## Facts

- Federal agents seized $359,500 in currency from Benedetto Romano in 1983.
- The United States filed federal tax liens against Romano the same day, based on his unpaid tax liabilities.
- The government brought a civil forfeiture action seeking to forfeit the seized currency; related criminal tax-evasion charges against Romano ultimately failed.
- In 1998, Romano prevailed in the forfeiture action and obtained a judgment requiring return of the seized funds (with accrued interest).
- Romano was represented in the forfeiture litigation by attorney Glenn Ripa under a contingency-fee agreement.
- After Romano’s forfeiture victory, competing claims arose to the fund: the United States asserted priority under its earlier-filed tax liens, while Ripa asserted an attorney’s charging lien.
- Ripa argued his lien had statutory priority under 26 U.S.C. § 6323(b)(8), which can protect attorneys’ liens on judgments or settlements despite previously filed federal tax liens.
- The United States contended § 6323(b)(8) did not apply because its exception removes protection for judgments or settlements “against the United States” that are offset against the taxpayer’s liabilities to the United States.

## Issues

1. Whether Romano’s forfeiture judgment constituted a “judgment . . . of a claim or of a cause of action against the United States” under the exception in 26 U.S.C. § 6323(b)(8).
2. If the exception applied, whether the United States’ earlier-filed federal tax liens had priority over Ripa’s attorney’s lien under the “first in time, first in right” rule.

## Decision

- The Second Circuit affirmed summary judgment for the United States.
- The court held the forfeiture judgment was a judgment of a claim or cause of action “against the United States” within § 6323(b)(8)’s exception.
- Because the exception applied, § 6323(b)(8) did not give Ripa’s attorney’s lien priority over the federal tax liens.
- Applying the default priority rule, the court concluded the government’s earlier-filed tax liens had priority in the distribution of the fund.

## Legal Principles

- Priority among competing liens involving federal tax liens is generally governed by “first in time, first in right,” absent a statutory rule granting priority to another interest.
- Under 26 U.S.C. § 6323(b)(8), an attorney’s lien for reasonable compensation may defeat a filed federal tax lien with respect to a judgment or settlement obtained through the attorney’s efforts.
- Section 6323(b)(8) does not apply to a judgment or settlement of a claim or cause of action against the United States to the extent the United States offsets the amount against the taxpayer’s liabilities to the United States.
- A successful claimant’s recovery in a civil forfeiture proceeding can qualify as a judgment “against the United States” for purposes of § 6323(b)(8), because the judgment requires the United States to relinquish money or property in response to the claimant’s litigation position.

## Conclusion

The Second Circuit held that the attorney’s lien did not receive priority under § 6323(b)(8) because the forfeiture judgment was against the United States and subject to offset, leaving the government’s earlier-filed federal tax liens first in priority to the fund.


United States v. Ripa, 323 F.3d 73 (2d Cir. 2003)