US v. Real Property at 11205 McPherson Lane

Decision Date15 January 1991
Docket NumberNo. CV-90-160-ECR.,CV-90-160-ECR.
Citation754 F. Supp. 1483
PartiesUNITED STATES of America, Plaintiff, v. REAL PROPERTY LOCATED AT 11205 McPHERSON LANE, OJAI, CALIFORNIA, Defendant. Claim of Michael CALDWELL, Claimant.
CourtU.S. District Court — District of Nevada

Will B. Mattly, Asst. U.S. Atty., Reno, Nev., for plaintiff.

Scott S. Furstman, Santa Monica, Cal., and Anthony P. Sgro, Las Vegas, Nev., for claimant Robin Caldwell.

Victor Sherman, Santa Monica, Cal., and David Z. Chesnoff, Las Vegas, Nev., for claimant Michael Caldwell.

ORDER

EDWARD C. REED, Jr., Chief Judge.

On October 24, 1989, the Federal Grand Jury in Reno, Nevada indicted Claimant Michael Caldwell ("Claimant") in various counts of United States of America v. Ciro Wayne Mancuso, et al., CR-N-89-24-ECR. A warrant was issued for Claimant's arrest. Claimant has remained a fugitive from justice since October, 1989.

On August 31, 1990, plaintiff filed a civil forfeiture action in this court, in connection with Claimant's indictment, against property located in Ojai, California. Claimant owns the Ojai property. Plaintiff alleged that Claimant purchased the property with funds acquired illegally through the criminal enterprise alleged in the indictment. After reviewing plaintiff's complaint for forfeiture and the attached affidavit on August 31, 1990, the Honorable Phyllis Halsey Atkins, Magistrate, determined that probable cause existed to seize the subject property. Plaintiff subsequently seized the property. Claimant remains a fugitive whose whereabouts are unknown to the court.

On October 21, 1990, Claimant, through his attorneys, filed a motion to dismiss the civil forfeiture action (document # 8) under Fed.R.Civ.P. 12(b)(6), alleging six separate grounds. None of the six grounds alleges failure to state a claim, as 12(b)(6) requires. However, this court will recategorize Claimant's claims correctly.

I. Claimant alleges that this court lacks jurisdiction over the person and the property 12(b)(2). II. Claimant alleges that 21 U.S.C. § 881(j), expanding venue in civil forfeiture actions, is unconstitutional. III. Claimant alleges that the United States District Court for the District of Nevada is an improper venue 12(b)(3). IV. Claimant alleges that this court has no jurisdiction to transfer the case to a proper venue, and therefor, must dismiss the case. V. Claimant alleges that plaintiff improperly seized the California property and must return it to claimant. VI. In the event this court has jurisdiction over the person or property, and is a proper venue, Claimant requests that this court order plaintiff to show probable cause to seize the property pursuant to 21 U.S.C. § 881(b).

On November 20, 1990, plaintiff filed an opposition to claimant's motion entitled "Government's response to claimant's motion to dismiss ..." (document # 19). On November 30, 1990, claimant filed a reply (document # 21). We address each of the six allegations in turn.

I. Jurisdiction over the person and the property

In addition to subject matter jurisdiction, a court adjudicating rights to real property must have personal jurisdiction over the defendant, in personam jurisdiction, or jurisdiction over the property, in rem jurisdiction. In this case, plaintiff asks a United States District Court in Nevada to adjudicate rights to property located in California.

Traditionally, in rem jurisdiction refers to a court's power to determine a person's interest in certain real property as against the whole world. This we clearly cannot do since we do not have jurisdiction over the property. However, plaintiff asks only that we determine that between the United States and Claimant, the United States has a right to the subject property. In effect, plaintiff asks that we exercise quasi in rem jurisdiction. That is, plaintiff asks that we decide who between plaintiff and Claimant is entitled to the property.

As stated, we do not have jurisdiction over property located outside the territorial borders of our district. However, if we have in personam jurisdiction over Claimant, we may determine plaintiff's interest vis à vis Claimant's interest in the subject property.

In this case, our subject matter jurisdiction arises from a federal question under 21 U.S.C. § 881. Thus, we must decide to what extent a United States district court must have personal jurisdiction over the defendant/claimant in a suit in federal court on a federal question.

We begin by considering Fed.R.Civ.P. 4(e) and 4(f). 4(f) provides in part:

Territorial limits of effective service:
All process ... may be served anywhere within the territorial limits of the state in which the district court is held, and, when authorized by a statute of the United States or by these rules, beyond the territorial limits of that state (emphasis added).

4(e) provides in part:

Summons: Service Upon Party Not Inhabitant of or Found Within State:
Whenever a statute of the United States ... provides for service of a summons, or of a notice ... upon a party not an inhabitant of or found within the state in which the district court is held, service may be made ... in the manner prescribed by the statute.... Whenever a statute ... of the state in which the district court is held provides (1) for service of a summons, or of a notice ... upon a party not an inhabitant of or found within the state ... service may ... be made ... in the manner prescribed in the statute.

Whether the person to be served is located in the state in which the district court sits, or out of such state, a party could physically serve that person even if 4(e) and 4(f) did not exist. For example, assume X files a suit against Y in federal court in Nevada on diversity, alleging Y battered X in New York while X was visiting there. X is a citizen of Nevada and Y is a citizen of New York. After filing suit in Nevada, X serves Y in hand in New York with the summons and complaint. While X has physically served Y with process from a federal court in Nevada, the court has not obtained jurisdiction over Y just because X served Y. However, 4(e) and 4(f) would confer jurisdiction on the court under the preceding facts if a United States statute so provided. That is, if the serving party complied with 4(e) or 4(f), serving the party pursuant to the federal law would confer personal jurisdiction on the court. In other words, 4(e) and 4(f) would make Y amenable to service and give the federal court in Nevada in personam jurisdiction over Y if X complied with 4(e) or 4(f).

Further, under the preceding hypothetical, assume that Y had some other relationship to Nevada. If a state long arm statute allowed the court to obtain jurisdiction over Y, and if exercising jurisdiction over Y comported with due process, the federal court could exercise jurisdiction over Y under 4(e) or 4(f).

In Omni Capital International v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987), the Supreme Court analyzed 4(e) and 4(f) to determine what requirements they impose on a federal trial court wishing to exercise in personam jurisdiction in a federal question case. Writing for a unanimous Court, Justice Blackmun set out a test to determine whether a federal trial court in a federal question case has in personam jurisdiction over the defendant.

If a United States district court wishes to obtain in personam jurisdiction over a person not within the territorial borders of the jurisdiction in which it sits, it first considers whether Congress has authorized such jurisdiction in a statute. For example, in Omni, plaintiff sued under the Commodity Exchange Act, 7 U.S.C. § 25. The trial court first looked to that act to see if Congress included a personal jurisdiction provision. In general, if Congress has included an applicable jurisdictional provision, the court must ensure that the provision comports with due process under the constitution. If it does, then service effectuated in compliance with its provisions is valid and confers jurisdiction. If the provision does not comport with due process, service is invalid and the court has no jurisdiction.

Under Fed.R.Civ.P. 4(e), if Congress has not provided a grant of in personam jurisdiction in the substantive statute, the federal trial court can look to the long arm statute of the state in which it sits. If the long arm statute does not allow the court to exercise personal jurisdiction, the court does not have personal jurisdiction. If the long arm statute allows the court to exercise jurisdiction, the court must ensure that exercising jurisdiction comports with due process. If it does, then service effectuated in compliance with its provisions is valid and confers jurisdiction. Thus, for a federal trial court in a federal question case to have in personam jurisdiction over a defendant or claimant not an inhabitant of or located within the borders of the state in which the court sits, the defendant or claimant must be amenable to service pursuant to a Congressional law or a state long arm statute.

In this case, Claimant is not an inhabitant of Nevada, nor has he been found within Nevada. Thus, we first consider whether Congress has authorized this court to exercise in personam jurisdiction under the civil forfeiture statute, 21 U.S.C. § 881. Two provisions in 881 arguably apply.

First, 881(b) provides in part:

Any property subject to civil forfeiture to the United States ... may be seized by the Attorney General upon process issued ... by any district court of the United States having jurisdiction over the property ...

This provision allows any district court to serve process on claimants located anywhere, and assert jurisdiction to seize forfeitable property located within the territorial borders of the court's jurisdiction. In this case, the property in question is located in California, outside the borders of this court's jurisdiction. Thus, this court does not have jurisdiction over the property. Consequently, 881(b) does...

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