Ibarra v. United States

Filed: August 11, 1997
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 96-1458
(CA-96-500-S)
Maria Jimena Ibarra,
Plaintiff - Appellant,
versus
United States of America, et al,
Defendants - Appellees.
O R D E R
The Court amends its opinion filed July 30, 1997, as follows:
On page 7, first full paragraph, line 3 -- the word "court" is
added between "district" and "is divested."
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
MARIA JIMENA IBARRA,
Plaintiff-Appellant,
v.
No. 96-1458
UNITED STATES OF AMERICA;
UNKNOWN GOVERNMENT OFFICERS,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Frederic N. Smalkin, District Judge.
(CA-96-500-S)
Argued: January 28, 1997
Decided: July 30, 1997
Before WILKINSON, Chief Judge, MICHAEL, Circuit Judge,
and HILTON, United States District Judge for the
Eastern District of Virginia, sitting by designation.
_________________________________________________________________
Affirmed by published opinion. Judge Hilton wrote the opinion, in
which Chief Judge Wilkinson and Judge Michael joined.
_________________________________________________________________
COUNSEL
ARGUED: Fred Parker Bingham, II, Miami Beach, Florida, for
Appellant. Richard Charles Kay, Assistant United States Attorney,
Baltimore, Maryland, for Appellees. ON BRIEF: Peter S. Herrick,
Miami, Florida, for Appellant. Lynne A. Battaglia, United States
Attorney, Baltimore, Maryland, for Appellees.
OPINION
HILTON, District Judge:
This case comes before the Court on plaintiff-appellant's appeal of
the district court's order dismissing her case for failure to state a
claim upon which relief can be granted and lack of subject matter
jurisdiction. For the reasons that follow, we affirm.
I.
On June 7, 1994 plaintiff-appellant Maria Jimena Ibarra ("Ibarra")
was stopped by agents of the Drug Enforcement Administration
("DEA") in Baltimore-Washington Airport while en route to Miami.
The agents were accompanied by a drug-sniffing dog which detected
trace amounts of narcotics on the $153,279.00 in currency that Ibarra
was carrying. After interrogating her through the use of a Spanish lan-
guage interpreter, the agents seized the currency on the basis that it
was used in or acquired as the result of a drug-related offense. No
drugs or drug paraphernalia were discovered on Ibarra and she was
never charged with a crime in connection with her possession of the
currency.
An administrative forfeiture action1 was initiated by the DEA on
June 27, 1994. Ibarra was served with a copy of the notice of the sei-
zure and forfeiture in conformity with 19 U.S.C.A.§ 1607(a)2 and 21
C.F.R. § 1316.75 on July 2, 1994. The notice included information
regarding how and when to file a claim to contest the forfeiture and
how and when to file a petition to request remission or mitigation of
the forfeiture. After receiving the notice, Ibarra sent several letters to
the DEA concerning the forfeiture. She filed a "petition for relief"
with the DEA on October 28, 1994. Her petition included a claim of
ownership and declaration in support of her request to proceed in
_________________________________________________________________
1 The currency is forfeitable pursuant to 21 U.S.C.A. § 881(a)(6) (West
1996).
2 Subsection 881(d) of Title 21 provides that the customs laws, 19
U.S.C.A. §§ 1602-1618, are applicable to the seizure and forfeiture of
property pursuant to that subsection.
2
forma pauperis.3 The DEA denied the petition on March 22, 1995.
Ibarra requested reconsideration of the denial on May 4, 1995. On
May 24, 1995 the DEA acknowledged receipt of the petition for
reconsideration and advised that it may take up to 120 days to review
the petition. As of the date of oral argument, Ibarra's request for
reconsideration was still pending before the DEA.
While she was pursuing an administrative claim with the DEA,
Ibarra filed a motion for return of seized property pursuant to Rule
41(e), Fed. R. Crim. P., in the United States District Court for the
Southern District of Florida. The court denied her motion on March
13, 1995. On February 20, 1996, Ibarra commenced this action in the
United States District Court for the District of Maryland seeking the
return of her property. Her complaint alleged that the DEA lacked
probable cause for the seizure and forfeiture; the DEA unlawfully
failed to refer her case to the United States Attorney for the institution
of judicial forfeiture proceedings; the DEA violated her due process
rights by unconstitutionally delaying the return of her property; and
the DEA violated her due process rights by providing her an English
language notice of the seizure. The Government responded by moving
to dismiss the complaint for lack of subject matter jurisdiction. Spe-
cifically, the Government argued that Ibarra failed to exhaust the
administrative remedies for recovering her seized property. On April
13, 1996, the district court granted the Government's motion to dis-
miss for lack of subject matter jurisdiction and also found that plain-
tiff had failed to state a claim upon which relief could be granted.
II.
We review de novo the district court's dismissal of the complaint.
Ahmed v. United States, 30 F.3d 514, 516 (4th Cir. 1994); Schatz v.
Rosenberg, 943 F.2d 485, 489 (4th Cir. 1991), cert. denied sub nom.,
Schatz v. Weinberg and Green, 503 U.S. 936 (1992). Regarding dis-
missal under Rule 12(b)(6), we accept the well-pled allegations of the
complaint as true, and we construe the facts and reasonable inferences
_________________________________________________________________
3 The DEA appears to have considered Ibarra's untimely filing to con-
test the forfeiture as a petition for remission or mitigation, even though
when considered as such, her petition was untimely under 21 C.F.R.
§ 1316.80(a) (West 1996).
3
derived therefrom in the light most favorable to the plaintiff. Little v.
Federal Bureau of Investigation, 1 F.3d 255, 256 (4th Cir.1993).
District courts clearly have original jurisdiction of any challenge to
a seizure pursuant to federal law not within admiralty and maritime
jurisdiction, except matters within the jurisdiction of the Court of
International Trade under 28 U.S.C.A. § 1582. 28 U.S.C.A. § 1356.
Additionally, district courts have original jurisdiction of any subse-
quent forfeiture. 28 U.S.C.A. § 1355. However, the Customs Laws of
the United States, 19 U.S.C.A. §§ 1602-1618, limit the jurisdiction of
the district courts over forfeitures to certain categories of property.
The relevant category in the instant case is $500,000 or less in United
States currency. 19 U.S.C.A. § 1607(a)(4).
The Customs Laws also set forth procedures for the institution and
maintenance of administrative forfeiture proceedings. To commence
administrative forfeiture proceedings, the seizing agency must publish
notice of the seizure and its intent to forfeit the property once a week
for at least three consecutive weeks in a newspaper in general circula-
tion in the district in which the forfeiture proceeding is initiated. 19
U.S.C.A. § 1607(a); 21 C.F.R. § 1316.75. The seizing agency must
also give personal written notice of the seizure and information on the
applicable procedures to any party who appears to have an interest in
the seized property. Id. An individual claiming an interest in seized
property that is subject to forfeiture has two options. First, at any time
within twenty days of the date of the first publication of the notice of
seizure, he may file a claim stating his interest in the seized property
and file a cost bond in the amount specified in the statute or request
a waiver of the bond requirement to proceed in forma pauperis. 19
U.S.C.A. § 1608; 21 C.F.R. § 1316.76. Once the seizing agency com-
mences forfeiture proceedings pursuant to 19 U.S.C.A. § 1607, the
seizing agency divests the district court of jurisdiction of the forfei-
ture proceedings and the court remains without jurisdiction unless an
interested party timely files a claim and cost bond pursuant to 19
U.S.C.A. § 1608. By timely filing a claim and cost bond or request
to proceed in forma pauperis, a claimant effectively halts the adminis-
trative proceedings by compelling the seizing agency to refer the mat-
ter to the United States Attorney for the district in which the seizure
occurred for the institution of judicial forfeiture proceedings. 19
U.S.C.A. § 1608; 21 C.F.R. § 1316.76. If a claimant fails to file
4
timely, the DEA shall declare the property forfeited and such declara-
tion shall have the same force and effect as a final decree and order
of forfeiture in a judicial forfeiture proceeding in the district court. 19
U.S.C.A. § 1609(a), (b); 21 C.F.R. § 1316.77(a). A declaration of for-
feiture results in title to the property vesting in the United States free
and clear of any liens or encumbrances. Linarez v. United States
Dep't of Justice, 2 F.3d 208, 210 (7th Cir. 1993), reh'g denied, 1993
U.S. App. LEXIS 22563 (7th Cir. 1993) (citing 19 U.S.C.A.
§ 1609(b) and 21 C.F.R. § 1316.77). Thus, failing to claim timely
one's interest in the seized property results in the administrative for-
feiture process continuing without judicial intervention.4
Second, a claimant may elect to file a petition for remission or mit-
igation of the forfeiture. 19 U.S.C.A. § 1618; 21 C.F.R. § 1316.79. A
petition for remission or mitigation "does not serve to contest the for-
feiture, but rather is a request for an executive pardon of the property
based on the petitioner's innocence . . . ." United States v. Vega, 72
F.3d 507, 514 (7th Cir. 1995) (quoting United States v. Ruth, 65 F.3d
599, 604 n.2 (7th Cir. 1995)), cert denied., 116 S. Ct. 2529 (1996).
Indeed, "under remission/mitigation procedures, forfeitability is pre-
sumed and the petitioner seeks relief from forfeiture on fairness
grounds." United States v. German, 76 F.3d 315 (10th Cir. 1996)
(quoting Orallo v. United States, 887 F. Supp. 1367, 1370 (D. Haw.
1995)). To be considered seasonably filed, a petition for remission or
mitigation should be filed within thirty days of the receipt of the
notice of seizure. 21 C.F.R. § 1316.80. If a petition is not received
_________________________________________________________________
4 A number of circuits have noted that once the administrative forfei-
ture is completed, district courts retain jurisdiction to review the forfei-
ture to determine compliance with due process or procedural
requirements. See United States v. Schinnell, 80 F.3d 1064, 1069 (5th
Cir. 1996); United States v. Giraldo, 45 F.3d 509, 511 (1st Cir. 1995);
United States v. Clagett, 3 F.3d 1355, 1356-57 (9th Cir. 1993); United
States v. Woodall, 12 F.3d 791, 793 (8th Cir. 1993); Linarez v. United
States Dep't of Justice, 2 F.3d 208, 213 (7th Cir. 1993); Frazee v. Inter-
nal Revenue Service, 847 F.2d 448, 449-50 (10th Cir. 1991); Onwubiko
v. United States, 969 F.2d 1392, 1398-99 (2d Cir. 1992). However, since
the administrative proceeding is still pending, the district court's jurisdic-
tion to review due process and procedural aspects of the forfeiture is not
implicated in the instant case.
5
within thirty days of the notice of the seizure, the property will either
be placed in official service or sold as soon as it is forfeited. Id.
Other courts have held that by initiating administrative forfeiture
proceedings pursuant to 19 U.S.C.A. § 1607, the seizing agency
divests the district court of jurisdiction over the forfeiture proceed-
ings. For example, in Linarez, supra, state law enforcement officers
seized currency from plaintiff on the basis that it had been used or
acquired to facilitate a drug-related offense. Plaintiff was never
charged with a crime but the currency was transferred to the DEA for
the institution of federal forfeiture proceedings. Plaintiff received the
statutorily mandated notice of seizure and forfeiture proceedings as
well as instructions on administrative procedures for contesting the
seizure and forfeiture and filing a petition for remission or mitigation.
Despite having received proper notice, plaintiff failed to contest the
seizure or forfeiture administratively. Subsequently, plaintiff filed a
complaint in district court seeking the return of his property and chal-
lenging the seizure and forfeiture. The court dismissed the complaint
for lack of subject matter jurisdiction. On appeal, the Seventh Circuit
affirmed. The court noted that plaintiff could have challenged the sei-
zure and forfeiture in the administrative proceeding or timely filed a
claim and cost bond to compel the DEA to institute judicial forfeiture
proceedings. As a result of plaintiff's failure to avail himself of these
options, the district court remained without jurisdiction. See also
United States v. One Jeep Wrangler, 972 F.2d 472, 479 (2d Cir. 1992)
(once the administrative proceeding had begun, the district court loses
subject matter jurisdiction to adjudicate claims regarding the seizure);
United States v. Price, 914 F.2d 1507, 1511 (D.C. Cir. 1990) (after
the Government initiates an administrative forfeiture proceeding and
the property is not the subject of an ongoing criminal proceeding, the
district court has no jurisdiction to resolve claims for the return of
seized property); United States v. Hernandez, 911 F.2d 981, 983 (5th
Cir. 1990) (affirming dismissal for lack of subject matter jurisdiction
because due process claims regarding the seizure are properly liti-
gated during the forfeiture proceeding); United States v. Castro, 883
F.2d 1018, 1019-20 (11th Cir. 1989) (adopting district court's ruling
that the district court was without jurisdiction to consider Rule 41(e)
motion for return of property following civil forfeiture proceeding);
United States v. $83,310.78 in United States Currency, 851 F.2d
1231, 1235 (9th Cir. 1988) (when civil forfeiture proceeding is pend-
6
ing, claimant may not seek equitable remedy in district court); In re
Harper, 835 F.2d 1273, 1274-75 (8th Cir. 1988) (legality of seizure
should be tested in forfeiture proceeding); Matthews v. United States,
917 F. Supp. 1090, 1097-1101 (E.D. Va. 1996) (district court is
divested of jurisdiction to consider Rule 41(e) petitions for return of
property where agency initiates forfeiture proceedings pursuant to 19
U.S.C.A. § 1607).
Based on the clear mandate of the statutory scheme, we conclude,
as have other circuits facing the issue, that once the Government initi-
ates forfeiture proceedings, the district court is divested of jurisdiction.
The court remains without jurisdiction during the pendency of the pro-
ceeding unless the claimant timely files a claim and cost bond or
request to proceed in forma pauperis.
III.
Ibarra elected to participate in the administrative forfeiture pro-
ceeding. Her petition for reconsideration was pending when this
action was commenced. As a result, she must await the outcome of
the administrative process that she has invoked. For these reasons, it
is clear that Ibarra failed to state a claim upon which relief can be
granted and the district court did not have jurisdiction to consider her
claims.
AFFIRMED
7