United States v. Robert Lee Bailey , 700 F.3d 1149 ( 2012 )

United States Court of Appeals
For the Eighth Circuit
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No. 12-1192
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United States of America
lllllllllllllllllllll Plaintiff - Appellee
v.
Robert Lee Bailey
lllllllllllllllllllll Defendant - Appellant
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Appeal from United States District Court
for the District of Minnesota - St. Paul
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Submitted: October 17, 2012
Filed: November 30, 2012
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Before MURPHY, BYE, and SHEPHERD, Circuit Judges.
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MURPHY, Circuit Judge.
Minneapolis police arrested Robert Lee Bailey in 2003 and seized several items
of his property. After his conviction and the disposition of his appeals, Bailey moved
under Rule 41 of the Federal Rules of Criminal Procedure to have his property
returned. The district court denied the motion. We reversed and remanded for an
evidentiary hearing. See United States v. Bailey, 407 F. App'x 74, 76 (8th Cir. 2011)
(per curiam) (unpublished). On remand the district court denied Bailey's request to
subpoena a witness and declined to convert his motion into a civil action for damages.
Bailey appeals. We affirm in part and reverse in part.
Bailey was arrested on prostitution related charges in 2003 by Minneapolis
detective Andrew Schmidt. Several items of Bailey's property were seized under a
search warrant issued by a Minnesota state court. That property included a wallet, a
cell phone, and over $2,000 in cash. The items were inventoried and checked into
storage by the property and evidence unit of the Minneapolis police department.
Bailey was brought to trial on federal charges in 2004. A few days before the
trial began, Detective Schmidt and another Minneapolis police officer, Darren
Blauert, retrieved Bailey's property from police storage and took it to the United
States Attorney's office. The cash was received as an exhibit during Detective
Schmidt's testimony, but neither the wallet nor the cell phone were entered into
evidence. The jury convicted Bailey of two counts of transporting a person across
state lines for the purpose of engaging in prostitution and one count of possessing a
firearm as a convicted felon. As a result of his convictions several items of Bailey's
property were subject to forfeiture, but the wallet, cell phone, and cash were not. It
is not clear from the record what happened to Bailey's property after the conclusion
of his federal trial.
After Bailey's conviction was upheld on appeal, he filed a motion for the return
of his property under Rule 41 of the Federal Rules of Criminal Procedure. Rule 41
provides that a person "aggrieved by an unlawful search and seizure" or "deprivation
of property" may seek the return of the property by filing a motion in the district
where the property was seized. Fed. R. Crim. P. 41(g). The court must receive
evidence on "any factual issue necessary to decide the motion," and if it grants the
motion it must order the government to return the property. Id.-2-
The district court denied Bailey's motion after the government objected that
Bailey had not yet exhausted his post conviction remedies. Bailey then renewed his
motion after his final claim for post conviction relief had been denied. The district
court again denied the motion, citing the government's statement that the property had
been returned to the Minneapolis police department. This court reversed and
remanded, concluding that Rule 41 required the district court to hold an evidentiary
hearing "to determine the current possessor of the [property] and whether Bailey is
entitled to its return." Bailey, 407 F. App'x at 75.
On remand Bailey asked the district court to subpoena Erica MacDonald, who
had been the lead prosecutor at his federal trial but had since been appointed a
Minnesota state judge. The district court concluded that MacDonald would have
judicial immunity and declined to issue a subpoena. Judge MacDonald nevertheless
submitted a letter stating that she had no information about the property because she
had not handled it during trial and had been absent during its later disposition.
At the evidentiary hearing the court heard testimony from Assistant U.S.
Attorney Chris Wilton, David Nygren, an agent of the Bureau of Alcohol, Tobacco,
Firearms, and Explosives, and Detective Schmidt. Wilton testified that he, Schmidt,
and Nygren had removed several of the exhibits from the courtroom after the trial was
completed. Wilton testified that except for the cash the exhibits were stored in the
U.S. Attorney's office for a few days until they could be retrieved by the Minneapolis
police. According to both Wilton and Nygren, Schmidt took the cash on the day the
trial concluded to return it to the Minneapolis property room. While Schmidt testified
that he did not remember taking the money from the federal courthouse, records from
the police property and evidence unit do not show that the money, the wallet, or the
cell phone were ever returned to its custody. The court also heard testimony from the
supervisor of the Minneapolis police property and evidence unit, who explained that
a search of all Minneapolis police storage facilities had been undertaken and the
property appeared not to have been returned.
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At the conclusion of the hearing, the government moved to dismiss Bailey's
motion, arguing that it could not be forced to return property it did not possess.
Bailey argued that the court should allow him to convert his Rule 41 motion into a
damage action against the United States. The district court decided however that it
had "completed [its] assigned responsibility by the remand" from the court of appeals
and dismissed the action.
Bailey first challenges the district court's decision not to subpoena Judge
MacDonald. We review the district court's decision whether to issue a subpoena for
abuse of discretion. United States v. Mabie, 663 F.3d 322, 329 (8th Cir. 2011). Since
Judge MacDonald voluntarily wrote to the district court and confirmed that she had
not handled the evidence before or during trial and had been absent after trial when
the property was lost, we need not address any issue of judicial immunity or whether
the district court abused its discretion by not issuing a subpoena.1
Bailey next argues that the district court erred in denying his motion to convert
the Rule 41 proceeding into a civil action for damages. In such proceedings the
district court's findings of fact are reviewed for clear error and its legal conclusions
de novo. Jackson v. United States, 526 F.3d 394, 396 (8th Cir. 2008). We have not
previously had occasion to determine the appropriate standard of review for the denial
of a motion to convert, but such a motion is analogous to a motion for leave to amend
the pleadings. Cf. Fed. R. Civ. P. 15(a)(2). We therefore review the district court's
denial of Bailey's motion for an abuse of discretion. See Marmo v. Tyson Fresh
Meats, Inc., 457 F.3d 748, 755 (8th Cir. 2006). We have previously considered
whether compensatory damages are available under Rule 41 when the government
has lost or destroyed a defendant's property. See United States v. Hall, 269 F.3d 9401
Bailey notes Agent Nygren's testimony that he spoke with Erica MacDonald
after the trial about the lost property, but whether he might seek more information on
that subject in the future is not presently before the court.
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(8th Cir. 2001). In Hall, the federal government had improperly disposed of a pickup
truck and a waterbed which had been seized from the defendant. Id. at 941. Since
the property could no longer be returned, the district court granted damages equal to
the fair market value of the items. Id. Although such an award was not authorized
under Rule 41 itself, "the court should grant the movant . . . an opportunity to assert
an alternative claim" under a statute which authorizes money damages against the
government. Id. at 943.
Here, the district court concluded that Bailey's property appeared no longer to
be in the government's possession and that its current whereabouts "remain[ed] a
mystery." It denied Bailey's motion to convert his Rule 41 motion into a civil claim
for damages, stating without further explanation that "leave to amend would be futile
under the circumstances" and that "[a] civil action would have to be brought
separately." It then denied Bailey's Rule 41 motion and dismissed the case.
We conclude that the district court abused its discretion in denying Bailey's
motion to convert the Rule 41 action into a civil claim for damages. When a court
determines that the government no longer possesses the property whose return is
sought, it "should grant the movant . . . an opportunity to assert an alternative claim
for money damages." Hall, 269 F.3d at 943. The district court failed to grant Bailey
that opportunity when it dismissed his Rule 41 motion and required him to initiate a
separate damages action. Under Hall, Bailey should have been allowed an
opportunity to convert his Rule 41 motion into an action for damages against the
United States.
This conclusion is supported by the fact that the statute of limitations might
well bar Bailey from bringing a separate action. The statute of limitations on claims
under 42 U.S.C. § 1983 and Bivens v. Six Unknown Named Agents of the Federal
Bureau of Narcotics, 403 U.S. 388 (1971), is six years in Minnesota. Minn. Stat.
§ 541.05, subd. 1(10); see Sanchez v. United States, 49 F.3d 1329, 1330 (8th Cir.
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1995) (per curiam). Bailey's property was seized nine years ago. When asked at oral
argument whether equitable tolling would apply to Bailey's claim, the government did
not concede that it would. Since the damages claim arises "out of the same conduct,
transaction, or occurrence" as Bailey's original Rule 41 motion, it relates back to the
original filing date of his motion. Peña v. United States, 157 F.3d 984, 987 & n.3
(5th Cir. 1998) (citing Fed. R. Civ. P. 15(c)(2)).
The district court assumed that Bailey's motion to convert "would be futile
under the circumstances." Where property cannot be returned because it has been
lost, however, a court may properly "resolve issues of fact that may help to determine
whether . . . an alternative claim is cognizable." Hall, 269 F.3d at 943. Under Rule
41 the United States is responsible for property that is considered as evidence in a
federal trial even if it is in the actual possession of state officials. Clymore v. United
States, 164 F.3d 569, 571 (10th Cir. 1999).
For these reasons we reverse the ruling of the district court denying Bailey's
motion to convert his Rule 41 motion into an action for damages against the United
States and remand for further proceedings consistent with this opinion.
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