United States v. Ross: Dismissal Without Prejudice and Voluntary Return of Property Do Not Make a CAFRA Claimant “Substantially Prevail”

I. Introduction

In United States v. Ross, No. 24‑1421‑cv (2d Cir. Dec. 4, 2025), the Second Circuit addressed a cluster of important civil forfeiture issues arising from a major business‑email‑compromise fraud and the seizure of nearly $4.9 million held in a lawyer’s trust account.

The opinion, authored by Judge Raggi, does more than resolve the fate of the particular funds. It clarifies:

How and when a property owner “substantially prevails” for attorney’s‑fees purposes under the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), 28 U.S.C. § 2465(b)(1);
The effect of a voluntary dismissal without prejudice on CAFRA fee claims;
The necessity of timely, property‑specific claims to establish “standing” in civil forfeiture;
How due process and the statutory stay provision, 18 U.S.C. § 981(g), interact after the Supreme Court’s decision in Culley v. Marshall;
The proper precondition for issuing a “certificate of reasonable cause” under 28 U.S.C. § 2465(a)(2).

The core factual setting is straightforward but dramatic: a Florida lawyer, Richard Stuart Ross, maintained a client trust account at Regions Bank. A fraudster tricked Rising Phoenix Holdings, LLC (“Phoenix”) into wiring $29.6 million into that account via a spoofed email. Within weeks, most of the funds had been wired out, including to Mexican banks. The government seized the remaining and recalled funds—about $4.9 million—in two stages and brought a civil forfeiture action.

Ross filed a verified claim to only a portion of the seized funds—about $1.213 million—asserting that:

A small piece was client money; and
Roughly $1.20 million were proceeds from the sale of his personal home, which he had placed into the trust account.

Phoenix, the defrauded victim, also claimed the same $1.21 million; neither Ross nor Phoenix filed a claim to the remaining $3.69 million. The government ultimately:

Obtained a default forfeiture of the unclaimed $3.69 million (later returned to Phoenix administratively);
Voluntarily dismissed the forfeiture action as to the contested $1.21 million without prejudice;
Returned the $1.21 million to Ross; and
Obtained from the district court a “certificate of reasonable cause” for the seizure.

Ross appealed, arguing principally that:

The district court improperly entered a default judgment as to the $3.69 million;
A discovery stay under § 981(g) violated his due process right to a “timely” hearing;
Because the $1.21 million was eventually returned to him, he had “substantially prevailed” and was entitled to attorney’s fees, costs, and interest under CAFRA;
The case should have been dismissed with prejudice, not without; and
The certificate of reasonable cause was unauthorized.

The Second Circuit vacated the certificate of reasonable cause (on the government’s concession of legal error) but affirmed on all other issues. In doing so, it established a significant precedent on when a claimant “substantially prevails” under CAFRA and confirmed a stringent, judicial‑relief‑based reading of that phrase, aligned with Buckhannon and Lackey.

II. Summary of the Opinion

A. Procedural and Factual Overview

After the $29.6 million fraudulent transfer to the Regions trust account and rapid outgoing transfers (including to Mexican banks), the government:

Seized the remaining ~$4.18 million in the account in November 2021 under 18 U.S.C. §§ 981 and 982; and
Later seized an additional ~$722,000 that Regions managed to recall from a Mexican bank.

The government then filed a civil forfeiture complaint in February 2022, alleging that:

The funds were proceeds of computer and wire fraud (18 U.S.C. §§ 1030, 1343) and/or property “involved in” money laundering (18 U.S.C. §§ 1956, 1957), forfeitable under § 981(a)(1)(A), (C); and
Alternatively, as fungible cash and bank funds, they were forfeitable under § 984, which avoids strict tracing requirements for cash‑type property within a one‑year period.

Notice was provided. Ross filed a timely verified partial claim, expressly covering only $1,213,113.11. Phoenix filed a claim to that same $1.21 million but chose not to claim the remaining $3.69 million, expecting the government to get a default and then return those funds to Phoenix separately.

The district court:

Entered a default forfeiture judgment as to the unclaimed $3.69 million;
Stayed discovery as to the $1.21 million under 18 U.S.C. § 981(g)(1), to protect a parallel criminal investigation;
Later granted the government’s unopposed motion to dismiss the forfeiture action without prejudice as to the $1.21 million and issued a certificate of reasonable cause under § 2465(a)(2); and
Denied Ross’s motion for reconsideration and his CAFRA fee application, holding he had not “substantially prevailed.”

On appeal, the Second Circuit:

Default Judgment: Held Ross lacked both Article III and “statutory” standing to contest the $3.69 million because he never filed a verified claim as to those funds, and he asserted no colorable ownership interest in them.
Due Process / Stay: Held that a roughly five‑month discovery stay, and a 16‑month span from seizure to judgment, did not violate Ross’s due process rights under the balancing test from Barker v. Wingo and United States v. $8,850, as adopted for civil forfeiture by Culley v. Marshall.
CAFRA Fees: Held that a claimant “substantially prevails” only by securing a judicially sanctioned, enduring change in the legal relationship—i.e., some form of judgment or order in his favor. A dismissal without prejudice plus the government’s voluntary return of seized funds does not satisfy this standard.
Dismissal Without Prejudice: Found no abuse of discretion under Rule 41(a)(2) and the Zagano factors in granting dismissal without prejudice rather than with prejudice.
Certificate of Reasonable Cause: Vacated the certificate because § 2465(a)(2) authorizes such certificates only “[u]pon the entry of a judgment for the claimant.” No such judgment existed here.

III. Detailed Analysis

A. Standing and the Partial Default Judgment

1. The Civil Forfeiture Standing Framework

Civil forfeiture actions are in rem: the “defendant” is the property itself (here, specified sums of money), not the property owner. Thus, a person who wants to contest forfeiture must first establish:

Article III standing: a concrete stake in the outcome—usually, a colorable ownership or possessory interest in the property; and
“Statutory standing”: compliance with the procedural requirements for contesting forfeiture, especially filing a verified claim under 18 U.S.C. § 983(a)(4)(A) and Supplemental Rule G(5).

The Second Circuit has long insisted on both elements, notably in:

United States v. Cambio Exacto, S.A., 166 F.3d 522 (2d Cir. 1999): a claimant must demonstrate a cognizable interest in the res (Article III) and comply with procedural claim requirements (statutory) to be heard on the merits.
United States v. Vazquez‑Alvarez, 760 F.3d 193 (2d Cir. 2014): a would‑be claimant who has not properly established standing cannot file dispositive motions; without standing, there is “no right to bring any motion” in the forfeiture case.
United States v. Starling, 76 F.4th 92 (2d Cir. 2023): clarified that what is sometimes called “statutory standing” is essentially the question whether the person has properly invoked the cause of action; but practically, courts still treat it as a prerequisite to merits litigation.

2. Article III Standing in Ross

For Article III standing, the Second Circuit looks for at least a “facially colorable interest” in the seized property, even if the claimant’s ultimate entitlement is disputed. The court cited:

United States v. $557,933.89, More or Less, in U.S. Funds, 287 F.3d 66, 79 (2d Cir. 2002): a colorable ownership allegation plus some evidence typically suffices for Article III purposes; ultimate proof is for the merits stage.
Torres v. $36,256.80 U.S. Currency, 25 F.3d 1154, 1158 (2d Cir. 1994): “an allegation of ownership and some evidence of ownership” is enough for constitutional standing.
Cambio Exacto, 166 F.3d at 527: a “mere custodian” with a naked claim of possession, but no ownership interest, lacks Article III standing.

Applying these principles, the court held:

Ross had Article III standing only as to the $1.20 million in proceeds he claimed to own personally (from his home sale), plus the small client‑fund component of the $1.21 million.
He had no Article III standing to challenge forfeiture of the remaining $3.69 million for which he did not assert any ownership; at most, he was a custodian via the trust account.
Collateral consequences—such as a loss of potential attorney’s fees—did not create standing to litigate entitlement to property he did not claim to own, especially absent any analogous risk of liability to third parties akin to that in Cambio Exacto.

3. Statutory Standing: The Verified Claim Requirement

CAFRA and Supplemental Rule G impose strict claim‑filing requirements:

18 U.S.C. § 983(a)(4)(A) requires a verified claim to be filed within 30 days of notice (or publication) of the forfeiture complaint.
Supplemental Rule G(5) specifies the form and content of such claims, including stating the claimant’s interest and being verified under penalty of perjury.

In Ross:

Ross timely filed a verified claim, but expressly limited it to $1,213,113.11.
He never filed any claim—timely or otherwise—covering the remaining $3.69 million.
He did not move for leave to file a late claim nunc pro tunc.
His general answer asserting an “innocent owner” defense could not substitute for a formal claim directed to the $3.69 million he had chosen not to claim.

The court emphasized that an “innocent owner” defense under 18 U.S.C. § 983(d) does not bypass the claim‑filing requirement. Section 983(d)(1) simply assigns the burden of proof on that defense to a claimant; it presupposes that the person has already become a proper “claimant” by filing a compliant claim.

Because Ross lacked both Article III and statutory standing as to the $3.69 million, he could not challenge either:

The sufficiency of the government’s allegations about those funds; or
The district court’s entry of default judgment forfeiting them.

The court underscored that a claimant “who lacks standing is not entitled to challenge the forfeiture on the merits.” (Citing the Advisory Committee’s note to Supplemental Rule G(8)(c).)

B. Due Process, Stays Under § 981(g), and “Timely” Forfeiture Hearings

1. The Mootness Question

Although neither party raised mootness, the court did so sua sponte, as required for Article III jurisdiction. After dismissal without prejudice and return of the $1.21 million, could Ross still obtain meaningful relief regarding the stay?

The court reasoned that:

Under Culley v. Marshall, 601 U.S. 377 (2024), property owners have a due process right to a “timely post‑seizure forfeiture hearing.”
In the criminal context, the remedy for a speedy‑trial violation is dismissal of the indictment, often with prejudice. (United States v. Moreno and 18 U.S.C. § 3162(a)(2) under the Speedy Trial Act.)
By analogy, the civil forfeiture remedy for a due process delay violation would likely be dismissal of the forfeiture action, potentially with prejudice, cutting off future forfeiture risk.

Here, because the government could still re‑file a forfeiture action under 18 U.S.C. § 981 (with a five‑year limitations period running from discovery of the offense, 19 U.S.C. § 1621), a judgment changing the without‑prejudice dismissal into a dismissal with prejudice would confer meaningful relief: it would preclude refiling and eliminate Ross’s ongoing risk. Therefore, the stay issue was not moot.

2. The Barker / $8,850 / Culley Framework

To evaluate delay in civil forfeiture proceedings, the Supreme Court has adopted the four‑factor test from Barker v. Wingo, 407 U.S. 514 (1972), as applied in United States v. $8,850, 461 U.S. 555 (1983), and reaffirmed in Culley:

Length of the delay (threshold and then weight);
Reason for the delay (including whether the government acted in good faith, whether investigations were complex or international);
Claimant’s assertion of his right to prompt resolution; and
Prejudice to the claimant (e.g., loss of use of property, business disruption).

3. Application to Ross

Key dates:

First seizure: November 16, 2021;
Civil complaint: February 14, 2022 (about 3 months later);
Ross’s interrogatories: June 6, 2022;
Government’s § 981(g) stay motion: July 5, 2022; stay granted August 17, 2022;
Ross withdraws discovery and seeks to lift stay: November 2, 2022;
Final judgment (dismissal/default): March 6, 2023.

Thus:

Overall span from seizure to judgment: ~16 months;
Discovery stay: effectively ~5 months (June–November 2022).

The court found no due process violation:

Length: 16 months, while significant, is not extraordinary in light of the circumstances, especially when compared to the 18‑month delay upheld in United States v. $8,850.
Reason: The government was conducting a complex, large‑dollar, partly international fraud and money‑laundering investigation. It needed time to:
- Trace tens of millions of dollars of transfers; and
- Obtain assistance from Mexican authorities via a Mutual Legal Assistance Treaty (MLAT).
International investigations are “inherently time‑consuming,” as recognized in $8,850, and the court found no indication of lack of diligence.
Assertion of right: Ross did assert his rights by seeking discovery and later moving to lift the stay, but he also withdrew his discovery requests, which softened any claim of intolerable delay.
Prejudice: The opinion emphasizes the investigative necessity and does not identify extraordinary prejudice beyond the ordinary loss‑of‑use that accompanies seizure. There was no showing of assets being irreparably lost due to the delay or similar extreme harm.

4. Statutory Stay Under § 981(g)

Section 981(g)(1) requires a court to stay a civil forfeiture proceeding if civil discovery would “adversely affect the ability of the Government to conduct a related criminal investigation or the prosecution of a related criminal case.” Section 981(g)(4) instructs courts to examine “the degree of similarity between the parties, witnesses, facts, and circumstances involved in the two proceedings.”

In Ross, the overlap was nearly complete:

The United States was both the civil forfeiture plaintiff and the criminal investigator.
Ross was both the civil claimant and the subject of the criminal investigation.
The funds, transactions, and time frame (October 2021 transfers in and out of the trust account) were identical in the civil and criminal arenas.

Allowing Ross’s interrogatories to go forward would have forced the government to reveal its investigative knowledge and strategy, risking the destruction or concealment of evidence and complicating international cooperation—concerns central to § 981(g).

Given the relatively short stay and the justified investigative needs, the court held the stay was reasonable, statutorily authorized, and consistent with due process.

C. CAFRA Attorney’s Fees: What It Means to “Substantially Prevail”

1. The Statutory Text and Sovereign Immunity

CAFRA’s fee‑shifting provision, 28 U.S.C. § 2465(b)(1), provides:

In any civil proceeding to forfeit property under any provision of Federal law in which the claimant substantially prevails, the United States shall be liable for … reasonable attorney fees and other litigation costs reasonably incurred by the claimant.

Because this makes the United States liable for fees, it is a waiver of sovereign immunity. As such, the court emphasized that it must be:

Strictly construed in favor of the sovereign; and
Not expanded beyond the clear language chosen by Congress.

This framework draws heavily on Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983), and Adeleke v. United States, 355 F.3d 144 (2d Cir. 2004).

2. Linking “Substantially Prevails” to “Prevailing Party” Jurisprudence

Although CAFRA uses the phrase “substantially prevails,” not “prevailing party,” the Second Circuit has treated those formulations as functionally aligned for fee‑shifting purposes. In United States v. Khan, 497 F.3d 204 (2d Cir. 2007), and later in United States v. Davis, 648 F.3d 84 (2d Cir. 2011), the court looked to Supreme Court case law on “prevailing party” provisions to interpret “substantially prevails” in CAFRA.

In Ross, the court explicitly relied on:

Buckhannon Bd. & Care Home, Inc. v. West Virginia Dep’t of Health & Human Res., 532 U.S. 598 (2001): rejected the “catalyst theory” and held that a party “prevails” only by obtaining a “material alteration of the legal relationship of the parties” that is “judicially sanctioned.” Mere voluntary changes by the opposing party do not suffice.
Lackey v. Stinnie, 604 U.S. 192 (2025): reaffirmed Buckhannon and clarified that:
- The change in legal relationship must be both judicially sanctioned and enduring; and
- Preliminary injunctions, which are inherently temporary and tentative, generally do not make a litigant a prevailing party even if the dispute later becomes moot through external events.
CRST Van Expedited, Inc. v. EEOC, 578 U.S. 419 (2016): clarified that a defendant can “prevail” without a decision “on the merits,” so long as there is a judicially sanctioned resolution that rebuffs the opposing party’s attempt to alter legal rights (such as dismissal with prejudice based on procedural failures).

The Second Circuit adopted the core Buckhannon/Lackey/CRST principle: to “prevail,” there must be some form of relief granted by the court, which materially and durably alters the parties’ legal relationship.

3. No “Catalyst Theory” Under CAFRA

Ross, supported by amici, urged a broader reading: that he “substantially prevailed” because:

His goal was return of the $1.21 million; and
The government did, in fact, return those funds after dismissing the case.

In other words, he argued that his lawsuit “catalyzed” the return, even if no formal judgment ordered it.

The Second Circuit rejected this argument, emphasizing:

Buckhannon explicitly rejected the catalyst theory for “prevailing party” statutes;
Lackey reaffirmed that a change in outcome, even if practically beneficial, must be judicially sanctioned to count for fee‑shifting; and
Congress knows how to adopt a catalyst standard when it wants to (e.g., FOIA’s 2007 amendments allowing fee awards where an agency’s voluntary change of position substantially benefits the requester), and it did not do so in CAFRA.

Because CAFRA is a sovereign‑immunity waiver, the court refused to import FOIA’s broader catalyst rule into § 2465(b)(1) by analogy.

4. What Counts as “Substantially Prevailing” for a Forfeiture Claimant?

Applying the governing standards, the court held that a forfeiture claimant “substantially prevails” only when:

The court grants relief in the form of a judgment or comparable order; and
That relief yields a judicially sanctioned, enduring change in the legal relationship between the claimant and the government (or the res).

Examples might include:

A judgment denying forfeiture and ordering the property returned to the claimant;
A dismissal with prejudice that conclusively prevents the government from refiling a forfeiture action on that property; or
Potentially, other court‑ordered final relief that definitively resolves ownership or forfeiture status.

By contrast:

Dismissal without prejudice leaves the government free to refile and does not adjudicate relative title; it “renders the proceedings a nullity” and leaves the situation as though the action was never filed.
Voluntary return of property by the government, without a court order compelling it, is not judicially sanctioned and thus cannot make the claimant a prevailing—or “substantially prevailing”—party under CAFRA.

The court aligned itself with the Eighth and Eleventh Circuits:

United States v. $32,820.56 in U.S. Currency, 838 F.3d 930 (8th Cir. 2016): a dismissal without prejudice does not confer prevailing status; what matters is whether there is a legal barrier to refiling, not merely practical difficulties.
United States v. $70,670 in U.S. Currency, 929 F.3d 1293 (11th Cir. 2019): the government’s practical difficulty in refiling is “irrelevant” to prevailing‑party analysis; the key is whether refiling is legally possible.

5. Why Ross Did Not “Substantially Prevail”

In Ross’s case:

The district court did not enter judgment in his favor; instead, it:
- Granted the government a default forfeiture judgment on the $3.69 million; and
- Dismissed the action without prejudice as to the $1.21 million.
The dismissal without prejudice did not decide ownership or forfeitability; the government’s claim of “superior title” remained unadjudicated.
The government remained legally free to refile a forfeiture action under 18 U.S.C. § 981, because:
- Section 984’s one‑year limitations period (which applies to fungible‑property forfeiture without tracing) had indeed expired; but
- Section 981, with a five‑year limitations period tied to discovery of the offense (19 U.S.C. § 1621), remained open until October 2026.
Ross thus remained “subject to the risk of refiling,” which is incompatible with prevailing status under Buckhannon and its progeny.
The government’s voluntary return of the $1.21 million, although practically favorable to Ross, did not carry a judicial imprimatur and did not eliminate the risk of future forfeiture.

Accordingly, Ross did not “substantially prevail,” and the United States was not liable for his attorney’s fees, costs, or interest under § 2465(b).

D. Voluntary Dismissal Without Prejudice: Rule 41 and the Zagano Factors

1. The Rule 41(a)(2) Standard

Once an answer has been filed and the parties do not stipulate to dismissal, Federal Rule of Civil Procedure 41(a)(2) allows dismissal only “by court order, on terms that the court considers proper.” Absent a contrary indication, such dismissals are normally without prejudice.

The Second Circuit’s framework asks:

Is there “plain legal prejudice” beyond the mere prospect of another lawsuit? (Cone v. West Virginia Pulp & Paper Co., 330 U.S. 212 (1947); Camilli v. Grimes, 436 F.3d 120 (2d Cir. 2006)).
If not dispositive, do the Zagano factors weigh against dismissal without prejudice?
- Plaintiff’s diligence in bringing the motion;
- Any undue vexatiousness;
- The extent of progress in the case (discovery, trial prep);
- Duplication of expenses in any refiled case; and
- The adequacy of the plaintiff’s explanation for seeking dismissal.

2. “Plain Legal Prejudice” and Loss of Fee Claims

Ross argued that dismissal without prejudice caused him “plain legal prejudice” by depriving him of CAFRA fees that he believed he would have obtained had the government persisted and lost on the merits.

The court rejected this theory, relying on Camilli v. Grimes, where the loss of an opportunity to sue for malicious prosecution was held insufficient to block a dismissal without prejudice:

Collateral, downstream opportunities (like malicious‑prosecution suits in Camilli, or CAFRA fee applications in Ross) do not constitute the kind of immediate, legal prejudice that requires dismissal with prejudice.
Otherwise, defendants (or claimants) could always insist on dismissals with prejudice simply by expressing an intention to seek such collateral relief, effectively nullifying Rule 41(a)(2)’s flexibility.

The court thus held that the potential loss of a fee claim is not “plain legal prejudice” for Rule 41 purposes.

3. Application of the Zagano Factors

The district court’s factual findings—and the Second Circuit’s review—supported dismissal without prejudice:

Diligence: The government sought dismissal within about nine months of filing its complaint. That interval is not dilatory, particularly in a complex, multi‑million‑dollar, partially international case.
Undue vexatiousness: The record showed no bad faith. The government:
- Reasonably seized and pursued forfeiture of funds in an account that had suddenly received $38.8 million in October 2021, most tied to a clearly fraudulent transfer.
- Later reassessed its ability to prove forfeitability of the $1.21 million, given documentation submitted about the home sale and client funds.
The timing of the dismissal, after Ross sought to lift the stay, did not alone establish gamesmanship or vexatious intent.
Progress of the suit: The parties had not exchanged discovery or engaged in substantive motion practice on the merits. The case remained at an early stage.
Duplicative expense: Little litigation expense had been incurred beyond initial motion practice; the risk of duplication was modest.
Explanation for dismissal: The government explained that “information and documentation obtained” during the investigation led it to reconsider its likelihood of success on the $1.21 million, while leaving open the possibility of refiling if further evidence emerged (e.g., evidence that the home sale was itself part of a laundering scheme).

In light of all this, the court held that the district court acted well within its discretion in granting dismissal without prejudice.

E. Certificate of Reasonable Cause Under § 2465(a)(2)

1. Statutory Framework and Purpose

CAFRA § 2465(a)(2) provides:

Upon the entry of a judgment for the claimant in any proceeding to condemn or forfeit property seized or arrested under any provision of Federal law … if it appears that there was reasonable cause for the seizure or arrest, the court shall cause a proper certificate thereof to be entered…

Historically, certificates of reasonable cause protect law‑enforcement officers (and, indirectly, the government) from damages liability when the seizure, although ultimately unsuccessful, was supported by reasonable cause. The Supreme Court discussed this mechanism in Heien v. North Carolina, 574 U.S. 54 (2014).

2. The Error in Ross

The statute’s plain text makes a certificate contingent on a threshold condition: there must be “a judgment for the claimant.” In Ross:

The district court never entered judgment “for” Ross on his claim to the $1.21 million;
Instead, it dismissed the action without prejudice and entered default forfeiture as to the unclaimed funds.

Because this prerequisite was not met, the Second Circuit agreed with the government’s concession that issuing a certificate was error and vacated that portion of the judgment, without reaching whether “reasonable cause” existed as a matter of fact.

This holding has an important procedural message: district courts may not issue § 2465(a)(2) certificates in cases resolved by dismissal without prejudice, or where claimants do not obtain judgment in their favor. The certificate remains tied to situations in which the government loses the forfeiture battle but is nonetheless found to have had reasonable cause to seize in the first place.

IV. Complex Concepts Simplified

A. What Is Civil Forfeiture?

Civil forfeiture is a legal mechanism where the government sues property (in rem)—such as cash or bank accounts—allegedly connected to crime, rather than suing the owner personally. The government must, at the end of the day, prove by a preponderance of the evidence that the property is:

Proceeds of specified unlawful activity; or
Property “involved in” certain crimes, like money laundering.

Owners (or other interested persons) must affirmatively come forward, file verified claims, and prove any defenses, such as being an “innocent owner.”

B. “In Rem” and “Defendant Property”

In rem actions proceed against the property itself. That is why the caption reads as if the “defendants” are bits of currency (“$4,183,402.74 in U.S. Currency”) rather than persons. This has important implications:

Anyone asserting an interest must intervene by claim, or they cannot be heard.
Default judgments can be entered against the property when no one comes forward with a timely claim.

C. “Innocent Owner”

Under 18 U.S.C. § 983(d), an “innocent owner” is a person who can show, by a preponderance of the evidence, that:

They did not know of the conduct giving rise to the forfeiture; or
They did all that reasonably could be expected under the circumstances to terminate such use of the property upon learning of it.

But to raise this defense at all, one must first be a proper “claimant”—i.e., have filed a timely, verified claim to the property.

D. “Substantially Prevails” and “Prevailing Party”

Fee‑shifting statutes often award attorney’s fees to the “prevailing party.” CAFRA instead speaks of claimants who “substantially prevail,” but courts interpret this in line with general “prevailing party” doctrine:

You must obtain something from the court—a judgment or equivalent order—that changes the legal relationship between you and the other side.
It is not enough that the government voluntarily backs down or returns property on its own.

E. Dismissal With vs. Without Prejudice

A dismissal with prejudice is final; the same claims cannot be refiled. It is akin to a win on the merits in terms of shutting the door.
A dismissal without prejudice leaves the plaintiff (here, the government) free to bring the same claim again, subject to the statute of limitations and other defenses.

From a CAFRA perspective, a dismissal with prejudice may be sufficient to confer prevailing status; a dismissal without prejudice generally is not.

F. Certificates of Reasonable Cause

Certificates of reasonable cause shield officers from damages liability when a seizure, though ultimately unsuccessful, was reasonably grounded in law and fact. Under CAFRA:

They only issue when a claimant has won a judgment in the forfeiture case; and
They do not themselves decide who owns the property—only whether the seizure was reasonably justified when made.

V. Broader Impact and Practical Implications

A. For Property Owners and Defense Counsel

File Claims Broadly and Precisely.

Ross illustrates the peril of making a “partial claim.” By limiting his verified claim to $1.21 million and never filing a claim to the remaining $3.69 million, Ross permanently forfeited any ability to contest the forfeiture of that larger amount, regardless of how strong his “innocent owner” theory might have been in the abstract.
Do Not Rely on Answers or Defenses to Substitute for a Claim.

An answer asserting an “innocent owner” defense cannot expand the scope of a verified claim. The claim delineates the property for which the claimant seeks to contest forfeiture.
Understand the High Bar for CAFRA Fees.

In the Second Circuit, a claimant cannot obtain CAFRA fees simply because the government dismisses or returns the property. To qualify:
- Push for and obtain judicial relief—a judgment denying forfeiture, dismissal with prejudice, or comparable final relief.
- Recognize that even a dismissal without prejudice plus full return of funds will not suffice; there must be a judicially sanctioned, enduring change.
Beware Commingling in Lawyer Trust Accounts.

The opinion pointedly notes that Florida’s professional conduct rules generally prohibit a lawyer from commingling personal funds with client trust funds. Ross’s use of the trust account for his home‑sale proceeds raised red flags and likely made the government more suspicious of the funds’ legitimacy.
Plan Around § 981(g) Stays.

Where a criminal investigation is ongoing, expect the government to seek—and courts to grant—discovery stays under § 981(g). To challenge such stays, counsel must show either:
- That civil discovery would not truly interfere with the criminal investigation; or
- That the delay has become unreasonable under the Barker/$8,850/Culley factors.

B. For the Government and Prosecutors

Strategic Use of Dismissal Without Prejudice.

Ross confirms that voluntary dismissals without prejudice, properly justified, do not trigger CAFRA fee liability—even when the government later returns the property. This tool allows the Department of Justice to:
- Withdraw questionable forfeiture claims; yet
- Preserve the possibility of refiling within § 981’s limitations period if new evidence arises.
But Courts Can Police Abuse.

The Second Circuit explicitly recognized that district courts retain authority to guard against abuse by granting dismissal with prejudice “in appropriate cases” (echoing the Eighth Circuit). Persistent patterns of last‑minute withdrawals solely to avoid adverse judgments and fee exposure may be scrutinized under Rule 41 and the Zagano factors.
Certificates of Reasonable Cause Must Follow the Statute.

Prosecutors should not seek—and courts should not grant—§ 2465(a)(2) certificates where no judgment has been entered for the claimant.

C. For the Development of Forfeiture and Fee‑Shifting Doctrine

Alignment with Supreme Court Fee‑Shifting Cases.

Ross firmly situates CAFRA within the mainstream of “prevailing party” jurisprudence. It treats “substantially prevails” as functionally equivalent to “prevailing party,” governed by Buckhannon, Lackey, and CRST, rather than carving out a special, more claimant‑friendly rule for forfeiture.
FOIA Remains the Exception, Not the Model.

The opinion’s careful distinction between FOIA’s catalyst‑friendly standard (expressly written into FOIA by Congress) and CAFRA’s narrower “substantially prevails” language underscores that courts will not extrapolate FOIA’s approach to other statutes absent similarly explicit text.
Clarity on Certificates of Reasonable Cause.

By tying certificates to “judgment[s] for the claimant,” the Second Circuit gives clearer guidance on when those protective determinations are appropriate and prevents their overuse in cases resolved procedurally.

VI. Conclusion

United States v. Ross is a significant Second Circuit decision at the intersection of civil forfeiture, attorney‑fee shifting, and procedural law. The court:

Reaffirmed the necessity of both Article III and statutory standing to contest civil forfeiture and upheld a partial default where no claim was filed;
Clarified that modest delays and stays under § 981(g), in the context of complex, cross‑border investigations, do not necessarily violate due process under the Barker/$8,850/Culley framework;
Established that a claimant “substantially prevails” under CAFRA only by obtaining judicially sanctioned, enduring relief that alters the legal relationship with the government; voluntary dismissals without prejudice and voluntary returns of property, standing alone, do not qualify;
Confirmed that loss of potential fee claims is not “plain legal prejudice” requiring dismissal with prejudice under Rule 41(a)(2); and
Held that § 2465(a)(2) certificates of reasonable cause may issue only after a judgment in the claimant’s favor, vacating such a certificate wrongly entered here.

For practitioners, the lessons are clear: file timely and comprehensive claims; do not assume that a favorable practical outcome (like return of property) will support a CAFRA fee award without a court order; and be prepared for courts to read “substantially prevails” narrowly, in line with broader Supreme Court fee‑shifting jurisprudence. For the law of civil forfeiture, Ross tightens the doctrinal connection between CAFRA and general “prevailing party” doctrine, and it refines the procedural and remedial contours of modern forfeiture practice.