United States District Court, District of Columbia
MEMORANDUM OPINION AND ORDER
RANDOLPH D. MOSS UNITED STATES DISTRICT JUDGE
approximately four years, the law firm of Neel, Hooper &
Banes P.C. (“NHB”) represented Hikmatullah
Shadman, his two brothers, and four companies that they
control (collectively, “Shadman claimants”) in a
long-running in rem action, seeking assets seized as
proceeds of an alleged scheme to defraud the United States.
See United States v. Sum of $70, 990, 605, 234
F.Supp.3d 212, 216-17 (D.D.C. 2017) (“Sum
II”). However, in 2016, the Shadman claimants
retained additional counsel, Dkt. 282, and, in late August
2017, apparently requested that the attorneys from NHB
withdraw their appearance, see Dkt. 296-3 at 7. On
September 21, 2017, the NHB attorneys filed a motion seeking
leave to withdraw, Dkt. 295, and the Court granted their
motion that same day, see Minute Order (Sept. 21,
2017). Several days later, NHB moved to intervene in order to
assert “an attorney's charging lien” against
any future award in favor of the Shadman claimants. Dkt. 296.
It attached to that motion, moreover, various materials
relating to the fees it claims to be owed and a previously
filed “Notice of Lien, ” announcing that NHB
“presents a claim and lien against any held funds or
recovery by way of judgment, settlement or otherwise, that
Plaintiff has provided or may recover from you or in this
action, for reasonable attorneys' fees, costs incurred
and advanced, and other expenses incurred on behalf of the
Shadman [c]laimants.” Dkt. 296-2 at 4.
United States filed a timely opposition, arguing principally
that NHB lacks standing to intervene in this in rem
forfeiture proceeding and that, to the extent it has a fee
dispute with the Shadman claimants, its remedy lies in a
different forum. Dkt. 297. The Shadman claimants also opposed
NHB's motion to intervene, although their opposition was
filed about a week after the deadline and, in any event, in
most respects it simply incorporated the arguments already
made by the United States. Dkt. 299. Having missed the deadline to
file a brief in opposition, the Shadman claimants provided
their substantive answer to NHB's asserted lien in the
form of a motion for sanctions, arguing that NHB's
filings purporting to establish an attorney's charging
lien are “frivolous, ” include “egregious
misrepresentations, ” and were filed to
“harass” the Shadman claimants. Dkt. 305 at 1-2.
present purposes, the Court concludes that NHB is entitled to
intervene in this action for the limited purpose of
protecting any claim it may have to share in a portion of any
award or settlement that the Shadman claimants may obtain and
that the Shadman claimants' motion for sanctions does not
satisfy the high burden for imposition of that extraordinary
form of relief. To the extent the parties differ over the
relevant facts and whether NHB is entitled to share in any
portion of whatever award or settlement the Shadman claimants
may someday obtain, that issue is not yet before the Court.
Nor is the Court convinced that NHB's resistance to the
efforts of its client to replace the firm as counsel in this
matter caused the Shadman claimants any prejudice. The Court
will, accordingly, grant NHB's motion for leave to
intervene for purposes of asserting its right to share in any
award or settlement and will deny the Shadman claimants'
motion for sanctions. At an appropriate time, the parties may
brief the question whether NHB is, in fact, entitled to share
in any award or settlement that the Shadman claimants may
Court has summarized the factual background of this matter on
multiple occasions, see Sum II, 234 F.Supp.3d at
212; United States v. Sum of $70, 990, 605, 128
F.Supp.3d 350 (D.D.C. 2015) (“Sum I”),
and will, for present purposes, describe only the facts
relevant to the pending motions. From July 2013 to September
2017, NHB represented the Shadman claimants in this in
rem action. Sum II, F.Supp.3d at 216. According
to NHB, it agreed to represent the Shadman claimants in July
2013 at specified hourly rates. Dkt. 296-1 at 2 (Mashal Aff.
¶ 3). Because Shadman “claimed he was unable to
pay at the agreed rates, ” “over time[, ] NHB
agreed to various monthly caps in exchange for deferring the
remainder upon recovery.” Id. (Mashal Aff.
¶ 3). The firm continued to work on the case for the
next four years, according to NHB, but endured multiple
periods when it went unpaid, prompting renegotiations of
NHB's fee agreement and plans for payment. Id.
at 3 (Mashal Aff. ¶¶ 4-6).
agreements, both signed on March 8, 2016, are relevant here.
The first required a quarterly payment of $45, 000 plus
expenses but deferred fees and expenses “in excess of
$450, 000, ” id. at 3 (Mashal Aff. ¶ 7),
agreeing that those costs would be “due only if money
is recovered for the clients on the civil forfeiture matter
or if the Firm leaves the case for reasons other than its
misconduct, ” id. at 37. The agreement further
provided that Shadman “authorize[d] the Firm to collect
agreed fees paid in full directly from [Shadman's]
designated bank representative prior to final release of all
funds to [Shadman].” Id. at 38. A second
agreement, signed that same day, specified that NHB was
entitled to receive a “contingent fee”
“capped” at specified levels depending on when
“recovery is awarded.” Id. at 39. That
agreement further provided that the “Law Firm is
authorized to work with Client's designated bank
representative to obtain any sums claimed directly from the
government or other parties on behalf of Clients and [would]
be entitled to receive and be paid a contingent fee” in
a percentage provided by a fee schedule. Id. at 39.
Both agreements provided that NHB could enforce the
provisions even after withdrawing from the case. See
Id. at 38, 40; see also Id. at 4 (Mashal Aff.
relations between NHB and the Shadman claimants deteriorated,
NHB filed a notice of petition to establish a lien on August
31, 2017, seeking “attorney's fees and
expenses.” See Dkt. 293 at 3. In that
petition, NHB alleges that it is the beneficiary of an
“irrevocable lien” and a “bank
assignment” through its agreements with the Shadman
claimants and that, although NHB had not been paid, it also
had “not been terminated for cause, and, ” at
least at the time it filed the notice of petition,
“remain[ed] as Lead Counsel before the Court.”
Id. On September 21, 2017, NHB formally withdrew as
counsel for the Shadman claimants, Dkt. 295, and shortly
thereafter, filed a motion to intervene to enforce its lien,
Dkt. 296. The Shadman claimants, for their part, have moved
for Rule 11 sanctions against NHB based on its
“multiple and egregious misrepresentations to the
Court” and “actions taken  counter to the
Shadman [c]laimants' interests, ” Dkt. 305 at 2.
date, the Shadman claimants have not received any award or
settlement in the underlying litigation. See Dkt.
297 at 5.
NHB's Motion to Intervene
seeking to intervene as of right under Federal Rule of Civil
Procedure 24(a) must satisfy four requirements. Deutsche
Bank Nat'l Tr. Co. v. FDIC, 717 F.3d 189, 192 (D.C.
Cir. 2013). First, “the application to intervene must
be timely.” Id. (quoting Karsner v.
Lothian, 532 F.3d 876, 885 (D.C. Cir. 2008)). Second,
“the applicant must demonstrate [that it has] a legally
protected interest in the action.” Id.
(quoting Karsner, 532 F.3d at 885). Third,
“the action must threaten to impair that
interest.” Id. (quoting Karsner, 532
F.3d at 885). Fourth, “no party to the action can be an
adequate representative of the applicant's
interests.” Id. (quoting Karsner, 532
F.3d at 885). A movant seeking to intervene as of right
pursuant to Rule 24(a) must also have Article III standing.
See Roeder v. Islamic Republic of Iran, 333 F.3d
228, 233-34 (D.C. Cir. 2003); Fund for Animals, Inc. v.
Norton, 322 F.3d 728, 731-32 (D.C. Cir. 2003).
the United States opposes NHB's motion for leave to
intervene on grounds that relate both to timeliness and
standing-the law firm failed to file a timely claim to the
seized assets pursuant to Supplemental Rule G(5). Dkt. 297 at
3. It is far from clear, however, that NHB needs to have
statutory standing under 18 U.S.C. § 981(k)(4)(B) and
§ 983(d)(6). NHB does not contend that it has standing
to pursue a claim against the res as an
“owner” of the seized funds but, rather that it
is entitled to intervene to protect its interest in any
recovery or settlement that its former clients may obtain.
See Dkt. 298 at 6. “This Circuit has long
allowed attorneys to intervene in the underlying case to
protect their interests, recognizing that charging liens
‘arise out of the underlying action and relate back
to the inception of the action.'” Peterson v.
Islamic Republic of Iran, 220 F.Supp.3d 98, 106 (D.D.C.
2016) (quoting Martens v. Hadley Mem'l Hosp.,
753 F.Supp. 371, 372 (D.D.C. 1990)). As the D.C. Circuit has
explained, “an attorney of record under a contingent
fee contract has an ‘interest in the cause of action,
'” and “may intervene to protect this
interest.” Friedman v. Harris, 158 F.2d 187,
187-88 (D.C. Cir. 1946). In none of these cases do the courts
ask whether the attorney would have had statutory or
constitutional standing to bring the action in the first
instance, nor would it make sense to approach the question
from that peculiar perspective. But, even if some version of
that approach applied here, as NHB points out, the statutory
definition of “owner” includes any one holding a
“lien” or “valid assignment of an ownership
interest.” 18 U.S.C. § 983(d)(6)(A).
generally, the Court is convinced that NHB satisfies the
requirements for intervention. The law firm filed its motion
to intervene shortly after the Court granted the NHB lawyers
leave to withdraw, see Minute Order (Sept. 21,
2017); Dkt. 296, and thus the motion was timely. Moreover,
NHB has established that it has a “legally protected
interest” in the litigation. Because NHB provided legal
services with respect to an action pending in this Court,
D.C. law presumably governs whether it has a right to assert
a lien against any recovery or settlement. See Democratic
Cent. Comm. of D.C. v. Wash. Metro. Area Transit
Comm'n, 941 F.2d 1217, 1219 (D.C. Cir. 1991)
(“The existence and effect of an attorney's lien is
governed by the law of the place in which the contract
between the attorney and the client is to be
performed.”). The District of Columbia does not have a
statute that governs attorney's liens but, rather,
“relies on the common law.” Peterson,
220 F.Supp.3d at 104. That common law rule “recognizes
two distinct types of liens applicable to a claim against a
client for attorneys' fees: the ‘retaining
lien' and the ‘charging lien.'” Wolf
v. Sherman, 682 A.2d 194, 197 (D.C. 1996). NHB seeks
only the latter-a charging lien. “D.C. case law has
long recognized the validity of an attorneys' charging
lien in proceeds obtained through judgment and recovery where
the client and the attorney understood that the attorney
would be paid out of the case's proceeds.”
Martens, 753 F.Supp. at 372. Thus, if NHB can