DocketNumber： 91-2292
Filed Date： 6/30/1992
Status： Precedential
Modified Date： 3/3/2016
June 30, 1992 [NOT FOR PUBLICATION]
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No. 91-2292
JOSE ROSADO-ACHA,
Plaintiff, Appellant,
v.
WILLIAM J. SNYDER, DIRECTOR,
THE DRUG ENFORCEMENT ADMINISTRATION,
AND FOUR THOUSAND DOLLARS IN UNITED STATES CURRENCY,
Defendants, Appellees.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gilberto Gierbolini, U.S. District Judge]
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Before
Breyer, Chief Judge
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Selya and Cyr, Circuit Judges.
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Jose Rosado-Acha on brief pro se.
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Daniel F. Lopez-Romo, United States Attorney, and Miguel A.
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Fernandez, Assistant United States Attorney, on brief for appellees.
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Per Curiam. Plaintiff Jose Rosado Acha brought suit
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seeking the return of $4,000 that had been administratively
forfeited by the Drug Enforcement Administration (DEA).
Plaintiff challenged the forfeiture on due process grounds,
alleging that he had been given inadequate notice of the
administrative proceeding. Without ruling on this issue, the
district court granted summary judgment to defendants on the
ground that the currency was properly subject to forfeiture.
As we find the evidence insufficient to support this
conclusion in the summary judgment context, we reverse and
remand for further proceedings.
I.
While the evidentiary record, as discussed infra, is
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less than fully developed, the following facts are
undisputed. On January 28, 1988, plaintiff was arrested by
Puerto Rico authorities on an outstanding warrant for failure
to appear for sentencing in a narcotics case in federal
court. Another narcotics case was then pending against him
in Puerto Rico Superior Court. In his possession at the time
of arrest were two bundles of United States currency
totalling $4,000 and $3,022, respectively.1 Both plaintiff
and the currency were turned over to federal officials.
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1. As reflected in a property receipt provided by the State
Police (attached to plaintiff's complaint), the $4,000 bundle
contained the following denominations: two 100-dollar bills,
39 "fifties," 86 "twenties," ten "tens," and six "fives."
-2-
Plaintiff was remanded without bail to the Rio Piedras State
Penitentiary, and he remained there following his sentencing
in federal court on February 29, 1988.
The DEA then commenced measures to forfeit the seized
currency pursuant to 21 U.S.C. 881(a)(6). That provision
authorizes forfeiture of all moneys "furnished or intended to
be furnished by any person in exchange for a controlled
substance in violation of this subchapter, all proceeds
traceable to such an exchange, and all moneys ... used or
intended to be used to facilitate any violation of this
subchapter." With respect to the $4,000, the DEA on March 4,
1988 sent notices of seizure to plaintiff's last two known
addresses: his home and the state penitentiary. These
notices described the procedure for contesting the
forfeiture, as well as that for seeking remission or
mitigation. The notice mailed to plaintiff's home was
returned "unclaimed"; the one sent to the penitentiary was
returned with the notation "addressee unknown."2 The DEA
also published notice of the $4,000's seizure in a newspaper
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2. The DEA likewise mailed identical notices with respect to
the $3,022. Plaintiff acknowledges that he did receive this
notice at the penitentiary. Plaintiff filed no objection to
the forfeiture of the $3,022, and has raised no challenge
thereto in this action. The instant appeal is concerned
solely with the forfeiture of the $4,000.
-3-
of general circulation on April 20, 1988.3 Having received
no response from plaintiff, the DEA administratively
forfeited the $4,000 (along with the $3,022) on June 1, 1988.
In the meantime, plaintiff's mother, acting on his
behalf, moved on March 31 in the underlying federal criminal
case for return of the $4,000. She stated that she had given
her son $5,000 in November 1987 to pay attorney's fees in
connection with the pending criminal case in Superior Court--
money which she had borrowed from a local bank on August 13,
1987. Her implication was that the seized currency derived
from this loan. The government opposed the motion on April
7, contending that the money was connected to plaintiff's
drug activities; it made no mention of the proposed
forfeiture. After the June 1 forfeiture had occurred,
however, the government relied on this fact to argue that the
district court lacked jurisdiction to entertain the motion.
The court agreed and denied relief, while noting that
plaintiff "may have an action for declaratory and equitable
relief against the United States for return of property under
the Fifth Amendment due process clause and federal question
jurisdiction," citing Willis v. United States, 787 F.2d 1089,
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1092-93 (7th Cir. 1986).
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3. Whether such notice was published for at least three
successive weeks, as required by statute, see 19 U.S.C.
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1607(a); 21 C.F.R. 1316.75(a), is unclear from the present
record.
-4-
Plaintiff filed just such an action in April 1990,
seeking return of the $4,000 on the ground that notice of the
administrative forfeiture was violative of due process. In
his pleadings, plaintiff relied on the statutory mandate,
applicable in this context, that "[w]ritten notice of seizure
together with information on the applicable procedures shall
be sent to each party who appears to have an interest in the
seized article." 19 U.S.C. 1607(a) (made applicable to
forfeitures under 21 U.S.C. 881(a) by virtue of 21 U.S.C.
881(d)). And he relied on Supreme Court pronouncements that
notice must be "reasonably calculated, under all the
circumstances, to apprise interested parties of the pendency
of the action." Mullane v. Central Hanover Bank & Trust Co.,
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339 U.S. 306, 314 (1950); see also Robinson v. Hanrahan, 409
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U.S. 38, 40 (1972) (per curiam) (when state knew that
appellant was incarcerated, sending notice of forfeiture
action to his home address violated due process). Plaintiff
contended that, given the DEA's awareness of his
incarceration, its failure to take further steps once the
notice mailed to the penitentiary was returned with the
notation "addressee unknown" contravened due process. The
government responded by moving for summary judgment on this
issue, arguing that it had made a good faith effort to
provide written notice and that it was under no
constitutional obligation to ensure that such notice actually
-5-
be received. Plaintiff opposed this motion and filed a
cross-motion "for equitable relief in the form of a
declaratory judgment."
The district court called for further briefing
"regarding the merits of plaintiff's claim that these funds
were not the proceeds of drug money." The government
responded with a two-page memorandum, unaccompanied by
supporting affidavits or other evidence. It argued that
plaintiff's effort to connect the $4,000 to money allegedly
received from his mother was unpersuasive; no corroborating
evidence had been offered, and five months had elapsed
between receipt of the alleged bank loan and the seizure.
And it contended, without elaboration, that plaintiff had
been in "constructive possession" of approximately 500 grams
of cocaine at the time of his arrest.4 Given this fact, and
given that plaintiff had been prosecuted in both federal and
state court for narcotics offenses, a "very strong inference"
arose that the $4,000 were connected to plaintiff's "drug
trafficking activities." In his reply, plaintiff submitted
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4. The government had advanced this assertion earlier. In
an unsworn statement of "uncontested material facts"
submitted in conjunction with its summary judgment motion,
the government stated: "At the time of his arrest, Rosado
Acha was in possession of approximately 500 grams of
cocaine." Plaintiff, in his initial opposition to this
motion, did not contest this assertion; his arguments were
directed to the adequacy of the notice. Plaintiff first
disputed this statement in his response to the court's call
for supplemental briefing.
-6-
an affidavit from his mother documenting the above-described
representations concerning the $5,000 loan to cover
attorney's fees. He added in this regard that only two
months elapsed between the time he received this money and
his arrest. And plaintiff disputed that he was in actual or
constructive possession of cocaine at the time of his arrest.
He had been arrested while driving in the Santurce area,
whereas the "500 grams of cocaine were allegedly seized as a
result of a completely unrelated and illegal search ... upon
certain premises located at Isla Verde." No evidence, he
asserted, had been adduced connecting him to such premises.
The district court, after surveying these responses,
deemed the government's position "well taken." Without
addressing the issue of notice, it held that "the $4,000
found in claimant's person while he was in possession of 500
grams of cocaine was connected to drug trafficking activities
and subject to forfeiture." On that basis, it granted
judgment for the government.
II.
Plaintiff first contends that the district court erred
in addressing the propriety of the forfeiture. His specific
claim is that the court lacked jurisdiction to do so in the
context of an equitable action seeking return of forfeited
property because of a due process violation. He suggests,
more generally, that the forfeiture issue is irrelevant to
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the constitutional claim, and that the district court's
decision unfairly afforded the government a second bite of
the apple. We see no jurisdictional bar to the court's
consideration of the forfeiture. Plaintiff points to general
statements in the case law to the effect that "federal courts
lack jurisdiction to review the merits of a forfeiture
decision that the Secretary has reached in the exercise of
his discretion." In re $67,470, 901 F.2d 1540, 1543 (11th
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Cir. 1990). Yet the district court here did not conduct such
a "review." In fact, there was no exercise of agency
discretion to review; the administrative forfeiture was
ordered due to the absence of objection by interested
parties. And as plaintiff concedes, the district court
possessed jurisdiction under 28 U.S.C. 1331 and the waiver
of sovereign immunity contained in 5 U.S.C. 702. See,
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e.g., Marshall Leasing, Inc. v. United States, 893 F.2d 1096,
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1098-1102 (9th Cir. 1990); United States v. Mosquera, 845
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F.2d 1122, 1126 (1st Cir. 1988) (per curiam); Willis v.
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United States, 787 F.2d at 1092-93.
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Nor are we persuaded that the forfeitability of the
currency is irrelevant in an equitable action seeking its
return due to constitutional violations. In analogous
contexts involving allegedly deficient notice of forfeiture
proceedings, courts have not deemed such an inquiry
inappropriate. See, e.g., Vance v. United States, 676 F.2d
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-8-
183, 187 (5th Cir. 1982) (agreeing, under "irregular"
circumstances, to convert equitable action into judicial
forfeiture proceeding); Fisher v. Stutman, 1987 WL 20223, *2
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(D. Mass. 1987) (finding administrative forfeiture invalid
due to inadequate notice, but proceeding to entertain
subsequently filed judicial forfeiture; property ordered
forfeited); Winters v. Working, 510 F. Supp. 14, 17 (W.D.
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Tex. 1980) (finding forfeiture proceeding invalid due to lack
of notice; "[a]ssuming arguendo that the plaintiff has the
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burden of also establishing [that forfeiture was
unwarranted], she has sustained her burden"). Cf. Cepulonis
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v. United States, 543 F. Supp. 451, 453-54 (E.D.N.Y. 1982)
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(action under 28 U.S.C. 1346(a)(2) for damages; although
notice of forfeiture was inadequate, only nominal damages
awarded since vehicle was properly forfeited). As this issue
was not addressed by the district court nor briefed by the
parties, and as a remand is necessary in any event, we are
reluctant at this point to explore it further. It suffices
to note our disagreement with plaintiff's contention that the
forfeitability of the currency is irrelevant per se to the
instant action.
We part company with the district court over the
sufficiency of the evidence demonstrating that the $4,000 was
subject to forfeiture. The framework for civil forfeiture
proceedings is well-established. The government must
-9-
initially show probable cause to believe that the property
was connected to illegal drug activity. See, e.g., United
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States v. One Parcel of Real Estate (Great Harbor Neck), 960
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F.2d 200, 204 (1st Cir. 1992) (must show "required nexus");
United States v. Parcel of Land (28 Emery St.), 914 F.2d 1,
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3-4 (1st Cir. 1990) ("substantial connection"). "Probable
cause to forfeit requires only a 'reasonable ground for
belief ... supported by less than prima facie proof but more
than mere suspicion' that the property is subject to
forfeiture." Id. at 3 (quoting United States v. $250,000 in
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United States Currency, 808 F.2d 895, 897 (1st Cir. 1987)).
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Once probable cause is shown, the burden shifts to the
claimant to prove by a preponderance of the evidence that the
currency was not connected to drug activity. See, e.g.,
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Great Harbor Neck, 960 F.2d at 204. Our review of the
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finding of probable cause is plenary, id. at 206 n.2, as is
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of course our overall review in the summary judgment context,
id. at 204.
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Viewing the record in the light most favorable to
plaintiff, and "indulging all reasonable inferences in [his]
favor," Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.
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1990), we find the showing of probable cause insufficient to
support summary judgment. The entirety of the government's
proof consists of the following: plaintiff's two prosecutions
for narcotics offenses, and his alleged constructive
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possession of cocaine at the time of his arrest. As to the
latter assertion, the government has adduced no evidence
whatsoever. From plaintiff's pleadings, it appears that the
cocaine was seized at a private residence in Isla Verde. And
the record indicates that the forfeiture notice allegedly
mailed to plaintiff's home (which was returned "unclaimed")
was sent to an address in Isla Verde. Beyond this, the
record is silent. Absent some evidence documenting where and
when the cocaine was found and how plaintiff was connected
thereto, this assertion contributes nothing to the probable
cause determination.
That plaintiff was twice convicted of narcotics offenses
is undisputed (the record shows that he entered a guilty plea
in Superior Court). Again, however, the record is otherwise
silent. The government's assertion that plaintiff was
involved in drug "trafficking" is unsupported; the nature of
these offenses, the dates on which they occurred, and the
type of drugs involved are all unknown. As such, it would be
speculative to infer that the forfeited currency derived from
drug sales. While the government has not mentioned this
fact, the denominations of the currency found on plaintiff,
see note 1 supra, admittedly invite suspicion. Yet absent
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some evidence as to the nature of plaintiff's drug
activities, nothing more than suspicion can be drawn from
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this circumstance. And "mere suspicion" is not enough to
establish probable cause. $250,000, 808 F.2d at 897.
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For these reasons, we find the government's evidence
insufficient to "create a necessary connection between the
property and drug trafficking." 28 Emery St., 914 F.2d at 6
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(reversing grant of summary judgment); accord, e.g., United
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States v. $80,760 in United States Currency, 781 F. Supp. 462
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(N.D. Tex. 1991) (denying summary judgment due to
insufficient proof of probable cause).
Vacated and remanded for further proceedings.
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Cepulonis v. United States , 543 F. Supp. 451 ( 1982 )
Marshall Leasing, Inc., a Washington Corporation v. United ... , 893 F.2d 1096 ( 1990 )
Winters v. Working , 510 F. Supp. 14 ( 1980 )
Bernard Shaney Willis v. United States , 787 F.2d 1089 ( 1986 )
United States v. $250,000 in United States Currency, (Two ... , 808 F.2d 895 ( 1987 )
United States v. $80,760.00 in U.S. Currency , 781 F. Supp. 462 ( 1991 )
Gerald Griggs-Ryan v. Beulah Smith, Gerald Griggs-Ryan v. ... , 904 F.2d 112 ( 1990 )
No. 89-7682 Non-Argument Calendar , 901 F.2d 1540 ( 1990 )
united-states-v-parcel-of-land-and-residence-at-28-emery-street-merrimac , 914 F.2d 1 ( 1990 )