Mohammad, Najah v. United States

UNPUBLISHED ORDER
Not to be cited per Circuit Rule 53
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued January 24, 2006
Decided February 27, 2006
Before
Hon. KENNETH F. RIPPLE, Circuit Judge
Hon. ILANA DIAMOND ROVNER, Circuit Judge
Hon. TERENCE T. EVANS, Circuit Judge
No. 04-4080
NAJAH MOHAMMAD, Appeal from the United States
Plaintiff-Appellant, District Court for the Northern District
of Illinois, Eastern Division
v.
No. 04 C 4403
UNITED STATES OF AMERICA,
Defendant-Appellee. Suzanne B. Conlon,
Judge.
ORDER
Najah Mohammad appeals the dismissal of her suit to recover money and
jewelry that the Drug Enforcement Administration seized before, but did not
declare administratively forfeited until after, the suit was commenced. The district
court held that it lacked subject matter jurisdiction over Mohammad’s suit because
she received written notices of the administrative forfeiture proceedings but failed
to file a claim with the DEA asserting an interest in the property. Mohammad
argues, however, that the notices were inadequate, in part because an assistant
United States attorney left her believing that the filing of her lawsuit in district
court was adequate to challenge the seizures. Because we conclude that
Mohammad’s suit should not have been dismissed without exploring her factual
allegations, we vacate the decision and remand for further proceedings.
No. 04-4080 Page 2
I.
On April 14, 2004, a magistrate judge issued three seizure warrants for,
respectively, a savings account, checking account, and safety deposit box in
Mohammad’s name located in a bank in Palos Hills, Illinois. The basis for each
warrant was a separate affidavit sworn to by a member of a DEA task force who
detailed various crimes, including drug trafficking, committed by Mohammad’s
husband, Fadel Mohammad. When the warrants were issued, Fadel Mohammad
was jailed in Cook County awaiting trial on a state drug charge; he already had
pleaded guilty to federal drug charges. The affidavits detail information from a
confidential informant that Fadel Mohammad garnered between $3 and $4 million
in proceeds from illegal activities and laundered the money through several bank
accounts, including the accounts at the bank in Palos Hills. The affidavits relate
that Fadel Mohammad commonly put his accounts in nominee names, including his
wife’s. On April 15, 2004, task force agents executed the three warrants and,
pursuant to 18 U.S.C. § 881, seized $170,450 in cash plus 112 pieces of jewelry
valued at $143,635.
In accordance with 18 U.S.C. § 981(d) and 19 U.S.C. § 1607(a), the DEA on
June 3, 2004, mailed Mrs. Mohammad written notice regarding the funds seized
from the savings account, and on June 14, 2004, two more written notices regarding
the funds seized from the checking account and the jewelry seized from the safety
deposit box. The three notices, all using a DEA standard form, informed her that
procedures to administratively forfeit the money and jewelry had been initiated:
Pursuant to Title 18, U.S.C., Section 983 and Title 19, U.S.C., Sections
1602-1619, procedures to administratively forfeit this property are
underway. You may petition the DEA for return of the property or
your interest in the property (remission or mitigation), and/or you may
contest the seizure and forfeiture of the property in Federal court.
The notices further explained the procedures for requesting remission or mitigation
of forfeiture and for contesting the forfeiture. To request remission or mitigation,
Mohammad was to file a petition with DEA Forfeiture Counsel within 30 days of
receiving notice. If she wanted to contest the forfeiture in district court, she had to
file a claim of ownership with DEA Forfeiture Counsel by July 8, 2004, with respect
to the funds from the checking account, and by July 19, 2004, with respect to the
funds in the savings account and the contents of the safety deposit box. The specific
language of the notices reads: [Y]ou may contest the forfeiture of the seized
property in UNITED STATES DISTRICT COURT. To do so, you must file a claim
with the Forfeiture Counsel of the DEA by July 8, 2004 [for the checking account]
and by July 19, 2004 [for the savings account and safety deposit box]. The notices
direct that claims be delivered to DEA Forfeiture Counsel at one of two addresses in
No. 04-4080 Page 3
Virginia depending on whether the submission was being sent via private courier or
regular mail.
Mohammad, though, did not submit a claim to DEA Forfeiture Counsel in
Virginia. Instead, on July 1, 2004, she filed in the district court what Charles
Murphy, her retained lawyer at that time, labeled as “Plaintiff’s Claim for Return of
Property Under 18 U.S.C. § 983, et seq., Which Was Seized by the United States
Government and is Presently Subject to Forfeiture Proceedings.” Section 983, in
relevant part, provides that “[a]ny person claiming property seized in a nonjudicial
civil forfeiture proceeding under a civil forfeiture statute may file a claim with the
appropriate official after the seizure.” 18 U.S.C. § 983(a)(2)(A). That statute
further requires that a claim “(i) identify the specific property being claimed;
(ii) state the claimant’s interest in such property; and (iii) be made under oath,
subject to penalty of perjury.” Id. § 983(a)(2)(C). Although § 983 defines the steps
to follow in making a claim with the agency that seized and holds the property, it is
apparent from her submission to the district court that Mohammad thought she
was complying with that provision. Her “claim” identifies the seized assets—the
funds from the two accounts and the contents of the safety deposit box—and both
articulates her alleged interest in those assets and argues that they are not
proceeds of her husband’s illegal activities. At this point, Mohammad still had
seven days before the first deadline to submit a claim to DEA Forfeiture Counsel
would expire.
Assistant United States Attorney Lisa Noller entered an appearance for the
government on July 13, and the district court ordered that a response to
Mohammad’s suit be filed by September 3, 2004. On that date the government,
through Noller, moved to dismiss the action for lack of subject matter jurisdiction,
asserting that Mohammad’s failure to file a claim and post bond with DEA
Forfeiture Counsel prevented the court from considering her claim. The
government also noted that because Mohammad had not submitted claims to the
agency by July 8 for the funds in the savings account, and by July 19 for the funds
in the checking account and the contents of the safety deposit box, the DEA had
issued Declarations of Forfeiture for all of the seized assets in mid-August.
Mohammad, still represented by attorney Murphy, responded with three
arguments. First, she contended that the district court should exercise “equitable
jurisdiction” over her demand for return of the seized assets because she was misled
by AUSA Noller, which deprived her of an adequate remedy at law. Specifically,
Mohammad alleged that attorney Murphy contacted the United States Attorney’s
Office before her deadlines for submitting claims to the DEA expired and was
directed to AUSA Noller when he asked to speak with someone about the seizures.
Over the course of several telephone conversations (Murphy indicated he could not
recall whether the conversations continued after Mohammad’s “claim” was filed in
No. 04-4080 Page 4
the district court), Murphy and Noller discussed the merits of Mohammad’s
contention that the DEA had seized assets belonging to her and derived from
sources untainted by her husband’s criminal activities. At no time, Mohammad
insisted, did Noller inform Murphy that he should be speaking instead to DEA
Forfeiture Counsel. The only time Noller told Murphy to speak to someone else was
when she suggested that he might wish to speak with “an administrative assistant
in the forfeiture unit” concerning the translation of Arabic-language documents that
Mohammad said would support her contention that the seized assets were not
criminally derived. Mohammad explained that “[i]n discussing the merits of
Plaintiff’s claim—at the very least—AUSA Noller implied that counsel was
communicating with the appropriate individual in the Department of Justice.”
Mohammad also found it noteworthy that it was Noller, not someone at DEA, who
faxed Murphy copies of the DEA seizure notices. Because Noller’s involvement led
her to believe she was adequately contesting the seizures by filing her “claim” in the
district court, Mohammad continued, she did not file timely claims with DEA
Forfeiture Counsel. Mohammad suggested that Noller stalled her until the time for
submitting her DEA claims lapsed by allowing attorney Murphy to believe that she
was taking adequate steps to challenge the seizures. Thus, Mohammad reasoned
(in a bit of hyperbole), she was deprived of an adequate remedy at law “due to the
scheming of the United States Attorney’s Office.”
Second, Mohammad argued that, because the DEA and the United States
Attorney’s Office are components of the Department of Justice, the DEA in effect
had knowledge of her claim when she made it clear to AUSA Noller that she
intended to contest the seizures. Mohammad cited Santobello v. New York, 404
U.S. 257, 262 (1971), for the proposition that prosecutors are responsible for “letting
the left hand know what the right hand is doing.”
Last, Mohammad argued that requiring her to file claims with DEA
Forfeiture Counsel as a prelude to challenging the seizures in district court served
no meaningful purpose because the very effect of submitting a claim to the agency is
to compel the government to proceed with a judicial forfeiture unless the assets are
returned or a settlement is reached with the agency. See 18 U.S.C. 983(a)(3).
On September 27, 2004, the district court sided with the government and
dismissed Mohammad’s lawsuit. The court reasoned that it was divested of
jurisdiction over the assets even before Mohammad filed her suit because the DEA’s
administrative forfeiture proceedings were underway. And, the court continued,
the only way it could have regained jurisdiction was for Mohammad to submit
timely claims with DEA Forfeiture Counsel, which she did not do. Finally, the
court held that it could not exercise “equitable jurisdiction” because Mohammad
bypassed an adequate remedy at law—the DEA administrative procedures.
No. 04-4080 Page 5
Mohammad then moved for reconsideration under Federal Rule of Civil
Procedure 59(e), reasserting the arguments she made in her response to the
government’s motion to dismiss. This motion gave AUSA Noller her first
opportunity to respond to Mohammad’s allegations about the telephone
conversations between the two lawyers. Noller did not deny that she was in contact
with Murphy regarding the merits of the proposed forfeitures or that she faxed
Murphy documents concerning the seizures. Instead, she argued that she had no
responsibility to tell Murphy that the seizures could be contested only by filing a
claim with the DEA. The government, she said, “never misled him or told him not
to file a claim.” Noller further stated that “she suggested that [Murphy] call a
forfeiture paralegal,” and that “on one occasion, the government suggested to
plaintiff’s attorney that he should file an administrative claim.” After receiving
Noller’s response, the district court refused to set aside its dismissal order. The
court explained that it already had considered Mohamad’s arguments, adding that
because Mohammad received notice of the administrative procedures her “attempt
to blame the United States Attorney’s Office for her failure to follow administrative
procedures is baseless.”
II.
On appeal Mohammad does not brief, and thus abandons, two of the three
arguments she made in the district court. See, e.g., Ricci v. Arlington Heights, Ill.,
116 F.3d 288, 292 (7th Cir. 1997). Through new counsel, she no longer contends
that she effectively notified DEA Forfeiture Counsel of her intention to challenge
the seizures when she conveyed that position to AUSA Noller. Nor does she
contend here that it would have served no purpose to submit claims to DEA
Forfeiture Counsel after she already had put the matter before the district court by
filing her “claim.” Mohammad, though, continues to maintain that the district
court should have exercised “equitable jurisdiction” over the case because, she says,
the seized assets were not derived from her husband’s drug dealing, the notices
from the DEA are ambiguous and thus inadequate, and those notices, even if
literally understandable, were rendered inadequate when AUSA Noller allowed
attorney Murphy to believe that Mohammad was dealing with someone authorized
to act in the matter.
We review the district court’s dismissal of Mohammad’s suit de novo.
Linarez v. United States Dep’t of Justice, 2 F.3d 208, 211 (7th Cir. 1993). Section
881(a)(6) of Title 21 authorizes the civil forfeiture of property derived from the
proceeds of drug transactions. By initiating administrative forfeiture proceedings
pursuant to 19 U.S.C. § 1607(a)—that is, by sending notice of a seizure and
proposed forfeiture to parties known to be interested in the property and publishing
notice to all others in a newspaper—an agency holding seized property divests the
district court of subject matter jurisdiction to review the forfeiture. Linarez, 2 F.3d
No. 04-4080 Page 6
at 211. The district court remains without jurisdiction unless an interested party
timely submits a claim and posts a bond with the seizing agency. Id. at 211-12;
see 19 U.S.C. § 1608. If no claim is filed, the property is forfeited without judicial
intervention. Lobzun v. United States, 422 F.3d 503, 506-07 (7th Cir. 2005);
Linarez, 2 F.3d at 211-12.
In Linarez, as in this case, the appellant received notice from the DEA telling
him that administrative forfeiture proceedings had commenced, and that he must
submit a claim to the DEA if he wanted to contest the seizure. Linarez, 2 F.3d at
210. The appellant instead sued in the district court to regain the seized assets, but
we held that the court lacked subject matter jurisdiction over the case because of
the administrative forfeiture proceedings. Id. at 213. Notwithstanding, we held out
the possibility that a district court might still retain “equitable jurisdiction” even
after the commencement of administrative forfeiture proceedings. Id. at 213. We
explained, though, that a plaintiff seeking equitable relief would have to establish
that she “had an inadequate legal remedy and that irreparable injury will result if
the court does not act.” Id. This notion of “equitable jurisdiction” was
acknowledged again in Williams v. United States Drug Enforcement
Administration, 51 F.3d 732 (7th Cir. 1995). In Williams, which came to us as an
appeal from the denial of relief under Federal Rule of Civil Procedure 60(b), the
appellant sued in the district court to recover forfeited assets on the theory that he
was denied due process because he did not receive personal notice of the
administrative forfeiture proceedings. We characterized this claim as “essentially a
plea for the court to exercise its equitable jurisdiction” and observed that “the
contours of these sorts of claims are largely undefined.” Id. at 733-35.
After Williams, however, we have moved away from the idea of “equitable
jurisdiction” in cases like this one. In United States v. Duke, 229 F.3d 627, 629 (7th
Cir. 2000), we clarified that jurisdiction to review a claim that notice of an
administrative seizure and proposed forfeiture was constitutionally deficient arises
under the general federal-question statute, 28 U.S.C. § 1331. That point is now
firmly established. See Lobzun, 422 F.3d at 507; Chairez v. United States, 355 F.3d
1099, 1101 (7th Cir. 2004); United States v. Howell, 354 F.3d 693, 695 (7th Cir.
2004); Krecioch v. United States, 221 F.3d 976, 980 (7th Cir. 2000). Morever, the
Civil Asset Forfeiture Reform Act of 2000, see 18 U.S.C. § 983(e), made explicit that
an aggrieved party could move to set aside even a completed forfeiture if notice of
the administrative forfeiture proceedings were not received. Accordingly, it would
seem that Mohammad’s invocation of the district court’s “equitable jurisdiction” was
unnecessary. It clouded what is really a straightforward contention: that the
notices of the property seizures and administrative forfeiture proceedings were
inadequate. The district court plainly had jurisdiction to decide this narrow
question.
No. 04-4080 Page 7
Two of the three reasons Mohammad gives for claiming she received
inadequate notice are not persuasive. Her first argument—that the seized assets
are hers alone and derived from a source independent of her husband’s drug
dealing—speaks to the underlying merits of the DEA’s claimed entitlement to the
assets and has nothing to do with whether the agency gave adequate notice of its
administrative proceedings. Challenges to the legality of a proposed civil forfeiture
are made in the district court “after filing a claim of interest and posting a bond
with the DEA.” Linarez, 2 F.3d at 213 (emphasis in original). The very point of
submitting a claim to the agency is to compel the government to proceed with a
judicial forfeiture action in lieu of the administrative route, see United States v.
Commodity Account No. 549 54930, 219 F.3d 595, 597 (7th Cir. 2000); Garcia v.
Meza, 235 F.3d 287, 292 n.5 (7th Cir. 2000), and to prevail in district court the
government must prove by a preponderance of the evidence that the assets are
subject to forfeiture.
Mohammad’s second argument, that the notices were inadequate because
they are literally confusing, also fails. Due process requires only that notice of a
seizure and impending administrative forfeiture be “‘reasonably calculated, under
all the circumstances, to apprise interested parties of the pendency of the action
and afford them an opportunity to present their objections.’” Lobzun, 422 F.3d at
507 (quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)).
Mohammad concedes that she received the notices but she argues that they are
deficient because they are confusing and contradicted by the underlying forfeiture
statutory scheme. But this is not an argument Mohammad made in the district
court when opposing the government’s motion to dismiss, and that is reason enough
to reject it. See, e.g., Belom v. Nat’l Futures Ass’n, 284 F.3d 795, 799 (7th Cir. 2002).
In any event, the contention lacks merit. The notices state that to contest the
seizures in the district court a claimant must start with the agency: “[Y]ou may
contest the forfeiture of the seized property in the UNITED STATES DISTRICT
COURT. To do so, you must file a claim with the Forfeiture Counsel of the DEA.”
The notices further stipulate that all submissions must be made to DEA Forfeiture
Counsel, and provide the appropriate addresses. Mohammad cannot seriously
contend that, standing alone, the notices are unclear. Moreover, we are not
persuaded by her suggestion that the forfeiture statutory scheme is confusing and
contradictory. The notices set out the steps she had to follow, and until now she has
never contended that a misunderstanding about the underlying forfeiture statutes
is what caused her and her former lawyer to fail to act.
That leaves Mohammad’s final argument, the one she developed most
thoroughly in responding to the government’s motion to dismiss. Mohammad
contends that the DEA notices, even if otherwise sufficient, were rendered
inadequate by the misleading conduct of AUSA Noller. Mohammad argues (and at
No. 04-4080 Page 8
this juncture we accept her factual allegations as true) that Noller, by discussing
the merits of the forfeiture matter with attorney Murphy and not telling him that
he should be talking to DEA Forfeiture Counsel until it was too late, “held herself
out as the appropriate government representative for the resolution of the matter
and potential release of the property.” As a consequence, Mohammad argues, she
was misled into believing that she did not have to file a claim with the DEA.
On the one hand, Mohammad does not allege that AUSA Noller specifically
told Murphy not to contact the DEA, and the government makes a forceful
argument that it should not be blamed for Murphy’s misunderstanding. Moreover,
any discussions Murphy had with Noller spoke to the underlying merits of the
forfeiture, which would be relevant only after she filed her administrative claim
with the DEA. See Linarez, 2 F.3d at 213. Further, Noller maintains that the
government “suggested to plaintiff’s attorney that he should file an administrative
claim.” If that assertion is true, then depending on how and when the message was
delivered, Mohammad has no legitimate cause for complaint.
On the other hand, if AUSA Noller did not tell attorney Murphy that
Mohammad must file an administrative claim with DEA Forfeiture Counsel and
that her district-court “claim” was not a substitute, this conduct could be viewed as
misleading, even without intending to have that effect. Judicial forfeitures are
initiated by the government, not by the party making a claim to seized property, see
Commodity Account No. 549 54930, 219 F.3d at 597; Garcia, 235 F.3d at 292 n.5, so
Mohammad’s filing was easily recognized as a nullity. But Noller (at least
according to Mohammad’s version of events) remained silent until it was too late
rather than informing Mohammad’s lawyer that their conversations did not relieve
him of the imperative of contacting DEA Forfeiture Counsel.
We find support for Mohammad’s position in Muhammad v. DEA, 92 F.3d
648 (8th Cir. 1996). In that case the Eighth Circuit declared an administrative
forfeiture void for lack of proper notice where the claimants filed a civil action
seeking return of seized assets even before the agency commenced administrative
forfeiture proceedings, since the claimants believed that the pendency of their court
action excused them from filing a claim and posting bond with the DEA. Id. at 650,
653. Although, just as in this case, notices were sent by the DEA advising the
claimants that administrative forfeiture proceedings were underway, the
Muhammad court found it significant that the claimants afterwards wrote to the
DEA requesting clarification of the appropriate procedures but were met with
silence from the agency. In thus concluding that the notices from the DEA were
inadequate under the particular circumstances, the court reasoned that “[a]
reasonable person would ordinarily not believe that their government would ignore
their inquiry and proceed as if it had never been sent.” Id. at 653.
No. 04-4080 Page 9
Much the same could be said on these facts if they are as Mohammad
represents. Although she did not file suit in district court before administrative
proceedings were initiated, she did sue before her deadlines to submit claims with
the DEA had expired. And taking her allegations as true, she believed that by filing
a “claim” in the district court she was doing what was required to contest the
administrative forfeiture of the assets, and it seems that a reasonable person could
believe, as Mohammad says she did, that AUSA Noller would have told her attorney
that he was talking to the wrong person and filing in the wrong place. Of course,
the facts may not be as Mohammad and her former counsel allege, but we conclude
that Mohammad, in fairness to her, should have a chance to prove her allegations.
III.
The judgment of the district court is VACATED and the case REMANDED
for further proceedings.