JUSTICE MANUAL 9-117.000 – Department Of Justice Assets Forfeiture Fund

9-117.100 – Transfer of Funds From the Seized Asset Deposit Fund to the Assets Forfeiture Fund
The United States Attorney’s Office securing a forfeiture is responsible for initiating transfers from the Seized Asset Deposit Fund to the Assets Forfeiture Fund and should provide prompt notification to the United States Marshals Service (USMS) of the events which should lead to a transfer from the Seized Asset Deposit Fund.

In the case of either a consent judgment or a default judgment, the USMS will immediately transfer the forfeited cash to the Assets Forfeiture Fund, unless the United States Attorney determines that execution of the judgment should be delayed.

In the case of a judgment after trial or upon summary judgment, there is an automatic stay of execution of the judgment of 10 working days. If the United States Attorney’s Office indicates that no motions or requests for additional stays have been filed, then the forfeited cash will be transferred to the Assets Forfeiture Fund on the eleventh working day following a summary judgment or a judgment after trial.

9-117.200 – Payment of Costs and Attorneys’ Fees from the Assets Forfeiture Fund—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 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 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 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.

9-117.210 – Payment of Costs and Attorneys’ Fees From the Assets Forfeiture Fund—Limited Authority
Notwithstanding the legal availability of the Assets Forfeiture Fund for EAJA awards, the Department limits by policy the cases in which Fund monies may be used for such awards. The Congress enacted the EAJA for specific public policy reasons. It would be inappropriate for the Fund to be used in a manner that completely ignored or negated the public policy basis for the EAJA. In an attempt to balance the competing interests involved, the following three tier policy is established:

The Fund will fund the EAJA award in any case in which the actions of the Federal participants were clearly consistent with current law and Department policy. This includes those cases in which:
The Money Laundering and Asset Recovery Section (MLARS), Criminal Division, is involved in planning a specific case or program initiative and the participating agency was executing the planned initiative in good faith;
The Federal participants were executing their responsibilities in consonance with current law and Department policy but the court creates a novel reason or basis for overturning a case that could not be anticipated;
Similar “no fault” cases. Once approved, the EAJA awards in these cases will be paid by the Fund against the case related expenses category;
The Fund allocations of the federal participant will be available to fund awards where the agency personnel were acting in good faith but it is not clear that their actions were consistent with existing law and Department policy. Once approved, the funds are to be taken from the case related expenses category. If there are insufficient funds available to cover the award, then the shortfall may be made up by funds available for other categories of expense. A request for reallocation will be approved for this purpose. Total allocations will not be increased to make up for the payment of the award; and
In any case in which the court finds bad faith or an intentional disregard for existing law or Department policy by the federal participants, the Fund will not be available, either directly or indirectly, to fund the EAJA award.

9-117.220 – Payment of Costs and Attorneys’ Fees From the Assets Forfeiture Fund—Procedure
No EAJA award may be charged against the Fund or the Federal participant’s Fund allocations without the express written approval of MLARS. Requests for approval to charge an EAJA award against the Fund or against Fund allocations must be submitted to MLARS in writing.

In non-forfeiture cases, the United States Attorney’s Office should follow any procedures established by the Executive Office for United States Attorneys (EOUSA) regarding notification of pending settlements or adverse judgments. The Fund and Fund allocations are not available to fund EAJA awards in non-forfeiture cases. Therefore, AFMLS should not be notified of actions in non-forfeiture cases.

If the government has contested the case and incurred an adverse judgment, a copy of the court order should be provided to all involved agencies immediately to permit their participation in preparation of the request package. The request should be forwarded by the United States Attorney’s Office to MLARS within 5 business days of the court order. The request should include, as appropriate:

a copy of the court order indicating that the award is being made under 28 U.S.C. § 2412(d) or that the government’s position was not substantially justified;
a copy of the seizure warrant and associated affidavit or a copy of the probable cause statement supporting the seizure, if the seizure was cited as a basis for the award;
a copy of any pleadings or answers or a description of any litigative position that was cited as a basis for the award;
a description of any governmental action not referenced above that was cited as a basis for the award; a description of any extenuating factors affecting the seizing agency and the United States Attorney’s Office that should be considered;
a list of the agencies involved in the case; and
a joint proposal for allocation of responsibility for the EAJA award among the involved agencies.
If the United States Attorney’s Office is proposing to settle an EAJA claim, the materials cited in items (2) through (7) above should be provided to MLARS in advance of agreeing to any settlement. This policy is in addition to any other policies governing settlements.

Proposed court orders drafted by the government should be silent as to the source of funds for paying any award. The identification of appropriate sources of funding to pay court judgments is an Executive Branch function and may vary from case to case depending on the facts of the particular case.

In general, responsibility for an EAJA award in a forfeiture case will be allocated equally among the participants, including the United States Attorney’s Office. However, this allocation may be modified by MLARS, depending on the specific findings made by the court and extenuating circumstances described by the participants. Availability of the Fund to certain participants in a case must not be used to relieve other involved agencies of responsibility for a portion of the award.

Upon approval of the request for authority to pay an EAJA award directly from the Fund, MLARS will notify the Asset Forfeiture Management Staff (AFMS), Justice Management Division, and EOUSA that the award may be paid. AFMS will instruct USMS to charge the award directly against the Fund. If the request is to permit use of Fund allocations to pay an EAJA award, the participants will be notified directly by AFMS of the action on the request.

In the case of awards to be paid by the United States Attorneys, AFMS will be responsible for processing the payment.