                                                                        FILED
                           NOT FOR PUBLICATION
                                                                         AUG 26 2015
                    UNITED STATES COURT OF APPEALS                   MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS


                           FOR THE NINTH CIRCUIT


UNITED STATES OF AMERICA,                      No. 13-15487

             Plaintiff - Appellee,             D.C. Nos.   4:04-cv-03055-DLJ
                                                           4:04-cr-40127-DLJ-4
 v.                                            Northern District of California,
                                               Oakland
THOMAS GROSSI, Sr.; et al.,

             Claimants - Appellants,           ORDER

  and

ALBERT B. DEL MASSO,

             Claimant,

  and

2638 MARKET STREET, OAKLAND,
CALIFORNIA; et al.,

             Defendants.


Before: N.R. SMITH and OWENS, Circuit Judges and COLLINS,* Chief District
Judge.




        *
             The Honorable Raner C. Collins, Chief District Judge for the U.S.
District Court for the District of Arizona, sitting by designation.
      The memorandum disposition filed on June 23, 2015 is amended and filed

concurrently with this order. The petition for panel rehearing is DENIED. Judge

Smith would grant the petition. No further petitions shall be entertained.
                                                                           FILED
                            NOT FOR PUBLICATION
                                                                           AUG 26 2015
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS


                            FOR THE NINTH CIRCUIT


UNITED STATES OF AMERICA,                        No. 13-15487

              Plaintiff - Appellee,              D.C. Nos.    4:04-cv-03055-DLJ
                                                              4:04-cr-40127-DLJ-4
 v.

THOMAS GROSSI, Sr.; et al.,
                                                 AMENDED
              Claimants - Appellants,            MEMORANDUM*

  and

ALBERT B. DEL MASSO,

              Claimant,

  and

2638 MARKET STREET, OAKLAND,
CALIFORNIA; et al.,

              Defendants.


                    Appeal from the United States District Court
                      for the Northern District of California
                 D. Lowell Jensen, Senior District Judge, Presiding



        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                        Argued and Submitted May 15, 2015
                             San Francisco, California

                               Filed June 23, 2015
                             Amended August 26, 2015

Before: N.R. SMITH and OWENS, Circuit Judges, and COLLINS,** Chief
District Judge.

      Thomas Grossi and Lauretta Weimer appeal from the district court’s order

denying their motion for attorneys’ fees under the Civil Asset Forfeiture Reform

Act, 28 U.S.C. § 2465. We have jurisdiction under 28 U.S.C. § 1291, and we

review the district court’s order for abuse of discretion. K.C. ex rel. Erica C. v.

Torlakson, 762 F.3d 963, 966 (9th Cir. 2014). We affirm in part, reverse in part,

and remand. Because the parties are familiar with the facts, we do not recount

them in detail here.

      1. The government is correct that Weimer is not entitled to an award of

attorneys’ fees because she did not “substantially prevail[]” under CAFRA. 28

U.S.C. § 2465(b)(1). A claimant does not substantially prevail unless a court

orders the government to afford that claimant some relief. See Buckhannon Bd. &

Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 605

(2001); Synagogue v. United States, 482 F.3d 1058, 1063 (9th Cir. 2007). Grossi,

       **
             The Honorable Raner C. Collins, Chief District Judge for the U.S.
District Court for the District of Arizona, sitting by designation.

                                        2                                       13-15487
not the government, provided Weimer with her relief by repaying her voluntarily,

and not by court order. We therefore affirm the denial of Weimer’s fees motion.

See Classic Media, Inc. v. Mewborn, 532 F.3d 978, 990 (9th Cir. 2008) (“Because

we can affirm on any ground supported by the record, we affirm the denial of

attorneys’ fees . . . .” (internal citation omitted)).

       2. The district court denied Grossi’s fees motion because CAFRA prohibits

fee shifting in favor of a claimant whose property interest was determined to be

subject to criminal forfeiture. 28 U.S.C. § 2465(b)(2)(B). However, after Grossi

repaid Weimer, he was her successor in interest and stood in her shoes when he

continued to pursue her interest from the government. That is why a prior panel of

this court awarded Grossi $87,666 as reimbursement for “Weimer’s interest,”

notwithstanding the plain statutory language that criminally forfeited property

“shall not revert to the defendant,” 21 U.S.C. § 853(h). See United States v.

Grossi, 482 F. App’x 252, 255 (9th Cir. 2012).

       Under the law of the case doctrine, we again adopt the legal fiction that once

Grossi repaid Weimer, he was her successor in interest and stood in her shoes. He

is therefore not statutorily precluded from recovering fees incurred in pursuing her

interest. Instead, to the extent that Grossi, as Weimer’s successor, substantially




                                           3                                    13-15487
prevailed in a “civil proceeding to forfeit property,” he is entitled to reasonable

attorneys’ fees and costs. 28 U.S.C. § 2465(b)(1).

      The bulk of the litigation to recover Weimer’s interest did not take place in a

“civil proceeding to forfeit property.” Id. Rather, in February 2005, the civil

proceeding to forfeit property was stayed pending resolution of the criminal action.

Subsequent to Grossi’s criminal conviction, Weimer initiated ancillary proceedings

under 21 U.S.C. § 853(n). Grossi has not identified any authority holding that

§ 853(n) proceedings are “civil proceeding[s] to forfeit property.” 28 U.S.C.

§ 2465(b)(1) (emphasis added). Plainly, they are not. See 21 U.S.C. § 853(n)

(setting forth procedures for third parties to recover interests in property subject to

forfeiture). And because § 2465(b) constitutes a waiver of sovereign immunity,

any ambiguity in whether a § 853(n) proceeding to exclude property from

forfeiture might constitute a proceeding to forfeit property under § 2465(b) would

be construed against Grossi. See Oklevueha Native Am. Church of Haw., Inc. v.

Holder, 676 F.3d 829, 840 (9th Cir. 2012). In short, Grossi has not carried his

burden of establishing that he is entitled to recover fees incurred in proceedings

ancillary to his criminal conviction. See Harris v. Maricopa Cnty. Superior Court,

631 F.3d 963, 971-72 (9th Cir. 2011) (“[T]he burden of establishing entitlement to

an attorneys fees award lies solely with the claimant.”).

                                         4                                       13-15487
      As a result, Grossi should only be awarded those fees incurred in pursuing

Weimer’s interest in the civil forfeiture action up to the point at which that action

was stayed. Because Grossi did not acquire Weimer’s interest until after the civil

forfeiture action was stayed, he is entitled—again, as her successor in interest—to

the fees that she incurred in that civil action. To be clear, we do not award Grossi

the fees that he himself incurred in the underlying forfeiture proceedings, nor do

we depart from the rule announced by our sister circuits that a third party may not

recover fees incurred in ancillary proceedings subsequent to a criminal forfeiture

judgment. We award Grossi (as Weimer) only those fees that Weimer incurred as

a claimant in the initial civil proceeding.1

      3. Finally, because Grossi is entitled to recover the fees that Weimer

reasonably incurred in the civil forfeiture proceeding, he is also entitled to that

portion of the fees he reasonably incurred in pursuing civil forfeiture fees through



      1
         United States v. 92 Buena Vista Avenue, 507 U.S. 111 (1993)—a case that
preceded CAFRA’s enactment by seven years—does not, as the dissent contends,
preclude the result we reach. In that case, a plurality of the Supreme Court
reasoned that an innocent owner may retain property purchased with funds subject
to criminal forfeiture even if that innocent owner acquired the property after the
crime giving rise to forfeiture took place. Id. at 116-18, 129. The Court neither
held nor suggested that an innocent interest becomes subject to forfeiture if, as
here, it reverts to the criminal defendant. Were that the rule, this court obviously
could not have awarded Grossi recovery of Weimer’s innocent interest. See
Grossi, 482 F. App’x at 255-56.

                                         5                                       13-15487
his fees motion below and in this appeal. See In re So. Cal. Sunbelt Developers,

Inc., 608 F.3d 456, 463 (9th Cir. 2010) (“In statutory fee cases, federal courts,

including our own, have uniformly held that time spent in establishing the

entitlement to and amount of the fee is compensable.”). We remand to the district

court to determine an appropriate fee award in light of this disposition.2 Grossi,

but not Weimer, is awarded costs on appeal.

      AFFIRMED in part; REVERSED in part; and REMANDED.




      2
         The district court should reduce or apportion fees to account for the degree
of success. See 28 U.S.C. § 2465(b)(2)(D) (providing that where, as here,
judgment is entered “in part for the claimant and in part for the Government, the
court shall reduce the award of costs and attorney fees accordingly”); see also
Webb v. Sloan, 330 F.3d 1158, 1168 (9th Cir. 2003) (holding that the extent of a
plaintiff’s success in a civil rights suit must be factored into the fee award).

                                        6                                       13-15487
                                                                             FILED
United States v. Grossi, No. 13-15487
                                                                              AUG 26 2015
N.R. Smith, Circuit Judge, concurring in part and dissenting in part:
                                                                          MOLLY C. DWYER, CLERK
                                                                           U.S. COURT OF APPEALS
      I respectfully dissent to parts two and three of the majority’s Memorandum

Disposition. In this case, we examine the breadth of 28 U.S.C. § 2465(b), a federal

statute waiving the government’s sovereign immunity to require the government to

pay attorney’s fees to opposing litigants in limited situations. I cannot agree with

the broad construction of 28 U.S.C. § 2465(b), erroneously concluding that it

applies in this most unusual situation.

      The Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”) governs civil

forfeitures to the United States. See 18 U.S.C. § 981. CAFRA provides that any

real property used, or intended to be used, in any manner or part, to commit, or to

facilitate the commission of, a felony violation of the Controlled Substances Act is

subject to forfeiture. 21 U.S.C. § 881(a)(7). If a third party claims to be an

“innocent owner” of the forfeited property, he may file a claim for return of his

interest. 18 U.S.C. § 983(d); 21 U.S.C. § 853(n)(2). The court then determines the

third party’s alleged ownership interest in the forfeited property in a separate,

ancillary proceeding. Fed. R. Crim. P. 32.2(c). CAFRA also provides that, in any

civil proceeding to forfeit property under federal law in which the claimant

substantially prevails, the United States shall be liable for reasonable attorney fees,



                                           1
litigation costs and interest. 28 U.S.C. § 2465(b)(1)(A)-(C). However, the United

States only pays under CAFRA if: (1) the claimant is not the convicted defendant;

and (2) the government expressly waived its sovereign immunity. See 28 U.S.C.

§ 2465(a)(2), (b)(2)(B); United States v. Nordic Vill. Inc., 503 U.S. 30, 33-34

(1992). The majority does not address whether Grossi satisfied both prongs before

awarding fees under CAFRA. Rather, it summarily concludes that Grossi

“substantially prevailed in a ‘civil proceeding to forfeit property,’ [and is

therefore]. . . entitled to reasonable attorneys’ fees and costs.” If we apply the law

to the facts of this case, Grossi fails to establish government liability under

CAFRA.

      First, a claimant is not entitled to fees under CAFRA “if the claimant is

convicted of a crime for which the interest of the claimant in the property was

subject to forfeiture under a Federal criminal forfeiture law.” 28 U.S.C.

§ 2465(b)(2)(B). Previously, this court held that “Weimer’s interest [in the

property] was extinguished” when “Grossi paid Weimer back” in December of

2006. United States v. Grossi, 482 F. App’x 252, 255 (9th Cir. 2012). Thus,

Weimer had no interest left in the property at the conclusion of the ancillary

proceedings. See id. Even under the legal fiction imposed by this court (that

Grossi equitably was entitled to receive the amount representing Weimer’s

                                           2
previous interest), the majority cites no support for its proposition that our imposed

legal fiction also allows Grossi to recoup fees under CAFRA. The statute clearly

states otherwise. The plain language of the statute precludes a claimant from

recovering any fees if he was “convicted of a crime for which the interest of the

claimant in the property was subject to [criminal] forfeiture under a Federal

criminal forfeiture law.” 28 U.S.C. § 2465(b)(2)(B) (emphasis added). The plain

text of CAFRA bars fee awards if the claimant is a convicted defendant. See also

21 U.S.C. § 853(h) (providing that “[a]ny property right or interest not exercisable

by, or transferable for value to, the United States shall expire and shall not revert

to the defendant, nor shall the defendant or any person acting in concert with him

or on his behalf be eligible to purchase forfeited property at any sale held by the

United States” (emphasis added)). At Grossi’s sentencing, his entire interest in the

Market Street property was ordered criminally forfeited under federal law.

      After the preliminary order of forfeiture was issued herein, two claimants

asserted an innocent-owner defense as to the Market Street property (Weimer and

Del Masso). The government quickly settled with Del Masso and likely would

have settled with Weimer, had Grossi not extinguished Weimer’s “innocent

owner” interest in the property by repaying to Weimer (after the preliminary order

of forfeiture) the money she had previously loaned him to purchase the property.

                                           3
There is no dispute that Weimer’s interest in the Market Street property was

extinguished upon receiving the full repayment of her loan. Thus, the point at

which Grossi fully repaid Weimer, Weimer’s interest in the property became

Grossi’s interest in the property. Even though this court determined that equitably

Grossi was entitled to recoup the loan payments made to Weimer, that

determination never suggested that his interest in the property (acquired after

repaying Weimer) should not be subject to the “convicted defendant” bar to

collecting fees under CAFRA. Indeed, the Supreme Court’s holding in United

States v. 92 Buena Vista Ave., 507 U.S. 111 (1993) (“Buena Vista”) insists that

ownership interests in a forfeited piece of property must be determined at the

conclusion of the ancillary proceedings, not at the time of the initial forfeiture.

      In Buena Vista, the Supreme Court reasoned that neither the statutory

embodiment of the relation back doctrine nor the common law doctrine makes the

government an owner of property before forfeiture has been decreed. 507 U.S. at

124-25.1 The Court noted that the time between the preliminary order of forfeiture

and the final order of forfeiture allows a district court time to determine claims of

      1
             The majority correctly notes Buena Vista preceded the passage of
CAFRA. However, this is of no consequence as to our issue. In Buena Vista, the
Court established the proper application of the relation back doctrine when
determining claims of ownership and vesting of title in property subject to
forfeiture. This is still binding precedent.

                                           4
ownership and priorities of interest vis-a-vis the government and third-party

claimants. Id; 21 U.S.C. § 853(n). The Court concluded that only when the

government obtains a judgment of forfeiture does the vesting of its title in the

property relate back to the moment of the offense. Buena Vista, 507 U.S. at 126.

Thus, until a final decree of forfeiture is entered, “someone else owns the

property,” and another party may acquire an interest in the property.2 Id.

      In this case, it is not disputed that Weimer’s ownership interest in the Market

Street property, that existed at the time the preliminary order of forfeiture was

issued, was extinguished prior to Grossi’s sentencing and the conclusion of the

ancillary hearings. Grossi, on the other hand, during this same time period

acquired an additional interest in the Market Street property (Weimer’s). Under

the holding of Buena Vista, a court must evaluate a third party’s ownership interest

at the time the defendant is sentenced and the ancillary hearings are concluded. At

that time, regardless of whether this court classifies the acquired interest as


      2
             The majority argues that the “Court neither held nor suggested that an
innocent interest becomes subject to forfeiture if, as here, it reverts to the criminal
defendant.” However, the majority fails to indicate why the Court would have
even reached such a holding: such facts were not at issue in Buena Vista.
Importantly, the majority cites no statutory basis allowing a convicted defendant to
acquire any interest (including an innocent owner interest) in forfeitable property.
This court based its previous determination (that Grossi was entitled to the amount
representing Weimer’s interest) on equity.

                                           5
Grossi’s or Weimer’s, Grossi owned it and Grossi’s entire ownership interest was

forfeited in the final order. Clearly then, Grossi is precluded from recovering fees

under CAFRA, because Grossi was “convicted of a crime for which the interest of

the claimant in the property was subject to forfeiture.” See 28 U.S.C.

§ 2465(b)(2)(B). Contrary to the plain language of the statute, the majority cites

no authority for its position that this statute does not apply to all of a convicted

defendant’s ownership interest in the property, that property acquired by a

defendant during this time period is excluded from consideration when barring a

convicted defendant from seeking fees under CAFRA, and that a convicted

defendant can be accorded innocent owner status as to an ownership interest he

acquires in the forfeitable property during this time period.

      Second, “[e]xcept to the extent it has waived its immunity, the Government

is immune from claims for attorney’s fees.” Ruckelshaus v. Sierra Club, 463 U.S.

680, 685 (1983). Section 2465(b) constitutes a waiver of sovereign immunity and

“[w]aivers of the Government’s sovereign immunity, to be effective, must be

unequivocally expressed.” United States v. Nordic Vill. Inc., 503 U.S. 30, 33

(1992) (internal quotation marks omitted). Additionally, waivers must be

construed narrowly and always in favor of the sovereign. Id. at 34. In this case,

Grossi argues that, even though he voluntarily extinguished Weimer’s interest in

                                            6
the property, he should still be able to collect fees under CAFRA. There is

absolutely no support for this position.

      Indeed, our sister circuits have determined that even a prevailing third-party

in an ancillary proceeding pursuant to 21 U.S.C. § 853(n) is not entitled to fees

under CAFRA. In United States v. Moser, 586 F.3d 1089 (8th Cir. 2009), the

Eighth Circuit held that even though many of the prevailing third-party petitioner’s

arguments in favor of a fee award were persuasive, ultimately it held that “[t]he

arguments for and against permitting a prevailing § 853(n) petitioner to receive

attorneys’ fees from the government [were] too closely balanced . . . to conclude

that Congress’s waiver of sovereign immunity clearly and unequivocally applies.”

Id. at 1090. Similarly, in United States v. Nolasco, 354 F. App’x 676 (3d Cir.

2009), the Third Circuit held that, even though § 853(n) proceedings are “civil” for

purposes of § 2465(b), they are not proceedings “to forfeit property” for

fee-shifting purposes. Id. at 679-80. The Third Circuit reasoned that “Section

853(n) ancillary proceedings exclude property from forfeiture and do not ‘forfeit

property’ as required by Section 2465(b).” Id. at 680.

      Thus, these cases indicate that even if Weimer were prosecuting the claim,

she would not be entitled to fees under CAFRA. The majority cannot successfully

distinguish this case from the above cases, as all involved ancillary proceedings

                                           7
pursuant to 21 U.S.C. § 853(n). Certainly then, there is no evidence that Congress

clearly and unequivocally intended to waive the government’s sovereign immunity

as to attorney’s fees for a convicted defendant who acquires an additional interest

in the forfeited property after the issuance of the preliminary order of forfeiture.

The district court should be affirmed.




                                           8
