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USCA1 Opinion
United States Court of Appeals
United States Court of Appeals
For the First Circuit
For the First Circuit
____________________
No. 92-1776
UNITED STATES OF AMERICA,
Plaintiff, Appellee,
v.
PARCELS OF PROPERTY, WITH BUILDING APPURTENANCES
AND IMPROVEMENTS LOCATED AT 255 BROADWAY, HANOVER,
Defendant, Appellee,
____________________
CLAIRE J. SOULE,
Claimant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Douglas P. Woodlock, U.S. District Judge]
___________________
____________________
Before
Selya and Stahl, Circuit Judges,
______________
and Fuste,* District Judge.
______________
____________________
Richard J. Inglis, with whom Richard A. Gargiulo and Gargiulo,
__________________ ____________________ _________
Rudnick & Gargiulo, were on brief for appellant.
__________________
Laurie J. Sartorio, Assistant United States Attorney with whom A.
___________________ __
John Pappalardo, United States Attorney was on brief for appellee.
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____________________
November 24, 1993
____________________
*Of the District Court of Puerto Rico, sitting by designation.
STAHL, Circuit Judge. In this appeal, claimant
_____________
Claire Soule seeks costs and attorneys' fees incurred in
recovering $2450 in cash which was seized in a drug raid on
her home. We affirm the denial of costs and fees, though we
do so on grounds different from those relied upon by the
district court.
I.
I.
__
FACTUAL BACKGROUND AND PRIOR PROCEEDINGS1
FACTUAL BACKGROUND AND PRIOR PROCEEDINGS
________________________________________
During July of 1988, United States Drug Enforcement
Administration (DEA) agents received information that 1500
pounds of marijuana were to be delivered to Jeffrey Soule at
255 Broadway in Hanover, Massachusetts. A local police check
revealed that a John Jeffrey Soule resided in nearby Carver,
Massachusetts, but that his mother lived at 255 Broadway in
Hanover.
On the evening of July 23, 1988, after local police
and DEA agents observed the delivery of marijuana to 255
Broadway, search warrants were obtained for the premises. At
4:30 a.m. the following morning, local and federal officials
executed the warrants. The search revealed, inter alia: (1)
_____ ____
approximately 1600 pounds of marijuana in a barn adjacent to
the house; (2) $874,510 in cash found in a box in a closet on
the first floor of the house; (3) 461.8 grams of cocaine,
____________________
1. For a more detailed version of the factual background in
this case, see United States v. 255 Broadway, 795 F. Supp.
___ _____________ ____________
1225 (D. Mass. 1992).
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along with $5310 in cash in a basement safe; (4) $26,500 in
cash found in a gym bag beside the bed in which John Jeffrey
Soule was sleeping; (5) $3171 in cash found in a leather
travel bag on top of a hutch in the dining room; and (6) a
disputed amount of cash between $2450 and $4490 contained in
five envelopes found inside the dining room hutch. Only this
last item is at issue in this appeal.
On April 17, 1989, John Jeffrey Soule pleaded
guilty to charges of conspiracy to possess marijuana and
possession of marijuana with intent to distribute. On May
25, 1989, less than one month later, the government filed a
complaint for forfeiture in rem of, inter alia, the cash
_____ ____
proceeds found in the search of Claire Soule's home.2 On
June 1, 1989, at the government's request, the district court
issued a warrant and monition for, inter alia, all of the
_____ ____
____________________
2. 21 U.S.C. 881(a)(6) states that the following shall be
subject to forfeiture:
All moneys, negotiable instruments, securities
or other things of value furnished or intended to
be furnished by any person in exchange for a
controlled substance in violation of this
subchapter, all proceeds traceable to such an
exchange, and all moneys, negotiable instruments,
and securities used or intended to be used to
facilitate any violation of this subchapter, except
that no property shall be forfeited under this
paragraph, to the extent of the interest of an
owner, by reason of any act or omission established
by that owner to have been committed or omitted
without knowledge or consent of that owner.
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seized cash.3 Claire Soule responded on June 14, 1989, by
filing a notice of claim for the money found in the envelopes
in the dining room hutch. On September 6, 1989, a default
judgment of forfeiture was entered against the lots of
$874,510, $26,500 and $5310.4 On February 13, 1991, the
district court held a hearing at which the government was
asked to show probable cause for the forfeiture of the money
found in the five envelopes inside the hutch. At the
conclusion of the hearing, the district court found that the
government had failed to show probable cause for forfeiture
of that money, and awarded $2450 to Claire Soule. The
government moved immediately for a certificate of reasonable
cause pursuant to 28 U.S.C. 2465, so as not to be liable
for costs.5 Claire Soule opposed the motion for a
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3. 21 U.S.C. 881(b) provides, in relevant part, that
"[a]ny property subject to forfeiture to the United States
under this subchapter may be seized by the Attorney General
upon process issued pursuant to the Supplemental Rules for
Certain Admiralty and Maritime Claims." The warrant and
monition in this case was issued pursuant to these
Supplemental Rules. See, e.g., United States v.
___ ____ _______________
Approximately Two Thousand, Five Hundred Thirty-Eight Point
_____________________________________________________________
Eighty-Five Shares of Stock, 988 F.2d 1281, 1283-84 (1st Cir.
___________________________
1993).
4. Though the appellate record is not entirely clear, the
$3171 found in the leather bag appears to have been subject
to administrative, rather than judicial, forfeiture.
5. 28 U.S.C. 2465 provides:
Upon the entry of judgment for the claimant in
any proceeding to condemn or forfeit property
seized under any Act of Congress, such property
shall be returned forthwith to the claimant or his
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4
certificate of reasonable cause and sought attorneys' fees
under the Equal Access to Justice Act (hereinafter EAJA), 28
U.S.C. 2412,6 for expenses incurred in recovering the
$2450. The district court granted the government's request
for the certificate of reasonable cause and denied claimant's
request for attorneys' fees.
II.
II.
___
DISCUSSION
DISCUSSION
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We begin by noting that "we are free to affirm a
district court's decision on any ground supported in the
record even if the issue was not pleaded, tried or otherwise
referred to in the proceedings below." De Casenave v. United
___________ ______
States, 991 F.2d 11, 12 n.2 (1st Cir. 1993) (citations and
______
internal quotations omitted). In this case, although the
district court misapplied the statutory burden-shifting
scheme applicable to federal forfeiture actions, we
nonetheless affirm its denial of costs and attorneys' fees.
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agent; but if it appears that there was reasonable
cause for the seizure, the court shall cause a
proper certificate thereof to be entered and the
claimant shall not, in such case, be entitled to
costs, nor shall the person who made the seizure,
nor the prosecutor, be liable to suit or judgment
on account of such suit or prosecution.
6. 28 U.S.C. 2412(d)(1)(A) provides, in relevant part,
that "a court shall award to a prevailing party other than
the United States fees and other expenses . . . unless the
court finds that the position of the United States was
substantially justified or that special circumstances make an
award unjust."
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A. The Statutory Scheme: Probable Cause to Institute
A. The Statutory Scheme: Probable Cause to Institute
_____________________________________________________________
Forfeiture Proceedings
Forfeiture Proceedings
______________________
In a forfeiture action brought under 21 U.S.C.
881, the allocation of the parties' burdens is provided by 19
U.S.C. 1615. See 21 U.S.C. 881(d); United States v. 1933
___ _____________ ____
Commonwealth Ave., 913 F.2d 1, 3 (1st Cir. 1990). Section
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1615 states, in relevant part, that the "the burden of proof
shall be upon the defendant: Provided, That probable cause
________
shall be first shown for the institution of such suit or
___ ___ ___________ __ ____ ____ __
action, to be judged by the court" (second emphasis
______
supplied).
In other words, under section 1615, the government
has a preliminary burden to show that it had probable cause
to institute the forfeiture proceeding. See, e.g., United
_____________ ___ ____ ______
States v. 1988 Oldsmobile Cutlass Supreme, 983 F.2d 670, 675
______ _______________________________
(5th Cir. 1993) (affirming district court's finding that
government had "probable cause to institute a forfeiture
__ _________
action") (emphasis supplied); United States v. One Hundred
______________ ___________
Forty-Nine Thousand Four Hundred Forty-Two and 43/100
_____________________________________________________________
Dollars, 965 F.2d 868, 876 (10th Cir. 1992) ("In forfeiture
_______
proceedings, the government bears the initial burden to show
probable cause for the institution of the forfeiture
___ ________________
action.") (emphasis supplied); United States v. 526 Liscum
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Drive, 866 F.2d 213, 216 (6th Cir. 1989) ("[O]nce the
_____
government has met its burden of showing probable cause to
__
institute the forfeiture action, the burden then shifts to
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the claimant . . . .") (emphasis supplied); United States v.
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One 1976 Ford F-150 Pick-Up, 769 F.2d 525, 526 (8th Cir.
_____________________________
1985) ("[T]he government has the initial burden of showing
probable cause for the institution of the forfeiture suit.")
___ ___ ___________
(citations and internal quotations omitted and emphasis
supplied). Once the government has made this showing, the
burden then shifts to the claimant to show by a preponderance
of the evidence that the property at issue is not subject to
forfeiture. See, e.g., United States v. 18 Oakwood St., 958
___ ____ ______________ ______________
F.2d 1, 3 (1st Cir. 1992).
Here, the district court did not assess whether the
government had probable cause to institute the proceedings.
__ _________
Rather, it improperly focused its inquiry on whether probable
cause existed on the date of the probable cause hearing
itself, and concluded that no probable cause existed at that
time. See United States v. 255 Broadway, 795 F. Supp. 1225,
___ _____________ ____________
1231-32 (D. Mass. 1992). The record before us makes clear,
however, that on May 25, 1989, the date of the institution of
___________
forfeiture proceedings, the government had probable cause to
believe that the funds at issue were forfeitable.
B. The Existence of Probable Cause in this Case
B. The Existence of Probable Cause in this Case
________________________________________________
"Probable cause to forfeit requires only a
``reasonable ground for belief of guilt[,] supported by less
than prima facie proof but more than mere suspicion' that the
property is subject to forfeiture." United States v. 28
______________ __
-7-
7
Emery St., 914 F.2d 1, 3 (1st Cir. 1990) (quoting United
__________ ______
States v. $250,000 in United States Currency, 808 F.2d 895,
______ ___________________________________
897 (1st Cir. 1987)). In other words, the government has a
"relatively light burden of showing probable cause" to
believe that the subject property is forfeitable. United
______
States v. Plat 20, Lot 17, Great Harbor Neck, 960 F.2d 200,
______ ___________________________________
205 (1st Cir. 1992) (hereinafter Great Harbor Neck).
____________________
Moreover, "[b]ecause there are so many variables in the
probable cause equation, probable cause findings are not
invariably bound by precedent." United States v. Maguire,
_____________ _______
918 F.2d 254, 258 (1st Cir. 1990) (citations and internal
quotations omitted), cert. denied, 111 S. Ct. 1421, 2861
_____ ______
(1991). Rather, in each case, we must consider "the totality
of the circumstances to evaluate the government's
demonstration" of probable cause. Id. In doing so, "we
___
review each piece of evidence only to determine whether it is
probative, not whether it establishes probable cause standing
alone." United States v. $67,220.00 in United States
______________ ______________________________
Currency, 957 F.2d 280, 285 (6th Cir. 1992).
________
In addition, we note that in order to show probable
cause to forfeit in this particular case, the government was
not required to show that the money at issue was traceable to
the very contraband found on the night of the search.
Rather, the district court held, and Claire Soule does not
dispute on appeal, that the money at issue would be
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forfeitable if found to be the proceeds of any of John
___
Jeffrey Soule's drug transactions. See, e.g., 1933
___ ____ ____
Commonwealth Ave., 913 F.2d at 3 (stating that the government
_________________
is not "require[d to] link[] the property to a particular
transaction").
Finally, while we accept the district court's
underlying factual findings unless they are clearly
erroneous, Maguire, 918 F.2d at 257, we note that "[t]he
_______
existence of probable cause is a question of law, and as
such, is subject to plenary review." United States v. One
_____________ ___
1986 Chevrolet Van, 927 F.2d 39, 42 (1st Cir. 1991). Cf.
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United States v. Holder, 990 F.2d 1327, 1328 (D.C. Cir. 1993)
_____________ ______
("We review de novo the district court's legal conclusion
__ ____
that probable cause supported the arrest, but we examine the
court's findings of fact only for clear error."); United
______
States v. Greene, 783 F.2d 1364, 13 (9th Cir.) ("The ultimate
______ ______
conclusion of presence or absence of probable cause is a
mixed question of law and fact. The underlying facts as
found by the district court are to be accepted unless clearly
erroneous. The court's ultimate conclusion, however, is
reviewed de novo.") (citations omitted), cert. denied, 476
__ ____ _____ ______
U.S. 1185 (1986).
Applying these standards, we find the record
replete with probative evidence which supports a finding
that, on May 25, 1989, the government had probable cause to
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institute forfeiture proceedings against the money at issue.
During the search of 255 Broadway, Claire Soule was
questioned by a DEA agent about the source of the cash at
issue in this appeal. While the district court did not
determine precisely what Claire Soule's answers were that
night, it nonetheless did find those answers to be
"inconsistent, indeed suspicious." This finding is fully
supported by the record.7 Moreover, there were 1600 pounds
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7. Agent Lively of the DEA testified as follows with regard
to Claire Soule's answers:
I had a concern as to what this money [in the
envelopes] was and I wanted to talk to Mrs. Soule
concerning what it was. She agreed to talk to us
about the money. And myself and Agent Hayes--
Lieutenant Hayes--talked with her. Lieutenant
Hayes began the conversation with her by asking her
about what the money was. And she said it was
money that was for a pool, which was fairly obvious
from the notation on the envelope. She was asked
how much money it was and she responded it was
about $10,000. She was asked what the source of the
monies were. And her first response was it was
money from an inheritance. And I believe I asked
her who was the inheritance from, what was the
source of the inheritance, which person. Her words
were, in effect, what difference does it that make?
And I told her, I said, "I'm trying to determine if
this is your money or this is somebody else's money
or where this money came from. If you can tell me
what the source of the inheritance is or if you
have some probate document that shows you receiving
this kind of money, you know, help me out." She
said, "Well, I got the money in cash." And my
response was you usually don't get that kind of
money from an estate in cash, it comes in the form
of checks. Her response was, "Well, I also got
monies from -- yes, for my birthday and other
occasions."
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of marijuana in the barn adjacent to Claire Soule's house, a
sizeable amount of cocaine in a safe in the basement, and
over $900,000 in cash in the house. Not only was there cash
near the hutch in which the funds at issue were found, there
was also a bag containing $3171 found directly on top of the
hutch. Suspicious and contradictory answers in the presence
of the large quantities of cash and drugs uncovered in this
search are certainly probative in determining the existence
of probable cause.
Equally important is the fact that Claire Soule
made no offers of proof, either before or after the
government's initiation of forfeiture proceedings, to
substantiate her allegations that the cash came from
legitimate sources. Thus, even if Claire Soule's responses
had not been adjudged "suspicious," her denials alone,
unaccompanied by offers of proof, were insufficient to rebut
a showing of probable cause. See, e.g., One Hundred Forty-
___ ____ __________________
Nine Thousand Four Hundred Forty-Two and 43/100 Dollars, 965
________________________________________________________
F.2d at 878 ("We conclude that claimants' proffer of three
``possible' innocent sources of income does not vitiate the
government's showing of a strong probability that the source
of the money is in fact illegal drug activity."); 1933
____
Commonwealth Ave., 913 F.2d at 4 (finding "general denials"
_________________
insufficient to overcome government's showing of probable
cause).
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Finally, it is undisputed that Claire Soule's keys
to a safe deposit box were seized during the drug raid and
that she surreptitiously went to the bank just days after the
search of her home and had the box drilled open by bank
employees so she could empty it before it could be searched.
The government was aware of this act at the time that it
instituted forfeiture proceedings. Again, while such
behavior is far from determinative, we believe it relevant to
the probable cause determination.
Without making any credibility determinations
beyond those made by the district court, and while noting
that none of these factors standing alone necessarily
establishes probable cause, we find that these circumstances
taken as a whole support a finding that, on May 25, 1989, the
date of the initiation of forfeiture proceedings, the
government had probable cause to believe that all of the
money seized from 255 Broadway, including the money found in
the envelopes inside the hutch, was subject to forfeiture.
C. Adversarial Evidence and the Probable Cause Hearing
C. Adversarial Evidence and the Probable Cause Hearing
_______________________________________________________
The government did commit serious errors in
handling the cash found in and around Claire Soule's dining
room hutch. For example, initial notations by a DEA agent,
made on the envelopes themselves on the night of the raid,
indicated that the envelopes contained the following: one
$10 bill, one-hundred and fourteen $20 bills, eighteen $50
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bills and eight $100 bills for a total of $3990. About
three days later, forms filed by the same agent showed
startlingly different denominations. These later forms
stated that the envelopes seized from the hutch contained one
$10 bill, sixty-four $20 bills, sixty-two $50 bills and one
$100 bill for a total of $4490. In addition, one report
filed by a local police officer who participated in the
search stated that the amount of cash found in the envelopes
combined with the cash found in the leather bag on top of the
________ ____
hutch totaled $2911.
At the February 13, 1991, probable cause hearing,
Claire Soule's counsel focused almost exclusively on these
various deficiencies in the government's handling and
accounting of the money found in the envelopes. While the
government's errors as to the amount at issue were
______
significant, it is the source of the funds in this case which
______
would have rendered them forfeitable. Thus, the government's
handling and accounting errors did nothing to diminish
probable cause. In other words, despite the government's
errors, there remained ample reason to believe that the
source of the funds rendered them forfeitable. Cf. 18
______ ___ __
Oakwood St., 958 F.2d at 5 ("[T]he [government's] affidavit
___________
asserts that $50,000 was seized during a particular drug-
related arrest at 18 Oakwood Street, whereas in fact, as the
government concedes, only $611.00 was seized. While the
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monetary discrepancy is large, [claimant] made no showing
that it was of any consequence to the establishment of
probable cause.").
In sum, the district court first erred in fixing
the date of the probable cause hearing as the date at which
the government must demonstrate probable cause. Rather, as
noted above, in order to meet its preliminary burden at
trial, the government need only show that it had probable
cause to institute forfeiture proceedings. Second, the
__ _________
district court erred in ruling that the government's errors
in handling and accounting for the money at issue vitiated
the existence of probable cause.
D. The Certificate of Reasonable Cause and the Denial of
D. The Certificate of Reasonable Cause and the Denial of
_____________________________________________________________
Attorneys' Fees
Attorneys' Fees
_______________
Despite these errors below, however, we nonetheless
affirm the district court's denial of costs and fees.
Claire Soule's argument that the district court's
issuance of the certificate of reasonable cause was error is
based solely on the ground that the district court found no
probable cause at the pre-trial hearing.8 In view of our
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8. We expressly decline to reach the question of whether we
have appellate jurisdiction to review the granting of a
certificate of reasonable cause. See United States v.
___ ______________
Abatoir Place, 106 U.S. 160, 162 (1882) (holding that the
_____________
denial of a certificate of reasonable cause is not
______
appealable); United States v. One Thousand Six Hundred Thirty
_____________ _______________________________
Dollars, 922 F.2d 740, 741 (11th Cir. 1991) (applying Abatoir
_______ _______
in holding that the granting of a certificate of reasonable
________
cause is unappealable). Rather, "it is settled that an
appellate court may forego the resolution of a jurisdictional
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determination that there was probable cause to institute the
instant proceedings, this argument is of no avail.9
Accordingly, Claire Soule's request for costs under 28 U.S.C.
2465 fails.
Claire Soule also seeks to recover attorneys' fees
under the EAJA based both upon the government's "agency
position", i.e., its decision to institute proceedings, and
its "litigation position", i.e., its persistence in seeking
forfeiture well after its May 25, 1989, initiation of
proceedings. See, e.g., Great Harbor Neck, 960 F.2d at 208-
___ ____ __________________
09 (differentiating, for EAJA purposes, between government's
"agency position," and its "litigation position").
Like her "certificate of reasonable cause"
argument, Claire Soule's argument that the government's
agency position was not "substantially justified" for EAJA
purposes hinges entirely on the district court's finding that
the government failed to meet its initial burden of showing
____________________
question if, as is true here, the appeal is uncomplicated and
easily resolved in favor of the party to whose benefit the
jurisdictional question would redound." United States v.
_____________
Connell, No. 93-1237, slip op. at 4 n.3 (1st Cir. October 6,
_______
1993).
9. Moreover, the Supreme Court has stated that reasonable
cause is essentially synonymous with probable cause. See
___
Stacey v. Emery, 97 U.S. 642, 646 (1878) ("If there was a
______ _____
probable cause of seizure, there was a reasonable cause.").
Thus, our determination that the government did, in fact,
possess probable cause to institute the forfeiture
proceedings would suffice to show that the government also
possessed reasonable cause, and that the issuance of the
certificate of reasonable cause was not in error.
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15
probable cause. Our conclusion to the contrary similarly
forecloses this arm of her EAJA argument. Cf. United States
___ _____________
v. One 1985 Chevrolet Corvette, 914 F.2d 804, 809 (6th Cir.
____________________________
1990) (finding that "when the government established probable
cause in the forfeiture proceeding, its position was
substantially justified" for EAJA purposes).
To the extent that Claire Soule seeks attorneys'
fees based on the government's litigation position, the
district court specifically found that the government's
persistence in seeking forfeiture was fully justified. See
___
255 Broadway, 795 F. Supp. at 1237 ("[T]he claimant points to
____________
no intervening evidence that might have given the government
pause over whether to continue onward with the case. No
newly unearthed information, for instance, substantiated
Claire Soule's conflicting accounts of the source of the
money or disproved the money's apparent connection to the
wealth of drug activity that took place in the house.").
This finding is fully supported by the record. Accordingly,
we decline to overturn the district court's denial of
attorneys' fees under the EAJA.
Finally, we note that the government does not
cross-appeal in this case. As a result, it is foreclosed
from further pursuit of its forfeiture claim, despite our
ruling that it met its initial burden of demonstrating
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probable cause to institute a forfeiture proceeding against
the money in question.
III.
III.
____
CONCLUSION
CONCLUSION
__________
For the foregoing reasons, the order of the
district court denying costs and attorneys' fees to Claire
Soule is
Affirmed. No costs.
Affirmed. No costs.
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Document Info
Docket Number： 92-1776
Filed Date： 11/24/1993
Precedential Status： Precedential
Modified Date： 9/21/2015