300 F.Supp.2d 99 (D.D.C. 2004), Civ. A. 00-3046, United States v. Funds from Prudential Securities

Docket NºCiv. A. 00-3046
Citation300 F.Supp.2d 99
Party NameUnited States v. Funds from Prudential Securities
Case DateJanuary 29, 2004
CourtUnited States District Courts, United States District Courts. United States District Court (Columbia)

Page 99

300 F.Supp.2d 99 (D.D.C. 2004)

UNITED STATES of America, Plaintiff,

v.

FUNDS FROM PRUDENTIAL SECURITIES et al., Defendants.

No. CIV.A.00-3046(RMU).

United States District Court, District of Columbia.

Jan. 29, 2004

Page 100

Linda Otani McKinney, U.S. Attorney's Office, Washington, DC, for Plaintiff.

MEMORANDUM OPINION

URBINA, District Judge.

DENYING THE PLAINTIFF'S MOTION TO STRIKE; DENYING THE PLAINTIFF'S REQUEST FOR DEFAULT JUDGMENT; AND DENYING THE PLAINTIFF'S REQUEST FOR A DECREE OF FORFEITURE

I. INTRODUCTION

If a bull gores a man or a woman to death, the bull must be stoned to death, and its meat must not be eaten. But the owner of the bull will not be held responsible. 1

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This in rem civil forfeiture 2 matter is once again before the court on the motion of the government ("the plaintiff") to strike the claim of Latonya Curtis ("the claimant") and its related requests for a default judgment and a decree of forfeiture. Because the claimant's verified claim satisfies the requirements of Supplemental Rule C(6) of the Federal Rules of Civil Procedure, the court denies the plaintiff's motion to strike the claimant's claim and, correspondingly, denies the plaintiff's pendent requests for a default judgment and a decree of forfeiture.

II. BACKGROUND 3

A. Factual Background

In February 1999, a joint task force, including the Federal Bureau of Investigation ("FBI"), the Washington, D.C. Metropolitan Police Department, and the U.S. Department of Housing and Urban Development, initiated an investigation of a large heroin-trafficking organization run principally by the claimant's significant other, Mr. Earl Garner, Sr. 4 Compl. at 4, 6. The investigation allegedly revealed that the claimant assisted Mr. Garner in various aspects of his drug-trafficking operation. Id. at 6. Court-authorized telephone monitoring of several members of the drug-trafficking organization allegedly indicated that the claimant, in addition to serving as Mr. Garner's confidant and advisor, stored contraband and/or drug proceeds at her residence in North Bethesda, Maryland. Id. Despite these allegations, and after considering the evidence against the claimant at trial, the jury returned a verdict acquitting the claimant. 5

B. Procedural Background

Although this case is still in its infancy, it has managed to assemble a rather lengthy procedural history. On December 21, 2000, the plaintiff filed a verified complaint for civil forfeiture in rem against the seized funds totaling $41,091.86. 6 The plaintiff alleges that these funds constitute proceeds traceable to violations of Title II of the Controlled Substances Act, as amended, 21 U.S.C. §§ 801 et seq., and the anti-money laundering provisions of 18 U.S.C. § 1956. Id. at 2.

On January 25, 2001, the claimant responded to the plaintiff's verified complaint

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by filing a claim to the seized funds. According to the plaintiff however, the claimant's claim failed to comply with the governing requirements of Supplemental Rule C(6) of the Federal Rules of Civil Procedure. Pl.'s Mot. to Treat as Conceded at 3. On March 5, 2001, the plaintiff sent a letter to the claimant and the attorney representing her in the related criminal matter, stating that the claimant's verified claim was defective and that the February 14, 2001 deadline for filing an answer had passed. Id. In that same letter, the plaintiff proposed to extend the claimant's filing deadline to March 19, 2001. Id.

Thereafter, on March 12, 2001, the claimant's attorney responded to the March 5, 2001 letter, alerting the plaintiff to a recent surgical procedure undergone by the claimant and requesting that the claimant have through April 15, 2001 to file her answer. 6 Pl.'s Opp'n Ex. V. Oddly enough, in a March 16, 2001 facsimile to the plaintiff, that same attorney stated that he did not represent the claimant in the civil forfeiture matter at bar. Id. at 4 & Ex. VII. On April 27, 2001, 12 days after the claimant's requested deadline of April 15 had passed, the claimant filed a motion to late-file her answer, explaining that her surgery and its attendant recovery period caused her filing delay. Cl.'s Mot. to Late File at 1.

On May 1, 2001, the court granted the claimant's motion to late-file her answer. Order dated May 1, 2001. That same day, the claimant filed both an amended verified claim, which asserted that she owned the defendant funds, and an answer, reasserting that she was an innocent owner of the defendant funds. Cl.'s Am. Verified Claim at 1; Cl.'s Answer at 1-4.

Also on that same day, the plaintiff filed a motion to strike the claimant's claim. The claimant, however, failed to respond. Consequently, on June 25, 2001, the plaintiff filed a motion asking the court to treat the motion to strike as conceded, enter default judgment, and issue a decree of forfeiture. Pl.'s Mot. to Treat as Conceded at 5.

During the following 12 months, the claimant remained silent and inactive, making no filings. Accordingly, on June 18, 2002, the court granted the plaintiff's motion to strike, entered default judgment, and issued a decree of forfeiture. United States v. Funds From Prudential Sec., 209 F.Supp.2d 259, 268-69 (D.D.C.2002) (" Funds I ").

On June 20, 2002, the claimant filed a motion, followed by three additional motions on June 27, 2002, each asking the court to alter or amend its June 18, 2002 ruling. 7 Mindful of the heightened duty of care owed to pro se litigants, the court vacated its prior ruling and allowed the claimant to respond to the plaintiff's motion to strike and related requests for entry of default judgment and issuance of a forfeiture decree. United States v. Funds from Prudential Sec., 245 F.Supp.2d 41 (D.D.C.2003) (" Funds II ").

Page 103

On March 10, 2003, the claimant filed her response, 8 along with an attached document styled as a verified claim. 9 Accordingly, the court must once again address the plaintiff's motion to strike and its related requests for default judgment and a decree of forfeiture.

III. ANALYSIS

A. The Plaintiff's Motion to Strike the Claimant's Claim

1. Legal Standard for a Motion to Strike a Claim in Civil Forfeiture

Supplemental Rule C(6) sets forth the governing standards and procedural requirements that a putative claimant must satisfy in order to perfect a claim in a federal in rem forfeiture action. FED. R. CIV. P. SUPP. R. C(6); 18 U.S.C. § 983(a)(4)(A); 21 U.S.C. § 881(b). The rule states in pertinent part:

The claimant of property that is the subject of an action in rem shall file a claim ... verified on oath or solemn affirmation, and shall state the interest in the property by virtue of which the claimant demands its restitution and the right to defend the action.

Id.

"To contest a forfeiture action [under Supplemental Rule C(6)], an individual bears the burden of demonstrating an interest in the seized item sufficient to satisfy the court of his standing." United States v. $47,875 in United States Currency, 746 F.2d 291, 293 (5th Cir. 1984). Specifically, Rule C(6) requires that a putative claimant file a verified claim under oath or affirmation and include "the claimant's interest in the property, the right by which [the claimant] demands restitution, and the right by which [the claimant] defends the action." United States v. $38,570 in United States Currency, 950 F.2d 1108, 1111 (5th Cir. 1992) (quoting F ED. R. CIV. P. SUPP. R. C(6)); see also United States v. Prop. Identified as $88,260.00 in United States Currency, 925 F.Supp. 838, 840-41 (D.D.C.1996) (noting that the claimant must file a verified claim in an in rem forfeiture action to acquire statutory standing); United States v. A Single Story Double Wide Trailer, 727 F.Supp. 149, 152-53 (D.Del.1989) (stating that "[o]nly by filing a verified claim, in accordance with C(6), can a claimant demonstrate that he has a sufficient interest in the seized item to satisfy standing requirements"); United States v. $288,914.00 in United States Currency, 722 F.Supp. 267, 270 (E.D.La.1989) (recognizing that a claimant must comply with the pleading requirements of Supplemental Rule C(6)). If a putative claimant fails to file a verified claim or otherwise follow the provisions set forth in Supplemental Rule C(6), it is within the court's discretion to strike the deficient claim. United States v. One 1990 Mercedes Benz 300CE, 926 F.Supp. 1, 4 (D.D.C.1996).

2. The Court Denies the Plaintiff's Motion to Strike the Claimant's Claim

The plaintiff asserts that the court should grant its motion to strike because the claimant's claim fails to satisfy the

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requirements of Rule C(6). 10 Pl.'s Opp'n at 8. Specifically, the plaintiff alleges that the claimant's claim is defective because she has failed to verify it "on oath or solemn affirmation" and it avows only that the claimant is the owner of the defendant funds, thereby failing to "state the interest in the property by virtue of which [she] demands restitution and the right to defend the action." Id. at 2-3; see also F ED. R. CIV. P. SUPP. R. C(6).

Before addressing the alleged deficiencies in the claimant's claim, the court takes a moment to consider Rule C(6) and the ways in which other courts have interpreted it. As an initial matter, the court recognizes that the rule's underlying goal is to prevent frivolous claims by ensuring that putative claimants come forward as quickly as possible after the initiation of forfeiture proceedings so that the court may hear all interested parties and resolve the dispute without delay. FED. R. CIV. P. SUPP. R. C(6) advisory committee's note; United States v. Various Computers & Computer Equip., 82 F.3d 582, 585 (3d Cir. 1996).

The plaintiff urges strict compliance with Rule C(6), a construction that denies the claimant standing for any failure to comply with the Rule. Pl.'s Opp'n at 2. As one court has stated, "[i]t is not an abuse of...

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