United States v. Land, Winston County , 221 F.3d 1194 ( 2000 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
_______________ ELEVENTH CIRCUIT
AUGUST 8, 2000
THOMAS K. KAHN
No. 99-11830 CLERK
_______________
D.C. Docket No. CV-96-HM-0216-J
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
LAND, WINSTON COUNTY, Certain Real
Property Located near Highway 195, Winston
County, Alabama, together with all improvements,
fixtures and appurtenances thereon,
Defendant,
HOWELL M. UPTAIN, Executor of the Estate
of Melphia B. Woods,
Claimant-Appellant.
_______________
Appeal from the United States District Court
for the Northern District of Alabama
_______________
(August 8, 2000)
Before EDMONDSON, HULL and WOOD*, Circuit Judges.
HARLINGTON WOOD, Jr., Circuit Judge:
This case began in 1993 when the United States filed the first of two civil
actions seeking the in rem forfeiture of the named defendant real estate for its alleged
use in violation of 18 U.S.C. § 1955 prohibiting illegal gambling.1 Alabama law
broadly defines gambling but also prohibits any gambling not specifically authorized
by Alabama law.2 Cockfighting, the particular gambling in this case, is not
*
Honorable Harlington Wood, Jr., U.S. Circuit Judge for the Seventh Circuit, sitting by
designation.
1
Title 18 § 1955 provides in its pertinent parts:
(a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal
gambling business shall be fined not more than $20,000 or imprisoned not more than five years, or
both.
(b) As used in this section–
(1) “illegal gambling business” means a gambling business which–
(i) is a violation of the law of a State or political subdivision in which it is
conducted;
(ii) involves five or more persons who conduct, finance, manage,
supervise, direct, or own all or part of such business; and
(iii) has been or remains in substantially continuous operation for a
period in excess of thirty days or has a gross revenue of $2,000 in
any single day.
(2) “gambling” includes but is not limited to pool-selling, bookmaking,
maintaining slot machines, roulette wheels or dice tables, and conducting
lotteries, policy, bolita or numbers games, or selling chances therein.
****
(d) Any property, including money, used in violation of the provisions of this section may
be seized and forfeited to the United States.
2
See ALA. CODE §§ 13A-12-20(1), (4), (7), (8), (9); 13A-12-22(a); and the catchall provision
13A-12-20(12), stating that any gambling not specifically authorized by law is unlawful.
2
specifically authorized by Alabama law.3 Cockfighting may be defined as pitting two
cocks, usually equipped with sharp blades on their legs, in a fight against each other.
See RANDOM HOUSE WEBSTER’S COLLEGE DICTIONARY 261 (1992). It is most often
associated with gambling. Forty-seven states have banned cockfighting, but it remains
legal in Oklahoma, Louisiana, and parts of New Mexico.4
This is the second appeal to this court involving the forfeiture of the building
and property known as the Clear Creek Sportsman’s Club. In 1993, the first action
filed by the United States was opposed by Melphia Bailey Woods (“claimant” or
“Mrs. Woods”), the only claimant to challenge the forfeiture. In light of United States
v. 2751 Peyton Woods Trail, 66 F.3d 1164 (11th Cir. 1995), the case was dismissed
on procedural grounds without prejudice with leave to refile a similar action within
the statute of limitations. See United States v. Certain Real Property Located Near
Highway 195, Winston County, Ala., CV-93-HM-0945-J (N.D. Ala. 1993).
The second civil forfeiture action was filed in January 1996. Again claimant
filed in protest denying any knowledge of the property’s use for illegal gambling and
3
See ALA. CODE § 13A-12-4 (2000):
Any person who keeps a cockpit or who in any public place fights cocks shall, on conviction,
be fined not less than $20.00 nor more than $50.00.
4
See: http//www.geocities.com/Wellesley/Atrium/2224/CockfightingQA.html.
3
again alleging the property had been illegally seized by the government. The district
court
granted summary judgment in favor of the United States and claimant appealed. This
court, in United States v. Land, Winston County, 163 F.3d 1295, 1303 (11th Cir.
1998), affirmed the district court’s holding that the government established probable
cause for the forfeiture action. Id. at 1303. However, the panel reversed the lower
court in determining that the government’s action in seizing the property violated the
Due Process Clause, and remanded for further proceedings on two issues: whether
any damages in the form of rents received or other proceeds were realized from the
property during the period of illegal seizure and whether the forfeiture violated the
Excessive Fines Clause of the Eighth Amendment. Id. at 1302-03.
On remand, after an evidentiary hearing, the district court concluded the
government had not received any rents or other proceeds during the period of the
illegal seizure, and, therefore, claimant had not been deprived of anything and was
entitled only to nominal damages of One Dollar ($1.00) and costs. It also found the
forfeiture did not constitute an excessive fine. Claimant now appeals these findings.
Claimant alleges the property, which the government sold in 1997 for $60,000,
was worth over $100,000. According to claimant, the lease value of the property was
4
$8,400 per year.5 The property had been purchased by Mrs. Woods and her husband6
in 1981. They promptly erected a metal building designed for cockfighting at an
alleged cost of $100,000. It contained one main cockfighting pit and three other pits,
referred to as “drag” pits, complete with stadium seating. There was also an
announcer’s booth, a food concession stand, a souvenir stand, and holding pens for
the cocks.
On this second appeal, in addition to reviewing the two issues remanded to the
district court, a new complication arose before oral argument in March 2000. The
court was advised by counsel that Mrs. Woods had recently died. Oral argument
proceeded conditionally, but counsel were asked to submit supplemental briefs as to
the impact of her death on this appeal.7 We will therefore consider that issue first.
Claimant’s estate asserts this action is abated since forfeiture laws are penal in
nature and abate upon the death of the alleged wrongdoer. No United States Court of
Appeals has as yet considered this precise issue as it relates to a violation of gambling
laws.
5
Claimant’s brief states the lease value was $8,400 per year. However, the record indicates the
figure as $7,800 per year.
6
According to claimant’s brief, Mrs. Woods’s husband died on June 27, 1984.
7
The parties either overlooked or misunderstood the court’s request as no additional briefs were
filed until brought to the attention of both counsel in June 2000.
5
The survivability of a cause of action depends on whether the recovery is
remedial, an action which compensates an individual for specific harm suffered, or
penal, an action which imposes damages upon the defendant for a general wrong to
the public. United States v. NEC Corp., 11 F.3d 136 (11th Cir. 1993) (as amended)
(citing Schreiber v. Sharpless, 110 U.S. 76, 80 (1884)). The attorney for claimant’s
estate cites Schreiber to support the fact that punitive or penal actions abate with the
death of the alleged wrongdoer. He also cites Kilgo v. Bowman Transportation, Inc.,
789 F.2d 859, 876 (11th Cir. 1986), to illustrate that penal actions do not survive death
of the plaintiff. The court in Kilgo held that a plaintiff’s civil rights action under Title
VII survived her death as the action was remedial rather than penal. Id. at 876. The
court stated that the primary purpose of Title VII was not to punish the defendant-
employer, but to eliminate discriminatory practices in the future. Id. Kilgo is of little
help to claimant’s argument. The general rule acknowledged in Schreiber and Kilgo,
that punitive or penal actions abate with the death of the wrongdoer, is not disputed.
Only its application to this case is disputed.
In behalf of abatement, the attorney for claimant’s estate in his supplementary
brief argues that the survivability of this action is a question of federal common law,
relying on NEC. That case was a qui tam action brought under the False Claims Act
(“FCA”), 31 U.S.C. § 3729 et seq. NEC, 11 F.3d at 137. The government argued that
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the claim of the qui tam plaintiff-relator, who died pending appeal, did not survive his
death. While the court noted it was clear the FCA is remedial with respect to the
government’s recovery against a defendant-wrongdoer, that the statute redresses
individual wrongs, rather than wrongs to the general public, and “is intended to
compensate the government for damages suffered as a result of the defendant’s
action,” id. at 137-38 (citation omitted), the question at issue was whether the FCA is
remedial or penal with respect to the recovery of the qui tam relator. Id. at 137. The
court held that a qui tam relator may also suffer harm, not just the government;
therefore, the FCA’s qui tam provisions are remedial, not penal, and would survive
the death of the plaintiff-relator. Id. at 138. In addition, the court noted that the qui
tam provisions of the FCA “provide incentive to government ‘whistleblowers’”,
encouraging individuals with knowledge of government-related fraud to come
forward, helping to relieve the government of expensive investigations and litigation.
Id. at 139. The cited case is more helpful to the government than to the claimant’s
estate.
The estate of the claimant directs us to two district court cases which have
determined that 18 U.S.C. § 1955(d), the gambling forfeiture statute, is penal in
nature. See United States v. $47,409.00 in U.S. Currency, 810 F. Supp. 919 (N.D.
Ohio 1993); United States v. Life Ins. Co. of Virginia, 647 F. Supp. 732 (W.D.N.C
7
1986). In the first case, the government alleged that the currency was subject to
forfeiture under § 1955(d) as the money was used in an illegal gambling business.
$47,409.00 in U.S. Currency, 810 F. Supp. at 919. The court held that it was self-
evident that the civil forfeiture of gambling proceeds is a penalty as it is an integral
part of the criminal statute. Id. at 923. The court’s interpretation was that “the
forfeiture provisions . . . are clearly intended to redress the public harm caused by
organized crime rather than to redress individual wrongs inflicted upon organized
crime’s ‘willing’ gambling victims.” Id. at 924. “There is no indication that the
Government here seeks, intends or engages in the absurd function of returning the
gambling profits to the luckless wagerers involved.” Id. However, the losses of the
bettors are of no concern to the government. It is the government which is looking out
for its own losses caused by the illegal conduct.
In the second case, the district court could find no case which had already
determined the nature of the gambling forfeiture statute. See Life Ins. Co. of Virginia,
647 F. Supp. at 741. The court then found it was a punitive and quasi-criminal statute.
Id. We find those cases not to be persuasive. That the forfeiture provision is
contained in the gambling prohibition statute of §1955 is not determinative. The
penalty provided for illegal gambling in that section is a fine or imprisonment, but
forfeiture provided for in a separate subsection serves a remedial purpose.
8
We find the answer in United States v. Ursery, 518 U.S. 267 (1996). The
Supreme Court stated that while forfeiture statutes may have “certain punitive aspects,
[they] serve important nonpunitive goals.” Id. at 290 (listing cases) (noting that civil
forfeiture of property discourages landowners from using or allowing property to be
used for illegal purposes or may abate a nuisance). The Court reaffirmed its
conclusion that “forfeiture . . . serves a deterrent purpose distinct from any punitive
purpose.” Id. at 292 (quoting Bennis v. Michigan, 516 U.S. 442, 452 (1996)).
The Court determined, “Civil forfeitures, in contrast to civil penalties, are
designed to do more than simply compensate the Government.” Ursery, 518 U.S. at
284. Forfeitures “are designed primarily to confiscate property used in violation of
the law, and to require disgorgement of the fruits of the illegal conduct.” Id. The
Court noted it may be possible to place a value on the property forfeited, but “it is
virtually impossible to quantify, even approximately, the nonpunitive purposes served
by a particular civil forfeiture.” Id. Therefore, the amount of harm suffered by the
government compared to the amount of the penalty is found to be inapplicable to civil
forfeitures. Id. We find the gambling forfeiture statute is remedial, not punitive, and
does not abate upon the death of the property owner.
In the most recent case of United States v. One Parcel of Real Estate at 10380
S.W. 28th Street, Miami, Florida, 214 F.3d 1291 (11th Cir. 2000), this circuit
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considered forfeiture of a home for drug violations. The husband had been convicted
of the drug offense, not the wife. The wife of the offender unsuccessfully sought
relief from the forfeiture and appealed. She died during the appeal and the husband
took up the appeal in her behalf contesting the denial of a Fed. R. Civ. P. 60(b)
motion. One Parcel of Real Estate, 214 F.3d at 1292-93. This court held the forfeiture
order did not abate upon the wife’s death and that the forfeiture did not violate the
Eighth Amendment Excessive Fines Clause. Id. at 1295. Relying on Ursery in drug
forfeiture circumstances, as we do in the gambling context, the court affirmed the
forfeiture. Id.
One difference between the present case, however, and the One Parcel of Real
Estate drug case is that the drug offense was a federal offense with no dependence on
state law. In the present case, the gambling offenses are determined by state law.
That distinction makes no difference in the outcome of this case, as the offenses are
illegal under both federal and state law. See, e.g., Kilgo, 789 F.2d at 876 (finding that
decedent’s § 1983 claim for damages survives death whether based on state law or
federal law).
As to the merits of the underlying case, the estate first argues that the taking
was an “excessive fine.” We have already addressed that issue. A civil forfeiture is
not a fine, whether excessive or not. See Ursery, 518 U.S. at 284. The forfeiture is
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part of the remedy in contrast to the imposition of incarceration or a fine imposed on
the wrongdoer. See id. at 287.
Finally, the estate argues that it is entitled to damages for the time after the first
forfeiture which was found to be illegal. This court’s mandate was to determine if
claimant was deprived of any damages in the form of rents received or other proceeds
realized by the government during that period. See Land, Winston County, 163 F.3d
at 1302. The district court’s findings of fact are reversed only if found to be clearly
erroneous. United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948);
Fed. R. Civ. P. 52(a). The district court’s conclusions of law are reviewed de novo.
United States v. One Single Family Residence, 894 F.2d 1511, 1513 (11th Cir. 1990).
The district court found no rents or other proceeds were realized by the government
during the period of the illegal seizure. The record supports these findings. The
premises were designed only for cockfighting and the property was not readily
adaptable for any other use. The government, of course, did not reopen the illegal
gambling enterprise (even though it appears from the record that for many years it was
profitable for the Woods). Therefore, only nominal damages were due to Mrs. Woods
for the violation of the due process clause. See Carey v. Piphus, 435 U.S. 247, 266-67
(1978) (approving award of nominal damages of one dollar where procedural due
process violation caused no actual injury). In addition, the sale of the property came
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only after the government had lawfully forfeited the property. Those sale proceeds
were not profits earned during the time of the illegal forfeiture. The government
earned nothing from the property and owes nothing other than the nominal damages
allowed by the district court.
AFFIRMED.
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