United States v. 408 Peyton Road, S.W.

United States Court of Appeals,
Eleventh Circuit.
No. 95-8330.
UNITED STATES of America, Plaintiff-Appellee,
v.
408 PEYTON ROAD, S.W., ATLANTA, FULTON COUNTY, GEORGIA, Including
all buildings and appurtenances thereon, described in Exhibit A
attached, Defendant-Appellant,
451 Hope Court, S.W., Atlanta, Fulton County, Georgia, Including
all buildings and appurtenances thereon, described in Exhibit B
attached, Defendant,
Robert Richardson, Claimant-Appellant,
Carswell Denson, et al., Claimants.
May 15, 1997.
Appeal from the United States District Court for the Northern
District of Georgia. (No. 1:93-cv-913-RLV), Robert L. Vining, Jr.,
Judge.
Before COX and BLACK, Circuit Judges, and FAY, Senior Circuit
Judge.
BLACK, Circuit Judge:
At issue in the present appeal is whether predeprivation
notice and a hearing must be provided when the Government executes
an arrest warrant against real property, but refrains from
asserting physical control. We conclude that the Due Process
Clause of the Fifth Amendment mandates provision of such
predeprivation procedures even when the seizure of real property is
not physically intrusive. Accordingly, we reverse the district
court's grant of summary judgment in favor of the United States.
I. BACKGROUND
On April 14, 1993, the Government secured ex parte warrants
authorizing seizure of 408 Peyton Road, S.W., and 451 Hope Court,
S.W.,1 properties in which Appellant Robert Richardson held an
interest. The warrant applications maintained that Appellant
Richardson had financed the acquisition and development of the
defendant properties through drug-trafficking activities. In
support of these contentions, the Government stated that
Richardson's reported income was insufficient to sustain his real
estate acquisition and development activities and that Richardson
had engaged in a series of suspect financial transactions relative
to the properties. The evidence persuaded a United States
Magistrate Judge that probable cause existed to believe the
properties were involved in or traceable to money laundering
proscribed by 18 U.S.C. § 1956.
On April 28, 1993, the Government instituted this civil
forfeiture proceeding against the defendant properties pursuant to
18 U.S.C. § 981(a)(1)(A). Upon the filing of the verified
complaint, the Clerk of Court issued a warrant directing the United
States Marshal "to arrest and take into custody" the defendant
properties. On the same date, April 28, 1993, the Government filed
a notice of lis pendens in the real property records of the
Superior Court of Fulton County, Georgia.2 On June 3, 1993, a
Deputy United States Marshal executed the federal arrest warrants
by posting copies at each of the defendant properties. As the
1
By stipulation entered into on October 21, 1994, the
property known as 451 Hope Court was dismissed as a defendant in
the forfeiture case.
2
The purpose of a lis pendens is to notify prospective
purchasers and encumbrancers that any interest acquired by them
in property is subject to the decision of the court in pending
litigation. Beefy King Int'l, Inc. v. Veigle, 464 F.2d 1102,
1104 (5th Cir.1972).
dwellings on each property were occupied, the Government elected
not to assert immediate physical control over the premises. The
record establishes that the Government neither posted warning signs
on the properties nor changed the locks.
On July 2, 1993, Appellant Richardson claimed an ownership
interest in the defendant properties. On May 5, 1994, Appellant
Richardson filed a motion to dismiss, arguing that the Government's
failure to provide preseizure notice and a hearing deprived him of
property without due process, in violation of the Fifth Amendment.
In an order issued on July 11, 1994, the district court rejected
Richardson's due process claim. Meanwhile, the Government had
filed a motion for summary judgment of forfeiture. By order dated
February 10, 1995, the district court granted the Government's
motion for summary judgment. Appellant Richardson filed a timely
notice of appeal.
II. DISCUSSION
Appellant Richardson advances six grounds for appeal. As we
conclude that the Government deprived Richardson of due process by
failing to provide notice and a hearing prior to executing an
arrest warrant issued against his real property, we decline to
address the remaining grounds for appeal.
A. Due Process Requirements Applicable to the Seizure of Real
Property
In United States v. James Daniel Good Real Property, 510 U.S.
43, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993), the Supreme Court
addressed whether the Fifth Amendment Due Process Clause prohibits
the Government in a civil forfeiture case from seizing real
property without first affording the owner notice and an
opportunity to be heard. The Court noted that, as a general
matter, the Government must provide notice and a hearing prior to
depriving an individual of property. Id. at 48, 114 S.Ct. at 498.
The Constitution tolerates exceptions to that general rule only in
those "extraordinary situations where some valid governmental
interest is at stake that justifies postponing the hearing until
after the event." Id. at 53, 114 S.Ct. at 501 (internal quotation
marks omitted); see also Fuentes v. Shevin, 407 U.S. 67, 82, 92
S.Ct. 1983, 1995, 32 L.Ed.2d 556 (1972). The Supreme Court
identified the three-part inquiry set forth in Mathews v. Eldridge,
424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), as the
appropriate analytical framework for determining whether seizure of
real property for purposes of civil forfeiture justifies such an
exception. Good, 510 U.S. at 53, 114 S.Ct. at 501. The Mathews
analysis requires consideration of (1) the private interest
affected by the official action, (2) the risk of an erroneous
deprivation of that interest through the procedures used, as well
as the probable value of additional safeguards, and (3) the
Government's interest, including the administrative burden that
additional procedural requirements would impose. Good, 510 U.S. at
53, 114 S.Ct. at 501.
The importance of the private interests at risk and the
absence of countervailing governmental needs convinced the Supreme
Court that seizure of real property in a civil forfeiture context
was not one of those extraordinary instances that justify an
exception to the general rule requiring predeprivation notice and
a hearing. Id. at 62, 114 S.Ct. at 505. First, the Court
reaffirmed that the right to maintain control over one's home, and
to be free from governmental interference, stands as a private
interest of historic and continuing importance. Id. at 53-54, 114
S.Ct. at 501. Second, the Supreme Court determined that ex parte
seizure involves an unacceptable risk of error, affording little or
no protection to the innocent owner. Id. Third, the Court found
no pressing governmental need to seize real property prior to the
forfeiture hearing. Id. at 56, 114 S.Ct. at 502. Accordingly, the
Supreme Court held that, absent exigent circumstances, the Due
Process Clause requires the Government to afford notice and a
meaningful opportunity to be heard before seizing real property
subject to civil forfeiture.3 Id.The Eleventh Circuit recently had occasion to apply Good in a
factual setting similar to that presented by the instant dispute.
In United States v. 2751 Peyton Woods Trail, S.W., 66 F.3d 1164,
1167 (11th Cir.1995), this Court addressed whether the Government
had deprived William Richardson of due process when it seized his
real property without prior notice and a hearing.4 As in the
3
"To establish exigent circumstances, the Government must
show that less restrictive measures—i.e., a lis pendens,
restraining order, or bond—would not suffice to protect the
Government's interests in preventing the sale, destruction, or
continued unlawful use of the real property." Good, 510 U.S. at
62, 114 S.Ct. at 505.
4
Although it has no bearing upon disposition of the present
controversy, we note that both the present case and 2751 Peyton
Woods Trail involve properties situated within an eight and
one-half acre tract of land known as the Hope Court subdivision.
As Robert Richardson developed Hope Court, William Richardson
presumably acquired his interest in the 2751 Peyton Woods Trail
property from him. The facts do not disclose what relation
Robert and William Richardson share beyond their common last
name.
present case, in 2751 Peyton Woods Trail the Government secured ex
parte seizure warrants by convincing a magistrate judge that
probable cause existed to believe the real properties were involved
in or traceable to money laundering. Id. at 1165. After receiving
the warrants, the Government executed process on the properties and
changed the locks on an uninhabited home situated on the one
developed property. Id. Based upon our interpretation ofGood, we
held "that the lack of notice and a hearing prior to issuance of
the warrants seizing the properties rendered the warrants "invalid
and unconstitutional,' and that because the resulting seizure
violated [the claimant's] due process rights, the forfeiture action
must be dismissed." 2751 Peyton Woods Trail, 66 F.3d at 1167.
B. The Due Process Implications of a Nonphysical Seizure of Real
Property
The Government seeks to distinguish the present case from Good
and 2751 Peyton Woods Trail based upon its decision to refrain from
exercising physical control over the seized premises. The record
indicates that the only action the Government took relative to 408
Peyton Road was to execute the arrest warrant. As the defendant
property was occupied, the Government elected not to evict the
residents, post warning signs, or change the locks. The Government
therefore contends that it never "seized" the property within the
meaning of Good because it refrained from asserting any physical
control over the defendant real property.
The Good Court never explicitly defined the term "seizure,"
but the Government suggests we should imply assertion of physical
control as an essential element of a seizure because the facts of
Good involved some level of physical intrusion. The Supreme Court
never indicated, however, that the exercise of physical control
over the defendant real property should be regarded as the sine qua
non of a constitutionally cognizable seizure. To the contrary, the
Supreme Court employed the term seizure more broadly to refer to
governmental action that deprived claimant Good of significant
property interests. See Good, 510 U.S. at 49, 114 S.Ct. at 498(stating that "[t]he Government does not, and could not, dispute
that the seizure of Good's home and four-acre parcel deprived him
of property interests protected by the Due Process Clause"); see
also United States v. Jacobsen, 466 U.S. 109, 113, 104 S.Ct. 1652,
1656, 80 L.Ed.2d 85 (1984) (holding that, in the Fourth Amendment
context, "[a] "seizure' of property occurs when there is some
meaningful interference with an individual's possessory interests
in that property"). In essence, the Supreme Court declared in
Good
that property deprivations of the magnitude involved in that case
must be preceded by notice and a hearing.
The present case does not involve a physically-intrusive
seizure, but still requires this Court to assess whether the
magnitude of the private interests at stake require predeprivation
notice and a hearing. As the Supreme Court instructed in Good, we
must evaluate the due process implications of the challenged
deprivation under the three-fold test enunciated in Mathews v.
Eldridge. In particular, although Good provides that notice and a
hearing must be afforded prior to a seizure of real property that
involves some element of physical intrusion, we must determine
whether some lesser procedural protection will suffice for
deprivations occasioned by nonphysical seizures of real property.
If lesser procedural protections fail to satisfy due process, then
even physically unobtrusive seizures of real property must be
considered "seizures" within the meaning of Good.
1. The Private Interest Affected by a Nonphysical Seizure
The first Mathews factor requires consideration of the
private interest that will be affected by the challenged official
action. Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 903,
47 L.Ed.2d 18 (1976). The United States essentially argues that
the private interest at stake in the present seizure is not
commensurate with the interests at stake in Good and 2751 Peyton
Woods Trail because the present case does not involve a substantial
physical invasion.
This argument misapprehends the import of the Supreme Court's
decision in Good and our decision in 2751 Peyton Woods Trail.
Neither case supports the proposition that the protections of the
Due Process Clause are confined to physical, invasive seizures. To
the contrary, the Supreme Court indicated that the mere execution
of an arrest warrant implicated interests protected by the Due
Process Clause because it bestowed upon the Government important
rights of ownership. See Good, 510 U.S. at 49, 114 S.Ct. at 498.
In particular, aside from the potential for physical intrusion, the
seizure of a home gives the Government the right to prohibit sale,
to evict occupants, to modify the property, to condition occupancy,
to receive rents, and to supersede the owner in all rights
pertaining to the use, possession, and enjoyment of the property.5
5
At oral argument, the Government represented that the
arrest warrant gave it no greater right in the property than a
lis pendens, a device the Supreme Court specifically endorsed as
Id. at 54, 114 S.Ct. at 501. As a consequence, even a nonphysical
seizure impairs the historically significant "right to maintain
control over [one's] home, and to be free from governmental
interference." Id. at 54, 114 S.Ct. at 501. Although the
Government allowed Richardson to maintain possession of his home,
Good forecloses the argument that the arrest of 408 Peyton Road did
not affect any constitutionally significant interests.
Also instructive is the Good court's reliance on Connecticut
v. Doehr, 501 U.S. 1, 111 S.Ct. 2105, 115 L.Ed.2d 1 (1991). In
Doehr, the Supreme Court struck down a state statute that
authorized prejudgment attachment of real estate without prior
notice or hearing, even in the absence of extraordinary
a valid means of safeguarding the Government's legitimate
interests in the forfeited real property. That representation is
not only at odds with Good, but also contrary to the Government's
contemporary understanding of its rights under the arrest
warrant. First, the Government evidently believed that it had
acquired the power to change locks and post warning signs on the
defendant properties, although it declined to exercise this
authority in the present case. Deputy United States Marshall Ray
Navarro indicated that Government declined to change locks on 408
Peyton Road not because they lacked the authority to do so, but
because the properties were occupied. Moreover, Navarro conceded
that the Government changed locks and posted warning signs at
2602 Peyton Woods Trail, a related parcel of property seized from
Appellant Richardson at the same time as 408 Peyton Road. The
Government advances no reason why such rights might have been
granted relative to 2602 Peyton Woods Trail, but withheld as to
408 Peyton Road. Second, the Government implies that it had the
power to evict occupants from the defendant property. Deputy
Marshall Navarro testified that the occupants of 408 Peyton Road
were "allowed" to remain in possession, but never suggested that
the occupants had any right to remain in possession. As a
result, it is evident that the Government understood the seizure
of 408 Peyton Road to have secured rights far more extensive than
those attendant to the filing of a notice of lis pendens. See
Beefy King Int'l, Inc. v. Veigle, 464 F.2d 1102, 1104 (5th
Cir.1972) (observing that notice of lis pendens merely warns
prospective purchasers and encumbrancers that any interest
acquired by them will be subject to determination of the court in
pending litigation).
circumstances. 501 U.S. at 4, 111 S.Ct. at 2109. The Court found
the statute failed to satisfy the Due Process Clause even though
the attachment did not interfere with the owner's use or possession
of the property and did not affect rentals from existing
leaseholds. See id. at 11-12, 111 S.Ct. at 2113. The Supreme
Court explicitly rejected the notion that only "complete, physical,
or permanent deprivation[s] of real property" trigger due process
scrutiny. Id. Reliance on Doehr reveals that the Good Court did
not intend for physical control to be of paramount importance when
determining whether a constitutionally cognizable "seizure" of real
property has taken place.
Nor has this Circuit suggested that the Due Process Clause
withholds its protection from seizures that are not physically
intrusive. The 2751 Peyton Woods Trail opinion noted that the
Government had changed the locks on an uninhabited home situated on
the one developed property, 66 F.3d at 1165, but never intimated
that our decision was premised upon so narrow a foundation. To the
contrary, the decision affirmatively establishes that we could not
have placed dispositive importance upon that factor inasmuch as the
Government changed the locks on only one of the defendant
properties, but we reversed the forfeiture judgments issued as to
both properties. To avoid the specter of confusion, we then
specified that "lack of notice and a hearing prior to issuance of
the warrants seizing the properties rendered the warrants "invalid
and unconstitutional.' " 66 F.3d at 1167; accord United States v.
9638 Chicago Heights, 27 F.3d 327, 330 (8th Cir.1994) ("The lack of
notice and a hearing prior to the issuance of an arrest warrant for
the seizure of the [defendant real property] renders that warrant
invalid and unconstitutional."). The 2751 Peyton Woods Trail
decision therefore supports our holding that a constitutionally
cognizable seizure of real property need not involve physical
intrusion.
2. The Risk of an Erroneous Deprivation
The second Mathews factor directs judicial attention to the
risk that the procedures employed may result in an erroneous
deprivation of the private interest and the probable value, if any,
of additional or substitute procedural safeguards. 424 U.S. at
335, 96 S.Ct. at 903. As the Supreme Court recognized inGood, the
practice of ex parte seizure creates an unacceptable risk of error.
Good, 510 U.S. at 55, 114 S.Ct. at 501. The ex parte preseizure
proceeding offers little or no protection for innocent owners. Id.Although Congress clearly intended to protect innocent owners from
the expansive grasp of the forfeiture statutes, see 18 U.S.C. §
981(a)(2) ("No property shall be forfeited under this section to
the extent of the interest of an owner or lienholder by reason of
any act or omission established by that owner or lienholder to have
been committed without the knowledge of that owner or
lienholder."), the Government need not offer any evidence on the
question of innocent ownership in the ex parte preseizure hearing.
Good, 510 U.S. at 55, 114 S.Ct. at 502. In any event, ex parte
presentation of such evidence would not suffice to protect the
innocent owner's interests because "fairness can rarely be obtained
by secret, one-sided determination of facts decisive of rights."
Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 170,
71 S.Ct. 624, 647-48, 95 L.Ed. 817 (1951) (Frankfurter, J.,
concurring). As Justice Frankfurter observed, "[n]o better
instrument has been devised for arriving at truth than to give a
person in jeopardy of serious loss notice of the case against him
and opportunity to meet it." Id. at 171-72, 71 S.Ct. at 649.
3. The Governmental Interest in Nonphysical, Ex Parte Seizures
The third Mathews factor concerns the Government's interest,
including the function involved and the fiscal and administrative
burden that additional or substitute procedural requirements would
entail. 424 U.S. at 335, 96 S.Ct. at 903. The governmental
interest implicated by the present controversy is not some
generalized interest in forfeiting property, but the specific
interest in conducting physically unobtrusive seizures of real
property prior to a forfeiture hearing. Good, 510 U.S. at 56, 114
S.Ct. at 502. The Court must determine whether, in the civil
forfeiture context, such seizures are justified by a pressing need
for prompt action. Id.In Good, the Supreme Court concluded that no pressing need for
prompt governmental action justified ex parte seizure of real
property in the civil forfeiture context. 510 U.S. at 56, 114
S.Ct. at 502. In contrast to the situation with personal property,
the Supreme Court held that jurisdiction over real property does
not depend upon prior seizure. Id. at 57, 114 S.Ct. at 503 (noting
that "because real property cannot abscond, the court's
jurisdiction can be preserved without prior seizure"). When
pursuing the forfeiture of real property, "the res may be brought
within the reach of the court simply by posting notice on the
property and leaving a copy of the process with the occupant." 510
U.S. at 58, 114 S.Ct. at 503.
Nor does forfeiture of real property involve the risk that
the res will disappear if the Government is required to provide
advance warning of the forfeiture action. Id. As a consequence,
in the typical case, the Government may secure its legitimate
interest without seizing the subject property. Sale of the
property may be prevented by filing a notice of lis pendens as
authorized by state law when the forfeiture proceedings commence.
Good, 510 U.S. at 58, 114 S.Ct. at 503. If an owner seems likely
to destroy his property when advised of the forfeiture action, the
Government may obtain an ex parte restraining order, or other
appropriate relief, upon a proper showing in district court. Id.
at 58-59, 114 S.Ct. at 503 (citing Fed.R.Civ.P. 65; United States
v. Premises and Real Property at 4492 South Livonia Road, 889 F.2d
1258, 1265 (2d Cir.1989)). Finally, the Government may prevent
further illegal activity with search and arrest warrants obtained
in the ordinary course. Good, 510 U.S. at 59, 114 S.Ct. at 504.
At oral argument, however, the Government maintained that its
ability to protect its legitimate interests through the filing of
a notice of lis pendens hinges upon its ability to seize the
defendant real property. The Government reasoned that a lis
pendens required the filing of a complaint, and that the forfeiture
complaint could not be filed until the defendant real property had
been seized. The Government therefore contends that execution of
the arrest warrant constitutes an essential prerequisite to the
district court's jurisdiction over the forfeiture action.
The Government's argument disregards the Good court's
repeated admonition that the district court may preserve its
jurisdiction over real property without prior seizure. 510 U.S. at
57, 114 S.Ct. at 503. Although seizure of the res has long been
considered a prerequisite to the initiation of in rem forfeiture
proceedings, the Good Court declared that no such seizure is
necessary for a forfeiture action initiated against real property.
Id. at 57, 114 S.Ct. at 503. In the case of real property, the res
may be brought within the reach of the court simply by posting
notice on the property and leaving a copy of the process with the
occupant. Id. at 58, 114 S.Ct. at 503.
As a result, the Government need not await seizure or arrest
of the defendant real property to file its civil forfeiture
complaint. On the contrary, the Government may file its complaint,
proceed to trial, obtain a judgment of forfeiture, and only then
seize the property.6 Once the complaint has been filed, the
Government may defeat efforts to sell the property to bona fide
purchasers by filing a notice of lis pendens as authorized by state
law. See Ga.Code Ann. §§ 44-14-610 to 44-14-613 (indicating that
a notice of lis pendens may be filed by advising the clerk of the
superior court for the county where the real property is located of
the parties to the action, the time of the institution of the
action, the name of the court in which the action is pending, a
description of the real property involved, and a statement of the
6
We note that the United States District Court for the
Northern District of Florida reached this same conclusion in
United States v. 18900 S.W. 50th Street, 915 F.Supp. 1199, 1202
(N.D.Fla.1994).
relief sought regarding the property). Consequently, in the
present case, as in Good, there is no reason for the Government to
take the additional step of seizing the property without first
affording notice and an adversary hearing. See Good, 510 U.S. at
59, 114 S.Ct. at 504.
The Government responds that, even if it attempted to follow
these procedures for securing a lis pendens, an arrest warrant
would issue pursuant to the forfeiture statute and the Supplemental
Rules for Certain Admiralty and Maritime Claims. Specifically, 18
U.S.C. § 981(b)(2) provides that "[p]roperty shall be seized under
... this subsection upon process issued pursuant to the
Supplemental Rules for certain Admiralty and Maritime Claims." The
Admiralty Rules state that "[i]n actions by the United States for
forfeitures for federal statutory violations, the clerk, upon
filing of the complaint, shall forthwith issue a summons and
warrant for the arrest of the vessel or other property without
requiring a certificate of exigent circumstances." Rule C(3),
Supplemental Rules for Certain Admiralty and Maritime Claims. The
mere fact that the statute may authorize issuance of an arrest
warrant upon the filing of a forfeiture complaint, however, does
not indicate that the Due Process Clause permits execution of that
7
warrant prior to provision of notice and a hearing. To the
contrary, as we interpret Good, the filing of the complaint and
receipt of the arrest warrant may precede provision of notice and
7
Furthermore, even if a statutory scheme authorized
immediate execution of an ex parte seizure warrant, that scheme
would have to yield to the requirements of the Due Process
Clause.
a hearing, but the execution of the arrest warrant may not. In
other words, we hold that the Due Process Clause is not implicated
until the Government executes the arrest warrant. Consequently,
the Government may comply with the requirements of the Due Process
Clause by filing the forfeiture complaint, then refraining from
executing the arrest warrant until it has provided notice and a
hearing.8 As occurred in this case, the notice of lis pendens may
be filed on the same day as the forfeiture complaint.
C. The Existence of Exigent Circumstances
Based on the foregoing, we hold that the procedures employed
by the Government in the present case do not comport with the Due
Process Clause of the Fifth Amendment unless the existence of
exigent circumstances justified the ex parte seizure. See Good,
510 U.S. at 56, 114 S.Ct. at 502. In order to establish the
existence of exigent circumstances, the Government must demonstrate
that means less restrictive than an ex parte seizure—including
filing of a lis pendens, restraining order, or bond—would not
adequately protect the Government's interests in preventing the
sale, destruction, or continued unlawful use of the real property.
Id. at 62, 114 S.Ct. at 505. In the present case, the Government
has not alleged or established the existence of any exigent
circumstances that would excuse the ex parte seizure of Appellant
Richardson's real property. As explained previously, the
8
At the risk of stating the obvious, we note that the United
States Marshall may not refrain from executing the arrest warrant
when such action would contravene a court order. Moreover, if
the district court concludes that a claimant has received
adequate notice and a hearing, that decision binds the Marshall
and requires prompt execution of the warrant.
Government could have protected its legitimate interests in the
defendant property by filing a notice of lis pendens or taking
other steps short of seizure. The Government therefore deprived
Richardson of due process when it seized 408 Peyton Road,
notwithstanding its decision not to assert physical control over
the property.
III. CONCLUSION
In accordance with the foregoing, we REVERSE the district
court order and REMAND with instructions to dismiss the complaint
without prejudice.