United States v. Thirty-Two Thousand Eight Hundred Twenty Dollars & Fifty-Six Cents ($32,820.56) in United States Currency
106 F. Supp. 3d 990
N.D. Iowa2015Background
- In May 2013 the Government seized $32,820.56 from a bank account owned by Mrs. Lady’s, Inc.; a civil in rem forfeiture complaint followed in October 2013 alleging structuring.
- Claimants (Carole Hinders and Mrs. Lady’s, Inc.) filed claims and answers; case was referred to a magistrate judge after consent.
- The Government moved to dismiss the forfeiture action and the magistrate judge granted dismissal without prejudice on January 9, 2015; seized funds were returned on February 4, 2015.
- Claimants moved for attorney fees, costs, and interest under CAFRA (28 U.S.C. § 2465), arguing they “substantially prevailed” because the funds were returned and the action dismissed.
- The Government opposed, arguing dismissal without prejudice does not produce the judicially sanctioned change in legal relationship required for a CAFRA fee award and that it could refile.
- The court denied attorney fees and interest under CAFRA but exercised its inherent authority to tax costs in the amount of $1,538.17 (limited to §1920 categories); travel expenses were disallowed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Claimants "substantially prevailed" under CAFRA and are entitled to attorney fees and interest | Dismissal and return of funds materially altered legal relationship; thus Claimants substantially prevailed | Dismissal without prejudice produces no enforceable judgment or consent decree; no material alteration; Government may refile | Denied — dismissal without prejudice does not confer "substantially prevailed" status under CAFRA (Buckhannon line of authority) |
| Whether the dismissal order should be reconsidered and converted to dismissal with prejudice to permit fees | Dismissal caused legal prejudice by extinguishing ability to recover fees; therefore reconsider and convert to dismissal with prejudice | Dismissal was proper; Claimants waived this argument by not raising it earlier; no Eighth Circuit support for prejudice theory | Denied — argument waived and unlikely to be adopted by Eighth Circuit; no basis to convert dismissal |
| Whether court may award costs after voluntary dismissal without prejudice | Claimants seek recovery of litigation costs as alternative relief | Government opposes any fees or costs | Granted in part — court exercised inherent authority to award taxable costs under §1920 in amount $1,538.17 |
| Scope of recoverable costs | Claimants sought $4,057.63 including deposition, court fees, copying, and travel | Government did not contest specific items but opposed any award | Court taxed only costs authorized by 28 U.S.C. §1920 (deposition transcripts, clerk fees, copying, etc.); travel costs disallowed |
Key Cases Cited
- Buckhannon Bd. & Care Home, Inc. v. West Virginia Dept. of Health & Human Resources, 532 U.S. 598 (judicially sanctioned change required to be a prevailing party)
- Sole v. Wyner, 551 U.S. 74 (material alteration of parties’ legal relationship is the touchstone)
- Sequa Corp. v. Cooper, 245 F.3d 1036 (8th Cir.) (district court may, in its discretion, award costs after voluntary dismissal)
- Doe v. Nixon, 716 F.3d 1041 (8th Cir.) (voluntary change by defendant producing dismissal does not create prevailing-party status)
- Marmo v. Tyson Fresh Meats, Inc., 457 F.3d 748 (8th Cir.) (deposition transcription taxable only if necessarily obtained for use)