U.S. v. One 1973 Rolls Royce, v. I.N. SRH-16266 By and Through Goodman

• Citation: 43 F.3d 794
• Decision Date: 24 February 1995
• Docket Number: SRH-16266,No. 93-1417,93-1417
• Parties: UNITED STATES of America, Appellee, v. ONE 1973 ROLLS ROYCE, V.I.N., (By and Through Claimant Oscar B. GOODMAN), Appellant, National Association of Criminal Defense Lawyers, Amicus-curiae.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 794

43 F.3d 794

63 USLW 2354

UNITED STATES of America, Appellee, v. ONE 1973 ROLLS ROYCE, V.I.N. SRH-16266, (By and Through Claimant Oscar B. GOODMAN), Appellant National Association of Criminal Defense Lawyers, Amicus-curiae.

No. 93-1417.

United States Court of Appeals Third Circuit.

Argued Dec. 6, 1993.

Decided Nov. 25, 1994.

As Amended Dec. 2 and Dec. 7, 1994.

Sur Petition for Panel Rehearing Feb. 24, 1995.

Michael R. Stiles, U.S. Atty., Walter S. Batty, Jr., Chief of Appeals, Joel M. Friedman, Frank A. Labor, III (argued), Asst. U.S. Attys., Philadelphia, PA, for appellee U.S.

David Chesnoff (argued), Goodman & Chesnoff, Stephen Stein, Robert E. Murdock, Murdock & Palazzo, Las Vegas, NV, for appellant One 1973 Rolls Royce VIN SRH-16266.

Peter Goldberger (argued), Ardmore, PA, for amicus-curiae Nat. Ass'n of Crim. Defense Lawyers.

Before: BECKER, NYGAARD, and WEIS, Circuit Judges.

OPINION OF THE COURT

EDWARD R. BECKER, Circuit Judge.

I. INTRODUCTION AND OVERVIEW

The Comprehensive Drug Abuse Prevention and Control Act, 21 U.S.C.A. Sec. 881 et seq. (West 1981 & Supp.1984), provides, among other things, for civil forfeiture of illegal drug related property. Section 881 authorizes the government to seize illegal drugs, containers of illegal drugs, records associated with illegal drugs, and other property associated with or purchased with proceeds derived from the distribution of illegal drugs. Section 881 has become attractive to prosecutors because it permits them to seize property involved in drug trafficking merely upon a showing of probable cause that the property was used to help facilitate a drug transaction.

Three subsections of Sec. 881 have emerged as far-reaching tools of the civil forfeiture scheme. Section 881(a)(4) provides for forfeiture of "conveyances" (airplanes, automobiles, boats, etc.) used or intended to be used to facilitate the transportation, sale, receipt, possession, or concealment of a controlled substance. 21 U.S.C.A. Sec. 881(a)(4) (West Supp.1994). Section 881(a)(6) provides for forfeiture of "all proceeds traceable" to a drug transaction. 21 U.S.C.A. Sec. 881(a)(6) (West 1981). And Sec. 881(a)(7) provides for forfeiture of "all real property" that is used or intended to be used to facilitate an illegal exchange of a controlled substance. 21 U.S.C.A. Sec. 881(a)(7) (West Supp.1994).

Congress' decision to add Secs. 881(a)(4), (6), and (7) to the forfeiture scheme signalled a dramatic expansion of the government's forfeiture power. Previously, forfeiture had been limited to the illegal substances themselves and the instruments by which they were manufactured and distributed. But Secs. 881(a)(4), (6) and (7) gave the government the power to seize property that by all appearances was legitimate. This development gave rise to the possibility that owners who had innocently leased or loaned property to others could lose that property in a forfeiture proceeding. For example, a landlord might forfeit an apartment complex if a tenant was caught dealing drugs from an apartment, or a father who had loaned his son the family car might lose it if the son were caught transporting drugs therein.

To ameliorate this problem, Congress engrafted an "innocent owner" defense to forfeiture under Secs. 881(a)(4), (6), and (7). The "innocent owner" defenses under Secs. (a)(6) and (7) are the same: no owner's interest in property may be forfeited "by reason of any act or omission established by that owner to have been committed or omitted without the knowledge or consent of that owner." 21 U.S.C.A. Secs. 881(a)(6), (7). Congress later added the innocent owner defense of Sec. 881(a)(4), and it has a slightly different formulation: no owner's interest in a "conveyance" shall be forfeited "by reason of any act or omission established by that owner to have been committed or omitted without the knowledge, consent, or willful blindness of the owner." 21 U.S.C.A. Sec. 881(a)(4)(C) (emphasis supplied) (West Supp.1994).

The overarching issue in this appeal is the extent to which the "willful blindness" language found in Sec. 881(a)(4)(C) requires us to interpret that innocent owner defense differently from the otherwise identical defenses in Secs. 881(a)(6) and (7). Specifically, we must first determine what constitutes "willful blindness" as that term is used in Sec. 881(a)(4)(C). We must then decide whether an owner can claim innocent owner status under (a)(4)(E) by showing that he or she lacked either knowledge or consent or willful blindness, which, in turn, requires us to determine the extent to which the rule in this Circuit that an owner need only show either lack of knowledge or lack of consent to make out the innocent owner defense in the context of Sec. 881(a)(7), see United States v. Parcel of Real Property Known As 6109 Grubb Road, 886 F.2d 618, 623-26 (3d Cir.1989), controls our interpretation of the defense in the context of Sec. 881(a)(4)(C).

This case arises out of the seizure of a Rolls Royce automobile owned by Oscar B. Goodman, a prominent criminal defense lawyer who represents clients throughout the country. Nicodemo Scarfo, Sr., a co-defendant of Goodman's former clients (and at one time the reputed head of the Philadelphia branch of La Cosa Nostra ("LCN")), gave Goodman the Rolls Royce in repayment for $16,000 that Goodman had paid to the Four Seasons Hotel in Philadelphia to cover the cost of a lavish party given by Scarfo's son and his friends at the hotel to celebrate Scarfo's acquittal at a murder trial in which Goodman was one of the defense counsel.

In 1989, the FBI seized the vehicle pursuant to Sec. 881(a)(4). The agency contended that members of the Scarfo family had used the Rolls Royce to shuttle people to and from meetings conducted as part of the Scarfo LCN family's drug distribution activities. Goodman filed a verified claim asserting innocent ownership pursuant to Sec. 881(a)(4)(C). Goodman alleged that he did not know about, did not consent to, and was not willfully blind to the car's use in drug transactions. After a bench trial the district court rejected Goodman's innocent owner claim and held that the Rolls Royce was subject to forfeiture.

On appeal, Goodman raises two principal challenges to the district court's decision. First, he contends that the district court incorrectly held that he had failed to prove that he lacked willful blindness. Goodman submits that, by holding that Goodman was willfully blind because he failed to exercise due care to ascertain whether the car had been used to facilitate a drug transaction, the district court improperly read willful blindness as a negligence provision. The proper standard, Goodman argues, is not an objective "due care" standard but rather requires a subjective inquiry, such as "deliberate ignorance" or "conscious avoidance."

Second, Goodman claims that the district court improperly concluded that his failure to prove lack of willful blindness, standing alone, defeated his innocent ownership defense. According to Goodman, he is entitled to innocent ownership protection even if he knew or was willfully blind to the fact that the Rolls Royce had been used to facilitate a drug transaction so long as he shows that he did not consent to its use therefor. He argues that our decision in 6109 Grubb Road, 886 F.2d at 618, which held that under Sec. 881(a)(7) an innocent owner defense would lie if the owner showed either lack of knowledge or lack of consent, mandates such a result. He reasons that since the innocent owner provision of Sec. 881(a)(7) is virtually identical to that in Sec. 881(a)(4)(C), he was entitled to show that, notwithstanding his willful blindness, he was an innocent owner because he did not consent to the Rolls Royce's use in the pre-transfer drug transactions.

Goodman's first challenge to the district court's decision requires us to articulate the meaning of willful blindness under Sec. 881(a)(4)(C). Although it is not clear from its opinion, it appears that the district court may have defined willful blindness in terms of an objective "due care" standard, i.e., the owner's failure to exercise due care to discover whether the car was tainted. To the extent that the district court applied an objective standard in determining whether Goodman was willfully blind, it erred, for we believe that the appropriate standard for willful blindness is the traditional subjective standard articulated in United States v. Caminos, 770 F.2d 361, 365 (3d Cir.1985). Under that standard, a person is willfully blind for purposes of Sec. 881(a)(4)(C) when he or she is aware of a high probability that the conveyance was used to facilitate a drug transaction but fails to take reasonable affirmative measures to find out whether the conveyance was in fact so used. Thus, for Goodman to escape the willful blindness prong of Sec. 881(a)(4)(C), he needs to show either 1) that subjectively he did not recognize the high probability that the vehicle was connected to a drug transaction, or 2) that he took reasonable steps under the circumstances to learn whether the vehicle had actually been used to facilitate a drug transaction. Because we cannot be sure that the district court applied this standard, we will vacate the judgment of forfeiture and remand for reconsideration.

Goodman's second challenge, relating to consent, raises a number of thorny issues. Our conclusion, however, is straightforward. We conclude that the rationale of 6109 Grubb Road applies perforce to forfeitures under Sec. 881(a)(4)(C), and that Goodman will be an innocent owner notwithstanding any knowledge or willful blindness he may have had if he did not consent to the use of the Rolls Royce in connection with drug transactions. Thus, assuming that Goodman can convince the factfinder that he did not own the Rolls Royce at the time it was used to facilitate a drug transaction, and was not otherwise in a position to prevent such a use of the car,...