Langbord v. United States Department of the Treasury ( 2015 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________
No. 12-4574
_________
ROY LANGBORD; DAVID LANGBORD; JOAN
LANGBORD
v.
UNITED STATES DEPARTMENT OF THE TREASURY;
UNITED STATES BUREAU OF THE MINT; SECRETARY
OF THE UNITED STATES DEPARTMENT OF THE
TREASURY; ACTING GENERAL COUNSEL OF THE
UNITED STATES DEPARTMENT OF THE TREASURY;
DIRECTOR OF THE UNITED STATES MINT; CHIEF
COUNSEL UNITED STATES MINT; DEPUTY
DIRECTOR OF THE UNITED STATES MINT; JOHN DOE
NOS. 1 TO 10 “JOHN DOE” BEING FICTIONAL FIRST
AND LAST NAMES; UNITED STATES OF AMERICA
_________
UNITED STATES OF AMERICA
Third Party Plaintiff
v.
TEN 1933 DOUBLE EAGLE GOLD PIECES; ROY
LANGBORD; DAVID LANGBORD; JOAN LANGBORD
Third Party Defendants
ROY LANGBORD, DAVID LANGBORD, JOAN
LANGBORD
Appellants
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 2:06-cv-05315)
District Judge: Honorable Legrome D. Davis
Argued: November 19, 2014
Before: MCKEE, Chief Judge, RENDELL, SLOVITER,
Circuit Judges.
(Opinion Filed: April 17, 2015)
Barry H. Berke, Esq. [Argued]
Eric A. Tirschwell, Esq.
Kramer, Levin, Naftalis & Frankel
1177 Avenue of the Americas
New York, NY 10036
2
Kevin J. Kotch, Esq.
Walter M. Phillips, Jr., Esq.
Obermayer, Rebmann, Maxwell & Hippel
1617 John F. Kennedy Boulevard
One Penn Center, 19th Floor
Philadelphia, PA 19103
Attorneys for Appellants
Jacqueline C. Romero, Esq.
Nancy Rue, Esq.
Robert A. Zauzmer, Esq. [Argued]
Office of United States Attorney
615 Chestnut Street
Suite 1250
Philadelphia, PA 19106
Attorneys for Appellees
3
OPINION
RENDELL, Circuit Judge:
Congress passed the Civil Asset Forfeiture Reform Act
of 2000 (“CAFRA”), Pub. L. No. 106-185, 114 Stat. 202, as a
“react[ion] to public outcry over the government’s too-
zealous pursuit of civil and criminal forfeiture” and as an
“effort to deter government overreaching.” United States v.
Khan, 497 F.3d 204, 208 (2d Cir. 2007). 1 To that end,
Congress crafted a statutory scheme that requires the
Government, if it has seized property that someone else
purports to own, to file a complaint for judicial forfeiture
within 90 days of receipt of a claim (known as a “seized asset
claim”) or else to return the property. 18 U.S.C.
§ 983(a)(3)(A). CAFRA also imposes on the Government a
heightened burden of proof to establish its right to the
property in such proceedings. United States v. Sum of
$185,336.07 U.S. Currency, 731 F.3d 189, 196 (2d Cir.
2013).
Here, the Government failed to follow CAFRA’s
procedure, which requires it to file a complaint for judicial
forfeiture within 90 days of the filing of a seized asset claim.
Accordingly, we will reverse the portion of the District
1
See also H.R. Rep. No. 106-192, at 10 (1999) (“Civil asset
forfeiture does not just impact civil liberties and property
rights. It can work at total cross purposes with the few
professed public policy goals of the federal government.”).
4
Court’s July 29, 2009 order denying the appellants’ cross-
motion for partial summary judgment concerning the
applicability of CAFRA. We will vacate all orders at issue on
appeal that postdate the July 29, 2009 order, including the
jury verdict and the District Court’s order entering judgment.
Further, we will remand for the District Court and instruct it
to grant the appellants the relief required by this Opinion.
I. Background
The ownership of the property in question and how the
appellants obtained possession of it are hotly disputed, but the
facts relevant to the disposition of this appeal are not. The
property consists of ten coins that were minted in 1933. Each
coin is a double eagle, which is a $20 gold coin. The 1933
double eagle is alleged to be “the most valuable ounce of gold
in the world” and “America’s most beautiful coin.” (J.A.
609.) There were 445,500 double eagles minted in 1933;
however, those coins were generally not released into
circulation. Instead, in an effort to halt the banking crisis
during the Great Depression, President Franklin D. Roosevelt
issued an executive order in 1933 removing gold coins from
circulation. See Exec. Order No. 6102 (Apr. 5, 1933). 2 The
U.S. Mint (“Mint”) was forbidden from releasing any more
gold coins, and, over the next few years, began melting the
coins into gold bricks. Nonetheless, a number of 1933 double
2
Executive Order 6102 allowed people to continue to possess
“[g]old coin and gold certificates in an amount not exceeding
in the aggregate $100 belonging to any one person,” as well
as “gold coins having a recognized special value to collectors
of rare and unusual coins.” Exec. Order No. 6102, at § 2(b)
(Apr. 5, 1933).
5
eagles left the Mint; some were unlawfully smuggled out and
at least two left the Mint lawfully.
One 1933 double eagle was sold to King Farouk of
Egypt, a coin collector, in 1944. This coin had been
unlawfully smuggled out of the Mint, but the Government
“had improvidently issued an export license,” which muddied
the issue of who rightfully possessed the coin. (J.A. 28.) In
1995, an English coin dealer, Stephen Fenton, purchased that
coin for approximately $200,000. Fenton then contacted a
coin dealer in the United States, who subsequently became a
confidential informant for the U.S. Secret Service (“Secret
Service”). The confidential informant convinced Fenton to
bring the coin to the United States in 1996. The Secret
Service seized the coin from Fenton in New York City, and
litigation ensued. The Government ultimately settled with
Fenton, agreeing to sell the coin at auction and divide the
proceeds equally. The Fenton coin was auctioned in 2002 for
nearly $7.6 million.
The appellants in this case are Joan Langbord and her
sons, Roy and David Langbord (collectively, the
“Langbords”). Shortly after the Fenton coin sold at auction,
Joan Langbord allegedly discovered ten 1933 double eagles
(the “Double Eagles”) in a safe deposit box originally
belonging to her deceased father, Israel Switt. Several
decades earlier, the Secret Service suspected that Switt, an
antique dealer in Philadelphia, and George McCann, a former
Philadelphia Mint cashier, unlawfully smuggled 1933 double
eagles out of the Philadelphia Mint; however, Switt’s
involvement in this scheme was never proven.
6
In 2004, the Langbords’ counsel informed the Mint
about the Double Eagles that the Langbords had discovered.
The Langbords sought an agreement similar to the Fenton
coin compromise. The Mint’s attorneys stated that they
“would be willing to discuss the matter” and that they were
“amenable to a discussion” on that topic. (J.A. 142.) The
Langbords, explicitly reserving their rights to the Double
Eagles, made the coins available to the Government for the
sole purpose of authentication. (J.A. 806.) Shortly thereafter,
the agencies involved—i.e., the U.S. Attorney’s Office for the
District of Columbia, the Secret Service, the U.S. Department
of the Treasury (“Treasury”), and the Mint—met to discuss
how to proceed. A memorandum summarizing the meeting
states that “[a]ll the agencies involved, with the exception of
the US Mint, are in favor of pursuing forfeiture.” (J.A. 818.)
Only the Mint “assert[ed] that the coins are government
property and should be returned [to the Mint] without the
need for forfeiture.” (Id.)
The Double Eagles were authenticated, and the
Treasury sided with the Mint, deciding not to institute a
judicial civil forfeiture proceeding. When the Langbords’
counsel requested return of the Double Eagles, the Mint’s
counsel wrote to him, stating, “[t]he United States Mint has
no intention of seeking forfeiture of these ten Double Eagles
because they already are, and always have been, property
belonging to the United States; this makes forfeiture
proceedings entirely unnecessary.” (J.A. 823.) In response,
the Langbords’ counsel submitted a “seized asset claim” on
September 9, 2005, demanding the return of the Double
Eagles or the institution of a judicial civil forfeiture
proceeding. (J.A. 828-35.) As described below, a seized
asset claim starts the process whereby the Government must
7
either institute a judicial civil forfeiture proceeding or return
the seized property. Nevertheless, in response to the seized
asset claim, the Mint responded that it was “returning these
documents . . . without action,” again stating that “[t]here is
simply no basis for the Government to initiate forfeiture
proceedings on property to which the United States holds
title.”3 (J.A. 837.)
In the face of the Government’s refusal, the Langbords
instituted this civil action in December 2006. The Langbords
asserted two claims for violations of the Administrative
Procedure Act (“APA”), a claim for violation of CAFRA, a
Fifth Amendment claim, a Fourth Amendment claim, a claim
for mandamus, and two claims under the Federal Tort Claims
Act (“FTCA”) for replevin and conversion.
The parties filed cross-motions for summary judgment.
On July 29, 2009, the District Court ruled in favor of the
Government on the CAFRA claim, holding that CAFRA’s
3
The Mint’s terse letter also denied that the Government had
seized the Double Eagles, an assertion which, as described
below, the District Court correctly rejected. (See J.A. 837
(“As you and your client are aware, there has been no seizure
of any property that is owned by, or that could be claimed to
be owned by, your client.”); J.A. 838 (“In short, there has
been no seizure of property; your client voluntarily
surrendered to the United States property belonging to the
United States.”).) This denial starkly contrasts with a
contemporaneous internal Government memorandum that
conceded that a seizure had occurred. (See J.A. 818 (“On
September 22, 2004, the [Secret Service] seized ten coins
referred to as ‘1933 Gold Double Eagle Coins’ . . . .”).)
8
90-day deadline in § 983(a)(3) did not apply because it
applies only to nonjudicial civil forfeitures and no such
forfeiture had occurred here. It reasoned that: (1) a “non-
judicial civil forfeiture ‘is commenced when the Government
sends notice of the forfeiture proceeding to potential
claimants’”; (2) “the Government never sent [the Langbords]
such a notice”; and thus (3) “the Government never began an
administrative forfeiture proceeding 4 and therefore the
requirements of § 983(a) [namely, the 90-day deadline] do
not apply.” (J.A. 146 (quoting Stefan D. Cassella, Asset
Forfeiture Law in the United States 143 (1st ed. 2007)
[hereinafter Cassella First Edition]).) The District Court did
find, however, that the Government had violated the
Langbords’ Fourth Amendment right against unreasonable
seizures and their Fifth Amendment due process right by
taking the Double Eagles contrary to the parties’ agreement.
It held that the remedy for these constitutional violations was
for the Government either to return the coins or to institute a
judicial civil forfeiture proceeding, which is the same result
that § 983(a)(3) demands, but without the 90-day deadline.
The District Court granted the Government’s summary
judgment motion on the APA claims and postponed ruling on
the FTCA claims.
As ordered by the District Court, the Government
sought leave to file a judicial civil forfeiture complaint on
September 28, 2009. The complaint alleged that the Double
Eagles were “embezzled, stolen, purloined, knowingly
converted to private use, or taken from the United States Mint
in Philadelphia without authority, and [were] concealed and
4
As used here, “administrative forfeiture” is synonymous
with “nonjudicial civil forfeiture.”
9
retained with the intent to convert [them] to private use or
gain” in violation of 18 U.S.C. § 641. (J.A. 1178.) The
Government’s proposed complaint also included a declaratory
judgment claim that “the disputed Double Eagles were not
lawfully removed from the United States Mint and that
accordingly, as a matter of law, they remain property of the
United States.” (J.A. 1180.)
Over the Langbords’ objection, the District Court
granted leave to file portions of the complaint, including the
forfeiture claim and the declaratory judgment claim. It also
ruled that the Langbords had a right to a jury trial on the
forfeiture claim but not on the declaratory judgment claim. A
jury trial was held on the forfeiture claim, and the jury
returned a verdict for the Government on July 20, 2011,
finding that the Double Eagles had been stolen from the Mint.
As a result of the jury verdict, the District Court entered
judgment for the Government on its forfeiture claim, as well
as on the related declaratory judgment claim.
On appeal, the Langbords argue that the District Court
erred by granting summary judgment for the Government on
the issue of CAFRA’s 90-day statutory deadline for filing a
judicial civil forfeiture action. They also argue that the
District Court erred by allowing the Government’s
declaratory judgment claim to proceed and by denying the
Langbords’ request to have the declaratory judgment claim
tried by a jury. In addition, the Langbords appeal the District
Court’s admission of certain evidence at trial, 5 argue that the
5
The Langbords persuasively argue that the hearsay-within-
hearsay rule, Fed. R. Evid. 805, does apply to ancient
documents admitted pursuant to Rule 803(16), contrary to the
10
District Court improperly instructed the jury on criminal
intent, and urge that the Government cannot seize property as
a result of an 18 U.S.C. § 641 violation—i.e., stolen
government property—unless the property was stolen or
embezzled after 1948 when § 641 was enacted.
II. Jurisdiction and Standard of Review
The District Court had jurisdiction over the
Langbords’ claims pursuant to 28 U.S.C. §§ 1331,
1346(b)(1), 1356, and 1361 and 5 U.S.C. § 702; it had
jurisdiction over the Government’s claims pursuant to 28
U.S.C. §§ 1345 and 1355(a). We have jurisdiction pursuant
to 28 U.S.C. § 1291.
We “employ a plenary standard in reviewing orders
entered on motions for summary judgment, applying the same
standard as the district court.” Blunt v. Lower Merion Sch.
Dist., 767 F.3d 247, 265 (3d Cir. 2014). We review questions
of law de novo. United States v. Mallory, 765 F.3d 373, 381-
82 (3d Cir. 2014).
District Court’s holding. Although we do not reach the issue,
the District Court appears to have been mistaken. See United
States v. Hajda, 135 F.3d 439, 444 (7th Cir. 1998) (“These
documents are more than 20 years old and they were properly
authenticated, so they are exceptions to the hearsay rule
admissible under Rule 803(16) of the Federal Rules of
Evidence. However, this admissibility exception applies only
to the document itself. If the document contains more than
one level of hearsay, an appropriate exception must be found
for each level.”).
11
III. Discussion
A. The CAFRA Violation
The Government was required either to file a judicial
civil forfeiture complaint or to return the Double Eagles
within 90 days of receipt of the Langbords’ seized asset claim
under 18 U.S.C. § 983(a)(3)(A). Because the Government
failed to do so, the Langbords are entitled to the return of the
Double Eagles.
The Government’s position as to why it did not need to
fulfill its obligation under § 983(a)(3)(A) has morphed over
time. When the Government initially returned the Langbords’
seized asset claim without action, it claimed that it did not
need to abide by CAFRA because the property was stolen
government property. Now, the Government’s principal
argument is that it did not need to abide by CAFRA because
it never sent a notice to the Langbords that it was pursuing
forfeiture, thereby relieving it of its obligation to institute a
judicial civil forfeiture proceeding. Neither of these
arguments nor any of the Government’s remaining arguments
have merit.
The Government’s original argument that stolen
government property falls outside the protections of CAFRA
is incorrect for a simple reason: Congress has specifically
enumerated theft or embezzlement of government property as
one of the crimes to which CAFRA applies. Congress has
provided that “[t]he following property is subject to forfeiture
to the United States: . . . . [a]ny property, real or personal,
which constitutes or is derived from proceeds traceable to . . .
any offense constituting ‘specified unlawful activity’ (as
12
defined in section 1956(c)(7) of this title).” 18 U.S.C.
§ 981(a)(1)(C) (emphasis added). “[S]pecified unlawful
activity” includes “an offense under . . . section 641 (relating
to public money, property, or records).” Id. § 1956(c)(7)(D).
Section 641, the very statute alleged in the Government’s
complaint to have been violated, criminalizes the theft or
embezzlement “of any record, voucher, money, or thing of
value of the United States or of any department or agency
thereof.” Id. § 641 (emphasis added). The Government
claims that the Double Eagles are government property—i.e.,
things of value of the United States. (J.A. 1178.) Clearly,
CAFRA applies when the underlying property is stolen
government property.
The Government’s original argument also appears to
have been based on the notion that the Langbords voluntarily
surrendered the Double Eagles to the Government. However,
on summary judgment, the District Court concluded that the
Government’s seizure of the coins was unconstitutional, and
the Government has not cross-appealed this ruling. 6 The
Langbords turned the Double Eagles over to the Government
for the sole purpose of authenticating them, and they
“specifically reserve[d] all rights and remedies with respect to
the Coins.” (J.A. 806.) As the District Court found, the
Langbords’ “letter communicated that [they] did not intend
the transfer to be an unconditional, permanent surrender,” and
“once [they] became aware that the Government intended to
6
Regardless of whether the Government could have taken an
interlocutory appeal of the District Court’s July 29, 2009
summary judgment order, the Government could have cross-
appealed at the conclusion of the case, after the jury trial. It
did not.
13
keep the coins permanently, they promptly requested their
return.” (J.A. 150.)
The Government’s seizure of property—even under a
theory that the property ultimately belongs to the
Government—can violate the Fourth and Fifth Amendment.
See Soldal v. Cook Cnty., Ill., 506 U.S. 56, 61 (1992) (“A
‘seizure’ of property, we have explained, occurs when ‘there
is some meaningful interference with an individual’s
possessory interests in that property.’” (quoting United States
v. Jacobsen, 466 U.S. 109, 113 (1984)); see also Lesher v.
Reed, 12 F.3d 148, 150 (8th Cir. 1994) (“The Leshers’
constitutional right against unreasonable seizures is not
vitiated merely because the [government] believed the dog
belonged to the [Little Rock Police Department].”). Here, the
Langbords had a possessory right that they preserved in
writing when they turned the Double Eagles over for
authentication. Even if the Double Eagles ultimately were
stolen government property, the Government’s seizure of
them was unconstitutional, as the District Court determined.
With this original line of argument rejected, we turn to
the Government’s main assertion on appeal—namely, that all
it needs to do to avoid CAFRA’s protections is to refrain from
sending notice that it is commencing a forfeiture proceeding.
As a corollary, the Government argues that it can avoid
CAFRA by unequivocally stating in its communication with
the people whose property was seized that it is not seeking
forfeiture. If the Government seizes property claimed by
someone else—whether it be money, a car, or even a house—
the Government argues it can avoid the protections Congress
sought to put in place simply by saying, “we are not seeking
forfeiture.”
14
The Langbords are correct in urging that we reject
these arguments. The Government was required either to
return their property or to institute a judicial civil forfeiture
proceeding within 90 days of the Langbords’ submission of a
seized asset claim. See 18 U.S.C. § 983(a)(3)(A) (“Not later
than 90 days after a claim has been filed, the Government
shall file a complaint for forfeiture . . . or return the property
. . . .”). This is what CAFRA envisions: the Government
cannot unilaterally ignore a seized asset claim. Instead, the
Government must either return the seized property or file a
complaint in court to seek forfeiture of the seized property
within 90 days of receipt of the seized asset claim. Our
dissenting colleague takes issue with this proposition, urging
that, although the Government was required to have followed
the 90-day deadline in § 983(a)(3), its failure to do so does
not require the Government to return the Double Eagles to the
Langbords. This is a novel argument, never posited by the
Government, and, as we discuss below, not supported by any
relevant case authority. 7 Moreover, it rewrites the statute.
Section 983(a) contains three independent subparts: in
(a)(1) it imposes a 60-day timeline for the Government to
send written notice of forfeiture in certain cases; in (a)(2) it
creates a mechanism by which a person claiming seized
7
We note, further, that of the approximately thirty cases cited
in Parts I and II of the dissent, only one was ever referred to
in any of the briefing—cited in a footnote in the
Government’s Brief for an unrelated issue. As we discuss
below, the jurisprudence the dissent cites is off-point, dealing
with a different provision of CAFRA, § 983(a)(1), and even
entirely different statutes. See infra note 19.
15
property can file a seized asset claim, whether or not the
Government has sent or is required to send notice; and in
(a)(3) it imposes a 90-day timeline, after a seized asset claim
has been filed, for the Government to respond either by
returning the property or by filing a complaint in court for
judicial forfeiture.
The District Court incorrectly reasoned that the seized
asset claim provision, § 983(a)(2), and the 90-day provision,
§ 983(a)(3), are activated only if written notice is sent under
§ 983(a)(1). This is wrong. The District Court combined
§ 983(a)(1) with (a)(2) and (a)(3) and held that, in any
forfeiture situation in which the Government does not send
notice under § 983(a)(1), no one is able to file a seized asset
claim pursuant to § 983(a)(2). But a careful reading of the
statutory provisions demonstrates that this is not the case:
(1)(A)(i) Except as provided in clauses (ii)
through (v), in any nonjudicial civil forfeiture
proceeding under a civil forfeiture statute, with
respect to which the Government is required to
send written notice to interested parties, such
notice shall be sent in a manner to achieve
proper notice as soon as practicable, and in no
case more than 60 days after the date of the
seizure. . . .
(2)(A) Any person claiming property seized in a
nonjudicial civil forfeiture proceeding under a
civil forfeiture statute may file a claim with the
appropriate official after the seizure. . . .
(3)(A) Not later than 90 days after a claim has
been filed, the Government shall file a
16
complaint for forfeiture . . . or return the
property pending the filing of a complaint . . . .
(3)(B) If the Government does not—(i) file a
complaint for forfeiture or return the property,
in accordance with subparagraph [(3)](A) . . .
the Government shall promptly release the
property pursuant to regulations promulgated by
the Attorney General, and may not take any
further action to effect the civil forfeiture of
such property in connection with the underlying
offense.8
18 U.S.C. § 983(a) (emphasis added).
Section 983(a)(1)(A) provides for the manner and
timing of notice that the Government must use in those
“nonjudicial civil forfeiture proceeding[s] . . . with respect to
which the Government is required to send written notice.” Id.
§ 983(a)(1)(A)(i) (emphasis added). This provision
recognizes that another law—separate from CAFRA—
provides that notice must be sent in some, but not all,
8
The dissent points to the phrase, “return the property
pending the filing of a complaint,” in § 983(a)(3)(A), as
creating ambiguity as to the Government’s obligations. (See
Diss. Op. at 3.) However, there is no question that the
Government did not return the Double Eagles pending the
filing of a complaint. Therefore, the Government did not
comply with § 983(a)(3)(A), which then requires that “the
Government shall promptly release the property . . . and may
not take any further action to effect the civil forfeiture of such
property in connection with the underlying offense.” 18
U.S.C. § 983(a)(3)(B).
17
nonjudicial civil forfeiture proceedings. See 19 U.S.C.
§ 1607(a).9 Section 1607(a) does not speak to the manner or
timing of the notice; that is what § 983(a)(1) does. The
Government errs in urging that, when notice of forfeiture is
either not required or not given within 60 days of a seizure
under § 983(a)(1), that insulates the Government from its
obligation under § 983(a)(3) to act within 90 days of
receiving a seized asset claim. Instead, § 983(a)(2) and (a)(3)
act independently from § 983(a)(1): whether notice has been
filed has nothing to do with the Government’s duty to
respond to a seized asset claim. Therefore, § 983(a)(1) is
irrelevant to the analysis that we must conduct under
§ 983(a)(2) and (a)(3).
The text of § 983(a)(3) provides that, “[n]ot later than
90 days after a claim has been filed, the Government shall
file a complaint for forfeiture . . . or return the property.” 18
9
Notice is required in the following situations:
(1) the value of such seized vessel, vehicle,
aircraft, merchandise, or baggage does not
exceed $ 500,000;
(2) such seized merchandise is merchandise the
importation of which is prohibited;
(3) such seized vessel, vehicle, or aircraft was
used to import, export, transport, or store
any controlled substance or listed chemical;
or
(4) such seized merchandise is any monetary
instrument within the meaning of section
5312(a)(3) of title 31 of the United States
Code; . . . .
19 U.S.C. § 1607(a).
18
U.S.C. § 983(a)(3)(A) (emphasis added). And the
requirements for filing a claim are laid out in § 983(a)(2), not
§ 983(a)(1). “Any person claiming property seized in a
nonjudicial civil forfeiture proceeding under a civil forfeiture
statute may file a claim with the appropriate official after the
seizure.” Id. § 983(a)(2)(A) (emphasis added). Here, the
Government’s seizure of the property is rightfully considered
a nonjudicial civil forfeiture proceeding. See Stefan D.
Cassella, Asset Forfeiture Law in the United States 10 (2d ed.
2013) [hereinafter Cassella Second Edition] (“Basically, an
administrative forfeiture begins when a federal law
enforcement agency with statutory authority in a given area
(e.g., DEA in a drug case, FBI in a fraud case, ATF in a
firearms case) seizes property discovered in the course of an
investigation.”). 10 In other words, it is when the agency
“seizes property” that the “administrative forfeiture begins.”
Id. Because a nonjudicial civil forfeiture proceeding occurred
when the Government seized the coins, the Langbords had the
right to submit a seized asset claim under § 983(a)(2), and,
when they did, they triggered the Government’s obligation
under § 983(a)(3) to bring a judicial civil forfeiture
proceeding or to return the property within 90 days.
The Government’s insistence that “[t]he statute says
that an administrative forfeiture proceeding is initiated by the
government providing notice of the seizure” is baffling. (Oral
10
While most forfeitures result from the Government’s
seizure of property derived from illegal activity, CAFRA
covers stolen government property in the hands of third
parties, as was explained above. See 18 U.S.C.
§ 981(a)(1)(C) (cross-referencing 18 U.S.C. § 1956(c)(7),
which cross-references 18 U.S.C. § 641).
19
Arg. Tr. 52:7-9, Nov. 19, 2014.) But the District Court
agreed. Quoting from a section of a treatise that does not
discuss the applicability of § 983(a)(3), the District Court
held that “[a] non-judicial civil forfeiture proceeding ‘is
commenced when the Government sends notice of the
forfeiture proceeding to potential claimants.’” (J.A. 146
(quoting Cassella First Edition, supra, at 143).) However, as
the language of § 983(a)(1)(A)(i) makes clear, only in some
nonjudicial civil forfeiture proceedings under a civil forfeiture
statute11 is the Government required to send written notice.
Otherwise, the subsection would not need to include the
phrase, “in any nonjudicial civil forfeiture proceeding under a
civil forfeiture statute, with respect to which the Government
is required to send written notice to interested parties.” 18
U.S.C. § 983(a)(1)(A)(i) (emphasis added). It cannot be that
a case where no notice of forfeiture is required is nonetheless
beholden to the Government’s notice as starting the
administrative process. The frivolity of the Government’s
position is demonstrated by the fact that it would afford the
Government total discretion to avoid CAFRA altogether by
unilaterally deciding not to notify the putative owner of the
seizure.
Further proof of why the Government is incorrect
appears in § 983(e)(1), which provides that “[a]ny person
11
There is no dispute that the Government acted “under a
civil forfeiture statute.” The definition of “civil forfeiture
statute” is “any provision of Federal law providing for the
forfeiture of property other than as a sentence imposed upon
conviction of a criminal offense.” 18 U.S.C. § 983(i)(1).
There are five enumerated exceptions, none of which applies
here. See id. § 983(i)(2).
20
entitled to written notice in any nonjudicial civil forfeiture
proceeding under a civil forfeiture statute who does not
receive such notice may file a motion to set aside a
declaration of forfeiture with respect to that person’s interest
in the property.” Id. § 983(e)(1) (emphasis added). Section
983(e)(1) is triggered only when there is a “nonjudicial civil
forfeiture proceeding” in which the Government has not sent
notice of its intent to pursue forfeiture. But if such a
proceeding can be commenced only when the Government
has sent notice of its intent, then the statute makes no sense.
In other words, if a nonjudicial civil forfeiture proceeding
commences only when the Government sends notice that it is
instituting such a proceeding, then § 983(e)(1), which
provides a remedy in any nonjudicial civil forfeiture
proceeding in which the Government was required but failed
to give notice of its intent to pursue forfeiture, would be
nonsensical. Therefore, it cannot be the case that a
nonjudicial civil forfeiture proceeding is initiated only when
the Government sends notice that it intends to commence
such a proceeding. 12 Section 983(a)(1) does not initiate a
12
To assert that a nonjudicial civil forfeiture proceeding
occurs only when the Government sends notice, the
Government relies upon cases interpreting the 60-day notice
requirement of § 983(a)(1), which do not address the
applicability of the 90-day requirement in § 983(a)(3). See,
e.g., United States v. Approximately $1,305,105 in Assorted
Silver Bars & Gold & Silver Coins, No. 12-C-7505, 2013 WL
453195, at *2-3 (N.D. Ill. Feb. 6, 2013), rev’d, No. 13-1452
(7th Cir. July 22, 2013); United States v. Assets Described in
“Attachment A”, No. 6:09-cv-1852, 2010 WL 1893327, at *6
(M.D. Fla. May 11, 2010); United States v. $147,900, No.
1:06-cv-197, 2009 WL 903356, at *4 (M.D.N.C. Mar. 31,
21
nonjudicial civil forfeiture proceeding; rather, it provides the
manner of giving notice when the provisions requiring notice
apply.
Instead, a “nonjudicial civil forfeiture proceeding”
commences when the Government has seized property.
Cassella Second Edition, supra, at 10. When the Government
has seized property, then the person from whom the property
was seized has the right to file a seized asset claim pursuant
to § 983(a)(2)(A), thereby triggering the 90-day deadline in
§ 983(a)(3)(A). If the Government has not seized property,
then it has no obligation to respond to a seized asset claim.
Thus, the horrors described by the Government at oral
argument—e.g., pro se prisoners filing seized asset claims for
jailhouse televisions—is of no concern here. Because no
seizure occurred in those situations, the Government would
not have to file a judicial forfeiture action, even if someone
files a seized asset claim. It is only when a seizure occurs
that there is a “nonjudicial civil forfeiture proceeding” and
thus the Government must respond. 13 Here, the Government
2009), vacated in part, 450 F. App’x 261 (4th Cir. 2011);
DWB Holding Co. v. United States, 593 F. Supp. 2d 1271,
1272 (M.D. Fla. 2009).
13
(See Oral Arg. Tr. 59:4-15 (“The other problem with this
notion that somebody can create their own forfeiture
proceeding by filing a seized asset claim is we would be
bombarded by litigation. . . . All the prisoners who say, [y]ou
know, that TV set on the wall is mine, I declare it. Here’s a
seized asset claim. You have 90 days to file a judicial
forfeiture against me, when the government never initiated
any forfeiture at all because the TV set [was never theirs]—
we can go on and on with examples.”).) This example is off-
22
unquestionably committed a seizure (and an unconstitutional
one at that), so it was required to respond to the Langbords’
seized asset claim, either by filing a judicial complaint within
90 days or by returning the property. See 18 U.S.C.
§ 983(a)(3)(A). Instead, the Government forced the
Langbords to commence this decade-long ordeal for the
return of the Double Eagles.
The Government’s remaining arguments as to why the
90-day deadline should not apply also lack merit. 14 These
topic because the Government did not seize the TV set, and,
therefore, no nonjudicial civil forfeiture proceeding has
occurred. Accordingly, the Government would have no
obligation to respond to the seized asset claim.
14
The Government has not argued that the Langbords waived
their right to CAFRA’s 90-day deadline by consenting to the
forfeiture proceeding, which the District Court ordered as a
remedy for the Government’s unconstitutional seizure of the
Double Eagles. Accordingly, the Government has waived
any potential waiver argument. See Freeman v. Pittsburgh
Glass Works, LLC, 709 F.3d 240, 250 (3d Cir. 2013) (“[A]
party can waive a waiver argument by not making the
argument below or in its briefs.”). Regardless, the Langbords
have clearly and repeatedly raised the argument that the
Government violated the 90-day deadline in § 983(a)(3).
(See, e.g., J.A. 628, 775-78.) We note that this is why there
was no “agreement of the parties” as to the Government’s late
filing of the forfeiture complaint. See 18 U.S.C.
§ 983(a)(3)(A) (“Not later than 90 days after a claim has been
filed, the Government shall file a complaint for forfeiture . . . ,
except that a court in the district in which the complaint will
23
arguments are: (1) the value of the Double Eagles prevented
them from being subject to CAFRA; (2) the Mint was not
authorized to bring a forfeiture action; and (3)
§ 983(a)(3)(A)’s “good cause” exception applies.
First, the Government’s argument that the Double
Eagles were not subject to forfeiture because their value
exceeded $500,000 is unavailing. This argument relies on 19
U.S.C. § 1607(a), which states only that “the appropriate
customs officer shall cause a notice of the seizure of such
articles and the intention to forfeit . . . to be published for at
least three successive weeks in such manner as the Secretary
of the Treasury may direct.” 19 U.S.C. § 1607(a). One of the
instances in which notice is not required is when the value of
the property exceeds $500,000. Id. § 1607(a)(1). Because
the Government assumes that notice is required to commence
a forfeiture proceeding and because § 1607(a) demonstrates
that no notice was required in this case, as the Double Eagles’
value allegedly exceeds $500,000, the Government argues
that no forfeiture has occurred here. This argument fails.
Section 1607(a) is relevant to determining whether the
Government was obligated to provide notice of forfeiture
within 60 days pursuant to 18 U.S.C. § 983(a)(1), but it does
not relieve the Government of its 90-day deadline in
§ 983(a)(3). Notice is not a prerequisite for persons to file a
seized asset claim and trigger the 90-day deadline in
§ 983(a)(3).
Second, the Government’s argument that its conduct
did not amount to a nonjudicial civil forfeiture since the Mint
be filed may extend the period for filing . . . upon agreement
of the parties.”).
24
was not authorized to conduct a forfeiture under 31 U.S.C.
§ 9703 fails because the Mint is an entity within the Treasury
and was not the only agency involved here. Section
9703(o)(1) provides a definition for “Department of the
Treasury law enforcement organization,” a definition which
includes the Secret Service but excludes the Mint. 31 U.S.C.
§ 9703(o)(1). 15 A separate subsection provides that “property
and currency shall be deemed to be forfeited pursuant to a law
enforced or administered by a Department of the Treasury
law enforcement organization if it is forfeited pursuant to—
. . . (B) a civil administrative forfeiture proceeding conducted
by a Department of the Treasury law enforcement
organization.” Id. § 9703(m)(2)(B). But the Secret Service
is the agency that “seized” the Double Eagles on September
22, 2004 and that continued to have custody of the coins until
months later. (J.A. 818.) The Secret Service is authorized to
conduct a forfeiture pursuant to § 9703. That the Treasury
ordered the Secret Service to give the Double Eagles to the
Mint (J.A. 821) does not insulate the Government from
CAFRA. Section 9703 sought to limit various agencies’
ability to conduct seizures; it does not give agencies that are
not authorized to conduct seizures a carte blanche ability to
avoid CAFRA.
Third, § 983(a)(3)(A)’s “good cause” exception does
not excuse the Government’s failings here. Pursuant to the
statute, “[n]ot later than 90 days after a claim has been filed,
the Government shall file a complaint for forfeiture . . . ,
except that a court in the district in which the complaint will
be filed may extend the period for filing a complaint for good
15
We note an inconsistency in the U.S. Code: there are two
separate statutes both identified as 31 U.S.C. § 9703.
25
cause shown or upon agreement of the parties.” 18 U.S.C.
§ 983(a)(3)(A) (emphasis added). We cannot help but read
this language (“shall file . . . except . . . may extend”) to mean
that the good cause exception allows the Government to seek
an extension of time only before the 90-day period expires.
See United States v. Funds from Fifth Third Bank Account,
No. 13-11728, 2013 WL 5914101, at *9 (E.D. Mich. Nov. 4,
2013) (“Given the narrow language used [in § 983(a)(3)(A)],
this Court concludes that the Government has to seek the
extension before the limitations period passes and that it
cannot seek a ‘retroactive extension.’”); see also United
States v. One 1991 Ford Mustang LX, 909 F. Supp. 831, 834
(D. Colo. 1996); United States v. 1986 Ford Bronco, 782 F.
Supp. 1543, 1546 (S.D. Fla. 1992); United States v. One
White 1987 Tempest Sport Boat, 726 F. Supp. 7, 9 (D. Mass.
1989). The period cannot be extended if it has already
passed.16
16
Congress included the “good cause” exception to “make it
unnecessary for the government, as it often must under
current law, to file a complaint and then immediately request
a stay under Rule 26, Federal Rules of Civil Procedure, or
under other statutory authority, to avoid jeopardizing a
criminal case.” H.R. Rep. No. 105-358(I), at 45 (1997)
(footnote omitted). Congress explained that “the court should
grant an extension of time where the filing of the complaint,
which is required to recite the factual basis in some detail,
would reveal facts concerning a pending investigation,
undercover operation, or court-authorized electronic
surveillance, or would jeopardize government witnesses.” Id.
at 44 (footnote omitted). Furthermore, “the court could grant
the extension to allow the government to include the
forfeiture in a criminal indictment, and thus avoid the
26
Even if the statute did permit retroactive extensions,
the Government would not be entitled to an extension for two
reasons. First, the Government’s delay was not minor; the
Government failed to file a complaint until September 28,
2009—four years and nineteen days after the Langbords filed
their seized asset claim—and only did so under court order.
See United States v. $39,480.00 in U.S. Currency, 190 F.
Supp. 2d 929, 932 & n.9 (W.D. Tex. 2002) (permitting a
retroactive extension when the government was one day late).
Second, according to the Government’s own documents, after
the Secret Service seized the Double Eagles, “[a]ll the
agencies involved, with the exception of the US Mint, [were]
in favor of pursuing forfeiture.” (J.A. 818.) Thus, the
Government knew that it was obligated to bring a judicial
civil forfeiture proceeding or to return the property, but
refused to do so. 17 As a result, the Government cannot show
good cause.18
necessity of initiating parallel civil and criminal forfeitures.”
Id. Congress’s reasons for including the good cause
exception are certainly not applicable here.
17
We note that an unjustified mistake of law can hardly be
considered “good cause.” See Green v. Humphrey Elevator
& Truck Co., 816 F.2d 877, 884 (3d Cir. 1987) (“We need not
decide here, the parameters of the ‘good cause’ exception to
Rule 4(j) for it is clear that an unjustified misunderstanding of
the requirements of the law will not suffice.”).
18
The Government incorrectly states that the District Court
found good cause here. The District Court stated no more
than that “the Government might still have had an opportunity
to file a judicial forfeiture action” under the good cause
exception. (J.A. 148 n.3 (emphasis added).) However, it did
not find good cause, nor could it have.
27
Accordingly, a nonjudicial civil forfeiture proceeding
occurred here, and the Government missed the 90-day
deadline under § 983(a)(3). On September 9, 2005, when the
Langbords submitted their seized asset claim, the 90-day
period in § 983(a)(3) commenced. See 18 U.S.C.
§ 983(a)(3)(A). The Government failed to return the
Langbords’ property or institute a judicial civil forfeiture
proceeding within 90 days. Having failed to do so, it must
return the Double Eagles to the Langbords. 19
19
While the dissent refers to a myriad of cases purportedly
contradicting the reasoning and the result we embrace, those
cases are easily distinguishable, and the impact of CAFRA’s
specific language in § 983(a)(3) could not be clearer. The
dissent’s argument—i.e., that the Government should have
followed § 983(a)(3) but that its failure does not lead to the
return of the Langbords’ property—is a novel position that
was not urged by the Government. Moreover, the statutes
that are the subject of the cases cited in the dissent have little
in common with CAFRA. See, e.g., Dolan v. United States,
560 U.S. 605 (2010) (Mandatory Restitution Act); Shenango
Inc. v. Apfel, 307 F.3d 174 (3d Cir. 2002) (Coal Act). It relies
on forfeiture cases that do not involve § 983(a)(3) at all. See,
e.g., Garcia v. Meza, 235 F.3d 287 (7th Cir. 2000); United
States v. Giraldo, 45 F.3d 509 (1st Cir. 1995); Lopez v.
United States, 863 F. Supp. 2d 127 (D. Mass. 2012); DeSaro
v. United States, No. 06-cv-20531 (S.D. Fla. Aug. 8, 2006).
It relies on cases that describe whether a statutory deadline is
jurisdictional, which is relevant for situations in which the
claimant failed to timely argue that the 90-day deadline in
§ 983(a)(3) required the return of the property, with the
claimant instead making the § 983(a)(3) argument in, e.g., a
Rule 60 motion to vacate a judgment. See, e.g., United States
28
v. Vazquez-Alvarez, 760 F.3d 193 (2d Cir. 2014) (per curiam);
United States v. Wilson, 699 F.3d 789 (4th Cir. 2012); United
States v. Martin, 662 F.3d 301 (4th Cir. 2011). Here, in
contrast, the Langbords have pressed this argument since day
one. See supra note 14. And it relies on cases interpreting
the 60-day notice deadline in § 983(a)(1). See, e.g., United
States v. $11,500.00 in U.S. Currency, 710 F.3d 1006 (9th
Cir. 2013); United States v. $114,031.00 in U.S. Currency,
No. 06-cv-21820, 2007 WL 2904154 (S.D. Fla. Oct. 4, 2007);
Salmo v. United States, No. 06-12909, 2006 WL 2975503
(E.D. Mich. Oct. 17, 2006); Manjarrez v. U.S. Dep’t of the
Treasury, No. 01-7530, 2002 WL 31870533 (N.D. Ill. Dec.
19, 2002). The 60-day notice deadline in § 983(a)(1) is
fundamentally different from the 90-day deadline in
§ 983(a)(3) because, if the Government misses § 983(a)(1)’s
60-day deadline, CAFRA specifically allows the Government
“to commence a forfeiture proceeding at a later time.” 18
U.S.C. § 983(a)(1)(F). There is no analogous provision that
gives the Government a second chance if it misses the 90-day
deadline in § 983(a)(3) or otherwise excuses the failure to act.
Congress could have included such a provision, but it did not.
As noted by Wilson—a case relied upon by the dissent—“the
time limit imposed on the government by § 983(a)(3) is
mandatory.” 699 F.3d at 791. “If the Government does not
file a complaint or take other action within 90 days as
required, it must ‘release the property pursuant to regulations
promulgated by the Attorney General, and may not take any
further action to effect the civil forfeiture of such property in
connection with the underlying offense.’” Id. at 795
(emphasis added) (quoting 18 U.S.C. § 983(a)(3)(B)). In that
case, Wilson lost merely because he raised his § 983(a)(3)
argument too late, i.e., in a Rule 60 motion to vacate the
29
B. The Declaratory Judgment
Given this conclusion, the District Court should not
have ordered the declaratory judgment claim to proceed, and
indeed we must vacate the declaratory judgment. The
declaratory judgment entered by the District Court was the
following:
The disputed Double Eagles were not lawfully
removed from the United States Mint and
accordingly, as a matter of law, they remain the
property of the United States, regardless of (1)
the applicability of CAFRA to the disputed
Double Eagles, (2) Claimants’ [i.e., the
Langbords’] state of mind with respect to the
coins, or (3) how the coins came into
Claimants’ possession.
(J.A. 52-53.) The District Court opined that “the declaration
concerns a different–and broader–set of legal rights than the
narrow question decided by the jury, which was simply
whether the Government had proven its claim of forfeiture of
the 1933 Double Eagles.” (J.A. 53-54.) However, the
District Court recognized that “the jury’s verdict [on the
forfeiture claim] dictates the outcome of the declaratory
judgment claim” and that it made the declaration “solely on
the basis of facts necessarily (although implicitly) found by
the jury.” (J.A. 52.)
judgment. See id. at 707 (“Wilson forfeited his limitations
argument by not raising it during the forfeiture
proceedings.”).
30
We will vacate the declaratory judgment for two
reasons. First, the declaratory judgment proceeding cannot be
recognized because, having missed CAFRA’s 90-day
deadline, the Government cannot use a declaratory judgment
proceeding to circumvent that deadline. We have held that a
“statute of limitations can[not] be circumvented merely by
‘[d]raping [the] claim in the raiment of the Declaratory
Judgment Act.’” Algrant v. Evergreen Valley Nurseries Ltd.
P’ship, 126 F.3d 178, 185 (3d Cir. 1997) (quoting Gilbert v.
City of Cambridge, 932 F.2d 51, 58 (1st Cir. 1991)).
Algrant’s focus is on whether the claims are “barred by a
statute of limitations applicable to a concurrent legal
remedy,” which means that the declaratory judgment is
“essentially predicated upon the same cause of action.” Id. at
184-85. Here, as the District Court acknowledged, the
forfeiture and declaratory judgment claims are undoubtedly
predicated upon the same cause of action, and, therefore, the
declaratory judgment claim cannot be used to circumvent
CAFRA’s 90-day deadline.
Second, the declaratory judgment proceeding cannot
be recognized because CAFRA amounts to a “special
statutory proceeding.” Federal Rule of Civil Procedure 57
states that “[t]he existence of another adequate remedy does
not preclude a declaratory judgment that is otherwise
appropriate.” Fed. R. Civ. P. 57. However, the Advisory
Committee’s Note qualifies Rule 57 by stating that a
“declaration may not be rendered if a special statutory
proceeding has been provided for the adjudication of some
special type of case, but general ordinary or extraordinary
legal remedies, whether regulated by statute or not, are not
deemed special statutory proceedings.” Fed. R. Civ. P. 57
advisory committee’s note. The Supreme Court has
31
confirmed that declaratory relief “should not be granted
where a special statutory proceeding has been provided.”
Katzenbach v. McClung, 379 U.S. 294, 296 (1964).
Although no court has opined that CAFRA provides
for a special statutory proceeding, conversely, no court has
held that CAFRA does not provide for a special statutory
proceeding. We hold that it does. To date, “a handful of
categories of cases have been recognized as ‘special statutory
proceedings.’” N.Y. Times Co. v. Gonzales, 459 F.3d 160,
166 (2d Cir. 2006). “These include: (i) petitions for habeas
corpus and motions to vacate criminal sentences; (ii)
proceedings under the Civil Rights Act of 1964; and (iii)
certain administrative proceedings.” Id. (internal citations
omitted). “Each of these categories involved procedures and
remedies specifically tailored to a limited subset of cases,
usually one brought under a particular statute.” Id.
Here, there is no doubt that the realm of civil forfeiture
involves “procedures and remedies specifically tailored to a
limited subset of cases.” See id. CAFRA provides a
structured scheme, which gives the parties multiple deadlines
to follow and puts a heightened burden on the Government.
CAFRA, like the Civil Rights Act of 1964, involves
procedures and remedies tailored to a limited subset of cases
and preserves individual rights. Given this tailored scheme,
even if the Government had filed a judicial action within 90
days from when the Langbords filed their seized asset claim
(and therefore we did not have the Algrant issue of the
Government using the declaratory judgment claim to
circumvent CAFRA’s 90-day deadline), the Government
could not use the declaratory judgment to circumvent the
specific remedy and heightened burden that CAFRA
32
provides. Based on either of these alternative grounds, we
must vacate the declaratory judgment. 20
C. The Remaining Issues
Because we will vacate the declaratory judgment, we
do not address whether the jury should have decided that
claim. Furthermore, given that we will also vacate the
judgment on the forfeiture claim, we do not address the
multiple trial issues raised by the Langbords, nor do we
address the mens rea required for a violation of 18 U.S.C.
§ 641, nor whether forfeiture is permitted for a § 641
violation where the theft or embezzlement of Government
property occurred before § 641 was enacted in 1948.
IV. Conclusion
At the insistence of the Mint and against the wisdom
of the Secret Service and multiple other agencies, the
Government opted to ignore CAFRA. Now, the Langbords
are entitled to the return of the Double Eagles. We will
reverse in pertinent part the District Court’s July 29, 2009
order, which denied the Langbords’ cross-motion for partial
summary judgment concerning the applicability of CAFRA,
and will vacate all orders at issue on appeal that postdate the
July 29, 2009 order, 21 including the jury verdict and the
20
Given this disposition, we do not address the Langbords’
remaining arguments as to why the declaratory judgment
must be vacated.
21
We will affirm the earlier order dated May 11, 2009, which
denied both the Langbords’ and the Government’s motions to
33
District Court’s order entering judgment. We will remand for
the District Court to order the Government to return the
Double Eagles to the Langbords.
exclude expert witnesses. We express no opinion as to
whether the expert testimony at trial was appropriate.
34
Langbord v. U.S. Dep’t of the Treasury
No. 12-4574
Argued: November 19, 2014
SLOVITER, Circuit Judge, dissenting:
The members of this panel agree on certain basic
issues: The Government of the United States (hereafter
“Government”) acted unconstitutionally when it seized the
ten Golden Eagle coins that had been delivered to it on behalf
of the Langbords for authentication and determined to retain
those coins without proceeding to a hearing after the seizure.1
And I agree with the District Court and the majority that the
seizure took place when the Government sent its notice that it
would not return the coins.
I also agree with the majority’s view that the
Government in this case rather casually treated its obligation
1
The Government has chosen not to rely on the
characterization of the Golden Eagles as “contraband” and
thus does not argue the application of 18 U.S.C. §
983(a)(1)(F), which provides that “The Government shall not
be required to return contraband or other property that the
person from whom the property was seized may not legally
possess.” Because gold may now be possessed, we will not
try to determine whether the Golden Eagles were contraband
at the time McCann and Switt illegally removed them from
the Mint.
under CAFRA to proceed to a hearing. Although it acted for
what turned out to be good reason (i.e. that because the
Double Eagles were stolen from the Mint—a conclusion
reached by two fact-finders after a full hearing—they were
already Government property and there was no reason to
subject them to forfeiture), the proper course of action was to
institute forfeiture proceedings to allow a court to determine
the disputed property rights. See United States v. Barnard, 72
F. Supp. 531, 532 (W.D. Tenn. 1947); App. at 59. The
District Court, who throughout this case was the Honorable
Legrome Davis of the Eastern District of Pennsylvania,
agreed with the Langbords. The Court held that the
“appropriate and authorized remedy for the Government’s
denial of Plaintiffs’ due process rights is a prompt forfeiture
hearing.” App. at 166. It therefore effected a remedy by
ruling: “Accordingly we will direct the Government to
initiate a judicial forfeiture proceeding as part of this action
on or before Monday, September 28, 2009.” Id. In other
words, the Langbords won that issue.
This, however, is where my agreement with the
majority ends. I definitely do not agree with the majority’s
holding that the Langbords are now “entitled to the return of
the Double Eagles,” Maj. Op. at 12, because the Government
failed to institute judicial civil forfeiture proceedings “within
90 days” of receiving the Langbords’ self-styled seized asset
claim. There is no provision of CAFRA that makes ultimate
entitlement to the disputed property conditional on the
amount of time before the Government files a forfeiture
hearing. Although there is language in CAFRA that requires
the Government to return items it seized or proceed to have
the issue of ownership decided by a forfeiture proceeding,
this does not mean that the claimants are entitled to
2
ownership of the property at issue, although the jury has
determined that the property belongs to the Government,
which is the result the majority appears to reach.
The statute does not state or suggest that the return is
unconditional. In fact, the provision on which the majority
relies, § 983(a)(3) provides “return the property” “pending the
filing of a complaint . . . .” Neither the legislative history nor
the majority explains the meaning of the “pending” condition.
The majority also asserts that CAFRA (through
incorporation of another provision) requires that notice of a
seizure must be given within 60 days of a seizure, which it
argues at length is required in some but not all cases. I do not
agree. I believe notice is required in all cases and the
Constitution and the relevant statutes so require.
Finally, the majority vacates the District Court’s award
of declaratory judgment on a basis no court has accepted, and
with which I cannot agree.
I
The majority’s position that the Government has lost
its entitlement to its own property because it failed to follow
the strict requirement of CAFRA as to the time to file a
forfeiture suit has been rejected in principle by numerous
courts, among them the Supreme Court of the United States,
other courts of appeals, and many district courts. Those
courts have held that the Government’s failure to strictly
adhere to a statutory timeframe does not deprive the
Government of the chance to pursue the action contemplated
by the statute.
3
In United States v. $8,850 in U.S. Currency, 461 U.S.
555, 558 (1983), the Supreme Court had before it a similar
statute providing for forfeiture (in that case, of currency),
which required the United States Attorney “if it appears
probable that a forfeiture has been incurred” to “cause the
proper proceedings to be commenced and prosecuted without
delay.” Id. (citing 19 U.S.C. § 1604). The Court, through
Justice O’Connor writing for eight Justices, rejected the
claimant’s argument that the Government’s “dilatory”
commencement of civil forfeiture violated the claimant’s
right to due process. Id. at 561. Justice O’Connor noted that
“The Government must be allowed some time to decide
whether to institute forfeiture proceedings.” Id. at 565. She
further commented that the issue of “the length of time
between the seizure [of the item at issue] and the initiation of
the forfeiture trial—mirrors the concern of undue delay
encompassed in the right to a speedy trial” analyzed in Barker
v. Wingo, 407 U.S. 514 (1972), where the Court enunciated a
balancing test. 461 U.S. at 564. After considering the
relevant factors, the Court stated that although the
Government’s 18-month delay instituting civil forfeiture
proceedings was “substantial,” it was reasonable and the
claimant had not asserted or shown that the delay prejudiced
her ability to defend against the forfeiture. Id. at 569-70.
The Court reversed the holding of the court of appeals
dismissing the forfeiture action and remanded for forfeiture
proceedings. Id. at 570.
That case was decided before the enactment of
CAFRA, but similar reasoning has been applied by other
courts dealing with forfeiture under CAFRA or statutes with
similar provisions. One such example can be found in United
States v. Vazquez-Alvarez, 760 F.3d 193 (2d Cir. 2014).
4
Claimant Vazquez interposed two grounds to defeat the
Government’s forfeiture of currency he had carried into the
country: one, irrelevant here, was that the Government did
not execute its warrant against the cash. Id. at 195. The
second, most relevant here, was that the Government failed to
bring its forfeiture action within the time set by the statute.
Id. Both, he argued, stripped the district court of its
jurisdiction over the res. Id. The Second Circuit, in a per
curiam opinion, stated, “We disagree. The statutory time
limits for commencing a forfeiture action are claims-
processing rules, not jurisdictional rules.” Id. Ultimately
dismissing Vazquez for lack of standing, the court rejected
the claimant’s allegation that he should prevail because the
Government filed its civil forfeiture action “well after the 60-
day time period allotted by 18 U.S.C. § 983(a)(1)(A)(ii).” Id.
at 198. It stated, “assuming without deciding that the
[G]overnment filed late, a late-filed forfeiture action would
not deprive the district court of subject matter jurisdiction.”
Id.
The Vazquez-Alvarez court relied in part on a Fourth
Circuit decision, United States v. Wilson, 699 F.3d 789 (4th
Cir. 2012). In Wilson, the claimant sought to set aside a
forfeiture judgment as void because the Government had
filed its forfeiture complaint later than § 983(a)(3)’s 90-day
time limit. 699 F.3d at 791. The claimant had not raised the
timing objection during the forfeiture proceeding, but argued
that “the time limit was jurisdictional and therefore was not
forfeited by his failure to raise it.” Id. The Fourth Circuit
rejected the claimant’s argument, stating, “While the time
limit imposed on the [G]overnment by § 983(a)(3) is
mandatory, it is not jurisdictional.” Id. In reaching this
conclusion, the court noted,
5
it readily appears that the
provisions of § 983 are procedural
rules for pursuing the forfeiture of
seized assets. The subject matter
jurisdiction for forfeiture is
conferred by 28 U.S.C. § 1355(a);
the authority to forfeit is provided
by 21 U.S.C. § 881(a)(6); and the
rules of procedure for pursuing a
civil forfeiture are provided by 18
U.S.C. § 983.
Id. at 795. The court further noted that § 983(a)(3)(A) allows
courts to “extend the period for filing a complaint for good
cause shown or upon the agreement of the parties,” and stated
that the possibility of an extension of time “undercuts any
argument that the deadline is jurisdictional. Congress does
not typically allow an agreement of the parties to define the
scope of the district court’s authority to hear a case.” Id.
Thus, the court concluded that “the provisions of § 983 are
procedural rules for pursuing the forfeiture of seized assets,”
not “conditions of subject matter jurisdiction.” Id.
The Wilson court relied on the decision of the United
States Supreme Court in Dolan v. United States, 560 U.S. 605
(2010), where Justice Breyer, speaking for the Court,
analyzed in detail the effect to be given different statutory
“deadlines.” 699 F.3d at 793. The statute under
consideration in Dolan (the Mandatory Victims Restitution
Act, 18 U.S.C. § 3664) provided that in sentencing “the court
shall set a date for the final determination of the victim’s
losses, not to exceed 90 days after sentencing.” The 90-day
6
deadline passed, and the Supreme Court undertook to
consider the consequences of the missed deadline where the
statute does not specify the particular consequences. In
answering that question, Justice Breyer noted that the Court
has looked to statutory language, the relevant context, and “to
what they reveal about the purposes that a time limit is
designed to serve.” 560 U.S. at 610. He considered first two
possibilities: whether the 90-day deadline in the case before
the Court had a jurisdictional purpose or whether it was an
ordinary claim-processing rule. After rejecting those
possibilities, he concluded that there was a third possibility
which he held was applicable: “a time-related directive that
is legally enforceable but does not deprive a judge or other
public official of the power to take the action to which the
deadline applies if the deadline is missed.” Id. at 611
(emphasis added).
The analysis applied by Justice Breyer in Dolan
requires rejection of the majority’s position that the
Government’s failure to file a civil forfeiture action within 90
days of the Langbords’ filing of a seized asset claim requires
return of the Golden Eagles to the Langbords. The first factor
to which Justice Breyer looked was the statutory language.
He noted that the use of the word “shall” in the statute’s time-
related directive has not, alone, “always led this Court to
interpret statutes to bar judges (or other officials) from taking
the action to which a missed statutory deadline refers.” Id.
(emphasis added). Similarly, the use of the word “shall” in
§ 983(a)(3)(A) (“Not later than 90 days after a claim has been
filed, the Government shall file a complaint for forfeiture . . .
. ” (emphasis added)) is not dispositive here. As Justice
Breyer explained, the statute’s “main substantive objectives”
control. Id. at 613. In Dolan, the statute at issue was meant
7
to “help victims of a crime secure prompt restitution rather
than to provide defendants with certainty as to the amount of
their liability.” Id. Applying similar reasoning, we see that
CAFRA’s purpose is not to deprive the Government of its
property, but rather to determine the rightful owner of the
property. As stated in the House Report introducing CAFRA,
H.R. 1965 [CAFRA] is designed
to make federal civil forfeiture
procedures fair for property
owners—to give innocent
property owners the means to
recover their property and make
themselves whole. H.R. 1965 is
not designed to emasculate federal
civil forfeiture efforts. To the
contrary, by making civil
forfeiture fairer, this Committee is
prepared to (and H.R. 1965 does)
expand the reach of civil
forfeiture and make it an even
stronger law enforcement tool.
H.R. Rep. No. 105-358(I), at 27 (1997). Therefore, as in
Dolan, I disagree with reading the word “shall” in the statute
to deprive the Government of the opportunity to pursue its
property claim.
The effect of a missed statutory deadline does not
require the Government to lose its opportunity to provide the
proceedings that were missed, as noted in cases from the
Supreme Court, the other courts of appeals and the district
courts. As explained in its comprehensive analysis, the
8
Fourth Circuit classified the 90-day “deadline” in another
forfeiture statute as a “time-related directive,” one even more
forgiving than a “claims processing rule.” United States v.
Martin, 662 F.3d 301, 308 (4th Cir. 2011). The majority
continually stresses that CAFRA “requires” the Government
to file a civil forfeiture action. Here again, the Dolan opinion
and its progeny show that the majority is wrong.
In Dolan, the Court was concerned about the possible
harm to the victim from the missed deadline. In this case, the
majority hypothesizes no harm to the Langbords. Although
the majority does not point us to a single way in which the
Langbords were harmed, it argues that they were prejudiced
by the Government’s “undue delay.” The District Court
addressed the issue of delay in the context of the Langbords’
objection to the Government’s filing of its declaratory
judgment claim. Judge Davis denied the Langbords’
objection, stating, “Permitting the United States to now bring
its desired . . . declaratory judgment count[] neither
introduces new factual issues nor revives irrelevant disputes.
In short, [the Langbords] will occupy no worse a position
than had the Government brought this counterclaim when
answering the 2006 complaint.” App. at 125-26. I agree.
The majority also presses its case against the
Government for its alleged failure to comply with § 983
requiring notice of its seizure within 60 days. I note that the
Langbords were aware from the very beginning of the matter
of the Government’s position as to the Golden Eagles.
Shortly after the Langbords’ counsel presented the coins to
the Mint for authentication and sought $40 million for them
9
from the Government, App. 144 2, the Government’s counsel
sent him a written memorandum advising that the coins were
government property and “that the U. S. Mint has no intention
of seeking forfeiture of [them].” App. at 143-44. Thus, the
Langbords were on notice of the Government’s chosen course
of action well within the statute’s 60-day notice requirement,
and therefore suffered no prejudice from lack of notice.
In Dolan, the Court stated that the party normally can
mitigate any harm that a missed deadline might cause by
simply telling the court or setting a timely hearing, which is
what happened in this case. See 560 U.S. at 615-16. When
the Langbords raised the absence of a hearing Judge Davis
ordered one. There are numerous cases, including those in
the Supreme Court, the other circuits, and the district courts,
that applied the same approach. Id. at 611 (finding a court’s
violation of the statutory timeframe to sentence a defendant to
be a mere “time-related directive” that is legally enforceable
but ultimately does not deprive the court of power to
determine the substantive issue); Barnhart v. Peabody Coal
Co., 537 U.S. 149, 171-172 (2003) (missed deadline for
assigning industry retiree benefits does not prevent later
award of benefits); Regions Hosp. v. Shalala, 522 U.S. 448,
459 n.3 (1998) (even though Government missed the statutory
deadline to file a report with Congress by approximately five
years, the “failure to meet the deadline . . . . does not mean
that [the] official lacked power to act beyond it”); United
States v. Montalvo–Murillo, 495 U.S. 711, 722 (1990)
(missed statutory deadline for holding bail detention hearing
does not require judge to release defendant); Brock v. Pierce
2
Later, the Langbords lowered their claim to $7 or $8
million.
10
Cnty., 476 U.S. 253, 266 (1986) (missed statutory deadline
for making final determination as to misuse of federal grant
funds does not prevent later recovery of funds); United States
v. Williams, 720 F.3d 674, 702 (8th Cir. 2013), cert. denied,
134 S. Ct. 1337 (2014) (failing to follow criminal forfeiture
procedures at trial does not relinquish the district court’s
ability to order post-conviction forfeiture); Martin, 662 F.3d
at 308-09 (deadline for the district court to enter a criminal
forfeiture order is a “time-related directive” and thus missing
the deadline did not strip district court of the power to enter
forfeiture orders); Cyberworld Enter. Techs., Inc. v.
Napolitano, 602 F.3d 189, 198 (3d Cir. 2010) (Government
was not precluded from taking action when it imposed
sanctions on an employer eighteen months after the statutory
limitations period expired); Shenango Inc. v. Apfel, 307 F.3d
174, 196-97 (3d Cir. 2002) (affirming that Government could
assign benefits to employees under the Coal Act even after
end of the statutory deadline for such assignment because the
statutory timeframe was not meant to strip the Government of
power to act beyond the deadline); Sw. Pa. Growth Alliance
v. Browner, 121 F.3d 106, 113–115 (3d Cir. 1997) (denying
petition to review the Environmental Protection Agency’s
ruling even though the ruling occurred outside the statutory
timeframe because the statutory timeframe does not divest the
agency of jurisdiction to act); Marshall Durbin Food Corp. v.
Interstate Commerce Comm’n, 959 F.2d 915, 919 (11th Cir.
1992) (Interstate Commerce Commission’s (“ICC”) failure to
review Administrative Law Judge’s (“ALJ”) preliminary
decision within mandatory review period did not divest ICC
of authority to reverse ALJ decision); Lowell Consortium v.
U.S. Dep’t of Labor, 893 F.2d 432, 433 n.3 (1st Cir. 1990)
(allowing agency to recover funds almost five years after 120-
day mandatory period had expired); City of Camden v. U.S.
11
Dep’t of Labor, 831 F.2d 449, 451 (3d Cir. 1987) (allowing
agency to recover funds six years after 120-day mandatory
period had expired); St. Regis Mohawk Tribe, N.Y. v. Brock,
769 F.2d 37, 46 (2d Cir. 1985) (Government’s failure to
comply with the 120-day time limit for directing repayment
of misspent federal grant funds did not bar Government from
making the determination as it would “sacrifice[e] the public
interest because of the negligence of public officers”); Balt. &
Ohio Chi. Terminal R.R. v. United States, 583 F.2d 678, 690
(3d Cir. 1978), cert. denied, 440 U.S. 968 (1979) (because the
Interstate Commerce Act “contains no express sanction for
noncompliance” with the statutory deadline, belated agency
proceedings need not be dismissed); Usery v. Whitin Mach.
Works, Inc., 554 F.2d 498, 501 (1st Cir. 1977) (under the
Trade Act of 1974, the Government may determine an
employee’s eligibility for economic assistance even if the
determination is outside the 60-day statutory limit).
The majority disparages my dissent’s use of what it
calls “easily distinguishable cases” that do not involve §
983(a)(3). See Maj. Op. at 28 n.19. The numerous cases
cited in the dissent are hardly “easily distinguishable.” They
involve forfeiture, as does CAFRA. It was my understanding
that appellate opinions frequently apply reasoning from
similar, albeit different statutes, to make a point. The
majority apparently requires one-on-one identity with the
statute under consideration. The majority apparently feels
free to censure a mere colleague’s use of analogous
precedent, but it apparently doesn’t notice or recognize
application of the same approach by a member of the
Supreme Court of the United States. For example, Justice
Breyer, in Dolan, uses as precedent for the Court’s analysis of
the Mandatory Restitution Act what the majority would
12
regards as “easily distinguishable” statutes. See Dolan, 360
U.S at 612 (citing Montalvo-Murillo, 495 U.S. at 718-19
(interpreting Bail Reform Act of 1984); Brock, 476 U.S. at
262 (interpreting Comprehensive Employment Training Act);
Barnhart, 537 U.S. at 158-63 (interpreting Coal Industry
Retiree Health Benefit Act of 1992); Regions Hosp., 522 U.S.
at 459 n.3 (interpreting Medicare Act)).
It stands to reason, then, that the proper remedy for a
failure to follow CAFRA’s notice or filing timeframes is to
order the Government to comply with the statute, and many
courts have so held. For example, in DeSaro v. United States,
No. 06-cv-20531 (S.D. Fla. Aug. 8, 2006), after the 11th
Circuit had remanded the individual’s CAFRA claim against
the Government for its seizure and four year retention of two
oil paintings without filing a forfeiture suit and without
providing the required 60 day notice in criminal actions, the
district court held that because the ownership and
forfeitability of the paintings had been the subject of litigation
almost since they were seized, the “requirement to bring a
timely forfeiture action is therefore tolled.” Id.; see also
Garcia v. Meza, 235 F.3d 287, 292 (7th Cir. 2000) (ordering
Government to either return the property or institute judicial
forfeiture proceedings after Government’s original attempt at
notice was deemed not to have afforded due process); United
States v. Giraldo, 45 F.3d 509, 512 (1st Cir. 1995) (“If the
notice turns out to have been [constitutionally] inadequate,
the forfeiture is void. The district court then must set aside
the declaration of forfeiture and order the Customs Service to
return the money to Giraldo or begin judicial forfeiture
proceedings in the district court.”); Lopez v. United States,
863 F. Supp. 2d 127, 130 (D. Mass. 2012) (“When a district
court concludes that procedural deficiencies render an
13
administrative forfeiture void, it must order the agency to
return the seized property or begin judicial forfeiture
proceedings.”); United States v. $114,143.00 in U.S.
Currency Seized from Michael J. Callash’s Vehicle, 609 F.
Supp. 2d 1321, 1322-23 (S.D. Fla. 2009) (ordering
Government to file a forfeiture complaint after the Drug
Enforcement Administration improperly rejected a seized
asset claim, where the claimant was aware within the notice
period that Government had commenced administrative
forfeiture proceedings, and noting that “the interests of justice
are best served here . . . by allowing the parties to resolve [the
forfeiture claim] on the merits” (alterations in original;
internal citations omitted)).
The majority focuses exclusively on the “return of the
Golden Eagles.” It does not challenge the District Court’s
decision that the Government’s institution of a civil forfeiture
proceeding would be an adequate remedy. In so ruling, the
District Court stated that “[the Langbords] concede that return
is not required if the Government promptly initiates a judicial
forfeiture proceeding.” App. at 157 (citing Plaintiffs’ Motion
for Summary Judgment, Due Process & Illegal Seizure). The
Court continued, “it is well established that ‘illegal seizure of
property does not immunize it from forfeiture as long as the
[G]overnment can sustain the forfeiture claim with
independent evidence.’” Id. (citing United States v. Pierre,
484 F.3d 75, 87 (1st Cir. 2007); United States v. 47 West 644
Route 38, 190 F.3d 781, 782 (7th Cir. 1999)). The majority
never explains why the ten day forfeiture trial presided over
by Judge Davis, “at which time the [Langbords could] raise
whatever defenses [were] available to them,” did not provide
an adequate remedy. App. at 165 (citing United States v. Von
14
Neumann, 474 U.S. 242, 251 (1983); Garcia v. Meza, 235
F.3d 287, 292 (7th Cir. 2000); Giraldo, 45 F.3d at 512).
As to the adequacy of the remedy ordered I note the
Ninth Circuit’s comments in United States v. $11,500.00 in
U.S. Currency, 710 F.3d 1006 (9th Cir. 2013), another
CAFRA case where the Government was directed to send
notice after missing the statutory deadline. The court asked,
“is the [G]overnment required to return the property even if it
has in the meantime commenced forfeiture proceedings?” Id.
at 1016. In that case, by the time the issue was raised before
the district court, the forfeiture proceeding was underway.
The Ninth Circuit responded to its own question: “requiring
the return of the property and then permitting the
[G]overnment to immediately re-seize it would impose a
meaningless exercise.” Id.; see also United States v.
$114,031.00 in U.S. Currency, No. 06-CIV-21820, 2007 WL
2904154, at *3 (S.D. Fla. Oct. 4, 2007); Salmo v. United
States, No. 06-12909, 2006 WL 2975503, at *3 (E.D. Mich.
Oct. 17, 2006); Manjarrez v. U.S. Dep’t of the Treasury, Nos.
01 C 7530 & 01 C 9495, 2002 WL 31870533, at *2 (N.D. Ill.
Dec. 19, 2002).
That leads to one of my principal bases for diverging
from the majority: it does not acknowledge that a forfeiture
proceeding did in fact take place and simply omits to mention
the result of that proceeding. It is indeed baffling that the
majority, which fervently asserts that a forfeiture proceeding
should have taken place earlier (precise date never listed),
disregards the result of the forfeiture proceeding when it did
take place. After a ten-day trial before Judge Davis, the jury
found “in favor of the United States on Count [I]
15
(forfeiture)”—a verdict the District Court found was fully
supported by the evidence. App. at 59.
In its post-trial findings, the District Court laid out the
substantial evidence the Government presented at trial in
support of its case. The District Court reviewed the
Government’s evidence of the movements of all 445,500
1933 Double Eagles that were minted as presented through its
expert, David Tripp’s, testimony about the Mint’s
“meticulous,” “exquisitely detailed” records. App. at 9-11.
The Court noted that “Tripp accounted for each and every one
of the 445,500 1933 Double Eagles, and showed that not a
single ’33 Double Eagle was issued to the public.” App. at
12. The Court noted that the “first ‘bank holiday’ forbidding
the payout of gold coins took effect on March 6[, 1933], nine
(9) days before the first shipment of ’33 Double Eagles to the
Philadelphia Mint cashier.” Id. On June 27, 1933, 445,000
of the coins were sealed in a basement vault at the Mint. Id.
“The remaining 500 coins were in the cashier’s control at one
point or another.” Id. After 29 coins were destroyed and 437
were returned to the Mint’s basement vaults, the cashier was
left with 34 coins. Id. The records reflect that all 34 coins
that remained with the cashier “were moved to a basement
vault on February 2, 1934.” Id. at 12-13. The Mint sent two
coins to the Smithsonian in October of 1934. Id. at 13.
[T]he Mints were authorized to
begin melting their general stock
of gold coins as of August 4,
1934. That included, of course,
the ’33 Double Eagles held in the
Philadelphia Mint’s vault. The
Mints started melting gold shortly
16
thereafter, and the entire process
took about two-and-a-half years to
complete. Because Tripp could
account for all of the ’33 Double
Eagles and none were ever
authorized for release, Tripp
concluded that no ’33 Double
Eagles—including the coins in
this case—could have been
obtained through legitimate
means.
Id. at 13-14.
The District Court found, relying on Tripp’s testimony,
that “[t]he jury saw no record of a legitimate ’33 Double
Eagle release, and from this lack of documentation one may
reasonably infer that the responsible party appropriated the
coins in secret, knowing full well the wrongfulness and
illegality of his actions.” App. at 35. Furthermore, despite
Switt’s own testimony, in earlier proceedings, that he never
obtained any gold coin from the Philadelphia Mint, Switt and
McCann’s 3 bank accounts evidence thousands of dollars of
deposits to McCann’s bank accounts that emanated from an
account Switt controlled. And, “the Secret Service
determined that McCann was the likely inside source of the
’33 Double Eagles; as Mint cashier, McCann had the
opportunity to abscond with the coins, and McCann’s
conviction for stealing other coins from the Mint shows that
3
Recall that Switt was the source of the Langbords’ coins and
McCann was the cashier at the Philadelphia U.S. Mint during
the relevant period.
17
he knew how to pull it off.” App. at 36. After a lengthy
investigation, the Secret Service could not identify any 1933
Double Eagle that left the Mint other than coins traced to the
possession of Israel Switt.
As to the Langbords’ knowledge, the Government
presented evidence that in 2002, after reading a New York
Times article about the Fenton 1933 Double Eagle (which
mentioned Switt), Roy Langbord called Joan Langbord to ask
if Switt (his grandfather) had kept any more of the coins.
Joan Langbord admitted to looking into the safe deposit box
that contained the Double Eagles many times over the years,
including the day before the Fenton coin was auctioned, but
maintained that she knew nothing about the coins until she
discovered them at the bottom of the same safe deposit box in
2003. As the District Court noted,
the evidence supports an inference
that Joan Langbord knew her
father had stolen the coins and
hidden them in the family’s safe
deposit box; she found the coins
well before the Fenton ’33 Double
Eagle went up for auction and
continued to conceal them; her
son Roy also knew of the
questionable provenance of [the]
1933 Double Eagles, at least after
reading the New York Times
piece in 2002; and the Langbords
decided to reveal the coins to the
Government only after learning of
their immense monetary value,
18
hoping to cash-in like Stephen
Fenton did.
Id. at 37. Thus, substantial evidence supports the jury’s
verdict and the District Court’s declaratory judgment that the
coins left the Mint illegally, that Switt was involved, that his
relatives knew that the coins’ acquisition was illegal and
continued to conceal them, and thus, that the coins should be
forfeited. None of the evidence discussed above relies upon
the Secret Service reports, the admissibility of which, as the
majority references, was contested on appeal on hearsay
grounds4.
On Count II (declaratory judgment), the District Court
declared:
The disputed Double Eagles were
not lawfully removed from the
United States Mint and
accordingly, as a matter of law,
they remain the property of the
United States, regardless of (1)
the applicability of CAFRA to
the disputed Double Eagles, (2)
Claimants’ state of mind with
respect to the coins, or (3) how
4
The majority states that it does not reach the hearsay-within-
hearsay rule, see Maj. Op. at 10 n.5, but it then proceeds to
reach it. I will not reach that issue because, as set forth in the
text, there is ample evidence to support the jury’s verdict
without relying on the Secret Service reports.
19
the coins came into the
Claimants’ possession.
App. at 5.
Though the majority’s entire objection to the
Government’s position in this case stems from the
Government’s failure to file a forfeiture suit, and its failure to
do so within the 90-day period that CAFRA fixes for that
action, the majority gives no credit to the result of the
judgment.
Finally, I believe Congress would be incredulous if
this court were to hold that the Langbords should be given the
Golden Eagles for which they originally sought $40 million
because a federal lawyer did not file a forfeiture complaint
within 90 days of the applicants filing a seized asset claim,
notwithstanding the decision of two triers of fact that the
Golden Eagles at issue belonged to the United States.
II
The majority rejects the Government’s position (and
the District Court’s conclusion) that the Government never
instituted administrative forfeiture proceedings in this case
because it never sent notice of its intent to forfeit the coins.
The majority reasons, in part, that notice cannot possibly be
the triggering event for CAFRA’s timeframes because, it
believes, the forfeiture statutes require notice in “some, but
not all, nonjudicial civil forfeiture proceedings.” Maj. Op. at
17-18. I cannot agree with this reading of the forfeiture
statutes. Section 1607 merely exempts “vessel[s], vehicle[s],
aircraft, [and] merchandise” worth over $500,000 from the
administrative forfeiture process altogether, meaning that for
20
such objects, the Government would have to resort to judicial
forfeiture. See Stefan D. Cassella, Asset Forfeiture Law in
the United States 154-55 (2d ed. 2013). Objects not covered
by § 1607 are addressed in a later statutory section:
If any vessel, vehicle, aircraft,
merchandise, or baggage is not
subject to section 1607 of this
title, the appropriate customs
officer shall transmit a report of
the case, with the names of
available witnesses, to the United
States attorney for the district in
which the seizure was made for
the institution of the proper
proceedings for the condemnation
of such property.
19 U.S.C. § 1610. Thus, rather than sending notice to
interested parties as for an administrative forfeiture, seized
property not subject to § 1607 is referred to the U.S. Attorney
for judicial forfeiture proceedings. See Malladi Drugs &
Pharm., Ltd. v. Tandy, 552 F.3d 855, 887 (D.C. Cir. 2009)
(“Under the customs laws, the DEA may forfeit seized goods
valued at more than $500,000 only upon a judicial decree
after judicial forfeiture proceedings, 19 U.S.C. § 1610, but
may administratively forfeit goods valued at or less than
$500,000.”). The reason for this is that “forfeitures involving
more valuable property must be processed through the
judicial system.” 135 Cong. Rec., S12622-01 (daily ed. Oct.
4, 1989) (Statement of Sen. Joseph Biden). However, as the
majority recognizes, the Double Eagles are monetary
instruments which do not fall under the $500,000 threshold of
21
§ 1607(a)(1) and for which administrative forfeiture is
allowed. See 19 U.S.C. § 1607(a)(4).
Furthermore, the majority’s contention that § 983(e)(1)
(“[a]ny person entitled to written notice in any nonjudicial
civil forfeiture proceeding under a civil forfeiture statute who
does not receive such notice may file a motion to set aside a
declaration of forfeiture with respect to that person’s interest
in the property”) contemplates administrative forfeitures
beginning without notice being sent, see Maj. Op. at 20-21,
disregards the fact that the Government often seizes property
and does not know all of the parties that may have an interest
in the property. The notice provision requires the
Government both to send notice “to each party who appears
to have an interest in the seized article” and to publish notice
in the newspaper for this very reason. 19 U.S.C. § 1607(a).
Cassella explains that the Government must generally send
notice to “the person from whom the property was seized, the
titled owner of the property, lienholders, and any other person
known to the Government to have an interest.” Cassella,
supra, at 175. Section 983 specifically provides for situations
in which “the identity or interest of a party is not determined
until after the seizure or turnover but is determined before a
declaration of forfeiture.” 18 U.S.C. § 983(a)(1)(A)(v).
Thus, I read § 983(e)’s discussion of a party “who does not
receive such notice” to contemplate instances in which a
person has an interest in seized property, but to whom the
Government does not send notice because it does not know
that person’s identity—not because it has no obligation to
contact that person. Indeed, § 983(e) allows such persons to
set aside forfeiture where “(A) the Government knew, or
reasonably should have known, of the moving party’s interest
and failed to take reasonable steps to provide such party with
22
notice; and (B) the moving party did not know or have reason
to know of the seizure within sufficient time to file a timely
claim.” Id. § 983(e). Far from evidencing that an
administrative forfeiture proceeding begins before notice is
given, § 983(e) reinforces the notion that notice is required to
institute administrative forfeiture.
III
The majority questions whether the District Court had
the authority to issue a declaratory judgment in a CAFRA
case. Under the Declaratory Judgment Act, “any court of the
United States, upon the filing of an appropriate pleading, may
declare the rights and other legal relations of any interested
party seeking such declaration, whether or not further relief is
or could be sought.” 28 U.S.C. § 2201(a). Rule 57 provides,
“The existence of another adequate remedy does not preclude
a declaratory judgment.” Fed. R. Civ. P. 57. The District
Court entered declaratory judgment for the Government,
ruling that the “Double Eagles were not lawfully removed
from the United States Mint and accordingly, as a matter of
law, they remain the property of the United States . . . . ”
App. at 5.
The majority vacates the declaratory judgment on a
basis no court has accepted.
The Advisory Committee notes to Rule 57 state, “A
declaration may not be rendered if a special statutory
proceeding has been provided for the adjudication of some
special type of case, but general ordinary or extraordinary
legal remedies, whether regulated by statute or not, are not
deemed special statutory proceedings.” Id. (1937 Advisory
23
Committee notes); see also Katzenbach v. McClung, 379 U.S.
294, 296 (1964) (declaratory relief “should not be granted
where a special statutory proceeding has been provided”).
The majority holds that CAFRA is a “special statutory
proceeding” under Rule 57.
However, since the enactment of
the Declaratory Judgment Act,
only a handful of categories of
cases have been recognized as
“special statutory proceedings”
for purposes of the Advisory
Committee’s Note. These
include: (i) petitions for habeas
corpus and motions to vacate
criminal sentences; (ii)
proceedings under the Civil
Rights Act of 1964; and (iii)
certain administrative
proceedings.
N.Y. Times Co. v. Gonzales, 459 F.3d 160, 166 (2d Cir. 2006)
(internal citations omitted). The parties do not direct us to,
nor could I find, any case finding forfeiture statutes to
preclude declaratory judgment, and the majority’s interest in
being the first court to so hold is questionable.
In support of its argument that CAFRA fits as a
“special statutory proceeding,” the majority, noting the
inclusion of the Civil Rights Act of 1964 within that rare
group of statutes that have been held to fit within that
category, compares CAFRA with the Civil Rights Act of
1964. Maj. Op. at 32. That such a comparison could be
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issued in an opinion of the Third Circuit which has a
distinguished history in support of civil rights, whatever the
context, shocks my conscience. I can attribute it only to the
desperation of its position.
Moreover, as the District Court noted, even where a
statute provides for “special statutory proceedings” that
would normally preclude declaratory judgment, a declaratory
remedy may still be necessary. See App. at 64. The District
Court reasoned, “even if CAFRA did typically provide a
special statutory remedy, it does not do so in this case.” Id.
The Court considered the Government to be playing a dual
role in this action: as a representative of the people of the
United States seeking forfeiture of the proceeds of an alleged
crime, and as the property owner seeking to reestablish legal
title to the coins. CAFRA’s remedies could accomplish the
forfeiture, but could not establish the property interest the
Government sought to vindicate. Therefore, the Court
determined that the Government could pursue declaratory
relief. The numerous district courts throughout the county
who hear CAFRA cases will be surprised to read that the
Third Circuit has deprived them of a tool they have used as a
matter of course. Why? Is the majority so eager to go down
in history as the first court to scuttle a useful procedure?
In responding to the Government’s requested
declaration that the disputed Double Eagles were not lawfully
removed from the United States Mint and accordingly remain
the property of the United States, the Langbords argued that
the declaration “would impermissibly interfere with the
province or the jury.” App. at 57. The District Court noted,
“Since the Government won on the forfeiture claim, the jury
must have found the coins were ‘not lawfully removed’ from
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the Mint.” Id. It then noted, “The principle of jury
supremacy binds us to that finding.” Id. (citing Roebuck v.
Drexel Univ., 852 F.2d 715, 717 (3d Cir. 1988)). That
principle also binds my colleagues as it did the District Judge,
who also stated it made it “unnecessary [for the District
Court] to conduct any additional fact finding to resolve the
Government’s declaratory judgment claim.” Id.
IV
A careful review of the provisions of CAFRA, its
legislative history, and the cases that have interpreted it
reveals that the purpose of the statute, its notices, and its
detailed
procedures, is to allow those claiming an interest in
potentially forfeitable property to have the merits of their case
heard by a fact finder, who will reach a fair determination as
to which party among those who lay claim on the subject in
dispute is entitled to the subject. It is that ultimate issue that
counts, which party is entitled to the property, even if the time
taken to reach that decision has been significant. This case
presented several difficult and complex issues for the District
Court to resolve. In a series of particularly well-reasoned
opinions, the District Court handled these issues thoroughly
and thoughtfully, and I would affirm. I believe the majority
misreads the statute, the relevant precedent, and Congress’
intent.
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