United States v. Approximately Two Thousand, Five Hundred Thirty-Eight Point Eighty-Five Shares (2,538.85) of Stock Certificates of the Ponce Leones Baseball Club, Inc. ( 1993 )

March 12, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 92-1555
No. 92-1800
UNITED STATES OF AMERICA,
Plaintiff, Appellee,
v.
APPROXIMATELY TWO THOUSAND, FIVE HUNDRED
THIRTY-EIGHT POINT EIGHTY-FIVE SHARES
(2,538.85) OF STOCK CERTIFICATES OF THE
PONCE LEONES BASEBALL CLUB, INC., ETC.,
Defendants, Appellees.
DOMINGO COTTO-GARCIA,
Claimant, Appellant.
ERRATA SHEET
The opinion of this court issued on March 5, 1993, is
amended as follows:
On page 17, line 5 of footnote 7, delete "be" between
"might" and "not".
March 5, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 92-1555
No. 92-1800
UNITED STATES OF AMERICA,
Plaintiff, Appellee,
v.
APPROXIMATELY TWO THOUSAND, FIVE HUNDRED
THIRTY-EIGHT POINT EIGHTY-FIVE SHARES
(2,538.85) OF STOCK CERTIFICATES OF THE
PONCE LEONES BASEBALL CLUB, INC., ETC.,
Defendants, Appellees.
DOMINGO COTTO-GARCIA,
Claimant, Appellant.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gilberto Gierbolini, U.S. District Judge]
Before
Torruella, Circuit Judge,
Campbell, Senior Circuit Judge,
and Skinner,* Senior District Judge.
Rafael F. Castro Lang with whom F. Castro Amy was on brief for
claimant-appellant.
Jose F. Blanco, Assistant United States Attorney, with whom
Daniel F. Lopez-Romo, United States Attorney, was on brief for the
United States.
March 5, 1993
*Of the District of Massachusetts, sitting by designation.
CAMPBELL, Senior Circuit Judge. At issue in this
appeal is whether appellant Cotto-Garc a was tardy in filing
his "claim" contesting the government's in rem seizure, under
drug laws, of his stock shares. Under relevant rules, infra,
appellant had "10 days after process has been executed" to
file the required claim. He contends he filed the claim on
time (in fact, prematurely), as process was executed, under
his theory, only when notice of the government's forfeiture
action was published an event that did not occur until
after Cotto-Garc a had filed his claim. The district court
rejected this argument. It ruled that "process [had] been
executed" much earlier, at the time appellant was personally
served with notice of the forfeiture action, causing
appellant's later filing to fall outside the ten-day period.
Like the district court, we reject Cotto-Garc a's
theory that the date when notice was published is
determinative as to him. We agree with the court that the
earlier notification to appellant by personal service
constituted the relevant notice. But while service of
personal notice upon the owner of the res (or other adequate
notification) was a necessary element of the execution of
process in this proceeding in rem, it was not sufficient by
itself to fulfill the triggering requirement in the rules
that "process has been executed." "Process" in an in rem
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action consists fundamentally of the warrant for arrest of
the property to be seized. "Execution" of such "process"
consists of service of the arrest warrant upon the defendant
property, after which the marshal files with the court proof
of service. In the present case, we find in the record an
issued arrest warrant, but we find no process return form or
other proof showing that the arrest warrant was served upon
appellant's shares of stock and when this occurred. Without
a return or at least some showing that service occurred, it
is impossible to say whether and when the arrest warrant was
executed. Had the arrest warrant been properly served on the
stock on or before January 3, 1992, the day when appellant
personally was served, we would agree with the district court
that the ten-day period commenced to run on the day of
personal service, to wit, January 3. But if the arrest
warrant had not by then been served, and was served either
later or not at all, the mere giving of personal notice alone
would not have constituted the "execution" of "process." And
until process had been executed, the ten-day period did not
begin to run.
We accordingly vacate and remand, with directions
to the district court to determine whether and when the
warrant for arrest of the property was served upon
appellant's stock shares, and, applying that information in
light of the present opinion, to determine if "process [had]
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been executed" as of January 3, 1992 when notice was served
upon appellant. Until this is correctly ascertained, the
timeliness of appellant's filing of claim cannot be
determined.
We turn now to a detailed discussion of this
appeal.
I.
Appellant Domingo Cotto-Garc a was arrested and
indicted in June 1991 for federal drug offenses. He pleaded
guilty to these in October 1991. After his arrest, the
United States government initiated civil forfeiture
proceedings against all known properties of Cotto-Garc a.
One of the forfeiture actions began on December 18, 1991,
when the United States government filed a complaint pursuant
to 21 U.S.C. 881(a)(6) and 18 U.S.C. 981 in the United
States District Court for the District of Puerto Rico. The
government sought forfeiture of approximately 2,538.85 shares
of stock of the Ponce Leones Baseball Club, Inc. allegedly
owned by Cotto-Garc a and purchased with proceeds of drug
transactions. A motion for issuance of warrants was filed by
the government on the same day.
On December 31, 1991, the clerk of the court issued
and delivered two warrants to the U.S. Attorney, pursuant to
a magistrate's order of December 30. One of the warrants was
a warrant for arrest in rem. It ordered the U.S. Marshal to
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seize the defendant (the 2,538.85 shares of stock) and to
notify "the owner and/or possessor" to file a claim "ten (10)
days after service, . . . [and] thereafter a responsive
pleading to the Complaint filed within twenty (20) days
following such claim or thirty (30) days after the service,
whichever is less . . . ." The second warrant was one for
"seizure and monition," ordering the marshal to publish a
newspaper announcement to notify "all persons claiming the
same" to file a claim "no later than ten (10) days after the
last publication."
On January 3, 1992, the alleged owner of the
stocks, appellant Cotto-Garc a imprisoned at a state
penitentiary at Rio Piedras, Puerto Rico was personally
served by a marshal with copies of the complaint and of both
warrants. On January 30, 1992, the government requested the
court to enter default judgment against Cotto-Garc a (and the
various other persons who had been personally served) because
no claim for the property had been filed. The magistrate
later denied this request for default.
The next day, January 31, 1992, Cotto-Garc a filed
a verified notice of claim, attesting that he was the owner
of the property named in the complaint. The government moved
to strike the notice of claim on February 4, 1992, on the
grounds that it was filed late under Supplemental Rule C(6).
A magistrate granted the motion to strike on February 12,
-6-
1992.1 In the meantime, a copy of the warrant of seizure
and monition was published on February 7 in El Nuevo D a, a
newspaper in Puerto Rico; no one filed a claim after
publication of the notice.
Cotto-Garc a appealed from the magistrate's order
striking his claim to the district court. The district court
issued an opinion agreeing with the magistrate that Cotto-
Garc a's claim had been filed out of time. Pursuant thereto,
the court dismissed Cotto-Garc a's appeal from the magistrate
and, finding no other claimants, ordered the property
forfeited to the United States of America. Cotto-Garc a
appeals from the final judgment.
II.
We now review the procedures that must be followed
in civil forfeiture actions like this. This forfeiture
action was brought by the United States pursuant to the
Comprehensive Drug Abuse Prevention and Control Act of 1970,
21 U.S.C. 881(a)(6), and the Money Laundering Act, 18
U.S.C. 981. 21 U.S.C. 881(a)(6) provides that, "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
1. Nevertheless, one week after the magistrate struck his
claim, Cotto-Garc a requested an extension of time to answer
the complaint. The government responded that Cotto-Garc a
had no standing in the case since his claim had been
stricken. The court took no action on this motion.
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subchapter [and] all proceeds traceable to such an exchange"
are subject to forfeiture to the United States. Similarly,
18 U.S.C. 981 subjects property related to money laundering
to forfeiture.
Both forfeiture statutes provide, with certain
exceptions, that the property shall be seized upon process
issued pursuant to the Supplemental Rules for Certain
Admiralty and Maritime Claims by any district court of the
United States having jurisdiction over the property.2 21
U.S.C. 881(b); 18 U.S.C. 981(b)(2). Thus the
Supplemental Rules govern the procedures for civil forfeiture
actions. See Fed. R. Civ. P., Supp. R. A et seq. The
Federal Rules for Civil Procedure also apply except to the
extent that they are inconsistent with the Supplemental
Rules. See Supp. R. A.
Supplemental Rule C contains special provisions for
actions in rem, including civil forfeiture proceedings. The
action in rem is brought by the plaintiff (here, the United
States) against the defendant property which is allegedly
2. "Alternatively, the government may commence a criminal
forfeiture proceeding by requesting 'the issuance of a
warrant authorizing the seizure of property subject to
forfeiture under [section 881] in the same manner as provided
for a search warrant under the Federal Rules of Criminal
Procedure.' 21 U.S.C. 881(b) (Supp. 1990). Federal Rule
of Criminal Procedure 41 governs the issuance of search
warrants. See Fed. R. Crim. P. 41." United States v. One
Parcel of Real Property, 921 F.2d 370, 373 n.4 (1st Cir.
1990).
-8-
subject to forfeiture (here, the stock certificates). The
government must file a verified complaint, in accordance with
the requirements of Supplemental Rules C(2) and E(2)(a), with
the clerk of the court and request issuance of a warrant for
the arrest of the property.
If upon reviewing the complaint and supporting
papers the court finds that conditions for an action in rem
appear to exist, the court orders the clerk to issue a
warrant for arrest of the property. Supp. R. C(3). The
clerk delivers the warrant to the marshal or other authorized
person, who serves the warrant for arrest of the property
either by taking possession of the property or by other means
pursuant to Supplemental Rule E(4). See Supp. R. C(3); Supp.
R. E(4). Rule E(4), which governs execution of the warrant
for arrest of the property, provides, in part:
(a) In General. Upon issuance and
delivery of the process . . . the marshal
or other person or organization having a
warrant shall forthwith execute the
process in accordance with this
subdivision (4), making due and prompt
return. [Emphasis supplied.]
Service, or execution, of process on tangible property is
generally done by taking it into possession; service of the
warrant on intangible property is generally accomplished by
leaving a copy of the complaint and process with the
garnishee or other obligor. See Supp. R. E(4)(b), (c); James
Wm. Moore & Alfred S. Palaez, 7A Moore's Federal Practice
-9-
E.08 - E.09 (2d ed. 1988 & Supp. 1992-93).3 A process
return and receipt form, or other proof of service indicating
when the warrant was served upon the property, is filed with
the court by the person serving process. See Supp. R.
E(4)(a); Fed. R. Civ. P. 4(g). In addition to service on the
property, notice of the action in rem is given by personal
service of copies of the complaint and warrant upon persons
known to have an interest in the property that is the subject
of the action, and, in most cases, by publication in a local
newspaper. See Supp. R. C(4).4
Before a claimant in a forfeiture case can file an
answer and defend on the merits, the claimant must file a
claim pursuant to Rule C(6). United States v. One Urban Lot,
978 F.2d 776, 778 (1st Cir. 1992). If no claim is properly
filed, a putative claimant lacks standing to contest
forfeiture of the property. Id.; United States v. One Parcel
of Real Property, 921 F.2d 370, 373 n.5 (1st Cir. 1990);
3. While stock certificates probably are considered
intangible for the purposes of Rule E(4), see 7A Moore's
Federal Practice E.09, we leave that determination, and all
related determinations, to the district court.
4. The Supplemental Rules do not expressly provide for the
giving of notice to persons known to have an interest in the
property, such as the owner or possessor of the property.
See 7A Moore's Federal Practice C.14; David B. Smith, 1
Prosecution and Defense of Forfeiture Cases 9.03[1] (1992).
However, such notice is constitutionally required. See
Mennonite Board of Missions v. Adams, 462 U.S. 791, 800
(1983). Courts accordingly routinely order personal service
to be made upon the owner or possessor of the property.
-10-
United States v. Parcels of Land, 903 F.2d 36, 38 (1st Cir.
1990). Rule C(6) of the Supplemental Rules establishes the
time requirements for filing a claim. Id. at 777.
The claimant of property that is the
subject of an action in rem shall file a
claim within 10 days after process has
been executed, or within such additional
time as may be allowed by the court, and
shall file an answer within 20 days after
the filing of the claim. . . .
Supp. R. C(6).
The crucial issue in this appeal is the meaning of
the phrase in Rule C(6), "10 days after process has been
executed."
III.
We dispose quickly of Cotto-Garc a's primary
argument on appeal, namely, that his notice of claim was
timely filed on January 31 because, in his view, the term
"process has been executed" in Rule C(6) refers to the day
the final published notice appeared (February 7), not the day
he was personally served with notice (January 3). He looks
to the warrant of seizure and monition for support, as that
warrant (as distinguished from the separate warrant for
arrest in rem) states that "all persons claiming the
[property] . . . be and appear before the said Court, at the
City of San Juan no later than ten (10) days after the last
publication." The government agrees with the district court
that Cotto-Garc a's argument would be correct for any
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claimant that had not earlier been personally served with
copies of the warrants, but contends that Mr. Cotto was
personally served with process on January 3, 1992.
Therefore, the government urges, his ten days to file a
notice of claim established by Rule C(6) had run out by the
time he filed his claim on January 31, 1992. See Dist. Ct.
Order at 3.
Cotto-Garc a's reading of Rule C(6) is perhaps not
entirely inconceivable, see United States v. Various Parcels
of Real Property, 650 F. Supp. 62, 64 n.2 (N.D. Ind. 1986),
given the confusion surrounding the requirements of Rule C.
See United States v. $38,570 U.S. Currency, 950 F.2d 1108,
1114 (5th Cir. 1992); 7A Moore's Federal Practice C.16 at
700.13-700.14. However, a deadline tied to the notice
publication date would, for someone who had already received
notice by personal service, make little sense. Personal
service is virtually certain to alert the intended noticee.
Notice by publication, on the other hand, is far less
reliable, being a stop gap for persons whose identities and
possible interests are unknown. Once alerted by personal
service, an individual has nothing left to learn by awaiting
publication of notice in the newspaper. All that would
occur, were we to adopt appellant's position, would be to
permit claimants who have been personally notified to
unjustifiably delay filing their claims. See 7A Moore's
-12-
Federal Practice C.16 at 700.14 ("A claimant with actual
knowledge, of course, should not [wait until after
publication] lest he be deemed guilty of laches.") The
purpose of the Rule C(6) time limit is "to force claimants to
come forward as soon as possible after forfeiture proceedings
have begun and to prevent false claims." United States v.
One Urban Lot Located at 1 Street A-1, 885 F.2d 994, 1001
(1st Cir. 1989); United States v. 1982 Yukon Delta Houseboat,
774 F.2d 1432, 1436 (9th Cir. 1985). Furthermore, newspaper
notice is not required in all cases, see Supp. R. C(4), and
"a claimant with actual notice of the arrest, especially if
such notice was obtained by service upon him, cannot object
to a failure to advertise." 7A Moore's Federal Practice
C.14 at 700.1; see also $38,570 U.S. Currency, 950 F.2d at
1115 n.8 (rejecting argument that process is not executed
until the final day of publication of notice). For these
reasons, we have little difficulty rejecting appellant's
reading of Rule C(6).
We add that the case law in this circuit is
consistent with treating the date on which adequate notice
was first given to a particular claimant, whether by personal
service or publication, as the trigger of the Rule C(6) time
period. See, e.g., United States v. One 1987 BMW 325, No.
92-1827, at 3, 1993 U.S. App. LEXIS 2505 (1st Cir. Feb. 18,
1993); One Urban Lot, 978 F.2d at 777; One Urban Lot Located
-13-
at 1 Street A-1, 885 F.2d at 1001; United States v. One 1978
BMW, 624 F. Supp. 491, 492 (D. Mass. 1985); see also United
States v. Estevez, 845 F.2d 1409, 1412 (7th Cir. 1988)
(considering date that claimant received notice in mail to
commence filing period under 21 U.S.C. 853(n)); United
States v. United States Currency Totalling $3,817.49, 826
F.2d 785, 786 (8th Cir. 1987) (assuming that claim filed
within ten days of notice, but five months after seizure, was
timely); United States v. $38,000.00 in U.S. Currency, 816
F.2d 1538, 1545-46 (11th Cir. 1987) (refusing to apply Rule
C(6) deadline to claim where government failed to properly
notify claimant of action). We, therefore, agree with the
district court that, in the case of an owner of property to
whom notice is first given by personal service, the notice
component of "process" is fully satisfied by the personal
service. There is no justification whatever for waiting
thereafter until notice by newspaper publication is made a
form of notification clearly addressed only to those persons
who have not earlier been identified and personally served.
But a harder question lurks here. Appellant
asserts, and the record seems to bear him out, that the
warrant for arrest and seizure of the res, i.e., the stock
shares, was never served. Insofar as service of such process
is also an essential part of the "execution" of "process"
that triggers the running of the ten-day period under Rule
-14-
C(6), it may be that January 3, 1992, the date when appellant
was personally served, did not trigger the running of the ten
days. Indeed, while personal service of notice on the owner
(or alternative means of giving notice) seems an essential
ingredient of execution of process in an in rem proceeding,
it is not the process specifically mentioned in the Admiralty
Rules. The text of the Rules quite clearly indicate that
Rule C(6)'s reference to execution of process applies to the
service of the warrant for arrest in rem on the res, here the
stock shares. The description of the triggering date in Rule
C(6) when "process has been executed" is the same
phraseology found in Rule E(4) describing service of the in
rem warrant. It seems clear, therefore, that the reference
to process execution in Rule C(6) comprehends service of a
duly issued warrant of arrest on the defendant property.
We hold, therefore, that the words "process has
been executed" are satisfied under Rule C(6) only when (1) a
properly issued warrant for arrest in rem has been properly
executed, i.e., served upon the res; and, (2) the requisite
notice has been given to potential claimants.5 If the first
element has already been met, then the ten-day filing period
begins to run as to a claimant who is personally served on
5. As we have discussed and will discuss at greater length
below, while the personal notice requirement is not expressly
set out in the Admiralty Rules, we think it also must be
regarded as an element of the "process" required by Rule C(6)
to be "executed."
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the date of personal service. For others, assuming again
that the first element has been previously fulfilled, the
ten-day period begins on the date of the final publication
notice (if any is required by Rule C(4)).
The first element that the warrant for arrest of
the property be issued and executed before process is
considered to have been executed arises, as we have
already said, from Supplemental Rules C(3) and E(4), which
define the procedures for execution of process. See supra
Part II. Clearly "process" as used there means the warrant
for arrest in rem, and that process is executed by service
upon the property subject to forfeiture. Supp. R. E(4);
$38,570 U.S. Currency, 950 F.2d at 1113; United States
Currency Totalling $3,817.49, 826 F.2d at 786-87; $38,000.00
in U.S. Currency, 816 F.2d at 1545-46; 7A Moore's Federal
Practice E.08 at E-355-56. Serving a copy of a warrant on
the property owner is not the same as execution of the
warrant. "Service must be made upon the res itself."
$38,570 U.S. Currency, 950 F.2d at 1113. We see no way to
escape from the conclusion that process has not been executed
within the meaning of Rule C(6) unless the procedures for
execution of process within Rules C(3) and E(4) have been
met. These procedures do not expressly include personal
service of a copy of the warrant upon the owner, and plainly
are not met merely by such personal service.
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This is not to say that notice to the owner is
irrelevant to the Rule C(6) formulation. Claimants can
hardly be expected to file a claim before they personally
have notice of the pending action. While admiralty law
traditionally presumed that service of the warrant on the
property (e.g., by seizing the vessel or posting notice) was
sufficient to give constructive notice of the action, that
presumption is dubious in the circumstances of civil
forfeiture proceedings such as the instant case. See 4
Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure 1074, at 462 (2d ed. 1987). Some courts, it is
true, have suggested that service of the warrant for arrest
on the res itself suffices, in all forfeiture cases, to
constitute execution of process for purposes of the time
limits in Rule C(6), regardless of when the claimant is
notified. See $38,570 U.S. Currency, 950 F.2d at 1113-14;
see also United States Currency Totalling $3,817.49, 826 F.2d
at 786-87 (rejecting argument that process is served through
publication of the notice). That interpretation of the rule,
however, raise both constitutional6 and practical problems7
6. Constitutional questions arise because this strict
interpretation implicitly assumes that service of the warrant
on the property either by seizing it or posting notice of
the action, pursuant to Supplemental Rule E(4) provides
adequate notice to potential claimants that a forfeiture
action is pending. This presumption applied in admiralty
law, where it was presumed "that the vessel owner, through a
master, agent, or personal presence, will maintain reasonable
contact with and continuing interest in the status and
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when it is applied. For example, under this interpretation,
a person might not receive notice (through personal service
or publication) until seven days after the warrant has been
condition of the vessel." MacDougalls' Cape Cod Marine
Serv., Inc. v. One Christina 40' Vessel, 900 F.2d 408, 412
(1st Cir. 1990). While constitutional in some cases, this
presumption is rebuttable; for example, this court has held
in an admiralty action that posting notice on a vessel was
insufficient to satisfy constitutional due process
requirements where the owner was known to be out of the area.
Id.The Supreme Court has expressly held that, even in an
action in rem, "[n]otice by mail or other means as certain to
ensure actual notice is a minimum constitutional precondition
to a proceeding which will adversely affect the liberty or
property interests of any party, whether unlettered or well
versed in commercial practice, if its name and address are
reasonably ascertainable." Mennonite Board of Missions v.
Adams, 462 U.S. 791, 800 (1983) (emphasis in original).
7. Practical problems arise because notice of the action in
rem, whether by personal service or publication, is not
required to be given at any particular time, and, in
practice, is usually given at least a few days after the
seizure of the property. Notice might not be given until ten
days or more after the property is seized. Therefore, under
the Fifth Circuit's interpretation of Rule C(6), the deadline
for filing claims could have passed by the time one receives
notice of the action. $38,570 U.S. Currency, 950 F.2d at
1114; United States v. One 1987 27 Foot Boston Whaler, No.
92-2992, 1992 U.S. Dist. LEXIS 19323, at *12-13 (D.N.J. Nov.
30, 1992).
"Even if [a claimant] does receive notice in time to
file a claim, he may have much less time than the ten days
contemplated by Rule C(6)." David B. Smith, 1 Prosecution
and Defense of Forfeiture Cases 9.03 at 9-42.14 (1992). In
addition, the government is not required to tell claimants
the date of the seizure, but only to put claimants "on notice
that execution of process on the res had recently occurred or
was imminent." $38,570 U.S. Currency, 950 F.2d at 1114.
Thus, even when one receives notice before the end of the
ten-day period, claimants are left to their own devices to
investigate the records at the courthouse to discover when
their ten-day filing period began. Id.-18-
executed on the property, leaving only three days to file a
claim. We believe that the drafters of Rule C(6) intended to
give claimants ten days, not three, to file their claims, and
that the rule should be interpreted to avoid constitutional
questions. See Public Citizen v. United States Dept. of
Justice, 491 U.S. 440, 465-66 (1989) ("It has long been an
axiom of statutory interpretation that 'where an otherwise
acceptable construction of a statute would raise serious
constitutional problems, the [courts should] construe the
statute to avoid such problems unless such construction is
plainly contrary to the intent of Congress.'") (quoting
Edward J. DeBartolo Corp. v. Florida Gulf Coast Bldg. &
Constr. Trades Council, 485 U.S. 568, 575 (1988)); see also
Public Citizen, at 454-55 (stating that courts should avoid a
reading of a statutory term which leads to "odd" or "absurd"
results inconsistent with Congress' intention). For these
reasons, we hold that the giving of adequate notice is an
essential element of the "process" to be executed before the
ten-day filing period of Rule C(6) begins. But while
personal service of a copy of the arrest warrant (or other
suitable notice) is, therefore, part and parcel of the Rule
C(6) execution-of-process trigger, it is not coextensive
therewith. Equally fundamental is service of the arrest
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warrant upon the res, and this also must be fulfilled before
process can be deemed to have been executed.8
The district court order in this case does not make
clear exactly how the court interpreted the phrase, "process
has been executed." While it rejected appellant's argument
that the publication date was relevant to claimants who
received personal service, it did not consider whether or
when the first element execution of the warrant for arrest
in rem had been fulfilled. This, by itself, would not be
fatal if, as might normally be expected, it could reasonably
be assumed that the arrest warrant had, in fact, been served
on the res before or in conjunction with personal service
upon appellant. But such, unfortunately, was not the case,
as we next discuss.
IV.
The district court found that because Cotto-Garc a
was personally served on January 3, 1992, his ten days to
file a claim began then. The difficulty with this finding is
that there is absolutely no indication in the district court
record that as of January 3, 1992, the warrant for arrest of
8. The situation can perhaps be analogized to serving a
defendant in a personal action with a copy of a complaint
that was never filed in court. While the service
requirements of Fed. R. Civ. P. 4 may have been met, the
failure to have instituted a viable lawsuit would render the
notice meaningless. Here, the failure to serve the warrant
on the res leaves the court without jurisdiction over the
"defendant" (i.e., the object in dispute), hence the giving
of notice is a meaningless exercise.
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the property had ever been executed upon the stock shares in
issue. There is in the record no process receipt and return
form or other proof of service executed by the marshal
indicating service of the warrant upon the res. That is not
to say that the marshal's return would necessarily be the
sole means to prove execution of process; other evidence
might suffice. See Fed. R. Civ. P. 4(g); 4A Federal Practice
and Procedure 1130 at 344-48. But the date of process
execution must be known in order to determine when the ten-
day period commenced to run. And this problem is
intensified, and not resolved, by the government's puzzling
post-argument filing described in the note below.9
9. Two months after oral argument before this court, the
government filed a motion setting forth its version of the
date and circumstances of the alleged seizure of the stock
certificates. The government asserted that the property was
seized on December 17, 1991. This date is one day before the
forfeiture complaint was filed. While no warrant was
attached to the motion, the motion was accompanied by an
unauthenticated copy of a process receipt and return form,
purportedly signed by a U.S. Marshal, indicating that one
Wender Colon, Secretary of Ponce Leones Baseball Club, Inc.,
was personally served with a "seizure warrant" on December
18, 1991 at 9:30 a.m., and a copy of a stock certificate
certifying that the United States of America owns 2,535.07
shares (not 2,538.85 shares) of the Ponce Leones Baseball
Club as of December 18, 1991.
These documents were apparently never filed or submitted
to the district court; they are not listed on the district
court's docket sheet. The only warrant in the record is the
later, apparently unserved, warrant dated December 31, 1991,
raising the question why, if the seizure had already been
validly executed, a further warrant was secured. In any
case, papers not filed with the district court or admitted
into evidence by that court are not part of the record on
appeal. See Fed. R. App. P. 10(a); Kirshner v. Uniden Corp.
of America, 842 F.2d 1074, 1077 (9th Cir. 1988). Counsel's
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We recognize that appellant has waited until appeal
to object to the adequacy of the process used for the
seizure. Only in extraordinary circumstances will we remand
for further findings on an issue not timely raised below. See
Germany v. Vance, 868 F.2d 9, 11 n.1 (1st Cir. 1989); United
States v. Krynicki, 689 F.2d 280, 291-92 (1st Cir. 1982).
But we find this to be such an extraordinary case. On this
record, it is impossible reliably to determine whether the
district court correctly applied Rule C(6), whether
appellant's claim was in fact filed late, and whether the
government itself complied with the procedural requirements
of the Supplemental Rules. Because "forfeiture is a harsh
medium," courts generally favor disposing of forfeiture cases
on their merits. One 1987 BMW 325, No. 92-1827 at 7.
Moreover, without an effective seizure of the property the
court may lack jurisdiction to forfeit the property to the
government. See $38,570 U.S. Currency, 950 F.2d at 1113 ("No
in rem suit can be maintained without a valid arrest of the
res by the marshal."); Alyeska Pipeline Serv. Co. v. Vessel
representation that the seizure occurred on December 17
(contradicting the December 18 process receipt) is not an
adequate substitute for a record showing. Goldstein v.
Kelleher, 728 F.2d 32, 37 (1st Cir.), cert. denied, 469 U.S.
852 (1984); Fisher v. Flynn, 598 F.2d 663, 666 n.5 (1st Cir.
1979).
We disregard the proffered documents and deny the motion
without prejudice to the government's right to submit and
explain this evidence to the district court on remand.
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Bay Ridge, 703 F.2d 381, 384 (9th Cir. 1983) (same), cert.
dismissed, 467 U.S. 1247 (1984). But cf. United States v.
TWP 17 R 4, Certain Real Property in Maine, 970 F.2d 984, 989
(1st Cir. 1992) (suggesting that posting of arrest warrant on
real estate, though insufficient to constitute a "seizure,"
is adequate to confer jurisdiction over property in an in rem
action); Trans-Asiatic Oil, Ltd., S.A. v. Apex Oil Co., 804
F.2d 773, 778-79 (1st Cir. 1986) (discussing differences
between jurisdictional requirements for Rule B attachments
and Rule C actions in rem). In any event, this is a case
where the government seeks to benefit by a strict application
of the Rules, alleging appellant to have failed to meet the
ten-day deadline by a relatively few days. Given that the
government may itself have failed to comply strictly with the
same Rules, we think it fair that the correct facts be
ascertained. See United States v. Borromeo, 945 F.2d 750,
753 (4th Cir. 1991); $38,000.00 In U.S. Currency, 816 F.2d at
1547.
Faced with a record suggesting a real possibility
that the government never effected valid service upon the res
prior to January 3, 1992, we remand to the district court for
it to determine when the warrant for arrest of the property
was executed and, accordingly, whether Cotto-Garc a's claim
was indeed filed late. If the court finds that a proper
arrest warrant was, in fact, executed on the property on or
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before January 3, 1992, then the court should find that the
Rule C(6) ten-day period began on January 3, the date that
Cotto-Garc a was personally served. If, however, the court
finds that the warrant was not executed until later, whether
the claim was late depends on the date of that execution,
which becomes the triggering date under Rule C(6). If, for
some reason, the warrant was never served on the property,
then Cotto-Garc a's claim was not late because process had
yet to be executed by the time he filed his claim.
V.
In conclusion, because the record is insufficient
to determine the timeliness of Cotto-Garc a's claim, we
vacate both the affirmance of the magistrate's ruling to
strike the notice of claim by Cotto-Garc a and the forfeiture
order, and we remand to the district court with directions to
reopen the record and redetermine, in light of this opinion,
whether Cotto-Garc a's notice of claim was in fact untimely
under Rule C(6). Because we vacate on other grounds, we do
not reach Cotto-Garc a's argument that the district court
should have exercised its discretion to extend the time for
filing his claim. Granting a discretionary extension is an
option that we leave open to the district court on remand
should it conclude that, although the claim was untimely,
there were sufficient factors justifying an extension.
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Vacated and remanded for further proceedings.
Costs for appellant.
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