Lead Opinion
ORDER
It is ordered granting the petition of the United States for modification of opinion. The attached amended opinion and amended dissent are ordered filed.
Attorney’s Fees
It is further ordered that the appellee Jack Johnson’s unopposed request for attorney’s fees on appeal is granted. See 28 U.S.C. Sec. 2412(d). Fees are awarded in the amount of $7,290.26.
OPINION
In this appeal we decide whether the government having established probable cause to forfeit seized currency was “substantially justified” under the Equal Access to Justice Act (EAJA) in its delay of the institution and prosecution of forfeiture proceedings and in investigating whether the currency had an innocent source. We conclude that the district court did not abuse its discretion in finding that the government’s position was not “substantially justified.” Neither did the district court abuse its discretion in awarding and determining the amount of the fees granted. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On September 10, 1986, pursuant to an informant’s tip, Oakland Police obtained a warrant tó search Johnson’s home where Johnson and Terrie Gibbs resided. The officers conducted the search on September 11, 1985. When the police officers arrived, Johnson was in the living room. The female, Terrie Gibbs, was found running out the back door. During the course of the search, the officers found over five pounds of marijuana, 1.2 grams of cocaine, seven tabs of L.S.D., five scales, marijuana and cocaine packaging paraphernalia, three handguns, four shotguns, a rifle, and the defendant $12,248 in U.S. currency.
The State of California filed a criminal complaint against Johnson and Gibbs on September 13, 1985. Johnson pleaded guilty to possession of cocaine on November 18, 1986. The remaining counts against him were dismissed. Johnson received a suspended sentence on January 26, 1987, and was placed on probation. The charges against Gibbs were also subsequently dismissed. Gibbs returned to her native England and Johnson has not seen her since June or July of 1986.
The currency was turned over to the United States Drug Enforcement Agency on September 12,' 1985, the day after the search. In a declaration dated November 15, 1985, Johnson claimed a valid ownership interest in the defendant currency. The United States Attorney’s office first opened their file in this matter in January 1986. There was no investigation done other than to conduct one interview of Johnson.- At that interview, Johnson informed the government that the funds seized were not related to any drug transactions but were the partial proceeds of a Home Maintenance and Improvement Loan Program (HMILP) loan he had obtained from the City of Oakland in 1977 or 1978 to renovate his home.
Johnson offered explanation for why he still had the bulk of the loan funds at the time of the government raid. He explained that he and contractor, Robert Beckstrom, had submitted a bid proposal in March 1984, to bring the building to code requirements. The bid for the project was $18,-750. Johnson was to be the subcontractor for the project and would do all work and furnish all materials described in the bid. Johnson received a $12,500 HMILP loan with no interest rate in April 1984. He also received a $7,500.00 grant from the office of Community Development for the rehabilitation project.
Many of Johnson’s friends worked at no charge on the project. Contractor Beck-strom and the cement finisher were the only two people who were paid for their services in the remodeling. Johnson documented with photographs the work done on the premises. He also presented the
After taking into account the expenses paid, Johnson had approximately $12,700 to $12,900 left from the loan funds; which approximated the amount of the funds seized. Johnson kept this cash in his home and did not bank it even though he had a checking account and credit card.
The government disbelieved Johnson’s story, but conducted no other investigation into his claim. On December 12, 1986, approximately fifteen months after gaining possession of Johnson’s money, the government finally instituted forfeiture proceedings.
Approximately two years later, on March 1, 1988, the U.S. Attorney’s office filed a motion for partial summary judgment on the issue of probable cause to justify its initial seizure of the currency under 21 U.S.C. § 881. The court granted this motion. With consent of the parties, further proceedings for determination were referred to a magistrate.
On July 21, 1989, almost a year and a half after that, Johnson moved for summary judgment based on the government’s unreasonable delay. This motion was denied on August 25, 1989. The magistrate applied the four factor test for determining unreasonable delay which amount to a due process violation, in forfeiture cases, as set forth in United States v. $8,850,
Four years after the initial seizure, the case proceeded to trial on September 13, 1989. The court found that the defendant currency in fact had an independent innocent source and had not been used illegally. The court also found that the government had unreasonably delayed in instituting and prosecuting these proceedings and had violated Johnson’s due process rights.
The Assistant U.S. Attorney in charge of this case failed to present any reason why it had taken fifteen months to file forfeiture proceedings. He could only speculate that the reason might have been because the office generally preferred to wait until the state criminal charges were resolved before instituting forfeiture ¡proceedings. He was uncertain, however, that this was the factor involved. The government’s attorney also noted that the U.S. Attorney’s office did not have an asset forfeiture division when this case was filed, and that it was common for cases to be delayed because of the work load. Again, the prosecutor could not say definitely that this was the factor in this case.
Johnson then moved to recover fees, costs, and prejudgment interest as the prevailing party pursuant to 28 U.S.C. Section 2412(d)(1)(A), the Equal Access to Justice Act (EAJA). The fee application submitted by Johnson’s attorney, William Panzer, listed the tasks performed and the total hours the tasks took cumulatively. On the first declaration in support of the fee application, Panzer described the various tasks performed, which totalled approximately seventy-five hours. On the supplemental declaration, Panzer described additional tasks performed which took approximately
STANDARD OF REVIEW
We review the district court’s determination of lack of substantial justification and the amount of the fee award for an abuse of discretion. Barry v. Bowen,
DISCUSSION
1. Substantial Justification.
The EAJA provides:
Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees ... unless the court finds that the position of the United States was substantially justified_
28 U.S.C. § 2412(d)(1)(A). “A position is 'substantially justified’ if it is 'justified in substance or in the main,’ that is, if it has a ‘reasonable basis both in law and fact.’ ” United States v. One 1984 Ford Van,
In Johnson’s case, the government argues that because it won a grant of partial summary judgment on the issue of probable cause to justify the initial seizure of the currency, it was necessarily substantially justified in pursuing its forfeiture claim as it did. Because probable cause is sufficient to trigger forfeiture, the government argues that it was substantially justified in pursuing this litigation to its completion.
Probable, cause for initial seizure, however, does not automatically equate with substantial justification for the government’s action in conducting a poor investigation of Johnson’s claim and for its unreasonable delay in pursuing and processing litigation of the forfeiture claim. Under the circumstances of this case, we agree that the government’s position was not substantially justified for the purposes of the EAJA. Specifically, we hold that the government’s position was not substantially justified because the government violated the claimant’s Fifth Amendment due process rights by depriving him of his property for an unreasonable period of time.
i. Length of Delay
The delay component of this case has two parts. Overall, the government delayed four years between the time of the forfeiture and the time when the trial ultimately established Johnson’s right to the funds. This is unacceptable. United States Attorneys have a duty to bring these cases to a conclusion as expeditiously as possible. Johnson’s story was easily verifiable both by Gibbs and Beckstrom. Additionally, Johnson kept meticulous records of his expenditures complete with photographs. Confronted with this verifiable evidence, it was unreasonable for the government to continue to delay this prosecution. This factor is particularly salient here given that the government was unable to state the reason for its initial lengthy delay.
The initial component of the delay is the time between the seizure and the institution of the forfeiture proceedings. In this case, the delay of thirteen months was not per se unreasonable. See United States v. $47,980 in Canadian Currency,
ii. Reason for Delay
The government asserts that it presented a reasonable explanation for the delay. The government argues it only waited until one month after Johnson pleaded guilty to possession of 1.4 grams of cocaine in proceedings brought by the state of California. The prosecutor testified that it was his preference to make a determination whether a forfeiture complaint should be filed after the criminal case was resolved. However, he could not testify that this was the factor that influenced him. Furthermore, the prosecutor could not state any reason why there was such a long delay in the filing of the complaint. At trial, the government only presented possible reasons for its delay. The record establishes that the government conducted no investigation in the time period in which it delayed. It is impermissible for the government simply to hold property belonging to United States’ citizens for an extended period of time without reason while neither conducting an investigation nor attempting to verify the claimant’s story. The government failed to meet its burden to show a reason for its lengthy delay. Just as the district court refused, we also refuse to “engage in speculation as to what the actual reasons for the delay were ... ”. The district court’s finding of fact that the government failed to provide any reason for its delay is supported by the record and is not clearly erroneous.
In denying the motion for summary judgment, the district court also found that factual questions existed as to the prejudice prong of the test. At trial, the district court held that thé prejudice from the delay aróse in two ways. First, the government failed to interview Gibbs. As a result, the government might have dismissed the case if Gibbs had corroborated Johnson’s story. Second, Johnson lost a witness that could have corroborated his story and bolstered his credibility at trial.' The government argues that Johnson was not prejudiced because he ultimately won his case.
. The government’s argument must, fail for two reasons. First, the mere absence of prejudice does not make the government’s position substantially justified. The Supreme Court stated “none of these [four] factors is a necessary or sufficient condition for finding unreasonable delay. Rather, these elements are guides in balancing the interests of the claimant and the Government to assess whether the basic due process requirement of fairness has been satisfied in a particular case.” United States v. $8,850,
Finally, we believe that “[w]henever the Government seizes a significant amount of money and withholds it for an unreasonable length of time without bringing charges and without offering evidence to justify its continued withholding and without any indication as to when if ever charges will be filed, the [claimant] suffers irreparable harm.” Mr. Lucky Messenger Service, Inc. v. United States,
iv. Conclusion
Johnson claimed an interest in the cash seized on November 15, 1985. The government did not file the forfeiture action until fifteen months later. Additionally,, .this matter did not come to trial for an additional three years. The government could not present a reason for this substantial delay. Nor could it establish that it conducted any investigation as to the source of the defendant currency.
The government had reasonable means to test Johnson’s story as to the independent innocent source of the money but chose to do nothing. The government did not conduct an investigation, but only delayed. Reviewing these factors, we conclude that the court correctly found an unreasonable delay sufficient to warrant its finding that the government’s position was not substantially justified.
The government argues that the district court abused its discretion in determining the amount of the fee awarded to Johnson’s attorney. The EAJA requires:
A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this subsection, and the amount sought, including an itemized statement from any attorney or expert witness representing or appearing on behalf of the party stating the actual time expended and the rate at which fees and other expenses are computed.
28 U.S.C. § 2412(d)(1)(B).
The district court is limited by the statute to awarding . “reasonable” attorney’s fees. 28 U.S.C..2412(d)(2)(A). In determining what a reasonable attorney’s fee entails, the district court must apply the hybrid approach adopted in Hensley v. Eckerhart,
The government contends that the district court erred in determining the number of hours it used in computing the lodestar. However, “ ‘[djeference is to be given to the district court’s determination of a reasonable attorney’s fee.’" Cunningham,
A review of the record indicates that the district court carefully considered and explained the basis for the lodestar figure. The district court considered the time and labor required for this case. It was intimately familiar with this case in which two separate summary judgment motions were prepared with attendant briefs and hearings and a two-day trial was then held with its attendant trial briefs, pretrial conferences, and discovery. Only after the court examined the entire factual and procedural history of this case did the magistrate state, in the order awarding fees: “[t]he court accepts the reasonable estimate of 160 hours which Panzer spent on the merits of the case.” The district court did not abuse its discretion in crediting Panzer's submitted hours.
The analysis of the results obtained in the case is also probative of the reasonableness of the number of hours spent and thus the reasonableness of the fee. Cunningham,
The court also examined the undesirability of this case as well as the nature of the fee agreement. Those factors are relevant in determining the reasonableness of the fee generated. Cf. Jordan v. Multnomah County,
*1521 The court also notes that Johnson’s counsel, William Panzer, ... agreed to represent Johnson on a pro bono basis.... Without his counsel's voluntary assistance, the court has doubt that Johnson would have been unable to afford private counsel. And without the able assistance of Panzer, Johnson would have lost this money to the government. Ah award of attorney’s fees in this case truly serves the public policy rationale of the EAJA.
The government cites a string of cases which hold that fee applications must be supported by detailed records and which have rejected fee applications based solely on estimates. However, this circuit has held that “[bjasing the attorneys’ fee award in part on reconstructed records developed by reference to litigation files and other records is not an abuse of discretion.” Bonnette v. California Health and Welfare Agency,
CONCLUSION
The district court did not abuse its discretion in determining that the United States’ position was not substantially justified because the government unreasonably delayed its prosecution of this case.. The district court also did not abuse its discretion in determining the amount of the fee to be awarded Johnson’s attorney.
AFFIRMED.
Notes
. Johnson also offered an explanation of the source and ownership of much of the drugs and drug paraphernalia found in his house. He claimed that he had been storing for a friend furniture in which much of the contraband had been found. He stated that he and Gibbs had found the paraphernalia in the furniture after storing it for several months, and that he had instructed Gibbs to throw the drugs out. He claimed that the police raid had occurred right after he and Gibbs made their discovery.
. The Court adjusted the hourly rate upward from the $75 statutory cap pursuant to the Consumer Pricing Index for Urban Consumers.
. The amount of the increase from the cap was not challenged on appeal. Our precedent establishes that this adjustment was proper. Ramon-Sepulveda v. I.N.S.,
. The government relies on United States v. One 1985 Chevrolet Corvette,
.' The dissent argues that even if the government violated the defendant’s Fifth Amendment due process rights, it was nevertheless substantially justified for the purposes of attorneys’ fees under the EAJA. We, however, simply cannot see
. This factor is not contested. Johnson asserted his right to the currency in November of 1985.
. ■ The government's position becomes more untenable when we examine the district court’s order denying Johnson’s motion for summary judgment based on the unreasonable delay of the government. In that order, the district court stated that it denied the motion because
. The dissent argues that "the government was not unreasonable in its belief that the fifteen-month delay did not violate Johnson’s due process rights." However, our task is to determine whether the district court abused its discretion in assessing whether the government was not substantially justified. Kali v. Bowen,
. The government argues that any pretrial preparation of this case could not have been extensive because Panzer asked for a week continuance on the date of trial to prepare his client, with whom he had lost touch. However, the , presentation of Panzer's case the next day belies this contention.
Dissenting Opinion
dissenting:
The majority’s opinion focuses on what it calls the government’s “poor investigation” and “unreasonable delay.” Because I believe the government adequately demonstrated a reasonable justification for its actions, I "respectfully dissent.
The Equal Access to Justice Act seeks to punjsh unreasonable government behavior without impairing the government’s.ability to effectively and efficiently enforce the nation’s, laws. United States v. B & M Used Cars,
It is undisputed that the government was substantially justified in initiating forfeiture proceedings against the $12,248.00 of currency seized from Johnson’s house. Although the magistrate later found in favor of the claimant, that fact alone does not warrant the award of attorney’s fees. “[A] position can be justified even though it is not correct, and we believe it can be substantially justified if a reasonable person could think it correct.” Pierce v. Underwood,
The majority observed that the government’s 15-month delay before instituting forfeiture proceedings was a significant factor in awarding attorney’s fees. The government’s position was justifiable under the EAJA. The government, quite reasonably, did not institute forfeiture proceedings against the defendant until it completed its criminal case. The defendant pleaded guilty to cocaine possession on November 18, 1986. The government initiated formal proceedings less than one month later. The delay that occurred following the completion of the criminal proceedings was minimal, and less than the two month delay held reasonable in $8,850. Id.
. Further, the government could reasonably. believe that the 15-month delay did not violate Johnson’s due process rights. In $8,850, the Supreme Court upheld a forfeiture with an 18-month delay, between the time of seizure and forfeiture proceedings. Id. at 569-70,
The majority finds it significant that the government failed to detail with preciseness the exact reason for the delay. The Assistant United States Attorney was asked three years after the initiation of the proceedings why the government waited fifteen months-to institute the forfeiture proceedings. The prosecutor gave what he assumed was the reason. I am not suggesting that the government be allowed in all cases to plead ignorance when asked about delays. However, in these particular circumstances, references to practices of the office was sufficient if the reason was sound. It was.
The prosecutor indicated that the filing may have been delayed until resolution of the underlying criminal case against Johnson. He stated that he preferred to make the determination whether a forfeiture complaint should be filed after the underlying criminal proceedings had been resolved. A. pending criminal action justifies significant delays in the civil forfeiture proceedings. Id. at 567,
Although the majority correctly notes that the loss of a potential witness is potentially prejudicial, Johnson was able to prove that the money had an innocent source. The court ruled in his favor.
Thé majority’s emphasis on the length of time the money was held is misplaced. We noted in Ivers v. United States,
The 15-month delay was not unreasonable under these circumstances. I would hold that the government established probable cause for initiating the forfeiture and its position was substantially justified. See United States v. One 1985 Chevrolet Corvette,
The award of attorney’s fees should be reversed.