United States v. Contents of Two Shipping Containers Seized ( 2004 )

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
10-26-2004
USA v. Contents of Two
Precedential or Non-Precedential: Non-Precedential
Docket No. 03-2460
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No: 03-2460
UNITED STATES OF AMERICA
v.
CONTENTS OF TWO SHIPPING CONTAINERS SEIZED AT ELIZABETH,
NEW JERSEY ON OR ABOUT DECEMBER 20, 1990, INCLUDING ONE 1900
NISSAN 300ZX (VIN JN1RZ26A3LX010643) AND VARIOUS ITEMS OF
FURNITURE AND PERSONAL EFFECTS
DANIEL ORIAKHI,
Appellant
Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 01-cv-05823 )
District Judge: Honorable William H. Walls
Argued March 24, 2004
Before: ROTH, AMBRO and CHERTOFF, Circuit Judges
(Opinion filed: October 26, 2004)
Joseph M. Bernstein, Esquire (Argued)
800 North King Street, Suite 302
Wilmington, DE 19801
Counsel for Appellant
Peter G. O’Malley, Esquire (Argued)
Office of United States Attorney
970 Broad Street, Room 700
Newark, NJ 07102
Counsel for Appellee
O P I N I ON
ROTH, Circuit Judge
Daniel Oriakhi appeals the judgment of the United States District Court for the District
of New Jersey, granting summary judgment in favor of the United States on this civil
forfeiture action of the contents of two shipping containers, seized in Elizabeth, New Jersey.
Oriakhi limits his argument on appeal to the proposition that the government’s civil
forfeiture action was barred by the statute of limitations found at 18 U.S.C.§ 983(e)(2)(B)(ii).
We reject this argument and will affirm the judgment of the District Court.
II. Background and Procedural History
The background of this case is provided in an opinion from the Fourth Circuit Court
of Appeals in a related criminal action, United States v. Oriakhi, 57 F.3d 1290, 1294, 1297
(4th Cir. 1995). Briefly, the contents of the two containers involved in this case were
originally seized in December 1990 by the United States Customs Service. Id. at 1294. The
owner of the contents of the containers was later discovered to be Daniel Oriakhi. See id.2
Oriakhi was indicted and convicted in the United States District Court for the District of
Maryland for conspiracy to import heroin into the United States. Id. at 1294-95.
Customs officials effected forfeiture of the contents of the two shipping containers
pursuant to 21 U.S.C. § 881(a)(6), which provides for forfeiture of, among other things, all
property traceable to an illegal drug transaction. See Alli-Balogun v. United States, 281 F.3d
362, 364-65 (2d Cir. 2002). The officials were required to provide publication and written
notice of their intent to forfeit the property to any party appearing to have an interest in the
property. 19 U.S.C. § 1607(a)1 . In 1991, the government attempted to send three notices to
Oriakhi. Oriakhi claims he never received these notices and the government does not contest
this claim. Oriakhi failed to make a timely claim on the property, and the contents of the two
containers were administratively forfeited in May and August of 1991. See 19 U.S.C.
§§1603(b) & 1609 (a). [App. II 26, 32]
In 1997, Oriakhi went to the United States District Court for the District of New Jersey
to seek compensation for the contents of the two containers. In August 1999, the court
concluded that the government’s three attempted notices in 1991 were not “reasonably
calculated” to alert Oriakhi to the impending forfeiture. The court set aside the administrative
1
If a timely claim is filed, the administrative forfeiture process stops and the
Attorney General is required to institute judicial forfeiture proceedings. 19
U.S.C.§1603(b). However, if no timely claim is filed, the agency must, by default,
declare the property forfeited. 19 U.S.C. (1609)(a). Subject to exceptions not relevant
here, no forfeiture action may be commenced more than five years after the underlying
alleged offense was discovered, or more than two years after the involvement of the
property in the alleged offense was discovered, whichever is later. 19 U.S.C. §1621.
3
forfeiture, but, rather than order the government to compensate Oriakhi for the value of the
property, the court directed the government to initiate judicial forfeiture proceedings.
Oriakhi appealed and we affirmed the District Court in August 2001 in an unpublished
per curiam decision. We reasoned that the District Court did not abuse its discretion by
directing the government to initiate judicial forfeiture proceedings rather than ordering
compensation for the improperly forfeited property.
The government initiated judicial forfeiture proceedings in December 2001 and moved
for summary judgment in January 2002. Oriakhi argued that the property in the containers
was not subject to forfeiture and that the government’s new judicial forfeiture action was
barred by the 5-year statute of limitations at U.S.C.§ 1621. The District Court held that
Oriakhi was collaterally estopped from making the first argument and that the statute of
limitations should be equitably tolled. Oriakhi appealed.
III. Jurisdiction and Standard of Review.
The District Court had federal question jurisdiction pursuant to 28 U.S.C. § 1331. We
have appellate jurisdiction under 28 U.S.C. § 1291. We exercise plenary review over an
order, granting summary judgment, applying the same test that the district court should have
applied. Assaf v. Fields, 178 F.3d 170, 171 (3d Cir. 1999); Chipollini v. Spencer Gifts, Inc.,
814 F.2d 893, 896 (3d Cir. 1987) (en banc). If we determine that “there is no genuine issue
as to any material fact” and that the movant is entitled to judgment at a matter of law, we will
affirm the district court’s grant of summary judgment. Fed. R. Civ. P. 56(c).
4
IV. Discussion
Oriakhi argued before the District Court that the limitations period found at 19 U.S.C.
§ 1621 barred the government’s judicial forfeiture action. He abandons this argument on
appeal and now contends that a different limitations provision, found in 18 U.S.C. § 983(e)(2
(B)(ii), bars the government’s action.2 Section 983 was added to Title 18 by the Civil Asset
Forfeiture Reform Act of 2000 (CAFRA). This appeal presents two questions. Does
CAFRA apply to this case? If so, does the limitations period at § 983(e)(B)(ii) apply? The
2
We normally refuse to consider arguments on appeal that were not raised in the
District Court, absent exceptional circumstances. E.g., Hormel v. Helvering, 312 U.S.
53, 557 (1941); Franki Foundation Co. v. Alger-Rau & Assoc’s, Inc., 513 F.2d 586, (3d
Cir. 1975). This rule is “one of discretion rather than jurisdiction.” Selected Risks Ins.
Co. v. Bruno, 718 F.2d 67, 69 (3d Cir. 1997) (internal quotation omitted).
We think the ends of justice would be promoted by reaching Oriakhi’s new
argument. In our earlier decision in this case we suggested that, due to the complexity of
the issues, including any statute defense, Oriakhi should request appointment of counsel
in District Court. Oriakhi moved for appointment of counsel in the District Court
immediately following our decision and renewed his motion two months later. The
District Court never ruled on these motions, perhaps because Oriakhi filed them under
the original docket number associated with his action seeking compensation for the
administratively forfeited property, rather than under the new docket number opened
when the government initiated judicial forfeiture proceedings in December 2001.
However, the same judge presided over both cases and was apprised by our earlier
decision of the possibility that Oriakhi might request appointment of counsel. Oriahki
might not have been entitled to appointment of counsel, see Taborn v. Grace, 6 F.3d 147,
153 (3d Cir. 1993) (decision to deny counsel in civil cases reviewed for abuse of
discretion), but the District Court should have ruled on his requests.
Pro se status by no means creates an automatic exception to the waiver rule, see
United States v. Garth, 188 F. 3d 99, 105-06 (3d Circ. 1999), but we have relied on this
factor to relax the waiver rule in the past, see Tabor, 6 F.3d at 153 n.2, and the unusual
circumstances described above make the argument for relaxing the rule especially
compelling here. We further note that the waiver rule may be relaxed where, as here, the
new argument presents pure questions of law that do not require and would not benefit
from factual development in the district court. See Trailways Lines, Inc. v. Trailways,
Inc., Joint Council of Amalgamated Transit Union, AFL-CIO, CLC 785 F.2d 101, 104
(3d Cir. 1986); see also In re American Biomaterials Corp., 954 F. 3d 919, 927-28 (3d
Cir. 1992) (waiver rule applied with “added force where the timely raising of the issue
would have permitted the parties to develop a factual record”).
5
answers are yes and no, respectively.
A. CAFRA Applies.
First, CAFRA applies here, CAFRA applies to “any forfeiture proceeding commenced
on or after” August 23, 2000, 120 days after CAFRA was signed into law. Pub. L. No. 106-
185, §21, 114 Stat. at 225 (codified at 8 U.S.C. §1324 (note)); United States v. One “Piper”
Aztec “F” De Luxe Model 250 PA 23 Aircraft Bearing Serial No. XX-XXXXXXX, 321 F. 3d 355,
257-358 (3d Cir. 2003). The government commenced its judicial forfeiture action in
December 2001, after CAFRA’s effective date.
Oriakhi correctly contends that the 1991 administrative forfeiture proceeding does not
affect the determination of CAFRA’s applicability. Administrative forfeitures set aside for
inadequate notice are void. United States v. One Toshiba Color Television, 213 F. 3d 147,
156 (3d Cir. 2000). A void judgment “is one which, from its inception, was a complete nullity
and without legal effect.” Raymark Industries, Inc. v. Lai, 973 F. 2d 1125, 1132 (3d Cir.
1992). Relying on the date of inception of the administrative proceeding to determine
CAFRA’s applicability would improperly give some “legal effect” to a void proceeding.
Further, legislative history indicates that “for purposes of the effective date provision, the date
on which a forfeiture proceeding is commenced is the date on which the first administrative
notice of forfeiture relating to the seized property is sent.” 146 Cong. Rec. H2040, H2051
(daily ed. April 11, 2000) (statement of Rep. Hyde). In this case, no constitutionally adequate
notice was ever sent, and therefore the administrative proceeding never legally “commenced”
6
at all.
The United States does not dispute this point but argues instead that the relevant
proceeding for determining CAFRA’s applicability is Oriakhi’s 1997 action to set aside the
administrative forfeiture. This argument runs counter to the plain language and legislative
history of the effective date provision. The effective date provision states that CAFRA
applies to “any forfeiture proceeding commenced on or after” August 23, 2000, 120 days after
CAFRA was signed in law. 8 U.S.C. §1324 (note) (emphasis added). Only the government
may initiate forfeiture proceedings. If anything, Oriakhi’s motion to recover property in 1997
was an anti-forfeiture proceeding.3 Also, as noted above, legislative history provides that
“for purposes of the effective date provision, the date on which a forfeiture proceeding is
commenced is the date on which the first administrative notice of forfeiture relating to the
seized property is sent.” 146 Cong. Rec. H2040, H2051 (daily ed. April 11, 2000) (statement
of Rep. Hyde) (emphases added). This statement indicates that the statutory term “forfeiture
proceeding” refers to the government’s action to forfeit property, not any subsequent action
by a claimant to set aside an administrative forfeiture.
3
Section 983 clearly distinguishes between forfeiture proceedings — which, by
definition, may only be initiated by the government — and motions, like Oriakhi’s
motion, to set aside declarations of forfeiture. See 18 U.S.C. § 983 (e)(1) (providing that
any “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”) (emphases added).
7
B. The Limitations Period at Subsection 983(e)(2)(B)(ii) Does Not Apply.
Oriakhi wins the battle concerning CAFRA’s applicability, but ultimately loses, the
war because the limitations period at § 983(3)(2)(B)(ii) does not apply to this case. This
section provides that if the district court grants a motion brought under § 983(e)(1) to set aside
an administrative declaration of forfeiture based on inadequate notice, the government must
commence a subsequent judicial forfeiture proceeding within six months of the entry of the
order granting the § 983(e)(1) motion. See 18. U.S.C. § 983(e)(2)(B)(ii).4 Oriakhi argues that
4
The full text of 18 U.S.C. § 983(e) is as follows:
e) Motion to set aside forfeiture.--
(1) Any 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, which motion shall be granted if–
(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 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.
(2)(A) Notwithstanding the expiration of any applicable statue of limitations, if
the court grants a motion under paragraph (1), the court shall set aside the
declaration of forfeiture as to the interest of the moving party without
prejudice to the right of the Government to commence a subsequent
forfeiture proceeding as to the interest of the moving party.
(B) Any proceeding described in subparagraph (A) shall be commenced–
(i) if nonjudicial, within 60 days of the entry of the order granting the motion;
or
(ii) if judicial, within 6 months of the entry of the order granting the motion.
(3) A motion under paragraph (1) may be filed not later than 5 years after the
date of final publication of notice of seizure of the property.
(4) If, at the time a motion made under paragraph (1) is granted, the forfeited
property as been disposed of by the Government in accordance with law,
the Government may institute proceedings against a substitute sum of
8
the government missed the six-month deadline by more than a year because the order setting
aside the forfeiture was entered in August 1999 and the government waited until December
2001 to commence judicial forfeiture proceedings.
However, the government correctly argues that subsection 983(e)(2) does not apply
here because subsection 983(e)(1) was never invoked. The language of the statute plainly
indicates that the limitations periods provided in § 983(e)(2)(B) apply only to a “subsequent
forfeiture proceeding” described in § 983(e)(2)(A), and that such a proceeding is only
authorized if a motion brought under § 983(e)(1) is granted by the court. Thus, the six-month
limitations period at § 983(e)(2)(B)(ii) does not apply if a § 983(e)(1) motion is never made.
Clearly, no § 983(e)(1) motion was made in this case. Rather, Oriakhi filed his motion under
Fed. R. Crim. Pro. 41(e) in 1997, three years before CAFRA was enacted. Thus, even though
CAFRA applies to this case for the reasons discussed above, the six-month limitations period
at § 983(e)(2)(B)(ii) does not.
Oriakhi implies that because he obtained the relief authorized by § 983(e)(1), albeit
before that section existed, the limitations period at § 983(e)(2)(B)(ii) ought to apply. Oriakhi
offers neither argument nor support for this position. The Supreme Court has explained that
money equal to the value of the moving party’s interest in the property at
the time the property was disposed of.
(5) A motion filed under this subsection shall be the exclusive remedy for
seeking to set aside a declaration of forfeiture under a civil forfeiture
statute.
9
the plain meaning of a statute is conclusive “except in the rare cases [in which] the literal
application of a statute will produce a result demonstrably at odds with the intentions of its
drafter.” United States v. Ron Pair Enters., 489 U.S. 235, 242 (1989) (internal quotations
omitted). There is no reason to think that Congress intended the limitations periods by §
983(e)(2)(B) to apply to a case where § 983(e)(1) does not - and could not - apply.
IV. Conclusion
For the reasons stated above, we will affirm the judgment of the District Court.
10