DECISION AND ORDER
REGARDING MOTIONS FOR AWARD
OF ATTORNEYS' FEES
(ECF NOS. 295 *& 301) vs.
JULIEN ABAT WEYMOUTH.
12
Defendant.
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Before the court are third-party claimants/petitioners Mark A.T. Canovas and Kenneth I.
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Manalo's (collectively, the ''Petitioners") Motions for Award of Attorneys' Fees. ECF Nos. 295,
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301.' Counsels for Petitioners Canovas and Manalo joined in each other's motions and rely on
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the legal arguments made in Canovas' motion. ECF Nos. 298, 302-03. Counsel for Petitioner Canovas is Mr. Daniel Berman. ECF No. 181. Counsels for Petitioner Manalo are Mr. Peter
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Perez and Mr. Edward Han. ECF Nos. 209, 210. Upon review of the motions and the relevant
20
law, the court finds this matter suitable for submission
without oral argument. For the reasons
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stated below, the court DENIES the motions.
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I
The court refers lo CM/ECF pagination throughout this Decision and Order.
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Page 2 of23
BACKGROUNDII.
2
A. CRIMINAL CHARGE AGAINST DEFENDANT
On April 1, 2022, the United States (the ''Government) filed an Information charging Defendant Julien Abat Weymouth with (I) operating an unlawful money transmitting business in
3
4
violation of 18 U.S.C. § 1960 and (2) money laundering in violation of 18 U.S.C. §5 1956(a)(3)(B). See ECF No. 1. The Government then filed
an Amended Information charging6 Defendant with the sole count of operating an unlawful money transmitting business in violation7 of 18 U.S.C. § 1960. See ECF No. 8. Thereafter, on
May 12, 2022, Defendant pled guilty8 pursuant to the Second Amended Plea Agreement to the sole count of operating an unlawful9 money transmitting business, ECF No. 13, and the court
accepted the plea on June 1, 2022. ECF10
11 No. 15.
12 B. SUBJECT PROPERTIES TO BE FORFEITED
The Defendant agreed to forfeit the following properties (''Subject Properties") in the13
14
Second Amended Plea Agreement:
1. PERSONAL PROPERTY15
16.39691 Bitcoin valued at approximately $1,004,919.06 seized on April 16,16a. 2021, in Mangilao, Guam from Julien Abat Weymouth;17
b. 42646.32 XLM valued at approximately $15,779.14 seized on April 16, 2021, in18
19
Mangilao, Guam from Julien Abat Weymouth; c. 214,526.52 VET valued at approximately $24,769.29 seized on April 16, 2021, in20 Mangilao, Guam from Julien Abat Weymouth;^21
d. 27,480.419 VTHO valued at approximately $226.68 seized on April 16, 2021, in22 Mangilao, Guam from Julien Abat Weymouth;23
24
^ The correct amount of VET was later determined to
be 214,528.52307727. See ECF Nos. 306,309, 310.
Page 3 of23 1.736266 Bitcoin valued at approximately $ 106,429.10 seized on April 22, 2021,1e.
2
in Hagatna, Guam from Julien Abat Weymouth; f.
256.52282224 Litecoin valued at approximately $63,484.27 seized on April 22, 3 2021, in Hagatna, Guam from Julien Abat Weymouth;4
0.000829 Bitcoin valued at approximately $50.81 surrendered by a third-party on5g- behalf of Julien Abat Weymouth and seized on July 2,
2021, in HagMna, Guam;6
0.001 Bitcoin valued at approximately $61.29 surrendered by a third-party onh.7 behalf of Julien Abat Weymouth and seized on July 7, 2021, in Hagatna, Guam;8 30.12498 Bitcoin valued at approximately $1,846,272.66 surrendered by a third-9 1. party on behalf of Julien Abat Weymouth and seized on July 7, 2021, in Hagatna,10 Guam;11
29.94741 Bitcoin valued at approximately $1,835,389.91 surrendered by a third-12J- party on behalf of Julien Abat Weymouth and seized on July 9, 2021, in Hagatna,13
14
Guam; 18.38302 Bitcoin valued at approximately $1,126,641.99 surrendered by a third-k.15 party on behalf of Julien Abat Weymouth and seized on July 9, 2021, in Hagatna,16 Guam;17
32.57 Bitcoin valued at approximately $1,996,120.85 surrendered by a third-party18 on behalf of Julien Abat Weymouth and seized on August 7, 2021, in Hagatna,19 Guam;20
12.5 Bitcoin valued at approximately $766,088.75 surrendered by a third-party on21m behalf of Julien Abat Weymouth and seized on August 9, 2021, in Hagatna,22 Guam;23
22 Bitcoin valued at approximately $1,348,316.20 surrendered by a third-party on24n.
Page 4 of23
1
behalf of Julien Abat Weymouth and seized on August 10, 2021, in Hagatfia,
2
Guam;
0. 22.56 Bitcoin valued at approximately $1,382,636.98 surrendered by athird-party3
4
on behalf of Julien Abat Weymouth and seized on August 27, 2021, in Hagatfia,
5
Guam; p. 16.51 Bitcoin valued at approximately $1,011,850.02 surrendered by a third-party6 on behalf of Julien Abat Weymouth and seized on September 14, 2021, in7 Hagatfia, Guam; and8
q. PenFed Credit Union Account #5228637 in the name of Julien Weymouth valued9 at $127,411.81 seized on May 14, 2021, in Hagatfia, Guam from Julien Abat10 Weymouth;
2. VEHICLES12
2020 Honda HR-V, VIN #3CZRU5H12LM708588 valued at $19,075.00 seized13a. on April 16, 2021, in Mangilao, Guam from Julien Abat Weymouth;14 2021 Honda Ridgeline, VIN # 5FPYK3F14MB007465 valued at $36,490.00b.15 seized on April 16,2021 in Mangilao, Guam from Julien Abat Weymouth;16 2021 Honda Civic Hatchback. VIN # SHHFK8G07MU200923 valued at17 c. $43,995.00 seized on April 16, 2021, in Mangilao, Guam from Julien Abat18 Weymouth;19
2008 Honda S2000 Roadster, VIN #JHMAP21248S000920 valued at $11,925.00d.20 seized on April 28, 2021, in Piti, Guam from Julien Abat Weymouth;21 2008 Honda S2000 Roadster, VIN #JHMAP21278S002211 valued at $17,525.0022 e. seized on May 14, 2021, in Hagatfia, Guam from Julien Abat Weymouth;23 2021 Honda HR-V, VIN #3CZRU5H15MM7I7870 valued at $23,800.00 seizedf.24
Page 5 of 23
on May 14, 2021, in Hagatna, Guam from Julien Abat Weymouth;
2 3. MONEY JUDGMENT
3
a. A sum of money representing the value of the property involved in or traceable to property involved in the offense. Id.4
On January 25, 2024, the Government filed a Preliminary Order of Forfeiture for the Subject Properties,^ and the court granted it. ECF Nos. 76, 78. The same day, the court sentenced
5
6
Defendant to a term of imprisonment of thirty months with credit for time served. See ECF Nos.7
C. NINETEEN PETITIONS FILED CLAIMING AN INTEREST IN SUBJECT
PROPERTIES FROM THE PRELIMINARY FORFEITURE ORDER
9
10
In total, nineteen petitions were filed claiming an interest in the Subject Properties listed in the Preliminary Order of Forfeiture."^ Petitioner Canovas claimed an interest in 4.04 Bitcoin and Petitioner Manalo claimed an interest in 6.15 Bitcoin.^ See ECF Nos. 87, 109 (for Petitioner
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Canovas), ECF Nos. 93, 103 (for Petitioner Manalo). The court set a hearing for eighteen of the
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petitions to be held on May 29, 2024. ECF Nos. 89, 104, 116, 140, 141, 147. Both Petitioner
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Canovas and Petitioner Manalo filed motions for orders
authorizing discovery and to vacate the
16
hearing, which the court granted. ECF Nos. 132, 157 (for Petitioner Canovas); 163, 184 (for
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Petitioner Manalo). The court then set a hearing for all nineteen of the petitions to be held on
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^ The Subject Properties in the Preliminary Order of Forfeiture did not include numbers 5, 6, and 17 from the Personal Properties or the Vehicles listed in the Second Amended Plea Agreement. See supra ECF No. 13.
20
Cecil Sulla (ECF Nos. 82, 112); Edward C. Artero (ECF No. 83); Jerich Jun Reyes (ECF Nos. 84, 106); Calvin Vy (ECF Nos. 85, 107); Di Xiong (ECF Nos. 86, 108); Mark Canovas (ECF Nos. 87, 109); Michael Jin (ECF Nos. 88); Jason Aguon (ECF No. 91); Joshua Manglona (ECF No. 92); Kenneth Manalo (ECF Nos. 93, 103); Cristobal Castro (ECF No. 94); Ronald Sun (ECF No. 96); Harry Uttamchandani (ECF No. 99); Mark Estrada (ECF No. 118); Tanya Cruz (ECF No. 125); Sunil Uttamchandani (ECF No. 128); Edgardo Hipolito (ECF No. 129); Allan Tinoso (ECF No. 130); and Cody Hubbard (ECF No. 196).
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^ Separately, Petitioner Sunil Uttamchandani claimed an interest in 5.09 Bitcoin, Petitioner Edgardo Hipolito claimed an interest in 5 Bitcoin, and Petitioner Cecil Sulla claimed an interest in 40.3 Bitcoin. See ECF Nos. 82,
128, 129.
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Page 6 of23
1
July 10, 2024. ECF Nos. 193, 199. This hearing was also continued. See ECF No. 218.
2
D. GOVERNMENT'S MOTION TO DISMISS PETITIONS On October 18, 2024, the Government filed a motion
to dismiss eight of the forfeiture 3 petitions, ECF No. 224, and eleven petitioners agreed to withdraw their claims.^ ECF No. 242.4 The eight forfeiture petitioners facing the motion to dismiss, including Petitioners Canovas and5 Manalo, sought a combined interest in 38.7944 Bitcoin. ECF No. 263, at 4. Petitioner Canovas6 filed an Opposition and a Declaration in response to the Government's motion, and Petitioner7 Manalo Tied an Opposition as well. ECF Nos. 228, 229, 230. Petitioner Canovas and Petitioner8 Manalo then filed motions to join each other's oppositions. ECF Nos. 231, 234, 235.9 E. HEARINGS ON RESTITUTION, FORFEITURE, AND GOVERNMENT'S
MOTION TO DISMISS THE REMAINING EIGHT PETITTIONS
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On December 26, 2024. the court held a hearing on restitution, forfeiture, and the motion
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to dismiss. See ECF No. 248. At the hearing, the court granted Petitioner Hipolito $201,272.40
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and Petitioner Sunil Uttamchandani $204,895.30 in restitution. See ECF No. 249. The court
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continued the hearing regarding the motion to dismiss and regarding several petitioners' claims
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for restitution and forfeiture, including Petitioners Canovas and Manalo's claims.^ See id.
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F. PARTIAL FORFEITURE ORDER OF SUBJECT PROPERTIES
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On January 31,2025, the Government filed a Motion for Partial Order of Forfeiture. ECF
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No. 263. In the Motion for Partial Order of Forfeiture,
the Government noted that the remaining
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eight petitioners claimed an interest in a sum of 38.7944 Bitcoin and that if the motion was
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granted by the court there would still be 94.851329 Bitcoin remaining. See id. at 5. The court
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granted the Government's Motion for Partial Order of Forfeiture and found that the remaining
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® Petitioners Sunil Uttamchandani, Edgardo Hipolito, and Cecil Sulla were among the petitioners who stipulated to withdraw their claims. See ECF No. 242.23
' Petitioner Sulla objected to the proposed restitution amount, so the court continued the hearing for his restitution as well. See ECF No. 249, at 1 n. 2.
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Page 7 of23 94.851329 Bitcoin was "more than enough to satisfy
any remaining successful third-party
2
petitions." ECF No. 266. The property forfeited to the Government in the Partial Forfeiture Order included the following:3
32.57 Bitcoin valued at approximately $1,996,120.85 surrendered by a third-party on41. behalf of Julien Abat Weymouth and seized on August 7, 2021, in Hagatna, Guam;5
12.5 Bitcoin valued at approximately $766,088.75 surrendered by a third-party on62. behalf of Julien Abat Weymouth and seized on August 9, 2021, in Hagatna, Guam;7
22 Bitcoin valued at approximately $1,348,316.20 surrendered by a third-party on83. behalf of Julien Abat Weymouth and seized on August 10, 2021, in Hagatna, Guam;9
22.56 Bitcoin valued at approximately $1,382,636.98 surrendered by a third-party on10 4. behalf of Julien Abat Weymouth and seized on August 27, 2021, in Hagatna, Guam;11 and12
16.51 Bitcoin valued at approximately $1,011,850.02 surrendered by a third-party on135. behalf of Julien Abat Weymouth and seized on September 14, 2021, in Hagatna,14 Guam. Id.15
G. NEW DISCOVERY REGARDING DEFENDANT WEYMOUTH'S
CRYPTOCURRENCY WALLET
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17
On February 7, 2025, Petitioner Manalo, Petitioner Canovas, and the Government filed a
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joint stipulation asking the court for a continuance of the February 24 Evidentiary and Motions
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Hearing to allow further discovery. See ECF No. 267. The court denied the joint stipulation
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stating that the "parties ha[d] not sufficiently justified their failure to adhere to the" deadline for
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additional discovery requests "or explained why additional time [was] needed before" the
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February 24 Evidentiary and Motions Hearing. ECF No. 275.
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On February 20, 2025, the Government filed a notice about the availability of new
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Page 8 of23 discovery relating to Defendant Weymouth's cryptocurrency wallet. ECF No. 279. The court1 issued an Order to Show Cause for the Government to
explain whether there had been2 significant delay in the investigation and [whether] discovery of the information identified in3
(4
4
his notice was made in bad faith." ECF No. 280. The
Government filed a reply arguing that it had acted in good faith and with diligence to "investigate
ownership interests and determine5 restitution." ECF No. 283. The court found in its Order
to Show Cause that the Government did 6 not act in bad faith, and thus, it did not impose any sanctions for the delay in "dealing with the7 evidence in [its] possession. ECFNo.304,at3-4.8
H. EVIDENTIARY AND MOTIONS HEARING9
The court held its Evidentiary and Motions Hearing on February 24, and February 25,10
10
ECF No. 310, at 8. Petitioner Canovas' petition "was DENIED for failure to meet restitution.17 his burden of proof under 21 U.S.C. § 853(n)(6)" and Petitioner Manalo's forfeiture claim was18 dismissed. ECF No. 289, at 5-6. Petitioner Manalo objected and filed for reconsideration, but the19 court overruled his objection. See ECF No. 288. Mr. Perez and Mr. Berman, "argued for20
21
® The court issued its finding on April 11, 2025. ECF No. 304. The court's order came after both Petitioners Canovas and Manalo had filed their respective motions for attorneys' fees. See infra page 9.
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^ Petitioners Sunil Uttamchandani and Edgardo Hipolito were represented by Ms. Minakshi Hemlani at the hearing. See ECF No. 288. Petitioners Sunil Uttamchandani and
Flipolito were awarded $0.00 in restitution after these hearings. Compare ECF No. 310 ($0.00 each), with ECF No. 249 ($204,895.30 and $201,272.40, respectively)
23
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Petitioner Sulla was represented by Ms. Georgette Concepcion at the hearing. See ECF No. 288.
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Page 9 of23 attorneys['] fees" but the court instructed them to file motions on the matter. Id.1
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I. FINAL ORDER OF FORFEITURE AND ORDER OF RESTITUTION
On March 5, 2025, the court filed its Final Order of Forfeiture and Order of Restitution, 3 and the following property was forfeited to the Government:4
6.30691 Bitcoinoflhe 16.39691 Bitcoin valued at approximately $1,004,919.061.5 seized on April 16, 2021, in Mangilao, Guam from Julien Abat Weymouth;6 42,646.32 XLM valued at approximately $15,779.14 seized on April 16, 2021, in2.7 Mangilao, Guam from Julien Abat Weymouth;8
214,526.52 VET valued at approximately $24,769.29 seized on April 16, 2021, in3.9 Mangilao, Guam from Julien Abat Weymouth;10
27,480.419 VTHO valued at approximately $226.68 seized on April 16, 2021, in4. Mangilao, Guam from Julien Abat Weymouth;12
0.000829 Bitcoin valued at approximately $50.81 surrendered by a third-party on5.13 behalf of Julien Abat Weymouth and seized on July 2, 2021, in HagMna, Guam;14
0.001 Bitcoin valued at approximately $61.29 surrendered by a third-party on behalf6.15 of Julien Abat Weymouth and seized on July 7, 2021, in Hagatna, Guam;16 30.12498 Bitcoin valued at approximately $1,846,272.66 surrendered by a third-party7.17 on behalf of Julien Abat Weymouth and seized on July 7, 2021, in Hagatna, Guam;18 29.94741 Bitcoin valued at approximately $1,835,389.91 surrendered by a third-party8.19 on behalf of Julien Abat Weymouth and seized on July 9, 2021, in Hagatna, Guam;20 and21
18.38302 Bitcoin valued at approximately $1,126,641.99 surrendered by a third-party9.22 on behalf of Julien Abat Weymouth and seized on July 9, 2021, in Hagatna, Guam.23 ECF No. 289, at 6-7. The court ordered the Defendant
to pay Petitioner Canovas restitution of 24
Page 10 of 23
"$16,950.00 to include pre-judgment and post-judgment interest." ECF No. 288, 289. Petitioner1 Manaio, however, received $0.00 in restitution because
he had "already been made whole." ECF2
3
Nos. 288, 289. Petitioners Sunil Uttamchandani and
Edgardo Hipolito did not receive restitution. but Cecil Sulla received $611,965.67. ECF No. 289.4 The following day, March 6, 2025, the court issued a Final Order of Forfeiture and an5 Amended Order of Restitution. ECF No. 290. The amended
order confirmed the forfeiture, and 6 restitution amounts for the above stated petitioners but added that the court considered the factors7 set forth in 18 U.S.C. § 3664(f)(2) in making its determination
that Defendant could pay the8 restitution. Id. The court issued its Amended Judgment with the final restitution amounts on9 March 6, 2025." ECF No. 291.10
PETITIONER CANOVAS' MOTION FOR AWARD OF ATTORNEYS' FEESII.11
On March 26, 2025, Petitioner Canovas filed a Motion
for Award of Attorneys' Fees and12 a Memorandum in Support. ECF No. 295. He argued that he was entitled to attorneys' fees on13 four grounds: (1) the substantial benefit doctrine, (2) the Eleventh Amendment of the14 Constitution, (3) the private attorney general doctrine, and (4) the Equal Access to Justice Act.15 See id. Mr. Berman filed a declaration to establish
the amount of money he was owed for his 16 legal services based on his rate and the number of hours he worked on the matter. See ECF No.17
296. Mr. Berman also filed a declaration from Mr. Braddock
Huesman, a practicing attorney on island, confirming that Mr. Berman's $275.00 rate was "common[]" based on his experience and19 on the legal market for litigation in Guam. See ECF No. 297. Petitioner Manaio and his attorney,20 Mr. Peter Perez, joined the motion. ECF No. 298.21
22
23
II
On May 8, 2025, the court issued a Second Amended Judgment to correct clerical errors, including correcting item "c" to be 214,528.52307727 VET. ECF Nos. 306, 309, 310.
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Page 11 of 23
1 III.
PETITIONER MANALO'S MOTION FOR AWARD OF ATTORNEYS' FEES
2
On April 4, 2025, Petitioner Manalo filed his Motion
for Award of Attorney's Fees in
3
which he incorporated the arguments from Petitioner Canovas' motion. ECF No. 301, at 1. He
4
highlighted counsels' legal work: "(a) opposing the Dismissal Motion while other claimants withdrew or did not prosecute their petitions; (b) preparing for and appearing at motion and5 evidentiary hearings; (c) demanding discovery and materials from the Government; (d)6 reviewing discovery and materials obtained from the Government; (e) inspecting property seized7 by the Government; (f) meeting and conferring with the Government and law enforcement8 agents; (g) assembling, preparing, and filing exhibit lists, witness lists, and other filings required9 by the Court; (h) appearing and arguing at the motion and evidentiary hearings; (i) uncovering10 records, testimony, and evidence that had not been previously obtained." Id. at 3-4. This legal11 work led to significant benefits for other claimants: (a) ''facilitation of the resolution of the12 forfeiture and restitution issues [in] this case"; (b) Petitioner Sunil "Uttamchandani sought and13 was pemiitted leave to withdraw his stipulation to withdraw his forfeiture petition as a result of14 new evidence and testimony on February 24, 2025"; (c) Petitioner "Hipolito sought and was15 permitted leave to withdraw his stipulation to withdraw his forfeiture petition as a result of new16 evidence and testimony on February 24, 2025"; (d) Petitioner Sunil "Uttamchandani was granted17
5.09 Bitcoin"; (e) Petitioner "Hipolito was granted 5 Bitcoin"; and (f) Petitioner "Sulla was18 granted additional restitution in an additional amount exceeding $100,000.00." Id. at 4. Counsels19 Mr. Han and Mr. Berman joined Petitioner Manalo's motion. See ECF Nos. 302, 303. On April20 11, 2025, the Government filed an Opposition to Petitioner Manalo's motion incorporating its Opposition to Petitioner Canovas' motion.'" See ECF No. 305.
21
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Petitioners Hipolito and Sunil Uttamchandani filed a joinder to the Government's opposition. ECF No. 308.
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Page 12 of 23
IV.
GOVERNMENT'S OPPOSITIONS AND PETITIONER CANOVAS' REPLY On April 2 and April 11, 2025, the Government filed its Oppositions to Petitioner2 Canovas and Petitioner Manalo's respective motions. ECF Nos. 300, 305. The Government3 argued that the petitioners are not entitled to attorneys'
fees under any of the four bases that they4 proposed. See ECF No. 300. As such, the Government contended that Petitioners Canovas and5 Manalo's motions must be denied because they are not eligible for an award of attorneys' fees. Id. On April 16, 2025, Petitioner Canovas filed his reply to the Government's Opposition.'^ ECF
6
7
No. 307. LEGAL ANALYSIS REGARDING ATTORNEYS' FEES9 V. The ''general American rule is that attorneys' fees are not ordinarily recoverable as10 costs," but "both the courts and Congress have developed exceptions to this rule for situations in11 which overriding considerations indicate the need for such recovery." Kdills v. Elec. Auto-Lite12 Co.,396U.S. 375, 391-92 (1970); .sec-^7/50 Reiser v. Del Monte Props. Ca, 605 F.2d 1135, 113713 (9th Cir. 1979). Here, the central question is whether Petitioners Canovas and Manalo's attorneys14 are entitled to attorneys' fees under one of the exceptions to the general rule. They argued two15 such exceptions, and those two exceptions are the common fund and substantial benefit doctrine16 and the Equal Access to Justice Act. Petitioners also argue two additional bases they contend17 entitle them to attorneys' fees: the Eleventh Amendment and the private attorney general18 19 doctrine.
A. GROUNDS FOR ATTORNEYS' FEES20
1. Common Fund and Substantial Benefit Doctrines (Court
Exception)21 Both Petitioner Canovas and Petitioner Manalo contend
that they are entitled to 22
23
13
Petitioner Manalo did not file a reply to the Government's Opposition and he did not join Petitioner Canovas' reply.
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Page 13 of 23
attorneys' fees "based on the application of the Substantial
Benefit Doctrine" as their attorneys1
2
conveyed a "concrete and significant benefit" on "an ascertainable class." ECF No. 295, at 6;
3
ECF No. 307, at 5-6. The common fund and the common benefit doctrines require that "successful litigation4 must either impart a substantial nonmonetary benefit or create or preserve a common fund for an5 identifiable class of beneficiaries." Se. Legal De.f Grp. v. Adams, 657 F.2d 1118, 1122 (9th Cir.6 1981) (citing Mills v. Elec. Auto-Lite Co., 396 U.S. 375 (1970)); see also Southerland v. Int 77 Longshoremen's and Warehouse's Union, Local 8, 845 F.2d 796, 798 (9th Cir. 1987) ("The8 'substantial benefit' principle is based on the premise that a successful plaintiff should be able to9 spread the costs of his litigation among those who benefitted from the successful outcome.").10 The substantial benefit doctrine has expanded the common fund doctrine to instances when a11 substantial benefit "has been conferred upon the members of an ascertainable class, despite the12 fact the benefit is not monetary." Loring v. City ofScottsdale, Ariz., 721 F.2d 274 (9th Cir.13 1983). A party seeking attorneys' fees under the common fund or the substantial benefit doctrine14 must show (1) that the benefitted parties "were small in number and easily identifiable;" (2)15 [t]he benefits could be traced with some accuracy;" and (3) the costs could be attributed "with16 some exactitude" to those who benefitted from the litigation" See Boeing Co. v. Van Gemert, 44417 U.S. 472, 478-79 (1980) {q\xo\\x\%Alyeska Pipeline Service Co. v. Wilderness Society, All U.S.18
The Supreme Court has based the equitable nature of this remedy on a theory of unjust20 enrichment. See Hall v. Cole, 412 U.S. 1, 6 (1973)
(citing Mills, 396 U.S. at 392). Specifically,21 the Supreme Court has explained that the purpose of awarding attorneys' fees under these22 doctrines is to share the costs of litigation on the parties who have "benefitted from" the23 litigation and "would have had to pay" litigation expenses had they brought the action24
Page 14 of 23
themselves. See Mills, 396 U.S. at 396-97. Here, Petitioners ask for an equitable setoff under the substantial benefit doctrine because2 the "substantial benefit" conveyed by their "legal expenditure was not imparted to all Guam or3 U.S. taxpayers," but instead to a "sufficiently small in number and identifiable group of victim4 investors." ECF No. 307, at 6-7. The Government counters
it has not waived sovereign5 immunity, and the substantial benefit doctrine is not applicable where there is a statute that6 allows recovery of attorneys' fees in the context of ancillary proceedings for criminal forfeiture.7 ECF No. 300, at 6. Furthermore, the Government asserts
that the Petitioners have "not provided8 any authority [under the substantial benefit doctrine] that such a claim is cognizable in the9 ancillary proceedings/criminal forfeiture context or that this is the proper forum for such a10 vl4
Idclaim.11 This court finds that based on the two leading Supreme Court cases, Mills v. Electric12 Auto-Lite Company and Hall v. Cole, the Supreme Court only intended for these doctrines to13 apply when the litigating party was (1) successful, and (2) secured a common or shared benefit14 for the litigating parties and the benefiting parties.15
In Mills V. Electric Aulo-Lite Company, a shareholder successfully litigated a securities16 fraud claim to set aside a merger involving his corporation. Mills, 396 U.S. at 389. The Supreme17 Court found that this not only benefitted the litigating plaintiff, but also his corporation and all of18 his fellow shareholders. Id. at 392. So, even though the suit had not yet produced a monetary19 award, the Court acknowledged that it had "conferred a substantial benefit on the members of an20 ascertainable class." Id. at 393-94. Thus, the Court
extended the "primary judge-created21 exception ... to award expenses where a plaintiff has successfully maintained a suit, usually on22
23 14
[T]he common fund doctrine gives rise to two kinds of claims: claims by plaintiffs to have their legal costs shared and claims by attorneys for an award other than that paid or owed by the client." Alan Hirsch & Diane Sheehey, AwardingAttorneys ' Fees and ManagingFee Litigation 67 (Fed. Judiciary Ctr. 3d ed. 2015) (citing Skelton v. GMCorp., 860 F.2d 250, 253 (7th Cir. 1988)).
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behalf of a class, that benefits a group of others in the same manner as himself'' Id. at 3921 (emphasis added). The Court continued its explanation, stating that "[t]o allow the others to2 obtain full benefit from the plaintiffs efforts without contributing equally to the litigation3 expenses would be to enrich the others unjustly at the plaintiffs expense." Id. at 392.4 Accordingly, in that case, the Court emphasized that plaintiff was successful in his claim and that5 the claim mutually benefitted an ascertainable class.6
In Hall V. Cole, a union member successfully litigated a case under the Labor-7 Management Reporting and Disclosure Act after he was expelled from the union for raising8 concerns at one of its meetings about ''undemocratic actions and shortsighted policies on the part9 of union officers." Hall, 412 U.S. at 2-3. The plaintiff sued and "vindicate[ed] his own right of10 free speech guaranteed" by the Labor-Management Reporting and Disclosure Act. Id. at 8. The11 Supreme Court found this litigation benefitted the union member and the union as a whole12 because it supported ''the preservation of union democracy." Id. at 8. The Court held that "an13 award of counsel fee[s] to a successful plaintiff*
was justified under the ''traditional equitable14 power of federal courts." Id. at 9. Similar to Mills, the Court held that attorneys' fees were15 justified when the plaintiff was successful and when his claim mutually benefitted himself and an16 ascertainable class, his union.17
After considering these two Supreme Court cases, the court finds Petitioners Canovas and18 Manalo face two problems. First, they were not successful parties, and second, their petitions19 could not have benefitted the third-party claimants in the same manner as they would have20 benefitted themselves. See Mills, 396 U.S. at 392-94; Hall, 412 U.S. at 8-9. The Petitioners do21
15
not contest that they "lost" the forfeiture proceedings. SeeECFNo.295,at3;ECFNo.301,at22
23
15
While Petitioner Canovas points out that he received restitution as a result of the criminal case, he was unsuccessful on his forfeiture petition. To be clear, the Government did not dispute Petitioner Canovas' claim to restitution and no third-parties benefitted from Petitioner Canovas' restitution claim. See ECF No. 300, at 4.
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4. Neither Petitioner Canovas nor Petitioner Manalo
were awarded any of the forfeited Bitcoin1
2
that they claimed an interest in. Additionally, the Petitioners were claiming an interest in Bitcoin from the same list of property subject to forfeiture as the other third-party claimants. There was3 94.851329 Bitcoin available for the petitioners' claims after the court granted the Government's4 Motion for Partial Order of Forfeiture, and the parties were all claiming separate, distinct5 interests in Bitcoin. See ECF No. 263, at 4. As the
remaining pool of Bitcoin was finite, their6 claims necessarily conflicted with one another. See id. Accordingly, the court declines to extend7 the common fund doctrine or the substantial benefit
doctrine to situations, as in this case, where 8 the litigating parties were unsuccessful in litigating their own claims, and the only benefits went9 incidentally to third-party claimants with separate and potentially conflicting claims to the10 forfeited property.11
2. Equal Access to Justice Act (Congressional Exception)12 Petitioners Canovas and Manalo alternatively request attorneys' fees under the Equal13 Access to Justice Act. ECF No. 295, at 14. They argue
that they were a prevailing party under14 the Equal Access to Justice Act because Petitioners Sunil Uttamchandani, Edgardo Hipolito, and15 Cecil Sulla prevailed in the underlying forfeiture proceedings. Id.; see also ECF No. 301, at 4.16 And they argue that the United States' positions regarding its motion to dismiss the other17 petitioners cannot be "substantially justified" because the court ultimately awarded 5.09 Bitcoin18 and 5 Bitcoin to Petitioners Sunil Uttamchandani and
Edgardo Hipolito as a part of the forfeiture 19 proceedings and Petitioner Sulla "was granted additional restitution." Id. Furthermore, they argue20 that they are prevailing parties because Petitioner Canovas showed at the hearings that he was21 entitled to restitution. Id. Petitioners emphasize that they "need not prevail on all issues" and that22 they have prevailed here because they secured "all relevant discovery" for Petitioners Sunil23
"Uttamchandani and Hipolito." ECF No. 307, at 3.
24
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1
The Government counters that Petitioners Canovas and
Manalo failed to satisfy the elements of a claim under the Equal Access to Justice Act. See ECF No. 300, at 2-3. For these2 proceedings, the Government argues that neither Petitioner Canovas nor Petitioner Manalo were3 prevailing parties. Id. at 4. As noted above, Petitioner Canovas' "petition was denied because the4 court found that he did not satisfy the criteria of 21 U.S.C. § 853(n)(6)" and Petitioner Manalo's5 petition was dismissed. See ECF Nos. 288; 289, at 5-6; 300, at 4. Furthermore, Petitioner6 Canovas' restitution amount was not disputed by the Government and took place in the separate7 restitution context, not the forfeiture context. See
ECF No. 300, at 4. "While ancillary8 proceedings in the criminal forfeiture context are 'civil' within the meaning of the [Equal Access9 to Justice Act], restitution is wholly part of the criminal sentencing process and thus outside the10 purview of the [Equal Access to Justice Act]." Id. (internal citations omitted). Moreover, the11 Government argues that "[t]here is no support in the [Equal Access to Justice Act] for the idea12 that a petitioner whose claim was denied in its entirety may nevertheless recover attorneys' fees13 because separate petitioners with entirely different claims and separate legal representation14 obtained the relief they sought." Id.15
The Government also asserts that their position was substantially justified for the16 proceedings. See id. at 5. The Government filed a motion for a preliminary order of forfeiture,17 and once the court granted it. the Government published notice of the forfeiture. Id. The18 Government reviewed the petitions from the third-party claimants and determined that they were19
"plainly deficient in that [they] failed to establish any ability to trace an interest in [the20 Petitioners'] lost property to the property subject to forfeiture." Id. The court then granted the21 Government's motion to dismiss Petitioner Manalo's petition and denied Petitioner Canovas'22 petition after an evidentiary hearing, thus demonstrating that the Government's position was23 substantially justified. Id.\ see also ECF Nos. 288; 289, at 5-6.24
Page 18 of 23
I
The Equal Access to Justice Act allows a prevailing party "in certain adversary administrative proceedings" to recover attorneys' fees from the Government. Ardestani v. I.N.S.,2
502 U.S. 129, 132 (1991). Section 504(a)(1) of the
Equal Access to Justice Act states that "[a]n3 agency that conducts an adversary adjudication shall
award, to a prevailing party other than the4 United States, fees and other expenses incurred by
that party in connection with that proceeding,5 unless the adjudicative officer of the agency finds that the position of the agency was6 substantially justified or that special circumstances make an award unjust." The Equal Access to7 Justice Act applies to ancillary proceedings regarding criminal forfeitures. See, e.g., U.S. v.8 Douglas, 55 F.3d 584, 588 (1 1th Cir. 1995) ("[W]e hold that litigation between an innocent9 third-party claimant and the Government, ancillary to a criminal forfeiture proceeding, is a civil10 action within the purview of the [Equal Access to Justice Act]."); see also U.S. v. Alcaraz-11 Garcia, 79 F.3d 769, 772 n.4 (9th Cir. 1996).12
Plaintiffs must set forth certain requirements to be entitled to attorneys' fees under the13 Equal Access to Justice Act: "(1) a showing that they are the prevailing party; (2) a showing that14 they are eligible to receive an award; (3) a statement of the amount sought together with an15 itemized account of time expended and rates charged; and (4) an allegation that the position of16 the United States was not substantially justified." Mohamed v. Barr, 562 F.Supp.3d 1128, 113217 (E.D. Cal. 2022) (citing 28 U.S.C. § 2412(d)(1)(B)
(emphasis added); Scarborough v. Principi,18
541 U.S. 401,408 (2004)). A "prevailing party" under the Equal Access to Justice Act is "a party19 in whose favor a judgment is rendered, regardless of the amount of damages awarded.'" Klamath20 Siskiyou Wildlands Ctr. v. U.S. Bureau of Land Mgmt., 589 F.3d 1027, 1030 (9th Cir. 2009)21 (internal quotation marks omitted) (quoting Citizensfor Better Forestry v. U.S. Forest Serv., 56722 F.3d 1128, 1131 (9th Cir.2009)). But see City of Carmel-By-The-Sea v. US. Dept. ofTransp.,23
123 F.3d 1142, 1167 (9th Cir. 1997) ("To be a prevailing party under the Equal Access to Justice24
Page 19 of 23
Act, a party need not prevail on all issues.").1 The first element is not met here because Petitioners
Canovas and Manalo did not prevail 2 on their petitions, and therefore, the court need not analyze the rest of the elements. Petitioner3 Canovas claimed an interest in 4.04 Bitcoin and Petitioner Manalo claimed an interest in 6.154 Bitcoin. See ECF Nos. 87, 93. The court denied Petitioner
Canovas' petition and dismissed5 Petitioner Manalo's petition. ECF No. 289, at 5-6. Neither party received any of their claimed6 interest in the forfeited property. As such, they did not prevail on their petitions.7 Petitioners argue that other third-party claimants prevailed based on the work provided by8 Petitioner Canovas' and Petitioner Manalo's attorneys. This argument fails for several reasons.9 First, there is no caselaw or support in the statute for the award of attorneys' fees to a party that10 did not win on any of their own claims. Second, Petitioners Sunil Uttamchandani, Hipolito, and11 Sulla had distinct petitions where they alleged their own claims in their own Bitcoin. These12 claims were distinct from the claims of Petitioner
Canovas and Petitioner Manalo. Third, these 13 other petitioners were all represented by their own attorneys who may have incidentally14 benefitted from the work of Petitioner Canovas' and
Petitioner Manalo's counsels, but who still 15 represented their clients throughout the proceedings. See ECF Nos. 288, 289.16 Petitioners also cannot claim that they prevailed because Petitioner Canovas was awarded17 $16,950.00 in restitution. Restitution is separate and apart from criminal forfeiture. There is no18 legal authority that allows for attorney fees under Equal Access to Justice Act for restitution19 proceedings. Additionally, the Government did not dispute Petitioner Canovas' restitution claim20
16
at the proceedings.21
3. Eleventh Amendment of the Constitution22 Petitioners contend that the court may award attorneys' fees when a state agency acts in23
24
16
Petitioner Manalo did not receive restitution. See
ECF Nos. 288, 289.
Page 20 of 23
bad faith under the Supreme Court's Eleventh Amendment jurisprudence. ECF No. 295, at 12.1 They allege that the Government acted in bad faith as evidenced by the orders compelling2 discovery and to show cause. Id. The Government challenges the Petitioners' interpretation of3 the Eleventh Amendment. ECF No. 300, at 6-7. The Government
argues the case cited by the4 Petitioners, Hutto v. Finney, 437 U.S. 678 (1978), and the Eleventh Amendment to the5 Constitution "simply have no bearing on [the Petitioners']
claim for attorneys' fees against the6 United States in these ancillary proceedings." Id. at 7. This court agrees.7 The Eleventh Amendment of the United States Constitution
states, "[t]he Judicial power of the United States shall not be construed to extend
to any suit in law or equity, commenced or 9 prosecuted against one of the United States by Citizens of another State, or by Citizens or10 Subjects of any Foreign State." U.S. Const, amend. XI. This amendment stands for the11 proposition "that each State is a sovereign entity in our federal system" and that "Mt is inherent in12 the nature of sovereignty not to be amenable to the suit of an individual without its consent.13 ^95
Seminole Tribe of Florida v. Florida, 517 U.S. 44, 54 (1996) (quoting Hans v. Louisianna, 13414 U.S. 1.13 (1890)); see also Guam Soc. of Obstetricians
and Gynecologists v. Ada, 776 F.Supp.15 1422, 1420 (D. Guam 1990) (discussing sovereign immunity under the Eleventh Amendment in16 the context of Guam).17
The case cited by the Petitioners, Hutto v. Finney, does not support their speculation that18 the "Eleventh Amendment jurisprudence may support the award of attorneys' fees." ECF No.19 295, at 7. That case, as the Government pointed out, involved claims against the state of Florida,20 and not the United States. See Hutto v. Finney, 437 U.S. 678, 689-93 (1978). As the Eleventh21 Amendment and its jurisprudence relate to state sovereign immunity and not the award of22 attorneys' fees in suits against the United States, the Petitioners do not have a claim on this basis.23
24
Page 21 of 23
4. Private Attorney General Doctrine1 Petitioners' last argument entitling them to attorneys'
fees is derived from the private2 attorney general doctrine. They contend their actions "served as the catalyst" for the award of3 Bitcoin to Petitioners Sunil Uttamchandani, Hipolito, and Sulla, and that they are entitled to4 attorneys' fees under the private attorney general doctrine. ECF No. 295, at 13. The Government5 argues that the doctrine "is largely a function of state statutes and common law." ECF No. 300,6 at 7. Furthermore, the Government asserts that "the
U.S. Supreme Court repudiated the Private7 Attorney General doctrine because the authority of federal courts to award attorneys' fees is8
9
limited to those situations authorized by Congress." Id. The Supreme Court has rejected the private attorney
general doctrine for the awarding of10 attorneys' fees. See Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 264 n. 3911 (1975); see also U.S. v. Imperial Irr. Dist., 595 F.2d 525, 529 (9th Cir. 1979) ("The 'substantial12 benefits' exception to the traditional rule disfavoring awards shifting legal fees is well13 recognized, and survives the [Supreme Court's] rejection ... of the more sweeping 'private14 attorney general' theory of counsel fee recovery.")
(internal citations omitted). As the Supreme15
16
Court has rejected the private attorney general doctrine, so must this court. In summary, as seen above, the four bases that Petitioner Canovas and Manolo's assert17
18
for attorneys' fees are meritless.
19 B. ORDER TO SHOW CAUSE
20
In Petitioner Canovas' reply, he requested an order to show cause for the Government to complete [its] reporting, appoint an independent receiver of special master, fund the special21
22
master with proceeds from Bitcoin to retain private
- neutral and detached legal counsel in order to conduct depositions, produce all email correspondence from [United States Secret Service23
24
Special Agent] James Ingram to Ichioka (at the minimum),
obtain the Ichioka Coinbase trading
Page 22 of 23
records, issue a subpoena to Coinbase and perform the tracing work, all in order to satisfy the1
2
USA duty they created when they filed a Motion to Dismiss that succeeded as to 95% of all claims, but failed spectacularly at the last minute as to two claims for 10.06 Bitcoin.'' ECF No.3 307, at 9. He requests such an order because there is an alleged discrepancy in the "reported,4 claimed and returned Bitcoin" and "the opposition does nothing to rebut or defense [sic] these5 specific allegations." Id. at 8. Moreover, Petitioner
Canovas claims that "the government has6 done nothing for a tracing report" which would have assisted with his claim. Id.1 The court does not find good cause to issue an order
to show cause. The discrepancy that Petitioner Canovas notes, the differing amounts of Bitcoin in the Plea Agreement, the Amended9 Presentence Investigation, and the Ingram Report from September 23, 2021, were all available10 for the court to analyze at the February 24 and 25 hearings. See ECF Nos. 7, 56, 286-1. The court11 issued its Order dated April 11, 2025, (ECF No. 304), fully aware of this information.12 Furthermore, the Government was under no duty to oppose this discrepancy in its opposition13
14
because the court had already decided the final figures for restitution and forfeiture. See ECF No.
15
310. Lastly, the Government already detailed the investigative steps they took to effectuate
16
discovery for these proceedings, and the court accepted the Government's explanation when it issued its order finding no bad faith. See ECF No. 304.17
18
Moreover, the Government outlined in its Response to Order to Show Cause its efforts to trace the cryptocurrency from the Coinbase records
following the court's order dated February19 21, 2025. ECF No. 280, at 5. The Government contacted
agents with the United States Secret20
21
Service based in Guam and the agents "confirmed that
Page 23 of 23
Response to the Order to Show Cause, the Government confirmed that the United States Secret1 Service made attempts to trace the seized property to any of the identified victims but ultimately2 was unsuccessful. Id. at 4, 10.3
The court ruled on the matter and ultimately found that counsel for the Government "did4 not act in bad faith." ECF No. 304, at 2. Explaining again what it discussed at the February 245 and 25 hearings, the court stated that the Government could have been more diligent. Id. The6 court, however, evaluated the Government's investigation and decided not to sanction the7 Government. Id. at 2, 4.
Accordingly, the court will not revisit issues already addressed. Petitioner Canovas'9 request for an order to show cause is denied.10
VI. CONCLUSION11
Based on the foregoing. Petitioners Canovas and Manalo's Motions for Attorneys' Fees12 are hereby DENIED. Petitioner Canovas' request for an order to show cause is also DENIED.13
ISSO ORDERED on this
of July, 2026. 14
15
M16
Frances M. Tydingco/Gatewood Chief Judge, District Court of Guam17
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