Ortiz-Cameron v. Drug ( 1998 )


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  • USCA1 Opinion


                     UNITED STATES COURT OF APPEALS
    
    FOR THE FIRST CIRCUIT

    ____________________

    No. 97-1496

    ARNALDO ORTIZ-CAMERON AND ERIC A. ORTIZ-CAMERON,
    Plaintiffs - Appellants,

    ____________________

    JOSE A. LOPEZ-CACERES,
    Plaintiff - Appellee,

    v.

    DRUG ENFORCEMENT ADMINISTRATION,
    Defendant - Appellee.

    ____________________

    APPEAL FROM THE UNITED STATES DISTRICT COURT

    FOR THE DISTRICT OF PUERTO RICO

    [Hon. H‚ctor M. Laffitte, U.S. District Judge]

    ____________________

    Before

    Torruella, Chief Judge,

    Cyr, Senior Circuit Judge,

    Lynch, Circuit Judge.

    _____________________

    Frank D. Inserni for appellants.
    Miguel A. Fern ndez, Assistant United States Attorney, with whom
    Guillermo Gil, United States Attorney, and Jacqueline D. Novas,
    Assistant United States Attorney, were on brief for appellee Drug
    Enforcement Administration.



    ____________________

    March 16, 1998
    ____________________ TORRUELLA, Chief Judge. Brothers Arnaldo Ortiz-Cameron
    ("Arnaldo") and Eric Ortiz-Cameron ("Eric") challenge the
    district court's order dismissing their complaint against the
    Drug Enforcement Administration ("DEA") which claimed an interest
    in various properties seized in prior civil forfeiture
    proceedings. We find that the doctrine of res judicata bars the
    brothers' action. Accordingly, we affirm the district court's
    decision.
    I. BACKGROUND Appellants Arnaldo and Eric are brothers of Luis Hiram
    Ortiz-Cameron ("Luis"), a convicted drug smuggler who purchased
    several dairy farms as well as animals and farming equipment with
    profits from the illegal drug trade. On November 3, 1989, and
    November 9, 1989, the government filed two separate in rem civil
    forfeiture proceedings against this property. In the first civil
    forfeiture action, United States Marshals personally served Arnaldo
    with the pleadings on November 4, 1989. On that date, Eric also
    was served through his brother Arnaldo. In response, on
    December 11, 1989, the brothers filed claims requesting protection
    of their alleged interests in the defendant properties, and on
    December 27, 1989, they filed an answer to the government's
    complaint. However, the district court judge, Jaime Pieras, Jr.,
    dismissed their claims because they failed to file their claims
    within the 10-day claim period and their answer within the 20-day
    answer period established in Rule C(6) of the Supplemental Rules
    for Certain Admiralty and Maritime Claims ("Rule C(6)"). On
    appeal, this court affirmed that decision. See United States v.
    One Dairy Farm, 918 F.2d 310 (1st Cir. 1990).
    In the second civil forfeiture proceeding, U.S. Marshals
    served Arnaldo and Eric with the pleadings on November 14, 1989, a
    few days after the filing of the action. Arnaldo failed to respond
    within the statutory limits, filing his claim on December 11, 1989,
    and his answer on December 27, 1989. Eric never filed either a
    claim or an answer. Consequently, the district court judge before
    whom this second action was filed, Chief Judge Carmen C. Cerezo,
    again dismissed their claims, finding that the brothers lacked
    standing to challenge the forfeiture of the properties. Despite
    these judgments against them, Arnaldo and Eric continued to pursue
    their interest in the properties by filing the instant action. On
    the DEA's motion for summary judgment, the district court dismissed
    their complaint. See Ortiz Cameron v. Drug Enforcement Admin., 959
    F. Supp. 92 (D.P.R. 1997). The brothers appeal.
    II. DISCUSSION We review a grant of summary judgment de novo. SeeUnited Nat'l Ins. Co. v. Penuche's, Inc., 128 F.3d 28, 30 (1st Cir.
    1997). The government asserts that the doctrine of res judicata
    bars the present action. The res judicata doctrine entails two
    different concepts--claim preclusion and issue preclusion. In
    entering summary judgment, the district court relied on claim
    preclusion principles. A claim is precluded if three requirements
    are met: (1) a final judgment on the merits in an earlier action;
    (2) a sufficient identity between the parties in the two suits; and
    (3) a sufficient identity of the causes of action in the two suits.
    See Porn v. National Grange Mut. Ins. Co., 93 F.3d 31, 34 (1st Cir.
    1996). According to the government, final judgment in the prior
    civil forfeiture proceedings precludes Arnaldo and Eric from
    relitigating claims that were raised or could have been raised in
    those proceedings. Since the brothers could have raised in their
    One Dairy Farm appeal the same issues they assert here, i.e., the
    inadequacy of post-seizure notice and the lack of pre-seizure
    notice, the government contends that all of Arnaldo and Eric's
    instant claims are precluded.
    Appellants do not dispute the presence of the second and
    third elements of claim preclusion in this case. However, they
    argue that in the prior proceedings they did not have a full and
    fair opportunity to have their claims adjudicated on the merits.
    In the first civil forfeiture action, Judge Pieras determined that
    the brothers lacked standing to pursue their claims because they
    failed to comply with the statutory deadlines. This court affirmed
    that decision. We thus take it as established as to the first
    property seized that Arnaldo and Eric had actual notice of the
    seizure, see One Dairy Farm, 918 F.2d at 311, and an opportunity to
    litigate their present claims. The same is also true as to the
    second seizure. In the second civil forfeiture proceeding, Judge
    Cerezo also decided that appellants lacked standing since Arnaldo
    filed a late claim and Eric never responded to the government's
    complaint. Judge Cerezo also ruled that, even if Arnaldo had filed
    a timely claim, his status as an unsecured creditor of Luis
    precluded him from recovering under the civil forfeiture statute.
    Neither Arnaldo nor Eric appealed Judge Cerezo's ruling to this
    court.
    Under these circumstances, we find the judgments in the
    two prior civil forfeiture proceedings to be "on the merits." As
    this court noted in Kale v. Combined Ins. Co. of Am., 924 F.2d 1161
    (1st Cir. 1991), "the dismissal of a claim as time-barred [by the
    statute of limitations] constitutes a judgment on the merits,
    entitled to preclusive effect." Id. at 1164 (citing Rose v. Town
    of Harwich, 778 F.2d 77, 80 (1st Cir. 1985)).
    We agree with the district court that the dismissal of
    the brothers' claims is analogous to a dismissal on statute of
    limitation grounds. The purpose behind Rule C(6) is "to require
    claimants to come forward as quickly as possible after the
    initiation of forfeiture proceedings, so that the court may hear
    all interested parties and resolve the dispute without delay." SeeUnited States v. Various Computers and Computer Equip., 82 F.3d
    582, 585 (3d Cir. 1996). If a putative claimant who has received
    proper notice fails to file within Rule C(6)'s time limits, he or
    she may not bring a future claim for the properties at issue. Cf.United States v. Real Property Located in Fresno County, __ F.3d
    __, __, 1998 WL 47135, at *6 (9th Cir. Feb. 9, 1998) (Rule C(6)'s
    purpose would be "ill-served if any person with an ownership
    interest in a property . . . were empowered to challenge a
    forfeiture judgment long after judgment had been entered.").
    Finding that the 10-day claim period and 20-day answer period
    established by Rule C(6) are analogous to a statute of limitations,
    we hold that Arnaldo and Eric's claims are precluded by the
    doctrine of res judicata.
    Arnaldo and Eric also argue that the district court erred
    in failing to extend the discovery deadline established in its
    initial scheduling order. They allege that the additional time to
    conduct discovery would have uncovered evidence that the DEA seized
    their property without proper notice as well as recklessly
    intermingling their properties. However, as the district court
    observed, a finding of res judicata "save[s] the parties the time
    and expense of conducting unnecessary discovery." See 959 F. Supp.
    at 96. Having decided the res judicata issue in the government's
    favor, we need not address whether the district court erred in
    denying appellants' request for additional discovery time.
    III. CONCLUSION
    For the foregoing reasons, the district court's opinion
    and order is affirmed.
    Costs to be assessed against appellants.