“The Anti-Assignment statute was enacted for the purpose of preventing third parties, with whom the Government was not in privity, from acquiring an enforceable interest in a claim against it.”
How later courts described this case
- “The Anti-Assignment statute was enacted for the purpose of preventing third parties, with whom the Government was not in privity, from acquiring an enforceable interest in a claim against it.”
- holding that an attorney’s lien authorized by the plaintiff’s board of directors was “ineffectual because of the Anti-Assignment Act”
- holding that “unless the United States has submitted itself to such state law, an attorney lien statute . . . has no force or effect against it and places no restraints on the government’s payment of its obligations to another”
- concluding that “a contract between an attorney and a client which gives the attorney an interest in the client’s claim against the Government is exactly what the anti-assignment statute forbids”
Written by the judges who cited it.
The opinion
In the United States Court of Federal Claims
No. 19-400L
(Filed: June 24, 2022)
NOT FOR PUBLICATION
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ELIZABETH G. BRADLEY et al., *
*
Plaintiffs, * Notice of Attorney’s Lien; Antiassignment
* Act, 31 U.S.C. § 3727; District of Columbia
v. * Law Regarding Attorney’s Liens; Sovereign
* Immunity
THE UNITED STATES, *
*
Defendant. *
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ORDER STRIKING NOTICE OF ATTORNEY’S LIEN
On May 9, 2022, James H. Hulme, on behalf of ArentFox Schiff LLP (“ArentFox
Schiff”), filed a notice of attorney’s lien in the above-captioned case. Mr. Hulme avers that the
purpose of the filing is to
assert[] an attorney’s lien against any recovery by Plaintiffs, or any award of fees
and costs to the Plaintiffs[,] . . . based upon legal services performed and costs
incurred by ArentFox Schiff in connection with the representation of [some of
the] Plaintiffs in this action, from inception of the matter through January 31,
2019.
Notice of Attorney’s Lien 1. The filing of such a lien is authorized, he contends, by United
States Court of Claims (“Court of Claims”) precedent and District of Columbia law. The court
disagrees. 1
1
Neither plaintiffs nor defendant moved to strike Mr. Hulme’s filing. However, in a
footnote in its response to ArentFox Schiff’s motion to intervene, defendant argues that the
“notice of attorney lien should be stricken as improper, as there is no waiver of sovereign
immunity supporting such a lien and it conflicts with the Anti-Assignment Act.” Def.’s Resp. 4
n.3. ArentFox Schiff responds that defendant “misreads the language and spirit of the Notice of
Lien . . . in asserting that ArentFox Schiff is seeking a claim against the United States” because
“the lien exists upon the right of Plaintiffs and [their] current counsel to receive the proceeds in
this case.” ArentFox Schiff Reply 7. Notwithstanding ArentFox Schiff’s characterization, its
purported lien would give it an interest in any award payable to plaintiffs by defendant. See
Pittman v. United States, 116 F. Supp. 576, 579-80 (Ct. Cl. 1953) (remarking that a contingency
fee agreement “did attempt to create in [the attorney] an interest in the proceeds of the claim
asserted on behalf of the client against the United States, as security for the payment of [the
attorney’s] fee” and that the attorney was seeking “to hold the Government liable” for his fee);
As Mr. Hulme observes, the Court of Claims stated in Carver v. United States that when
a claimant seeks to substitute a new attorney to appear on his behalf, and the original attorney
was proceeding on a contingency fee basis, “courts will assure [the original attorney] of a lien
upon the ultimate judgment, and secure his immediate re-imbursement of the expenses that have
been incurred.” 7 Ct. Cl. 499, 500 (1871). However, thirty-five years later, the United States
Supreme Court (“Supreme Court”) held in Nutt v. Knut that a contractual provision deeming the
payment of attorney’s fees to be a lien on the client’s claim against the federal government was
contrary to statute. 200 U.S. 12, 19-21 (1906). The statute at issue generally prohibited the
assignment of claims against the United States:
All transfers and assignments made of any claim upon the United States, or of any
part or share thereof, or interest therein, whether absolute or conditional, and
whatever may be the consideration therefor . . . shall be absolutely null and void
unless they are freely made and executed in the presence of at least two attesting
witnesses, after the allowance of such a claim, the ascertainment of the amount
due, and the issuing of a warrant for the payment thereof.
Id. at 19 n.† (quoting 36 Rev. Stat. § 3477 (1878) 2). The Supreme Court explained that one of
the purposes of this statute, commonly referred to as the Antiassignment Act,
was to forbid anyone who was a stranger to the original transaction to come
between the claimant and the government, prior to the allowance of a claim, and
who, in asserting his own interest or share in the claim, pending its examination,
might embarrass the conduct of the business on the part of the officers of the
government.
Id. at 20.
Subsequently, in Pittman, the Court of Claims applied the holding in Nutt to a situation in
which an attorney, who was working pursuant to a contingency fee agreement, asserted an
attorney’s lien against the amount recovered by his client from the federal government. 116 F.
Supp. at 576. Recognizing that Nutt “stands for the broad principle that any attempt to impress a
lien upon the proceeds of a claim against the United States as security for the payment of an
attorney’s fee is within the ends to which the prohibition of [the Antiassignment Act] was
aimed,” id. at 580, the court held that that the lien asserted by the attorney “was a nullity,” id. at
578. See generally id. at 580 (“The Anti-Assignment statute was enacted for the purpose of
preventing third parties, with whom the Government was not in privity, from acquiring an
enforceable interest in a claim against it.”). The Court of Claims reached this same conclusion in
Lien, Black’s Law Dictionary (11th ed. 2019) (defining the type of attorney’s lien asserted by
ArentFox Schiff––a charging lien––as “[t]he right of an attorney . . . to encumber money payable
to the client . . . until the attorney’s fees have been properly determined and paid”).
2
This version of the statute was enacted in 1853. See Act of Feb. 26, 1853, § 1, 10 Stat.
170, 170. The current version of the statute, enacted in 1982, is substantively similar. See 31
U.S.C. § 3727(a)-(b).
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other cases. See Kearney v. United States, 285 F.2d 797, 800 (Ct. Cl. 1961) (concluding that “a
contract between an attorney and a client which gives the attorney an interest in the client’s claim
against the Government is exactly what the anti-assignment statute forbids”); Empire Ordinance
Corp. v. United States, 128 F. Supp. 744, 744-45 (Ct. Cl. 1955) (holding that an attorney’s lien
authorized by the plaintiff’s board of directors was “ineffectual because of the Anti-Assignment
Act”).
In light of the Supreme Court’s decision in Nutt and the Court of Claims precedent
applying the holding of Nutt––all of which is binding on this court––Mr. Hulme’s reliance on
Carver is not well taken. Furthermore, Mr. Hulme has not alleged that the requirements of the
current version of the Antiassignment Act have been satisfied. See 31 U.S.C. § 3727(a)-(b)
(reflecting that an assignment of a claim, or an interest in a claim, against the United States “may
be made only after a claim is allowed, the amount of the claim is decided, and a warrant for
payment of the claim has been issued”). Consequently, the notice of attorney’s lien filed by Mr.
Hulme violates the Antiassignment Act.
Case law from the District of Columbia supporting the use of attorney’s liens in
contingent fee cases does not alter this conclusion. As an initial matter, the decisions relied upon
by Mr. Hulme did not involve a claim against the federal government and, therefore, did not
implicate the Antiassignment Act. Moreover, the United States Court of Appeals for the Federal
Circuit (“Federal Circuit”) has expressly concluded that the application of a state’s attorney’s
lien statute against the United States is barred by the doctrine of sovereign immunity. See
Knight v. United States, 982 F.2d 1573, 1578 (Fed. Cir. 1993) (holding that “unless the United
States has submitted itself to such state law, an attorney lien statute . . . has no force or effect
against it and places no restraints on the government’s payment of its obligations to another”);
accord Tucker v. United States, 7 Cl. Ct. 374, 376 (1985). Notably, Mr. Hulme was made aware
of this binding Federal Circuit precedent by the Honorable Armando O. Bonilla during a March
31, 2022 status conference in another case in which ArentFox Schiff filed a notice of attorney’s
lien. See Transcript of Status Conference at 10, Arnold v. United States, No. 15-1252L (Fed. Cl.
Mar. 31, 2022) (citing Knight and Tucker for the proposition that the notice of attorney’s lien
filed in a consolidated case was “contrary to the law of this Circuit”). Thereafter, on April 8,
2022, ArentFox Schiff withdrew the notice of attorney’s lien. See Praecipe, Dawson v. United
States, No. 15-1268L (Fed. Cl. Apr. 8, 2022). Given these events, it is difficult to understand
why Mr. Hulme––only six days later––chose to file a notice of attorney’s lien in this case, and
did so without attempting to establish that the United States has subjected itself to District of
Columbia law regarding attorney’s liens so as to waive its sovereign immunity.
In short, the notice of attorney’s lien filed by Mr. Hulme violates the Antiassignment Act
and is barred by the doctrine of sovereign immunity. Accordingly, the court directs the clerk to
STRIKE the notice of attorney’s lien (ECF No. 83) from the docket.
IT IS SO ORDERED.
s/ Margaret M. Sweeney
MARGARET M. SWEENEY
Senior Judge
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