NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT MAR 10 2015
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
UNITED STATES OF AMERICA, No. 13-56823
Plaintiff - Appellee, D.C. No. 2:04-cv-02788-ABC-
PLA
v.
OPTIONAL CAPITAL, INC., AKA MEMORANDUM*
Optional Ventures,
Claimant - Appellant,
And
475 MARTIN LANE, BEVERLY HILLS,
CALIFORNIA, Real Property Located at,
Defendant.
Appeal from the United States District Court
for the Central District of California
Audrey B. Collins, District Judge, Presiding
Argued and Submitted March 2, 2015
Pasadena California
Before: REINHARDT, N.R. SMITH, and HURWITZ, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Optional Capital, Inc. (“Optional”) appeals the district court’s order denying
(1) Optional’s motion for attorney’s fees pursuant to the fee-shifting provision of
the Civil Asset Forfeiture Reform Act (“CAFRA”), 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 475 Martin
Lane, 545 F.3d 1134, 1144-46 (9th Cir. 2008); United States v. DAS Corp., 406 F.
App’x 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
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Citizens’ Council for Clean Air, 478 U.S. 546, 561 (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
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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 (2001).
AFFIRMED.
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