U.S. v. Real Property

• Citation: 135 F.3d 1312
• Decision Date: 09 February 1998
• Docket Number: No. 96-15720,96-15720
• Parties: , 98 Cal. Daily Op. Serv. 997, 98 Daily Journal D.A.R. 1355 UNITED STATES of America, Plaintiff-Appellee, v. REAL PROPERTY, Real Property located in Fresno County, commonly known as the Lido Motel, 5145 North Golden State Boulevard, Defendant, and Kanubhai Dayyabhai Patel, Claimant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1312

135 F.3d 1312

1999 A.M.C. 1215, 98 Cal. Daily Op. Serv. 997,

98 Daily Journal D.A.R. 1355

UNITED STATES of America, Plaintiff-Appellee, v. REAL PROPERTY, Real Property located in Fresno County commonly known as the Lido Motel, 5145 North Golden State Boulevard, Defendant and Kanubhai Dayyabhai Patel, Claimant-Appellant.

No. 96-15720.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 9, 1997.

Decided Feb. 9, 1998.

Peg Carew Toledo, Orrick, Herrington & Sutcliffe, Sacramento, California, for claimant-appellant.

Clare K. Nuechterlein, Assistant United States Attorney, Fresno, California, for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of California; Dennis L. Beck, Magistrate Judge, Presiding. D.C. No. CV-93-05134-DLB.

Before: SKOPIL, D.W. NELSON, and TASHIMA, Circuit Judges.

D.W. NELSON, Circuit Judge:

Appellant, Mr. Kanubhai Patel, seeks to set aside a default judgment entered by the magistrate judge against his interest in the defendant motel property. The United States initiated civil forfeiture proceedings in rem against the property after Patel was charged with committing drug-related criminal offenses on its premises. Patel challenges the magistrate judge's jurisdiction over the forfeiture action and seeks to have the forfeiture set aside on the grounds that it violates the Excessive Fines Clause of the Eighth Amendment. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Patel owned and operated the Lido Motel in Fresno, California, beginning in December 1987. The motel was both his primary asset and his family's home.

In February 1993, Patel was charged with several offenses, including criminal forfeiture, arising from his participation in the sale of crack cocaine on the premises of his motel. Patel pleaded guilty to all charges in June 1993. In exchange, the Government agreed to move for dismissal of the criminal forfeiture charge against him. In the plea agreement, however, the Government also reserved the right to "seek forfeiture of the subject property in any pending or future civil forfeiture proceeding."

On March 2, 1993, shortly after Patel was indicted on the narcotics charges, the Government filed a complaint for civil forfeiture in rem against the Lido Motel. The complaint alleged that the motel was used "to commit, or to facilitate the commission" of criminal offenses and that it consequently was subject to forfeiture under 21 U.S.C. § 881(a)(7). On March 4, 1993, the complaint and summons in forfeiture were served by certified mail on Patel in the Fresno County Jail, where he was a pretrial detainee. Patel claims, however, that he did not actually receive the complaint at that time.

Copies of the complaint and summons were also served on Patel's criminal defense attorney, Mr. Marc Stefano. Stefano discussed the forfeiture action with Patel's sister and brother-in-law, who also appear to have had a financial interest in the motel. Then, at some point before April 15, 1993, Stefano visited Patel in prison and allegedly informed him that a forfeiture action had been brought by the Government and that Stefano would be representing Patel's sister and brother-in-law in their efforts to oppose it. According to Stefano, Patel advised him at that meeting "that he [Patel] did not wish to contest the seizure matter." On April 15 1993, Stefano filed a claim and answer to the civil forfeiture complaint on behalf of Patel's sister and brother-in-law. Patel did not respond in any way to the complaint.

On May 27, 1993, the Government moved for partial default judgment as to Patel's interest in the defendant property. On June 17, 1993, Government counsel and Stefano--representing Patel's sister and brother-in-law ¹--appeared at a scheduling conference at which they consented to the jurisdiction of the magistrate judge, pursuant to 28 U.S.C. § 636(c)(1). A partial default judgment as to Patel's interest was entered on July 15, 1993. Patel's sister and brother-in-law ultimately withdrew their claims, and the Government obtained a final judgment of forfeiture on October 20, 1993.

Six months later, on April 21, 1994, Patel filed a pro se motion for relief from judgment and to set aside the default in the district court, arguing that his due process rights had been violated. He also requested that the court order the Government to provide him with a copy of the forfeiture complaint. On June 21, 1994, the magistrate judge continued the hearing on Patel's motion. The magistrate judge sua sponte requested additional briefing by the parties regarding whether he had jurisdiction to enter the default judgment against Patel in view of the fact that Patel had not consented to the magistrate judge's jurisdiction. After a second continuance, Patel's motion to set aside the default judgment was heard and denied on August 1, 1994. Patel attempted to make a telephonic appearance at the hearing; but, inexplicably, his call to the court came too late, and Patel was informed that the magistrate judge already had denied his motion. Patel attempted to appeal that decision to the district court. His appeal appears instead to have been filed with the Court of Appeals, however, and was dismissed because the magistrate judge's order was deemed non-final and, therefore, non-appealable. In September 1994, Patel also filed a motion for summary judgment with the district court. Patel argued that a recent Ninth Circuit decision, United States v. $405,089.23 in U.S. Currency, 33 F.3d 1210 (9th Cir.1994), rev'd sub nom., United States v. Ursery, 518 U.S. 267, 116 S.Ct. 2135, 135 L.Ed.2d 549 (1996), barred the Government from instituting both civil forfeiture proceedings and a criminal prosecution against a defendant for the same crime. On October 26, 1994, Patel filed a motion for relief from the judgment with the district court, making substantially the same argument. On December 15, 1995, more than a year later, Patel's motion was referred back to the magistrate judge; and, on January 19, 1996, the magistrate judge denied it.

Finally, on January 30, 1996, Patel moved for reconsideration, arguing that the magistrate judge had denied him an opportunity to be heard, in violation of his due process rights. The magistrate judge denied the motion. Patel timely appeals.

STANDARD OF REVIEW

We review de novo whether the magistrate judge had jurisdiction. Bingman v. Ward, 100 F.3d 653, 656 (9th Cir.1996). We review the denial of a motion to set aside a default judgment for a clear showing of abuse of discretion. Price v. Seydel, 961 F.2d 1470, 1473 (9th Cir.1992).

ANALYSIS

I. The magistrate judge had jurisdiction to enter a default judgment against Patel's interest in the Lido Motel.

Patel argues that the magistrate judge lacked jurisdiction over the forfeiture action because Patel never consented to the magistrate judge's jurisdiction. Although the record appears to confirm that Patel did not give consent to the magistrate judge's jurisdiction, it also indicates that Patel failed to take the steps necessary to establish his standing as a party to the action. We consequently affirm that the magistrate judge had jurisdiction to enter the default judgment as to Patel's interest in the property. The Statutory Scheme and Applicable Rules

Title 28 defines a magistrate judge's authority as follows:

Upon consent of the parties, a full-time United States magistrate ... may conduct any or all proceedings in a jury or nonjury civil matter and order the entry of judgment in the case, when specially designated to exercise such jurisdiction by the district court or courts he serves.

28 U.S.C. § 636(c)(1) (emphasis added). Accordingly, a magistrate judge may establish jurisdiction over an action only if the parties have consented to it. See Pacemaker Diagnostic Clinic of America, Inc. v. Instromedix, Inc., 725 F.2d 537, 546 (9th Cir.1984). The parties, moreover, must give their consent explicitly and in writing. Columbia Record Productions v. Hot Wax Records, Inc., 966 F.2d 515, 516-17 (9th Cir.1992).

In the present case, the magistrate presided over a civil forfeiture action. Judicial forfeitures of property are governed by the Supplemental Rules for Certain Admiralty and Maritime Claims, as follows: The Government initiates forfeiture proceedings by filing a complaint in the district where the property was seized. Supp. Rule C(2). Once the complaint has been filed, the district court evaluates whether the circumstances warrant an action in rem; if they do, the district court issues a warrant for the arrest of the property. Supp. Rule C(3). The Government then is required to publish notice of the forfeiture action in a newspaper of general circulation in the district, specifying the time within which potential claimants must file an answer. Supp. Rule C(4). Claimants, in turn, must file a claim within ten days after process has been executed or within such additional time as may be allowed by the court and must serve an answer to the complaint within twenty days of filing their claims. Supp. Rule C(6).

A. Patel was given sufficient notice of the forfeiture action.

Patel contends that the Government gave him insufficient notice of the civil forfeiture action against the Lido Motel. As a result, Patel claims, he was unable to respond to the complaint in a timely fashion. Although Patel concedes that the Government sent by certified mail a copy of the summons and complaint to the Fresno County Jail, where Patel was incarcerated, Patel claims that he never actually was served. Patel's argument is unavailing.

As noted above, Supplemental Rule C(4) requires the Government to give notice of forfeiture proceedings by publication alone. In the instant action, the Government satisfied this requirement by publishing an announcement in the Fresno Business Journal on May 5, 1993. The Supreme Court has established,...