Republic National Bank of Miami v. United States

• Decision Date: 14 December 1992
• Docket Number: No. 91-767,91-767
• Parties: REPUBLIC NATIONAL BANK OF MIAMI, Petitioner, v. UNITED STATES
• Court: U.S. Supreme Court

506 U.S. 80

113 S.Ct. 554

121 L.Ed.2d 474

REPUBLIC NATIONAL BANK OF MIAMI, Petitioner,

v UNITED STATES.

No. 91-767.

Argued Oct. 5, 1992.

Decided Dec. 14, 1992.

Syllabus ^*

The Government filed a civil action in the District Court, alleging that a particular residence was subject to forfeiture under 21 U.S.C. § 881(a)(6) because its owner had purchased it with narcotics trafficking proceeds. After the United States Marshal seized the property, petitioner Bank, which claimed a lien under a recorded mortgage, agreed to the Government's request for a sale of the property, the proceeds of which were retained by the Marshal pending disposition of the case. A trial on the merits resulted in a judgment denying the Bank's claim with prejudice and forfeiting the sale proceeds to the United States. When the Bank filed a timely notice of appeal but failed to post a supersedeas bond or seek to stay the execution of the judgment, the Marshal, at the Government's request, transferred the sale proceeds to the United States Treasury. The Court of Appeals then granted the Government's motion to dismiss, holding, inter alia, that the removal of the sale proceeds from the judicial district terminated the District Court's in rem jurisdiction.

Held: The judgment is reversed, and the case is remanded.

932 F.2d 1433 (CA 11 1991), reversed and remanded.

Justice BLACKMUN delivered the opinion of the Court with respect to Parts I, II, and IV, concluding that, in an in rem forfeiture action, the Court of Appeals is not divested of jurisdiction by the prevailing party's transfer of the res from the district. The "settled" rule on which the Government relies that jurisdiction over such a proceeding depends upon continued control of the res—does not exist. Rather, the applicable general principle is that jurisdiction, once vested, is not divested by a discontinuance of possession, although exceptions may exist where, for example, release of the res would render the judgment "useless" because the res could neither be delivered to the complainant nor restored to the claimant. See, e.g., United States v. The Little Charles, 26 F.Cas. 979. The Brig Ann, 13 U.S. (9 Cranch) 289, 290, 3 L.Ed. 734, distinguished. The fictions of in rem forfeiture were developed primarily to expand the reach of the courts and to furnish remedies for aggrieved parties, not to provide a prevailing party with a means of defeating its adversary's claim for redress. Pp. ____, ____.

THE CHIEF JUSTICE delivered the opinion of the Court in part, concluding that a judgment for petitioner in the underlying forfeiture action would not be rendered "useless" by the absence of a specific congressional appropriation authorizing the payment of funds to petitioner. Even if there exist circumstances where funds which have been deposited into the Treasury may be returned absent an appropriation, but cf. Knote v. United States, 95 U.S. 149, 154, 24 L.Ed. 442, it is unnecessary to plow that uncharted ground here. For together, 31 U.S.C. § 1304—the general appropriation for the payment of judgments against the United States—and 28 U.S.C. § 2465 —requiring the return of seized property upon entry of judgment for claimants in forfeiture proceedings—would authorize the return of funds in this case in the event petitioner were to prevail below. See OPM v. Richmond, 496 U.S. 414, 432, 110 S.Ct. 2465, 2476, 110 L.Ed.2d 387. Pp. ____.

BLACKMUN, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, and IV, in which REHNQUIST, C.J., and WHITE, STEVENS, O'CONNOR, SCALIA, KENNEDY, and SOUTER, JJ., joined, and an opinion with respect to Part III, in which STEVENS and O'CONNOR, JJ., joined. REHNQUIST, C.J., delivered the opinion of the Court in part, as to which WHITE, SCALIA, KENNEDY, SOUTER, and THOMAS, JJ., joined, and concurred in part and concurred in the judgment, joined by WHITE, SCALIA, KENNEDY, and SOUTER, JJ. WHITE, J., filed a concurring opinion. STEVENS, J., and THOMAS, J., filed opinions concurring in part and concurring in the judgment.

Stanley A. Beiley, Miami, Fla., for petitioner.

Robert A. Long, Jr., Washington, D.C., for respondent.

Justice BLACKMUN announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, and IV, and an opinion with respect to Part III in which Justice STEVENS and Justice O'CONNOR joined.

The issue in this case is whether the Court of Appeals may continue to exercise jurisdiction in an in rem civil forfeiture proceeding after the res, then in the form of cash, was removed by the United States Marshal from the judicial district and deposited in the United States Treasury.

I

In February 1988, the Government instituted an action in the United States District Court for the Southern District of Florida seeking forfeiture of a specified single-family residence in Coral Gables. The complaint alleged that Indalecio Iglesias was the true owner of the property; that he had purchased it with proceeds of narcotics trafficking; and that the property was subject to forfeiture to the United States pursuant to § 511(a)(6) of the Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended, 92 Stat. 3777, 21 U.S.C. § 881(a)(6).¹ A warrant for the arrest of the property was issued, and the United States Marshal seized it.

In response to the complaint, Thule Holding Corporation, a Panama corporation, filed a claim asserting that it was the owner of the res in question. Petitioner Republic National Bank of Miami filed a claim asserting a lien interest of $800,000 in the property under a mortgage recorded in 1987. Thule subsequently withdrew its claim. At the request of the Government, petitioner Bank agreed to a sale of the property. With court approval, the residence was sold for $1,050,000. The sale proceeds were retained by the Marshal pending disposition of the case. See App. 6, n. 2.

After a trial on the merits, the District Court entered judgment denying the Bank's claim with prejudice and forfeiting the sale proceeds to the United States pursuant to § 881(a)(6). App. 25. The court found probable cause to believe that Iglesias had purchased the property and completed the construction of the residence thereon with drug profits. It went on to reject the Bank's innocent-owner defense to forfeiture. United States v. One Single Family Residence, 731 F.Supp. 1563 (SD Fla.1990).² Petitioner Bank filed a timely notice of appeal, but did not post a supersedeas bond or seek to stay the execution of the judgment.

Thereafter, at the request of the Government, the United States Marshal transferred the proceeds of the sale to the Assets Forfeiture Fund of the United States Treasury. The Government then moved to dismiss the appeal for want of jurisdiction. App. 4.

The Court of Appeals granted the motion. 932 F.2d 1433 (CA11 1991). Relying on its 6 to 5 en banc decision in United States v. One Lear Jet Aircraft, 836 F.2d 1571, cert. denied, 487 U.S. 1204, 108 S.Ct. 2844, 101 L.Ed.2d 881 (1988), the court held that the removal of the proceeds of the sale of the residence terminated the District Court's in rem jurisdiction. 932 F.2d, at 1435-1436. The court also rejected petitioner Bank's argument that the District Court had personal jurisdiction because the Government had served petitioner with the complaint of forfeiture. Id., at 1436-1437. Finally, the court ruled that the Government was not estopped from contesting the jurisdiction of the Court of Appeals because of its agreement that the United States Marshal would retain the sale proceeds pending order of the District Court. Id., at 1437.

In view of inconsistency and apparent uncertainty among the Courts of Appeals,³ we granted certiorari. --- U.S. ----, 112 S.Ct. 1159, 117 L.Ed.2d 406 (1992).

II

A civil forfeiture proceeding under § 881 is an action in rem, "which shall conform as near as may be to proceedings in admiralty." 28 U.S.C. § 2461(b). In arguing that the transfer of the res from the judicial district deprived the Court of Appeals of jurisdiction, the Government relies on what it describes as a settled admiralty principle: that jurisdiction over an in rem forfeiture proceeding depends upon continued control of the res. We, however, find no such established rule in our cases. Certainly, it long has been understood that a valid seizure of the res is a prerequisite to the initiation of an in rem civil forfeiture proceeding. United States v. One Assortment of 89 Firearms, 465 U.S. 354, 363, 104 S.Ct. 1099, 1105, 79 L.Ed.2d 361 (1984); Taylor v. Carryl, 61 U.S. (20 How.) 583, 599, 15 L.Ed. 1028 (1858); 1 S. Friedell, Benedict on Admiralty § 222, p. 14-39 (7th ed. 1992); H. Hawes, The Law Relating to the Subject of Jurisdiction of Courts § 92 (1886). See also Supplemental Rules for Certain Admiralty and Maritime Claims C(2) and C(3). The bulk of the Government's cases stands merely for this unexceptionable proposition, which comports with the fact that, in admiralty, the "seizure of the RES, and the publication of the monition or invitation to appear, is regarded as equivalent to the particular service of process in law and equity." Taylor v. Carryl, 61 U.S. (20 How.), at 599.

To the extent that there actually is a discernible rule on the need for continued presence of the res, we find it expressed in cases such as The Rio Grande, 90 U.S. (23 Wall.) 458, 23 L.Ed. 158 (1875), and United States v. The Little Charles, 26 F.Cas. 979 (CC Va.1818). In the latter case, Chief Justice Marshall, sitting as Circuit Justice, explained that "continuance of possession" was not necessary to maintain jurisdiction over an in rem forfeiture action, citing the "general principle, that jurisdiction, once vested, is not divested, although a state of things should arrive in which original jurisdiction could not be exercised." Id., at 982. The Chief Justice noted that in some cases there might be an exception to the rule,...