United States v. Thirty One Thousand Eight Hundred Fifty Two Dollars & Thirty Eight Cents ($31,852.38) in United States Currency , 183 F. App'x 237 ( 2006 )

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
6-6-2006
USA v. $31,852.38
Precedential or Non-Precedential: Non-Precedential
Docket No. 05-3321
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 05-3321
UNITED STATES OF AMERICA
v.
THIRTY ONE THOUSAND EIGHT HUNDRED FIFTY TWO DOLLARS AND
THIRTY EIGHT CENTS ($31,852.38) In United States Currency;
ONE THOUSAND NINE HUNDRED AND NINE DOLLARS AND THREE CENTS
($1,909.03) In United States Currency; THIRTY ONE THOUSAND
FIVE HUNDRED FIFTY THREE DOLLARS AND SEVENTY EIGHT CENTS
($31,553.78) In United States Currency; *SHAWN WRIGHT,
Appellants
*(Pursuant to F.R.A.P. 12(a))
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
D.C. Civil 04-cv-00854
District Judge: The Honorable Gregory M. Sleet
Submitted Under Third Circuit LAR 34.1(a)
May 11, 2006
Before: BARRY, SMITH and TASHIMA,* Circuit Judges
(Opinion Filed: June 6, 2006)
*
The Honorable A. Wallace Tashima, Senior Circuit Judge, United States Court of
Appeals for the Ninth Circuit, sitting by designation.
OPINION
BARRY, Circuit Judge
At issue in this in rem forfeiture proceeding are bank accounts held by Shawn
Wright and seized by the Drug Enforcement Administration (“DEA”) as part of a drug
investigation. The United States District Court for the District of Delaware struck
Wright’s answer to the government’s forfeiture complaint and entered a default judgment
in favor of the United States. Wright appeals. We will affirm.
I.
Shawn Wright was the subject of a drug investigation. The DEA, having seized
bank accounts containing $31,553.78, $1,909.03, and $31,852.38, instituted an
administrative forfeiture action against the accounts in rem. Wright filed verified claims
to the accounts with the DEA on March 22, April 14, and April 23, 2004. As required by
18 U.S.C. § 983(a)(3)(A), the government commenced a civil forfeiture action in the
District Court on July 13, 2004. That same day, the deputy clerk of the District Court
issued a warrant for arrest in rem and summons. Wright, through his attorney, received
service of the warrant, complaint, and interrogatories from the government on August 2,
2004.
The arrest warrant informed Wright that
2
any person claiming an interest in, or right against, the property must file a
verified Statement of Interest or Right identifying the interest in, or right
against, the property in the manner set forth in Rule C(6)(a) of the
Supplemental Rules for Certain Admiralty and Maritime Claims, Federal
Rules of Civil Procedure, except that in no event may such Statement of
Interest or Right be filed later than 30 days after the date of service of the
complaint . . . . In addition, any person having filed such a Statement of
Interest or Right must also file an answer to the complaint not later than 20
days after the filing of the Statement . . . .
Accordingly, Wright had until September 1, 2004 to file a verified statement of interest,
and then until September 21, 2004 to file his answer to the complaint.
As of September 27, 2004, Wright had filed nothing; that day, the government
filed a request for entry of default. On October 7, 2004, the government received from
Wright an unverified response to its interrogatories. The government wrote Wright on
October 22, 2004, informing him that he had “yet to file a claim and answer as required
by Admiralty Rule C” and asking whether “he still intend[ed] to contest the forfeiture.”
Wright’s next act was not until November 17, 2004, when he filed an answer to the
complaint. As Wright had still not filed a verified statement of interest, the government
moved to strike Wright’s answer, and Wright responded on January 28, 2005.
The District Court found that the government provided Wright with the notice
required by Rule C(6) and observed that Wright never requested an extension of time to
file the claim.1 It concluded that
1
Wright’s only explanation for his incomplete and late submissions was that he was
not available and, “therefore, lost communication with his counsel.” The District Court
found “that Wright’s assertion, absent any specific facts or supporting affidavits, is
3
Wright’s answer to the complaint, unverified responses to interrogatories,
and verified statements of interest filed with the DEA, while perhaps
providing some type of notice to the Government, are not substitutes for the
Rule C(6) verified statement, nor do they prevent the Government from
claiming prejudice. The Government has an interest in the rapid resolution
of claims and the delay in this case has prejudiced that interest and
increased the length and cost of litigation. (citations omitted)
Consequently, the District Court struck the answer on June 7, 2005.
Thereafter, the government moved for entry of default judgment. The clerk
entered a default on June 9, 2005, and the District Court granted the government’s motion
for default judgment four days later.2 On July 6, 2005, Wright appealed.3
insufficient to warrant the delay.” The District Court did note, however, that “even if [it]
were to consider Wright’s brief as a request for an extension of time, [it] would deny the
request, as Wright has not demonstrated that the delay in filing was a result of excusable
neglect, as required by the Federal Rule of Civil Procedure 6(b).”
2
Wright never sought relief from judgment pursuant to Fed. R. Civ. P. 60(b). Nor
does Wright claim on appeal, and has therefore waived the argument, that the District
Court failed to comply with the procedural requirements of Fed. R. Civ. P. 55 when it
entered default judgment, instead focusing on the merits of the District Court’s decision
to strike the answer.
3
We have jurisdiction pursuant to 28 U.S.C. § 1291, and will review the District
Court’s grant of the motion to strike Wright’s answer, as the parties agree we should,
under an abuse of discretion standard. Cf. United States v. $ 23,000 in United States
Currency, 356 F.3d 157, 168-69 (1st Cir. 2004) (applying an abuse of discretion standard
and noting that its “ruling is in accord with other Courts of Appeals that have similarly
found no abuse of discretion when a district court requires claimants to comply strictly
with the verified statement requirement of Rule C(6)”); United States v. Beechcraft
Queen Airplane, 789 F.2d 627, 630 (8th Cir. 1986) (holding it was not an abuse of
discretion for the District Court to strike an answer not preceded by a verified claim); see
United States v. $ 8,221,877.16 of United States Currency, 330 F.3d 141, 150 n.9 (3d Cir.
2003) (citing cases applying abuse of discretion standard of review to district courts’
decisions to strike claims).
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II.
The verified statement of interest serves as the means of establishing statutory
standing in forfeiture actions. See United States v. Contents of Accounts Nos.
3034504504 & 144-07143 (In re Friko Corp.), 971 F.2d 974, 984 (3d Cir. 1992) (“Article
III standing requires the claimant to show an interest in the property sufficient to create a
‘case or controversy,’ while statutory standing requires claimants to comply with certain
procedures.”); see also David B. Smith, Prosecution and Defense of Forfeiture Cases §
9.04[1][a] (noting that statutory standing “is established by filing a timely verified claim
pursuant to Rule C(6) of the Supplemental Rules”). “Statutory standing is a threshold
issue that determines whether a party is properly before the court.” United States v. $
8,221.877.16 in United States Currency, 330 F.3d 141, 150 n.9 (3d Cir. 2003) (emphasis
removed).
The timing requirements of Rule C(6) permit courts to “hear all interested parties
and resolve the dispute without delay.” United States v. Various Computers and
Computer Equipment, 82 F.3d 582, 585 (3d Cir. 1996). The statement of interest must be
verified “to minimize the danger of false claims.” Friko Corp., 971 F.2d at 984. A sister
circuit has explained:
The filing of a verified statement, as required by Rule C(6), is no mere
procedural technicality. It forces claimants to assert their alleged ownership
under oath, creating a deterrent against filing false claims. For this reason,
filing a verified statement is normally “a prerequisite to the right to file an
answer and defend on the merits.”
5
$23,000, 356 F.3d at 163 (citations omitted); see United States v. Commodity Account No.
549 54930, 219 F.3d 595, 597 (7th Cir. 2000) (“Verification forces the claimant to place
himself at risk for perjury of false claims, and the requirement of oath or affirmation is
not a mere technical requirement that we easily excuse”).
Here, Wright received proper notice yet never filed a verified statement of interest,
as required to establish statutory standing in the civil forfeiture proceeding. He did,
however, file verified claims in the administrative forfeiture proceedings, but any
contention that these filings were sufficient to bestow statutory standing in the civil
forfeiture proceeding is unavailing. As the “leading treatise on forfeiture,”
$ 8,221,877.16, 330 F.3d at 155, has pointed out, “the filing of the earlier administrative
claim is not a substitute for the claim that must be filed with the court under Rule C(6).”
David B. Smith, Prosecution and Defense of Forfeiture Cases § 9.04[1].
Wright also contends that his eventual filing of an answer to the complaint and his
responses to the government’s interrogatories served the purposes of Rule C(6). In at
least one case, which presented “extraordinary circumstances,” we permitted a claimant
who failed to verify his claim to challenge a forfeiture action. See Various Computers, 82
F.3d at 585. There, the imprisoned, pro se litigant timely filed a claim and answer, but
failed to verify the former as required by Rule C(6). He conceded as much, “but
assert[ed] that the procedural defects were due to his pro se and prison status.” Id. at 584.
Where “[b]oth the court and the Government were aware of the source of [the claimant’s]
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interest in the property and the basis for his claim of ownership,” we concluded that “it
was error under these circumstances to reject [his] claim merely because of the absence of
verification, especially in light of [his] pro se status and his lack of any knowledge of
Rule C(6).” Id. at 585.
By contrast, Wright was, and is, represented by counsel yet nonetheless failed to
file a statement of interest, verified or otherwise, despite ultimately filing an answer to the
complaint and responses to the interrogatories of the government. Indeed, after the time
for filing a verified statement of interest had passed, the government informed him by
letter that he had “yet to file a claim and answer as required by Admiralty Rule C” and
asked whether “he still intend[ed] to contest the forfeiture.” Wright’s chosen response
was to file only an untimely answer.
That decision to forego “plac[ing] himself at risk for perjury,” Commodity Account
No. 549 54930, 219 F.3d at 597, by failing to verify, or even to file, a statement of interest
undermined Rule C(6)’s goal of protecting against false claims and delayed the
government’s ability to promptly effectuate the forfeiture. Accordingly, the District
Court acted well within its discretion when it struck Wright’s answer and entered default
judgment for the government. Cf. $ 8,221,877.16, 330 F.3d at 150 n.9 (noting that “[h]ad
the Court truly held that [the claimant] lacked statutory standing to proceed, the proper
response would have been to strike [the claimant’s] claim”).
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III.
The orders of the District Court granting the motions to strike the answer and for
default judgment will be affirmed.
8