Court Opinions: 10th Circuit Court of Appeals Opinion for Jan. 10

The 10th Circuit Court of Appeals

Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.

United States v. Schwabe

An informant alerted drug enforcement of a marijuana grow in Silt, Colorado. Officers went to the property to investigate and discovered two illegal marijuana grows — one with 42 plants and one with 175 plants. The smaller grow belonged to Richard Schwabe, whom officers arrested for the cultivation of more than 30 marijuana plants and possession with intent to distribute marijuana. 

The officers then acquired a search warrant and lawfully searched the property. They found marijuana, marijuana trimmings, odor-concealing stink bags, a copy of the “Marijuana Grower’s Handbook” and innumerable envelopes as well as $114,700 in cash. 

Later, the government filed a complaint for forfeiture in rem, arguing the $114,700 seized constituted proceeds from marijuana sales forfeitable under 21 U.S.C. 881(a)(6). Schwabe opposed forfeiture, claiming it was income he earned and saved over decades. Schwabe also asserted 14 affirmative defenses, nine of which the government moved to strike as legally deficient. In response, Schwabe abandoned six of the challenged defenses, and the district court struck the other three. 

Schwabe also moved to dismiss the complaint because the civil forfeiture statute’s preponderance-of-the-evidence standard violates due process, quash two third-party bank subpoenas and suppress the fruits of the officer’s search. The district court denied all motions. 

The case proceeded to trial and Schwabe came away with a partial victory. The jury found only $21,000 was subject to forfeiture, leaving Schwabe with $93,000. But during the trial, the district court admonished Schwabe’s counsel several times for an overall lack of professionalism. 

After the trial, Schwabe moved for $520,762.50 in attorneys’ fees under 28 U.S.C.  2465(b)(1)(A), but the district court determined attorney Edward Burch and his co-counsel David Michael exercised unsound billing judgment for themselves and two other lawyers. The district court based this on Burch’s “relatively modest skillset” and that counsel spent time on frivolous legal work. 

To adjust, the court went motion by motion removing specific hours. It then reduced Burch’s hourly rate from $600 to $275 along with similar reductions for Schwabe’s other attorneys. The court lessened Schwabe’s fee award by 18% and an additional 7% to remove billing for non-substantive legal work. The district court ultimately awarded Schwabe $133,539 in attorneys’ fees.

Schwabe then asked for $18,625.66 in costs, but the clerk of the court determined only $7,901.48 constituted awardable costs under 28 U.S.C. 1821 and 1920. After reducing that amount to reflect Schwabe’s partial recovery and deducting the costs awarded to the government, the clerk awarded Schwabe $5,558.58, taxed as costs to the government. The district court affirmed the clerk’s award.  

Schwabe appealed both the fee and cost award. 

The 10th Circuit Court of Appeals affirmed the district court’s award of attorneys’ fees and costs because district courts maintain discretion to determine which costs attorneys have reasonably incurred and the court acted within its discretion to reduce Schwabe’s requested award. However, the 10th Circuit remanded the case to correctly categorize attorneys’ travel costs as attorneys’ fees.

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