 3 hr. for
2011-2012, and 5.25 hr. for 2013-2014.
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________
$195,797.50

Total Fees
E. Costs

Finally, the government objects to Claimant’s cost of $2,487.66 because he has
failed to provide any receipts. The government also complains that Claimant has not
filed a bill of cost with the clerk as provided by Fed. R. Civ. P. 54 and DUCivR 54-2.
Under 28 U.S.C. § 2465(b)(1)(A) Claimant clearly is entitled to litigation costs
reasonably incurred. Burch has declared under penalty of perjury as to the cost
incurred. The government has not otherwise disputed the reasonableness of the
specific costs claimed and the Court deems then reasonable. Van Wagoner, likewise,
declares costs to Claimant of $3.60 for telephone charges. That charge is not disputed
and is deemed reasonable. Accordingly, litigation costs reasonably incurred total
$2491.26.
III. CONCLUSION
For the reasons set forth above, Plaintiff United States shall pay Claimant’s
reasonable attorney fees in the amount of $195,797.50 and costs in the amount of
$2491.26.
IT IS SO ORDERED.
DATED this 4th day of February, 2015.
BY THE COURT:

DAVID SAM
SENIOR JUDGE
UNITED STATES DISTRICT COURT

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