United States v. Optional Capital, Inc.

MEMORANDUM * Optional Capital, Inc. (“Optional”) appeals the district court’s order denying (1) *593 Optional’s motion for attorney’s fees pursuant to the fee-shifting provision of the Civil Asset Forfeiture Reform Act (“CAF-RA”), 28 U.S.C. § 2465(b)(1)(A), and (2) Optional’s motion for attorney’s fees under 26 U.S.C. § 7430(a)(2). We affirm. 1. Optional is not entitled to an award of attorney’s fees under CAFRA, because it was not the prevailing party “in any civil proceeding to forfeit property.” 28 U.S.C. § 2465(b)(1)(A). Our prior rulings in this case indicate that, after the Government lost its forfeiture claim against properties seized from the Kim Claimants, the district court adjudicated Optional’s claims to the properties in a separate in rem proceeding. See United States v. Real Prop. Located at 175 Martin Lane, 545 F.3d 1184, 1144-46 (9th Cir.2008); United States v. DAS Corp., 406 Fed.Appx. 154, 159-60 (9th Cir.2010). By the time Optional obtained ownership of the properties in the separate proceeding, the Government had been dismissed from the case and its forfeiture claims had been defeated by the Kim Claimants. After the forfeiture proceedings were concluded, the district court awarded attorney’s fees to the Kim Claimants under CAFRA. Optional has not pointed to any work it performed that was “useful” or “necessary to secure” victory against the Government in the forfeiture proceedings. See Pennsylvania v. Del. Valley Citizens’ Council for Clean Air, 478 U.S. 546, 561, 106 S.Ct. 3088, 92 L.Ed.2d 439 (1986) (internal quotation marks omitted). 2. Optional is also not entitled to attorney’s fees under 26 U.S.C. § 7430(a)(2), which provides that “[i]n any ... court proceeding which is brought by or against the United States in connection with the ... collection ... of any tax ... the prevailing party may be awarded” attorney’s fees. The district court allowed the Government to act as an “observer” in the separate in rem action between Optional and the Kim Claimants because the Government had tax liens on the properties in dispute. Optional contends that it defeated these liens by obtaining a judgment recognizing its ownership of the properties, citing to Newnham v. United States, 813 F.2d 1384, 1385-86 (9th Cir.1987). Despite its non-party status, the Government participated in the in rem proceeding in two primary ways: (1) the Government responded to Optional’s motion to determine lien priority in the properties; and (2) the Government attempted to assert its liens after Optional and the Kim Claimants settled their ownership claims in Optional’s favor. With regard to the first, Optional lost on summary judgment when the district court concluded that the Government’s tax lien was superior to Optional’s judgment lien. With regard to the second, when the Government objected to Optional’s proposed findings of fact confirming its ownership of the properties, Optional asked the court to strike the Government’s objections; the district court agreed, holding that the Government was not a claimant and lacked standing. The district court’s order distinguishes this case from Newnham. Accordingly, Optional was not a prevailing party in a proceeding to collect taxes under § 7430(a)(2). See Buckhannon Bd. and Care Home, Inc. v. West Virginia, 532 U.S. 598, 603-06, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). AFFIRMED. Footnotes [*] This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.