United States v. Kim, 806 F.3d 1161

Background

The Government seized property from Christopher Kim and related parties in a fraud investigation; the Kim claimants prevailed in civil-forfeiture proceedings and were awarded attorney’s fees under CAFRA.
Attorney Eric Honig had a retainer agreement stating court-ordered fees “belong to me” and sought direct payment of CAFRA awards to himself; he also recorded a lien on seized property.
The Government filed tax liens against some claimants and invoked the Anti-Assignment Act (31 U.S.C. § 3727) to challenge Honig’s contractual assignment of the fee awards.
The district court ordered fees paid directly to Honig and denied the Government’s Rule 60(b)(1) motion; the Government appealed.
The Ninth Circuit considered (1) whether CAFRA fee awards are “claims against the United States” subject to the Anti-Assignment Act, (2) whether fee awards belong to the client or attorney, (3) whether equitable/judicial estoppel barred the Government’s defense, and (4) what rights (if any) survive despite the Act.

Issues

Issue	Plaintiff's Argument (Honig/Kim)	Defendant's Argument (United States)	Held
Does judicial/equitable estoppel bar the Government from asserting the Anti‑Assignment Act?	Govt changed positions and filed tax liens; estoppel should prevent invoking the Act.	No binding representation or detrimental reliance that would preclude assertion of statutory defenses.	Denied — estoppel not warranted.
Is a CAFRA attorney‑fee award a “claim against the United States” subject to the Anti‑Assignment Act?	CAFRA is remedial and fees are meant to make claimants whole; fees are not a government claim.	A statutory fee award is a right to demand money from the U.S. and thus a claim the Act covers.	Held: Yes — CAFRA fee awards are claims against the U.S. and within the Act’s scope.
Do CAFRA fee awards “belong” to the attorney such that Anti‑Assignment Act does not apply?	Honig asserts the retainer vested ownership; prior pre‑Ratliff precedent supports direct attorney payment.	Fee awards are payable to the claimant (client), not the attorney, so any assignment triggers the Act.	Held: Fees belong to the claimant; under Ratliff and Ninth Circuit precedent fees are payable to the client, not directly to counsel.
Effect of Anti‑Assignment Act on Honig’s contractual assignment and lien; who has priority over fee proceeds?	Even if assignment void as against the U.S., Honig retains an equitable/contractual attorney’s lien under California law that can attach to proceeds.	The Act voids assignments and (the Government argues) can defeat attorney interests as against the U.S., favoring tax liens.	Held: The contractual assignment is void as to direct payment by the U.S.; but the Act does not extinguish Honig’s attorney’s lien under state law. Case remanded to resolve lien priority and related proceedings.

Key Cases Cited

United States v. Gillis, 95 U.S. 407 (Sup. Ct.) (Anti‑Assignment Act broadly covers claims against the United States)
Martin v. National Surety Co., 300 U.S. 588 (Sup. Ct.) (equitable exceptions where proceeds are in assignor's possession can create equitable liens)
United States v. Shannon, 342 U.S. 288 (Sup. Ct.) (Anti‑Assignment Act preserves government defenses like set‑off)
Astrue v. Ratliff, 560 U.S. 586 (Sup. Ct.) (statutory fee awards are payable to the litigant and subject to government offset)
United States v. $186,416.00, 642 F.3d 753 (9th Cir.) (CAFRA fees payable to claimant, not claimant's attorney)
United States v. $186,416.00, 722 F.3d 1173 (9th Cir.) (post‑Ratliff discussion recognizing direct payment may occur if government waives Anti‑Assignment Act)
Nutt v. Knut, 200 U.S. 12 (Sup. Ct.) (clause creating lien on claim against U.S. invalid under Anti‑Assignment Act)
Calhoun v. Massie, 253 U.S. 170 (Sup. Ct.) (Anti‑Assignment Act voids contract provisions creating liens on warrants/payment from Treasury)
Hobbs v. McLean, 117 U.S. 567 (Sup. Ct.) (a claim against the U.S. is a right to demand money)