Muhammed v. Drug Enforcement Agency, Asset Forfeiture Unit, 95-3194

• Citation: 92 F.3d 648
• Decision Date: 08 August 1996
• Docket Number: No. 95-3194,95-3194
• Parties: Leo MUHAMMED; Antoinette Muhammed, Appellants, v. DRUG ENFORCEMENT AGENCY, ASSET FORFEITURE UNIT, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 648

92 F.3d 648

Leo MUHAMMED; Antoinette Muhammed, Appellants, v. DRUG ENFORCEMENT AGENCY, ASSET FORFEITURE UNIT, Appellee.

No. 95-3194.

United States Court of Appeals Eighth Circuit.

Submitted Feb. 15, 1996.

Decided Aug. 8, 1996.

Oscar Trivers, Cleveland, OH, argued, for appellant.

Raymond Martin Meyer, Asst. U.S. Atty., St. Louis, MO, argued, for appellee.

Before BEAM, LOKEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

BEAM, Circuit Judge.

The Muhammeds appeal the district court's dismissal of their motion for return of seized property. We reverse.

I. BACKGROUND

This is a cautionary tale, illustrating the mischief to which our eagerness to employ forfeiture as a weapon in the war on drugs can lead. Although, due to the posture of the case, the factual record is sparse, the following can be gleaned from the complaint, affidavits, and the subsequent motion to dismiss. The Muhammeds, a family from the Los Angeles area of California, were in St. Louis, Missouri, with their two-month-old infant son visiting family. According to their affidavits, they purchased tickets to return to the Los Angeles area at a suburban travel agency and paid in cash. On September 1, 1994, when the family arrived at the airport to depart, Drug Enforcement Administration (DEA) agents approached. The Muhammeds were separated and each was taken to be interviewed. No Miranda warnings were given. Mr. Muhammed told the agents that he worked for the Nation of Islam, collecting cash from chapter activities. He used St. Louis as his midwest base because he had family there. Agents found $70,990 in cash in Mr. Muhammed's bags. A drug dog was called and alerted to the cash, which was then seized.

Meanwhile, Mrs. Muhammed was asked if she had any cash. She had $22,000 in her girdle. She was uncertain as to where her husband had obtained the cash. When asked if the money could have come from drug sales, she said she did not know. The drug dog alerted to that cash as well, which was also seized.

The Muhammeds sought counsel who, in turn, filed an action in federal district court on September 21, 1994, for the return of the Muhammeds' property. DEA receipts of both seizures were attached. On the same day the Muhammeds mailed copies of the motion, the receipts, and their attorney's affidavit to the DEA. The motion evidently triggered administrative forfeiture proceedings. On September 26, notice of seizure and intent to forfeit the $70,990 was mailed, individually, to both the Muhammeds. That notice was received by them and explained that to contest the forfeiture they needed to submit personally signed claims and a cost bond to the DEA by a date certain. The notice also explained how to obtain waiver of the cost bond. The Muhammeds and their counsel did not correctly follow these directions. Rather, they amended their complaint to include the notice of seizure and to include personal affidavits by each of them asserting that the money in question was lawfully acquired. On November 3, the Muhammeds sent copies of the amended complaint, affidavits, and receipts to the DEA along with a cover letter listing the seizure number per the instructions on the notice of seizure and requesting release of the property. The letter specifically asked the DEA if the Muhammeds needed to provide additional material to gain release of the property. ¹ Rather than reply, the DEA chose to categorize the Muhammeds' actions as petitions for remission or mitigation and declared the $70,990 administratively forfeited on November 14, 1994. We cannot tell from the record what occurred with respect to the $22,000. On February 27, 1995, the DEA filed a motion to dismiss the Muhammeds' claim for return of their property. The district court dismissed the Muhammeds' action because it found that they had failed to contest the forfeiture of the $70,990 through the DEA's administrative procedure.

The Muhammeds appeal, arguing that: 1) their complaint, viewed in the light most favorable to them, states a claim; 2) the

motion to dismiss should not have been considered because it was grossly out of time; 3) the district court erred in dismissing the action with respect to Mrs. Muhammed's $22,000; and 4) the district court erred in failing to convert the government's motion to dismiss to one for summary judgment.

II. DISCUSSION

While there is some question as to the nature of the action the Muhammeds filed in district court, the district court treated it as a 41(e) motion for the return of property under the Federal Rules of Criminal Procedure. ² The Muhammeds have now adopted this characterization in their brief and, upon the court's inquiry at oral argument, affirmed that this is indeed the correct characterization of their action. But see supra n. 2. Thus, the ultimate question is whether the district court erred in declining to assert its equitable jurisdiction under Rule 41(e).

Under the current statutory scheme, the government may declare the forfeiture of up to $500,000 administratively. 19 U.S.C. §§ 1607-1609; 21 U.S.C. § 881. That is, after seizure and constitutionally adequate notice of intent to forfeit, the government may declare the money forfeited if no interested party opposes the forfeiture by filing a personal claim and a cost bond (or a declaration of inability to file the cost bond) with the DEA within the statutorily proscribed time limits. Id. If an interested party opposes the forfeiture, the government is put to its proof in federal district court. 19 U.S.C. §§ 1608, 1615. If there is no opposition and the property is administratively forfeited, the courts may review the administrative procedure leading to that forfeiture, but not the merits of the forfeiture itself. ³ See 19 U.S.C. § 1609(b); United States v. Woodall, 12 F.3d 791, 793, 795 (8th Cir.1993) (judicial review is fundamental safeguard against government agencies' wrongful seizure of citizens' property); see also Scarabin v. Drug Enforcement Admin., 919 F.2d 337, 338 (5th Cir.1990) (while administrative decisions on the merits of petitions for mitigation and/or remission may not be reviewed, process underlying those decisions are subject to review to ensure that proper procedural safeguards are followed).

If a citizen files a 41(e) motion in district court before the administrative forfeiture commences, an action frequently taken The Muhammeds admit that they did not file the cost bond or a request for waiver of the cost bond, or move for a district court stay. ⁵ Rather they relied on their 41(e) motion, its amendment, their personal affidavits and accompanying cover letter to the DEA to forestall the forfeiture. This was an error, but an understandable one brought on by the inadequacies of the DEA's notice. Moreover, equity is sometimes tolerant of errors. In re Harper, 835 F.2d at 1274. While the notice of seizure and intent to forfeit instructs parties what they must do to contest the impending forfeiture in district court, it in no way indicates that parties who are already in district court need to start over:

                to force the government agency to act expeditiously, the government's subsequent initiation of administrative forfeiture proceedings is ordinarily a sufficient basis for a court to abstain from exercising jurisdiction over the dispute unless the citizen complies with the DEA's administrative procedures to contest the forfeiture. 4  See In re Harper, 835 F.2d 1273, 1274-75 (8th Cir. 1988) (Rule 41(e) motion, filed prior to administrative forfeiture proceedings invokes equity jurisdiction, but citizen's failure to contest the administrative proceeding in any way justifies district court's refusal to exercise that jurisdiction);  United States v. Rapp, 539 F.2d 1156, 1160-61 (8th Cir.1976) (while equity jurisdiction is not dependent on label, defendant in a criminal proceeding may not use 41(e) motion to attack a forfeiture where the motion does not predate the forfeiture or the indictment, and where property in question is not evidence in an ongoing case).  Here, the Muhammeds filed their 41(e) motion before the administrative forfeiture and opposed the forfeiture action, although imperfectly.  The question, then, is whether the district court ought to have exercised its jurisdiction
                

TO CONTEST THE FORFEITURE

In addition to or in lieu of petitioning for remission or mitigation, you may contest the forfeiture of the seized property in UNITED STATES DISTRICT COURT. To do so, you must file a claim of ownership and cost bond with the DEA. Submit the bond in the amount shown above in the form of a cashier's check or a certified check payable to the U.S. Department of Justice. [sic] or present satisfactory surety. Claims must be signed by the parties making the claim. Unsupported submissions signed by attorneys are insufficient to satisfy the requirement the claims be personally executed.

If you are indigent (needy and poor) you may not have to post the bond. To request a waiver of the bond, you must fully disclose your finances in a signed statement called a "Declaration in Support of Request to Proceed In Forma Pauperis" along with a claim of ownership of the property. Use the format of the pauperis declaration shown as Form 4 in the Appendix of Forms following Rule 48 of the Federal Rules of Appellate Procedure or obtain a form from a DEA field office. The claim of ownership, with either bond or the "Declaration in Support of Request to Proceed In Forma Pauperis" must be filed within twenty (20) days of the first date of the publication of the notice of seizure in the edition of the USA Today newspaper referenced above. The notice will be published three successive weeks.

Joint App. at 24 (emphasis in original) (citation omitted). This notice is clearly focused on instructing parties not yet contesting the forfeiture in court what procedures must be followed. It does not instruct parties already in court that the DEA's action nullifies their ongoing court actions to...