United States v. Stokes, Johnny L. ( 2006 )

UNPUBLISHED ORDER
Not to be cited per Circuit Rule 53
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted July 19, 2006*
Decided July 31, 2006
Before
Hon. KENNETH F. RIPPLE, Circuit Judge
Hon. DANIEL A. MANION, Circuit Judge
Hon. DIANE P. WOOD, Circuit Judge
No. 05-3116
UNITED STATES OF AMERICA, Appeal from the United States District
Plaintiff-Appellee, Court for the Eastern District of
Wisconsin
v.
No. 03-CR-217
JOHNNY L. STOKES,
Defendant-Appellant. Charles N. Clevert, Jr.,
Judge.
ORDER
Johnny Stokes appeals from an order denying his motion to set aside the
administrative forfeiture of $15,000 to the Drug Enforcement Administration. We
affirm but for different reasons than the district court’s.
*
After an examination of the briefs and the record, we have concluded that
oral argument is unnecessary. Thus, the appeal is submitted on the briefs and the
record. See Fed. R. App. P. 34(a)(2).
No. 05-3116 Page 2
In September 2003 Stokes was arrested, and law enforcement agents seized
the property that he now seeks to recover: $7,000 in currency and the proceeds of
an $8,000 cashier’s check payable to Eddie Thompson. In early October 2003, the
government obtained a criminal indictment charging Stokes with possessing
cocaine with intent to distribute, see 21 U.S.C. § 841(a)(1). The indictment included
a count for the criminal forfeiture of the $7,000 cash and $8,000 cashier’s check
mentioned above, along with a 1997 Buick, a different $8,000 cashier’s check (this
one payable to someone named Jamar Walker), and real property located at 3542
North 23rd Street and 3218/3220 North 12th Street in Milwaukee, Wisconsin.
Pursuant to a written agreement executed on January 13, 2004, Stokes
pleaded guilty to the drug charge. As a condition of his plea agreement, he
relinquished any interest in the property listed in the indictment. “The defendant
agrees,” reads the relevant term, “that any interest he holds in each of the listed
properties is hereby forfeited.” Additionally, the agreement stipulates that “all
properties listed in the indictment constitute the proceeds of the offense to which he
is pleading guilty, or were used to facilitate such offense.” Based on this language
in the plea agreement, the government later secured a preliminary order of criminal
forfeiture for the Buick, the cashier’s check to Walker, and the 12th Street property,
but abandoned its claim to the 23rd Street property because Stokes had no equity in
it. The government voluntarily dismissed its forfeiture claim as against the $7,000
in currency and the $8,000 check to Thompson because the DEA had
administratively forfeited the funds in February 2004, the month after Stokes
executed his plea agreement. As the government explains in its brief on appeal, the
prosecution did not learn about the administrative proceedings until they were
over. Nothing in the record establishes what notice, if any, the DEA sent to Stokes.
The district court sentenced Stokes to 142 months’ imprisonment and five
years’ supervised release. The judgment includes an order forfeiting Stokes’s
interests in the Buick, the cashier’s check to Walker, and the 12th Street property.
Stokes took a direct appeal but raised no issue concerning the criminal forfeiture of
these assets. We affirmed the judgment after a limited remand under United States
v. Paladino, 401 F.3d 471, 484 (7th Cir. 2005), cert. denied, 126 S. Ct. 1343 (2006).
United States v. Stokes, 161 F. App’x 602 (7th Cir. 2006) (unpublished).
While his direct criminal appeal was still pending, Stokes filed a motion in
the district court seeking return of the cash, the check payable to Thompson, and
the 12th Street property. He argued that the funds were not derived from drug
dealing and that he did not receive notice of the administrative forfeiture. The
district court treated the motion as a separate civil action for the return of property
and ruled on it before we resolved the criminal appeal. In ruling on Stokes’s
motion, the court acknowledged 18 U.S.C. § 983(e), enacted as part of the Civil
No. 05-3116 Page 3
Asset Forfeiture Reform Act of 2000 (“CAFRA”), see Pub. L. 106-185, 114 Stat. 202(2000), but did not apply § 983(e) or determine whether the DEA had sent Stokes
the notice of the administrative proceedings required by statute. Instead, the court
limited its inquiry to whether Stokes received constitutionally adequate notice, the
question under pre-CAFRA law. See, e.g., Chairez v. United States, 355 F.3d 1099,
1101 (7th Cir. 2004), cert. denied, 543 U.S. 823 (2004). And the court concluded
that the plea agreement itself gave Stokes constitutionally adequate notice of the
government’s intent to seek forfeiture, or that he waived his entitlement to
statutory notice by signing the agreement.
Although the district court did not explain its resolution of Stokes’s claim for
return of the real property on 12th Street, it presumably realized that it had no
jurisdiction in the civil action to entertain the motion as to that property. Stokes
should have raised any pertinent challenge in his criminal appeal. See United
States v. Apampa, 179 F.3d 555, 557 (7th Cir. 1999) (per curiam); United States v.
Mosavi, 138 F.3d 1365, 1366 (11th Cir. 1998) (per curiam).
As for the $15,000 that was administratively forfeited, Stokes now contends
that the court should have evaluated his motion under 18 U.S.C. § 983(e)(1), which
requires the district court to set aside an administrative forfeiture when someone
entitled to the notice under the statute, see 18 U.S.C. § 983(a); 19 U.S.C. §§ 1607-
1609, does not receive it. Stokes is right that the court should have applied
§ 983(e)(1) instead of asking whether he received constitutionally adequate notice.
The administrative forfeiture proceedings were begun after the statute’s effective
date, August 23, 2000, see United States v. Sims, 376 F.3d 705, 707 (7th Cir. 2004),
cert. denied, 543 U.S. 1094 (2005), and § 983(e) is now the “exclusive remedy for
seeking to set aside a declaration of forfeiture under a civil forfeiture statute,” 18
U.S.C. § 983(e)(5); see Mesa Valderrama v. United States, 417 F.3d 1189, 1195 (11th
Cir. 2005). Therefore the district court should not have disregarded that section.
But Stokes lacked Article III standing to contest the forfeiture. That is
because he abandoned any interests in the property with the language in the plea
agreeing “that any interest he holds in each of the listed properties is hereby
forfeited.” That abandonment stripped him of standing to contest the forfeiture
(even though the government had not yet secured its own title to that property).
See United States v. Le, 173 F.3d 1258, 1278-79 (10th Cir. 1999); United States v.
Grover, 119 F.3d 850, 852 (10th Cir. 1997); see also David B. Smith, Prosecution and
Defense of Forfeiture Cases § 9.04[2][a] (2006) (explaining that Article III standing
to contest forfeiture requires some kind of interest in property); United States v.
Santee Sioux Tribe of Neb., 254 F.3d 728, 734 (8th Cir. 2001) (same); United States
v. $94,000.00 in U.S. Currency, Along With Any Interest Earned Thereon in First
No. 05-3116 Page 4
Financial Sav. Ass'n Account No. 79-70063411, 2 F.3d 778, 790 n.11 (7th Cir. 1993)
(same).
Accordingly, we MODIFY the judgment of the district court to reflect a
dismissal for lack of subject-matter jurisdiction, and AFFIRM as modified.