Leo Muhammed v. Drug Enforcement ( 1996 )

___________
No. 95-3194
___________
Leo Muhammed; Antoinette *
Muhammed, *
*
Appellants, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri.
Drug Enforcement Agency, *
Asset Forfeiture Unit, *
*
Appellee. *
___________
Submitted: February 15, 1996
Filed: August 8, 1996
___________
Before BEAM, LOKEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
___________
BEAM, Circuit Judge.
The Muhammeds appeal the district court's dismissal of their motion
for return of seized property. We reverse.
I. BACKGROUND
This is a cautionary tale, illustrating the mischief to which our
eagerness to employ forfeiture as a weapon in the war on drugs can lead.
Although, due to the posture of the case, the factual record is sparse, the
following can be gleaned from the complaint, affidavits, and the subsequent
motion to dismiss. The Muhammeds, a family from the Los Angeles area of
California, were in St. Louis, Missouri, with their two-month-old infant
son visiting family. According to their affidavits, they purchased tickets
to return to the Los Angeles area at a suburban travel agency and paid in
cash. On September 1, 1994, when the family arrived at the
airport to depart, Drug Enforcement Administration (DEA) agents approached.
The Muhammeds were separated and each was taken to be interviewed. No
Miranda warnings were given. Mr. Muhammed told the agents that he worked
for the Nation of Islam, collecting cash from chapter activities. He used
St. Louis as his midwest base because he had family there. Agents found
$70,990 in cash in Mr. Muhammed's bags. A drug dog was called and alerted
to the cash, which was then seized.
Meanwhile, Mrs. Muhammed was asked if she had any cash. She had
$22,000 in her girdle. She was uncertain as to where her husband had
obtained the cash. When asked if the money could have come from drug
sales, she said she did not know. The drug dog alerted to that cash as
well, which was also seized.
The Muhammeds sought counsel who, in turn, filed an action in federal
district court on September 21, 1994, for the return of the Muhammeds'
property. DEA receipts of both seizures were attached. On the same day
the Muhammeds mailed copies of the motion, the receipts, and their
attorney's affidavit to the DEA. The motion evidently triggered
administrative forfeiture proceedings. On September 26, notice of seizure
and intent to forfeit the $70,990 was mailed, individually, to both the
Muhammeds. That notice was received by them and explained that to contest
the forfeiture they needed to submit personally signed claims and a cost
bond to the DEA by a date certain. The notice also explained how to obtain
waiver of the cost bond. The Muhammeds and their counsel did not correctly
follow these directions. Rather, they amended their complaint to include
the notice of seizure and to include personal affidavits by each of them
asserting that the money in question was lawfully acquired. On November
3, the Muhammeds sent copies of the amended complaint, affidavits, and
receipts to the DEA along with a cover letter listing the seizure number
per the instructions on the notice of seizure and requesting release of the
property. The letter specifically asked the DEA if the Muhammeds needed
to
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provide additional material to gain release of the property.1 Rather than
reply, the DEA chose to categorize the Muhammeds' actions as petitions for
remission or mitigation and declared the $70,990 administratively forfeited
on November 14, 1994. We cannot tell from the record what occurred with
respect to the $22,000. On February 27, 1995, the DEA filed a motion to
dismiss the Muhammeds' claim for return of their property. The district
court dismissed the Muhammeds' action because it found that they had failed
to contest the forfeiture of the $70,990 through the DEA's administrative
procedure.
The Muhammeds appeal, arguing that: 1) their complaint, viewed in the
light most favorable to them, states a claim; 2) the motion to dismiss
should not have been considered because it was grossly out of time; 3) the
district court erred in dismissing the action with respect to Mrs.
Muhammed's $22,000; and 4) the district court erred in failing to convert
the government's motion to dismiss to one for summary judgment.
II. DISCUSSION
While there is some question as to the nature of the action the
Muhammeds filed in district court, the district court treated it as a 41(e)
motion for the return of property under the Federal Rules of Criminal
Procedure.2 The Muhammeds have now adopted this
1
Although the district court apparently chastises the
Muhammeds for failure to include the DEA seizure number on their
initial complaint and correspondence to the DEA, those documents
predated the Muhammeds' receipt of any such number from the DEA.
The original complaint and correspondence did include copies of the
DEA receipts which were adequate to apprise both the court and the
agency of which seizures were in issue.
2
Rule 41(e) provides:
A person aggrieved by an unlawful search and seizure or
by the deprivation of property may move the district
court for the district in which the property was seized
for the return of the property on the ground that such person is
entitled to lawful possession of the property.
The court shall receive evidence on any issue of fact
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characterization in their brief and, upon the court's inquiry at oral
argument, affirmed that this is indeed the correct characterization of
their action. But see supra n.2. Thus, the ultimate question is whether
the district court erred in declining to assert its equitable jurisdiction
under Rule 41(e).
Under the current statutory scheme, the government may declare the
forfeiture of up to $500,000 administratively. 19 U.S.C. §§ 1607-1609; 21
U.S.C. § 881. That is, after seizure and
necessary to the decision of the motion.
Fed. R. Crim. P. 41(e). The Muhammeds argue, however, that the
government's motion should be considered as a 12(b)(6) motion for
failure to state a claim Federal Rules of Civil Procedure. They
further argue that the district court should have converted the
12(b)(6) into one for summary judgment under Federal Rule Civil
Procedure 56 as matters extraneous to the pleading were considered.
While this argument is problematic, it is not totally baseless, as
many cases have indicated that Rule 41(e) motions filed outside of
any criminal proceeding should be considered as civil actions.
See, e.g., United States v. Woodall, 12 F.3d 791, 794 n.1 (8th Cir.
1993) (court should liberally construe 41(e) motion filed outside
of a criminal proceeding to invoke the proper remedy); Onwubiko v.
United States, 969 F.2d 1392, 1397 (2d Cir. 1992) (41(e) motions
should be treated as civil complaints where there is no ongoing
criminal action); Grant v. United States; 282 F.2d 165, 168 (2d
Cir. 1960) (J. Friendly) (such a motion is in effect a complaint
initiating a civil action). However, even under the civil rules,
the government's motion to dismiss is best characterized as a
12(b)(1) motion with which it is permissible to attach documents
establishing jurisdictional facts. Seber v. Unger, 881 F. Supp.
323, 327-28 (N.D. Ill. 1995). It is somewhat ironic that the
government, while criticizing the Muhammeds for ambiguity as to
their cause of action, has failed to be a model of procedural
clarity itself. In any case, the Muhammeds were permitted to
respond to the motion with whatever additional evidence they chose
to submit, so there was no prejudice. Nonetheless, in reviewing
this motion to dismiss on jurisdictional grounds, we accept the
underlying allegations in the Muhammeds' complaint as true. Id. at
327. See generally, Mirax Chem. Prods. Corp. v. First Interstate
Commercial Corp., 950 F.2d 566, 569 (8th Cir. 1991).
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constitutionally adequate notice of intent to forfeit, the government may
declare the money forfeited if no interested party opposes the forfeiture
by filing a personal claim and a cost bond (or a declaration of inability
to file the cost bond) with the DEA within the statutorily proscribed time
limits. Id. If an interested party opposes the forfeiture, the government
is put to its proof in federal district court. 19 U.S.C. §§ 1608, 1615.
If there is no opposition and the property is administratively forfeited,
the courts may review the administrative procedure leading to that
3
forfeiture, but not the merits of the forfeiture itself. See 19 U.S.C.
§ 1609(b); United States v. Woodall, 12 F.3d 791, 793, 795 (8th Cir. 1993)
(judicial review is fundamental safeguard against government agencies'
wrongful seizure of citizens' property); see also Scarabin v. Drug
Enforcement Admin., 919 F.2d 337, 338 (5th Cir. 1990) (while administrative
decisions on the merits of petitions for mitigation and/or remission may
not be reviewed, process underlying those decisions are subject to review
to ensure that proper procedural safeguards are followed).
If a citizen files a 41(e) motion in district court before the
administrative forfeiture commences, an action frequently taken to force
the government agency to act expeditiously, the government's subsequent
initiation of administrative forfeiture proceedings is ordinarily a
sufficient basis for a court to abstain from exercising jurisdiction over
the dispute unless the citizen complies with the DEA's administrative
3
Although one could argue that a total lack of probable cause
in the initial seizure is deficient procedure, our cases have held
that citizens must contest such deficiencies through the
administrative forfeiture, if there is one, rather than circumvent
such process through the courts. See Woodall, 12 F.3d at 795.
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procedures to contest the forfeiture.4 See In re Harper, 835 F.2d 1273,
1274-75 (8th Cir.
4
Some circuits hold that intervening administrative forfeiture
proceedings divest the district court of jurisdiction altogether,
see Linarez v. United States Dep't of Justice, 2 F.3d 208, 211-12
(7th Cir. 1993), but our view is more moderate. Although Federal
Rule of Criminal Procedure 41(e) motions may not be used to attack
antecedent civil forfeitures, see Fed. R. Crim. P. 54(b)(5); United
States v. Rapp, 539 F.2d 1156, 1160 (8th Cir. 1976), such motions
which predate any forfeiture proceeding are not being used to
attack a civil forfeiture. It is the administrative forfeiture
which is being used to attack the motion. The motion has invoked
the court's equity jurisdiction, which, depending on the equities
of the situation, may or may not be defeated by the subsequent
initiation of administrative forfeiture proceedings. See In re
Harper, 835 F.2d 1273, 1274 (8th Cir. 1988) (district court may
decline to exercise existing equity jurisdiction when party has not
acted equitably in subsequent administrative action). In a word,
it often matters in the legal world who acts first.
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1988) (Rule 41(e) motion, filed prior to administrative forfeiture
proceedings invokes equity jurisdiction, but citizen's failure to contest
the administrative proceeding in any way justifies district court's refusal
to exercise that jurisdiction); United States v. Rapp, 539 F.2d 1156, 1160-
61 (8th Cir. 1976) (while equity jurisdiction is not dependent on label,
defendant in a criminal proceeding may not use 41(e) motion to attack a
forfeiture where the motion does not predate the forfeiture or the
indictment, and where property in question is not evidence in an ongoing
case). Here, the Muhammeds filed their 41(e) motion before the
administrative forfeiture and opposed the forfeiture action, although
imperfectly. The question, then, is whether the district court ought to
have exercised its jurisdiction.
The Muhammeds admit that they did not file the cost bond or a request
for waiver of the cost bond, or move for a district court stay.5 Rather
they relied on their 41(e) motion, its amendment, their personal affidavits
and accompanying cover letter to the DEA to forestall the forfeiture. This
was an error, but an understandable one brought on by the inadequacies of
the DEA's notice. Moreover, equity is sometimes tolerant of errors. In
re
5
We note that many courts have found failure to file the cost
bond excusable for sundry reasons. See, e.g., Onwubiko, 969 F.2d
at 1397-99; Camacho v. United States, 645 F. Supp. 725, 727
(E.D.N.Y. 1986).
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Harper, 835 F.2d at 1274. While the notice of seizure and intent to
forfeit instructs parties what they must do to contest the impending
forfeiture in district court, it in no way indicates that parties who are
already in district court need to start over:
TO CONTEST THE FORFEITURE
In addition to or in lieu of petitioning for remission or
mitigation, you may contest the forfeiture of the seized
property in UNITED STATES DISTRICT COURT. To do so, you must
file a claim of ownership and cost bond with the DEA. Submit
the bond in the amount shown above in the form of a cashier's
check or a certified check payable to the U.S. Department of
Justice. [sic] or present satisfactory surety. Claims must be
signed by the parties making the claim. Unsupported
submissions signed by attorneys are insufficient to satisfy the
requirement the claims be personally executed.
If you are indigent (needy and poor) you may not have to post
the bond. To request a waiver of the bond, you must fully
disclose your finances in a signed statement called a
"Declaration in Support of Request to Proceed In Forma
Pauperis" along with a claim of ownership of the
property. Use the format of the pauperis declaration
shown as Form 4 in the Appendix of Forms following Rule
48 of the Federal Rules of Appellate Procedure or obtain
a form from a DEA field office. The claim of ownership,
with either bond or the "Declaration in Support of
Request to Proceed In Forma Pauperis" must be filed
within twenty (20) days of the first date of the
publication of the notice of seizure in the edition of
the USA Today newspaper referenced above. The notice
will be published three successive weeks.
Joint App. at 24 (emphasis in original) (citation omitted). This
notice is clearly focused on instructing parties not yet contesting
the forfeiture in court what procedures must be followed. It does
not instruct parties already in court that the DEA's action
nullifies their ongoing court actions to retrieve the property
unless the party starts over. However, in a proceeding of this
nature, due process requires that notice be reasonably calculated,
under all the circumstances, to apprise the party of the action
against them and afford the opportunity to object. Woodall, 12
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F.3d at 794. In order to adequately perform this function, the
notice must include all critical information. Glasgow v. United
States Drug Enforcement Admin., 12 F.3d 795, 798 (8th Cir. 1993).
In this situation, where the government is the drafter, the
sophisticated party, and the one who benefits from an owner's
confusion as to the effect of the administrative action on the
owner's ongoing court actions to regain the property in question,
due process requires more. This is especially so in a case where
the owners of the property have put the DEA on notice that they are
seeking return of the property in court and that they have not
understood the administrative requirements as to the cost bond.
See Scarabin, 919 F.2d at 339 (DEA may not ignore citizen's
response to seizure notice, even if technically in error, where
response contains the necessary information); see also Aero-
Medical, Inc. v. United States, 23 F.3d 328, 330-31 (10th Cir.
1994) (it is unreasonable for the DEA to ignore its actual
knowledge that notice is inadequate even if notice is otherwise
technically adequate). For example, had the DEA sent notice of
intent to forfeit to a non-English speaker and received a
communication to the effect of "no hablo Ingles," would
bureaucratic stonewalling have been an adequate response?
Given the areas left unaddressed by the notice, reasonable
persons could believe that since they were already in court they
need not worry. Or, if uncertain, a reasonable person could
believe that inquiry of the DEA would reveal whether, indeed, those
already in court need to start over. A reasonable person would
ordinarily not believe that their government would ignore their
inquiry and proceed as if it had never been sent. See Glasgow, 12
F.3d at 798-99 (agency actions that obscure rather than provide
information on the applicable procedures and that reflect "an
attitude of concealment rather than enlightenment" do not meet the
basic demands of due process); see also Ramirez v. United States,
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767 F. Supp. 1563, 1570 (M.D. Fla. 1991) (where government actually
knows citizen is contesting forfeiture, proceeding with
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administrative forfeiture violates due process). Our conclusion is
consistent with our In re Harper decision, where the petitioning
citizen simply ignored a subsequent notice of seizure and made no
attempt to oppose the forfeiture.6 835 F.2d at 1273. Here, it was
the DEA that ignored the Muhammeds, not the contrary.
Criminal charges have never been brought against the
Muhammeds. The facts alleged by the government to discredit the
Muhammeds are spare indeed. The government points out that Mr. and
Mrs. Mohammed had been married only three months but already had a
two-month old son. This information may be of prurient interest,
perhaps, but is wholly immaterial. The government further refers
to the drug dog's alert to the cash. However, it is well-
established that an extremely high percentage of all cash in
circulation in America today is contaminated with drug-residue.
See, e.g., United States v. $5,000, 40 F.3d 846, 848-50 (6th Cir.
1994). The fact of contamination, alone, is virtually meaningless
and gives no hint of when or how the cash became so contaminated.
Finally, the government lamely points to events five months after
the seizure, when Leo Muhammed was again stopped in the St. Louis
airport. He had allegedly "discarded" a ticket not in his name
before being stopped, and was found to have 12.7 grams of marijuana
on his person. Even more damningly, in the eyes of the government,
receipts for the purchase of fast food and clothing were found in
his pockets despite his claim of unemployment since the DEA's prior
cash seizure.
We are therefore faced with a seemingly baseless government
seizure of its citizens' cash currency. Because of, and with
6
In re Harper did not address the issue of the adequacy of the
DEA's forfeiture notice to a party who is already in district court
contesting the seizure. 835 F.2d at 1273.
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actual notice of, the Muhammeds' evident confusion, the DEA
administratively forfeited at least $70,990 of the cash. We
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realize that the war on drugs has brought us to the point where the
government may seize up to $500,000 of a citizen's property,
without any initial showing of cause, and put the onus on the
citizen to perfectly navigate the bureaucratic labyrinth in order
to liberate what is presumptively his or hers in the first place.
See 19 U.S.C. §§ 1607-09, 1615. Should the citizen prove inept,
the government may keep the property, without ever having to
justify or explain its actions. 19 U.S.C. § 1609. Because the
courts have little authority to review the merits of an
administrative forfeiture directly,7 it is all the more important
that the citizen be adequately apprised of exactly what he or she
needs to do to regain his or her property. Although some case law
indicates that initiation of administrative forfeiture may
successfully oust a citizen's pending motion for return of the
property until the administrative procedures have been complied
with, the DEA notice is not at all clear on this point. We
conclude, therefore, that here, at least, where the agency was on
notice that the Muhammeds were confused as to this point and not
only in need of, but requesting, clarification, the agency had a
duty to refrain from further action until tender of the requested
information. Thus, the administrative forfeiture is void because
of inadequate notice given to the Muhammeds. Woodall, 12 F.3d at
795.
Our finding is reinforced by the basic principle that
forfeitures are disfavored and should only be enforced when within
both the letter and the spirit of the law. United States v.
7
Had the failure to file the cost bond permitted the
administrative forfeiture in this case, besides a claim against
their attorneys, the Muhammeds may have had their day in court
through a Bivens action contesting the constitutionality of the
actions of the agents seizing the cash, the Muhammeds, or both.
See Madewell v. Downs, 68 F.3d 1030 (8th Cir. 1995); Glasgow, 12
F.3d at 799.
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Premises Known as 3639-2nd St., N.E., 869 F.2d 1093, 1098 (8th Cir.
1989) (R. Arnold, J., concurring). Here, the agency's knowing
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capitalization on the Muhammeds' confusion to avoid being put to
its proof in a court of law runs very much counter to the spirit of
forfeiture statutes, which are meant to divest the blameworthy, not
the inept, of private property. See id. (forfeiture statutes are
not meant to divest citizens of private property without a
substantial connection between the property and criminal activity).
In its order of dismissal, the district court also held that
the Muhammeds' complaint was limited to the return of the $70,990,
and did not encompass the $22,000. The court based this ruling on
the notice of seizure attached to the amended complaint which lists
$70,990, and the amended complaint's citation of that notice's
seizure number. However, the original complaint included a DEA
field receipt for the $22,000 seized from Mrs. Muhammed, and an
affidavit complaining of that seizure. The Muhammeds' resistance
to the government's motion for dismissal raised the issue of the
$22,000. The government confirmed in its motion to dismiss that
$22,000 was seized from Mrs. Muhammed, but does not further address
that seizure. Thus, we do not know whether that money has been
forfeited, or, if so, what sort of notice was given. (The record,
as far as we can discern, contains only copies of the notice
relating to the $70,990. The $22,000 has apparently disappeared
into thin air.) Because the complaint, the attached receipts, and
the Muhammeds' resistance to the motion to dismiss (with both
seizure receipts attached) clearly put the seizure of Mrs.
Muhammed's $22,000 in issue, and because the government has in no
way accounted for that money, the district court erred in
construing the Muhammeds' action to refer to only the seizure of
the $70,990.
III. CONCLUSION
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We reverse the district court's dismissal of the Muhammeds'
claim for the return of seized property as it relates to the
$70,990 and remand for further proceedings consistent with this
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opinion. We also direct the district court to consider that part
of the complaint which refers to the $22,000 seized from Mrs.
Muhammed in those further proceedings.
MORRIS SHEPPARD ARNOLD, Circuit Judge, dissenting and concurring.
I concur in the court's disposition of this case insofar as it
deals with the matter of Mrs. Muhammed's $22,000. But, with
respect, I disagree with the court that the notice to the Muhammeds
concerning the manner in which they could contest the forfeiture
proceeding was constitutionally infirm. It was about as plain as
it could have been and the Muhammeds simply failed to follow it.
Indeed, the Muhammeds never argued that the notice was in any way
deficient. Under these circumstances, the district court was quite
correct in dismissing the Rule 41(e) proceeding. See In re Harper,
885 F.2d 1273 (8th Cir. 1988).
The court sees fit to discuss the question of whether the
money was in fact forfeitable, though that question is irrelevant
to a resolution of the legal issue that the case presents. The
merits of the government's forfeiture case are not before us, and,
in fact, we do not know what evidence the government would have
produced had it been called on to present a case on the merits.
The court evidently finds nothing suspicious about a woman having
$22,000 stuffed in her girdle. In any event, the court rehearses
only part of the government's justification for seizing the
currency, an account produced, evidently, by selecting certain
allegations from the motion to dismiss that the government made in
the district court. The court does not mention that in that motion
the government had maintained that Mr. Muhammed told DEA agents
that he had only two thousand dollars on his person when he was
interviewed (he had over $70,000), and that he did not even know
the last name of his friends with whom he had recently driven from
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Chicago to St. Louis. Mrs. Muhammed, the government also alleged,
had said that the money that she and her husband were carrying did
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not belong to the Nation of Islam, and, indeed, admitted that it
could have come from drug sales. The court also omits to notice
the government's allegation that when it interviewed Mr. Muhammed
on a later occasion it was discovered that his ticket and boarding
pass were in different names, neither of them Mr. Muhammed's. But
the most remarkable omission from the court's account of the
government's story is Mr. Muhammed's evidently straight-faced
assertion that the money had been made selling fish products and
bean pies on behalf of the Nation of Islam. While this explanation
does not involve, I suppose, a physical impossibility, I offer the
respectful observation that only the most extraordinarily gullible
person would be inclined to accept it without at least a
considerable amount of reflection. All of this, as I have already
said, is irrelevant in the present posture of the case. My point
is simply that if the merits were relevant, as the court evidently
believes them to be, it is not manifest that a miscarriage of
justice has occurred here.
I would therefore affirm the district court's judgment with
respect to the plaintiffs' claim to the $70,000 in currency.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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