United States v. Nine Hundred Sixty Thousand Dollars in U.S. Currency

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 05-12673 NOV 21, 2006
________________________ THOMAS K. KAHN
CLERK
D.C. Docket No. 03-23101-CV-CMA
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
NINE HUNDRED SIXTY THOUSAND
DOLLARS IN U.S. CURRENCY,
Defendant,
JESUS SANTOS MARTINEZ,
Claimant-Appellant.
________________________
Appeal from the United States District Court for the
Southern District of Florida
_________________________
(November 21, 2006)
Before TJOFLAT and CARNES, Circuit Judges, and HODGES,* District Judge.
*
Honorable Wm. Terrell Hodges, United States District Judge for the Middle District of
Florida, sitting by designation.
HODGES, District Judge:
This is a civil forfeiture proceeding. The district court entered partial summary
judgment finding that probable cause existed to forfeit $960,000 in U.S. currency;
and then, after a bench trial, the court further held that the Claimant, Jesus Santos
Martinez, had not proved his claim of ownership. Martinez appeals. We affirm.
Facts and Background
The material facts are undisputed. On June 23, 2003, a carton was placed with
Pack Mail de Occidentes, R.L. Dec. V. (“Pack Mail”), a shipping company located
in Mexico. The shipper was identified in the accompanying papers as Francisco J.
Rubalcaba Ortiz. The shipping label on the carton was addressed to Representaciones
C.A.C. Cia Ltda (“Representaciones”), for delivery in Colombia. The invoice
prepared for the carton described the contents as “one hydro pneumatic pump” valued
at $520. Pack Mail entrusted the carton to Cargomundo Internacional Rosa, S.A. de
C.V. (Cargomundo), located in Mexico, and Cargomundo loaded the carton onto a
plane bound from Mexico to Miami International Airport. At Miami International
Airport, the carton was off-loaded to await transport to Colombia on a plane
scheduled for departure several days later.
Based on a review of the cargo manifest from the flight carrying the carton into
the United States, a U.S. Customs inspector chose to inspect the item while it was
2
located at Miami International Airport. The carton contained what appeared to be a
water tank with a compressor welded to it. A closer inspection, which included
cutting into the “hydro pneumatic pump,” revealed the defendant currency in the
amount of $960,000. The currency was not noted anywhere on the Air Waybill
accompanying the carton. U.S. Customs then seized the currency and notice of the
seizure was sent to the consignee (Representaciones), the shipping agent (Pack Mail)
and to the shipper (Rubalcaba).
In November 2003, the Government filed a verified complaint for forfeiture in
rem against the currency. Shortly thereafter, although his name was not mentioned
in any of the relevant papers, Martinez filed a verified claim seeking possession of
the currency. He also filed a Rule 12(b)(6) motion to dismiss the Government’s
complaint. The Government responded by filing a motion to show cause and a
request for an evidentiary hearing challenging Martinez’ standing to contest the
forfeiture. Martinez then submitted the declaration of Carlos Alberto Cardenas
Ibarra, who purported to speak for Representaciones. The district court, however,
granted in part the Government’s motion, and directed Martinez to “amend his claim
by providing more detailed affidavits, along with any necessary supporting
documentation, regarding his ownership interest of Defendant property.”
Martinez complied by filing an Amended Verified Claim, alleging that: (1) he
3
is the owner of the $960,000; (2) the property seized represents revenues from his
business in the marble trade; (3) the name of his marble company is Retalmar; (4) his
company conducts business throughout Latin America, including Mexico, C.A., the
country of origin of the seized currency that was being sent to him via
Representaciones; and (5) in Latin America, it is customary to deal in U.S. currency
due to the instability of the local currencies and distrust of local financial institutions.
Martinez also attached an amended affidavit of Mr. Ibarra, who identified himself as
the president of Representaciones. Mr. Ibarra stated that when the carton was shipped
from Mexico, Representaciones was notified that Martinez was the owner of the
carton. Further, the responsible person at Representaciones knew to contact Martinez
when the carton arrived. Mr. Ibarra also stated that it was customary for the owner
of merchandise to be contacted when it was delivered to Representaciones, and that
the owner of merchandise would claim it by presenting an identification card.
Martinez attached three additional documents to his Amended Verified Complaint:
(1) a commerce certificate for Representaciones issued by the government of
Colombia, certifying the “existence” and “representation” of Representaciones; (2)
the shipment invoice dated July 1, 2003 for the hydro pneumatic water pump with a
unit price of $520, identifying Pack Mail as the “shipper” and Representaciones as
the “consignee;” and (3) the shipping label from Pack Mail, addressed from Francisco
4
J. Rubalcaba Ortiz to Representaciones.
On April 28, 2004, the Government moved to strike or dismiss Martinez’ claim
on the ground that he lacked the necessary Article III standing to assert entitlement
to the currency because he had failed to demonstrate a sufficient ownership interest.
The district court denied the Government’s motion, holding that:
Martinez has demonstrated by a preponderance of the evidence that he has
standing to contest the forfeiture of the Defendant currency, although he has
yet to prove the merits of his ownership claim. Whether or not the Defendant
currency does, in fact, belong to Martinez is a matter better dealt with on
summary judgment or at trial. The allegations and evidence proffered by
Martinez, which are consistent with the allegations of the Verified Complaint,
are sufficient to raise a serious question about the Claimant’s ownership of the
Defendant property.
During the discovery period that followed the district court’s order, the
Government pursued a deposition of Martinez. However, Martinez terminated the
interrogation prior to the completion of the Government’s questioning, and did not
comply with the district court’s order directing him to resume the deposition.
Martinez produced no additional evidence in support of his alleged ownership interest
in the defendant currency.
The Government moved for summary judgment, requesting that the district
court enter judgment that probable cause existed to justify the seizure. In his
response, Martinez relied upon the evidence already before the district court in
5
conjunction with his deposition testimony, asserted legal defenses and made requests
to reduce the amount seized based upon principles of mitigation and proportionality.
The district court found that the undisputed facts established that probable cause
existed to seize the defendant currency pursuant to 19 U.S.C. § 1595a(c)(1)(A)1
because the currency: (1) was merchandise; (2) which was smuggled, or clandestinely
imported or introduced; (3) into the United States; (4) contrary to law.2 However, the
district court partially denied the Government’s motion for summary judgment,
finding that: “Trial will proceed . . . as to facts that may bear upon Martinez’ request
for proportionality and mitigation of forfeiture, as well as his entitlement to and
ownership of the Defendant currency.” In the same order, the district court denied
the Government’s renewed motion to dismiss, which again asserted that Martinez
lacked standing to contest the forfeiture. The district court found that:
Martinez has stated under oath, at his deposition, that the Defendant currency
was payment to him from Rubalcaba for 60 tons of marble purchased from
Martinez’s marble company, Retalmar. Documents regarding the sale of
1
Section 1595a(c)(1)(A) provides that: “Merchandise which is introduced or attempted to
be introduced into the United States contrary to law shall be treated as follows: (1) The
merchandise shall be seized and forfeited if it (A) is stolen, smuggled, or clandestinely imported
or introduced.”
2
The Government contends that the defendant currency was transmitted in violation of
the laws of the United States, Mexico and Colombia. In support of its position, the United States
presented an expert report that concluded that the defendant currency was transmitted in violation
of the laws of both Mexico and Colombia. Martinez did not challenge the conclusions of the
Government’s expert as incorrect.
6
marble are presumably in the possession of Jose Castro Gallego, Rubalcaba’s
representative in Colombia. The United States has not presented or suggested
any other possible owner of the Defendant currency, nor identified a basis for
striking or dismissal of the claim of Martinez. At trial, Martinez still has the
burden of proof on his claim of ownership.
The district court then proceeded to a bench trial regarding Martinez’s claims
to ownership of the defendant currency and his request for proportionality and
mitigation. Martinez did not appear at trial and his counsel presented no new
evidence. Moreover, the district court did not allow the introduction of Martinez’s
deposition as evidence because the court properly found that Martinez was the cause
of his own absence at trial.3 Martinez was left to rely heavily on the Joint Pre-trial
Stipulation, paragraph 29, which stated that “Consignee, Representaciones C.A.C.,
identified the Claimant as the intended recipient of the water tank with currency.”
In a brief memorandum opinion following trial, the district court found that:
The record evidence simply does not establish that [Martinez] is the owner of
the defendant currency. He has certainly presented a claim as owner of the
defendant currency, and the consignee identified him as the intended recipient
of the water tank with the hidden currency. However, that evidence, standing
3
Martinez claimed that he was “unavailable” to appear at trial pursuant to Federal Rule of
Evidence 804(b) because the United States denied his visa application. The district court found,
however, that Martinez’ failure to appear did not fall within Rule 804(b) because Martinez had
been given approximately one year to make preparations to enter the United States for purposes
of testifying at trial; Martinez chose to ignore the Government’s offers to assist him in the visa
application process; Martinez had falsely stated in his visa application that he intended to travel
to the United States as a tourist, never mentioning the pending trial; and Martinez apparently
made no effort to appear at trial via video conference. Martinez does not appeal this evidentiary
ruling.
7
alone, is insufficient to support a finding that Jesus Santos Martinez is or was
the owner of the defendant currency.
The district court did not reach Martinez’ request for mitigation or proportionality,
“as such request [was] premature absent a finding that he is the owner of the
defendant currency.” It is from both the partial grant of summary judgment and the
district court’s final judgment following trial that Martinez now appeals.
Standards of Review
Following a bench trial, we review a district court's findings of fact for clear
error and its conclusions of law de novo. See A.I.G. Uruguay Compania de Seguros,
S.A. v. AAA Cooper Transp., 334 F.3d 997, 1003 (11th Cir. 2003). The issue of
whether the plaintiff lacks standing is jurisdictional and, as an issue of law, receives
de novo review. See London v. Wal-Mart Stores, Inc., 340 F.3d 1246 (11th Cir.
2003). Further, we review de novo the district court's partial grant of summary
judgment to the Government. See Gilmour v. Am. Nat’l Red Cross, 385 F.3d 1318,
1321 (11th Cir.2004). Summary judgment is proper only if there are no genuine
issues of material fact and the movant is entitled to judgment as a matter of law. See
Walton v. Johnson & Johnson Servs., 347 F.3d 1272, 1279 (11th Cir. 2003).
Discussion
Standing “is the threshold question in every federal case, determining the
8
power of the court to entertain the suit.” Warth v. Seldin, 422 U.S. 490, 499 (1975).
“In the absence of standing, a court is not free to opine in an advisory capacity about
the merits of a plaintiff's claims and the court is powerless to continue.” CAMP
Legal Defense Fund, Inc. v. City of Atlanta, 451 F.3d 1257, 1269 (11th Cir. 2006)
(internal citations and quotations omitted). Further, “[t]he party invoking federal
jurisdiction bears the burden of proving standing.” Bischoff v. Osceola County, 222
F.3d 874, 878 (11th Cir. 2000).
It is well settled that a claimant must demonstrate an “ownership or possessory
interest in the property seized” to establish standing under Article III to contest a civil
forfeiture of seized property. United States v. $500,000, 730 F.2d 1437, 1439 (11th
Cir. 1984). Moreover, a claimant asserting that he has standing to contest a forfeiture
bears the burden at all stages of litigation of establishing his interest. See id.Since standing is not a mere pleading requirement but, rather, is an
indispensable part of a claimant’s case, the alleged ownership interest in the seized
property must be supported in the same way as any other matter on which the
claimant bears the burden of proof. Lujan v. Defenders of Wildlife, 504 U.S. 555,
561 (1992). In other words, the claimant must move forward “with the manner and
degree of evidence required at the successive stages of the litigation.” Id.; see
Gladstone Realtors v. Vill. of Bellwood, 441 U.S. 91, 115 (1979) (“We conclude that
9
the facts alleged in the complaints and revealed by initial discovery are sufficient to
provide standing under Art. III. It remains open to petitioners, of course, to contest
these facts at trial.”). The Supreme Court has stated the requirement to plead and
prove standing as follows:
At the pleading stage, general factual allegations of injury resulting from the
defendant’s conduct may suffice, for on a motion to dismiss we presume that
general allegations embrace those specific facts that are necessary to support
the claim. In response to a summary judgment motion, however, the plaintiff
can no longer rest on such mere allegations, but must set forth by affidavit or
other evidence specific facts which for purposes of the summary judgment
motion will be taken as true. And at the final stage, those facts (if
controverted) must be supported adequately by the evidence adduced at trial.
Lujan, 504 U.S. at 562 (internal citations and quotations omitted).
Here, Martinez argues that the district court erred by requiring him to prove
that he “owned” the defendant currency even though a possessory interest is sufficient
under the law to establish standing. See $500,000, 730 F.2d at 1439. Martinez
asserts that he established a sufficient possessory interest through evidence that he
was the intended “recipient” in Colombia of the carton containing the defendant
currency. To support his argument, Martinez relies primarily upon Fonseca v. Regan,
734 F.2d 944 (2d Cir. 1984) and Dunbar v. United States, 502 F.2d 506 (5th Cir.
1974). But neither Fonseca nor Dunbar support Martinez’ position because both are
distinguishable and, what is more, the important point of distinction serves to
10
demonstrate the fatal flaw in Martinez’ claim. In Fonseca, the claimant’s baggage,
for which he held a baggage claim check, was misdirected by the airline. In Dunbar,
the claimant mailed a package to a friend for safekeeping, but addressed the mail
matter to the firm for which the friend worked rather than addressing it to the friend
in person. Thus, in both cases, the claimant, unlike Martinez, had been in actual
possession of the subject property and intended to remain in constructive possession
when he temporarily relinquished physical control to another. Here, by contrast and
without dispute, Martinez was never in actual possession of the currency; and to the
extent that he might have had an expected or inchoate possessory interest in
Colombia as the “recipient” of the property, that is clearly not sufficient to establish
even a constructive possessory interest in the property as it rested in Miami. The
currency at that point was in transit and still belonged to Rubalcaba.
The fact that Representaciones identified Martinez as the intended recipient of
the carton is a far cry from proving that Martinez had an ownership or possessory
interest in the carton containing the defendant currency. Further, while the district
court did not consider Martinez’ deposition testimony - in which Martinez asserted
under oath that the currency was payment for marble delivered to Rubalcaba - that
testimony consisted merely of self-serving assertions. Thus, Martinez’ deposition
testimony is no help to his cause. Martinez presented no documentary or other
11
evidence of the alleged Rubalcaba marble transaction or, for that matter, evidence that
he was ever involved in any transaction involving marble.4 Accordingly, Martinez
has not produced evidence sufficient to establish that he either owned or possessed
the carton containing the defendant currency, and the district court was correct in
finding that he lacks standing to contest the forfeiture.5
The judgment of the district court is AFFIRMED.
4
Even assuming the truth of Martinez’ claim that the currency was payment for a
shipment of marble, Martinez presented no evidence that would convince this Court that he is
anything other that an unsecured creditor of Rubalcaba, and, as such, has no interest in or legal
right to the defendant currency itself. See United States v. Four Million, Two-Hundred Fifty-
Five Thousand Dollars ($4,255,000), 762 F.2d 895, 907 (11th Cir. 1985).
5
Martinez’ other bases for appeal lack merit. First, the district court correctly determined
that it had subject matter jurisdiction over the in rem civil forfeiture proceeding in this case. See
28 U.S.C. § 1355(a). Second, the district court properly entered partial summary judgment in
favor of the Government on the issue of probable cause for forfeiture under § 1956a because the
defendant currency was introduced “into the United States” as defined by that section. See
United States v. Lehman, 225 F.3d 426, 428-29 (4th Cir. 2000) (“In sum, we hold that these
goods were introduced when they were moved from the ship that transported them to the
warehouse on United States soil.”). Third, the district court appropriately refused to entertain
Martinez’ claim that the forfeiture of the entire $960,000 was constitutionally excessive because
Martinez lacked standing to contest the forfeiture. Fourth, the Court need not address the merits
of Martinez’ claim that the search and seizure of the carton was unlawful because Martinez’
motion raising this issue before the district court was properly denied as untimely. See Lemon v.
Dugger, 931 F.2d 1465, 1468 (11th Cir. 1991).
12