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 Assets Forfeiture 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 Assets Forfeiture 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 Assets Forfeiture 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.
[cited in USAM 9-117.200]