Boero v. Drug Enforcement Admin.

• Decision Date: 14 April 1997
• Docket Number: D,No. 518,518
• Citation: 111 F.3d 301
• Parties: Alberto BOERO, Plaintiff-Appellant, v. DRUG ENFORCEMENT ADMINISTRATION, Defendant-Appellee, ocket 96-2158.
• Court: U.S. Court of Appeals — Second Circuit

Page 301

111 F.3d 301

Alberto BOERO, Plaintiff-Appellant, v. DRUG ENFORCEMENT ADMINISTRATION, Defendant-Appellee,

No. 518, Docket 96-2158.

United States Court of Appeals, Second Circuit.

Submitted Jan. 23, 1997.

Decided April 14, 1997.

Alberto Boero, Fort Dix, NJ, pro se.

Deborah R. Slater, Assistant U.S. Attorney, Hartford, CT (Christopher F. Droney, United States Attorney, Carl L. Schuman, Assistant United States Attorney, District of Connecticut, on the brief), for Defendant-Appellee.

Before OAKES, KEARSE and JACOBS, Circuit Judges.

JACOBS, Circuit Judge:

Alberto Boero, pro se, appeals from a judgment of the United States District Court for the District of Connecticut (Covello, J.) dismissing his complaint. The complaint seeks the return of $1799.46 in currency seized from Boero upon his arrest, and administratively forfeited by the Drug Enforcement Administration ("DEA") on January 31, 1991. Upon Boero's motion for summary judgment, the district court found that the DEA had provided inadequate notice of the seizure and of its intent to effect forfeiture, but dismissed Boero's complaint nevertheless, directing the DEA to recommence administrative forfeiture proceedings. In light of the finding that inadequate notice was given to the likely claimant, who was known by the DEA to be in custody, we conclude that the dismissal was erroneous, and we remand for further proceedings on the merits of Boero's forfeiture claim.

BACKGROUND

Boero was arrested on October 25, 1990, pursuant to a federal arrest warrant and criminal complaint charging him with violations of federal narcotics laws. Boero ultimately entered a plea of guilty to distribution of cocaine and conspiracy to commit kidnapping.

At the time of Boero's arrest, $1799.46 in currency and a wallet were seized from him pursuant to 21 U.S.C. § 881. The DEA thereafter sent notices of seizure to Boero's residence and to his assumed place of incarceration, pursuant to 19 U.S.C. § 1607. Boero had been arrested on a federal warrant, held in a federal facility, and then transferred to a state prison. The notices were sent to the federal facility, and came back marked "Return to Sender," after which no further notice of forfeiture was sent. The DEA also published notice for three successive weeks in USA Today, pursuant to 21 C.F.R. § 1316.75. On January 31, 1991, no claims having been filed for the property, the DEA declared the property administratively forfeited to the United States under 19 U.S.C. § 1609.

On April 13, 1994, Boero filed a civil complaint against the DEA seeking return of his wallet and the currency. ¹ On September 6, 1994, the DEA filed a response and opposition to the complaint, arguing for dismissal on the grounds that the wallet had been returned to Boero and that the cash had been forfeited according to law.

On August 30, 1995, Boero moved for summary judgment under Fed.R.Civ.P. 56(e), abandoning his claim as to the wallet and arguing (i) that there was no genuine issue of material fact for trial as to the DEA's failure to notify him that the money was subject to forfeiture, and (ii) that the failure of notice justified the return of his property as equitable relief. Boero's supporting affidavit averred that the currency was his "own personal funds and had nothing to do with any drug transaction."

In response, the DEA conceded that Boero had never received proper notice of the DEA's intent to forfeit the seized funds, but argued that the only appropriate relief was to treat Boero's motion as a timely but unperfected administrative claim under 19 U.S.C. §§ 1603(b) and 1608. In short, the DEA argued that Boero could not recover the money in district court, and must be consigned to an administrative claim.

The district court agreed with the DEA, granting Boero's motion in part and denying it in part. Thus the district court found that the DEA had failed to comply with the applicable notification provisions, but ruled that Boero's remedy was to proceed with "any

applicable administrative claims to recover the $1799.46," and directed the DEA to give Boero notice of the administrative claim procedures. On appeal, the DEA and Boero renew the arguments they presented to the district court.

DISCUSSION

Section 881 of U.S.C. Title 21, which is part of the Comprehensive Drug Abuse Prevention and Control Act, Pub.L. 91-513, Title II, § 511, 84 Stat. 1276 (1970) (the "Act"), authorizes the civil forfeiture of funds that are the proceeds of drug transactions. ² Torres v. $36,256.80 U.S. Currency, 25 F.3d 1154, 1155 (2d Cir.1994). For property valued at $500,000 or less, the DEA may follow an administrative forfeiture process governed by the customs laws. 19 U.S.C. § 1607; 21 U.S.C. 881(d); Torres, 25 F.3d at 1156. See generally United States v. Idowu, 74 F.3d 387, 394 (2d Cir.), cert. denied, --- U.S. ----, 116 S.Ct. 1888, 135 L.Ed.2d 182 (1996); 21 C.F.R. 1316.71-.81. An administrative forfeiture is commenced by the publication of notice. See 19 U.S.C. § 1607; 21 C.F.R. § 1316.75. In addition, the DEA must send notice to every party who has an interest in the property. ³ 19 U.S.C. § 1607. Within twenty days from the date of the first publication of the notice of seizure, a claimant who has received constitutionally adequate notice of intent to forfeit can judicially contest the forfeiture by filing a claim with the DEA, and a cost bond (in the "penal sum of $5,000 or 10 percent of the value of the claimed property, whichever is lower, but not less than $250"), or a declaration of an inability to file the cost bond. 19 U.S.C. § 1608; 28 C.F.R. §§ 9.1-9.7; 21 C.F.R. §§ 1316.75-.76. Generally, if no claim or cost bond is filed, or if a petition to waive the bond is not filed or is denied and not appealed, then an administrative forfeiture occurs by default. 19 U.S.C. § 1609; 21 C.F.R. § 1316.77.

Proper and timely filing stops the administrative forfeiture process, and requires the seizing agency to refer the matter to the United States Attorney for the district where the property was seized in order to institute judicial forfeiture proceedings. 19 U.S.C. §§ 1603(b), 1608; 21 C.F.R. §§ 1316.76(b), 1316.78. In judicial proceedings (unlike the administrative proceedings), the DEA is required to show probable cause for the forfeiture. United States v. $37,780 in U.S. Currency, 920 F.2d 159, 162 (2d Cir.1990); see also 21 U.S.C. § 881(b)(4). The burden of proof then shifts to the claimant to demonstrate that the property belongs to him, is not drug money, and is therefore not forfeitable. See $37,780 in U.S. Currency, 920 F.2d at 164.

In Onwubiko v. United States, 969 F.2d 1392, 1398 (2d Cir.1992), we explained that an administrative forfeiture ordinarily removes the subject matter of the action--the property or res--from the district court and thereby deprives the court of jurisdiction to review administrative decisions once the administrative process has begun. An exception to this rule is when property is taken accidentally, fraudulently, or improperly. In actions asserting such a claim, the district court has jurisdiction to correct the deficiency. ⁴ Id. Boero's complaint that his property was taken improperly--without proper notice--correctly invoked district court jurisdiction. ⁵ The court's findings concerning the impropriety of the forfeiture gave the court power to correct the deficiency. See id. The court, however, did not correct the deficiency, and instead allowed Boero to pursue an administrative remedy, over five years from the date of the initial seizure, as if an improper forfeiture had never occurred. (Ordinarily, forfeiture proceedings under the customs laws must be commenced within five years after the time when the alleged offense was discovered. See 19 U.S.C. § 1621; 21 U.S.C. § 881(d)).

Consignment of Boero to his administrative remedy is contrary to this Circuit's civil forfeiture case law. In Torres, for example, we remanded for a trial on the merits of the forfeiture challenge because an administrative forfeiture was effectuated without adequate notice to the property owner. 25 F.3d at 1158, 1161. The claimant had written to the DEA, asking that the seizure warrant be lifted from her property; the DEA denied her request on the ground that her claim, filed after the conclusion of the forfeiture, was untimely. Id. at 1156. We reversed on the ground that the claimant's default had been caused by the DEA's constitutionally inadequate notice. Rather than allow the DEA to begin administrative proceedings anew upon a proper notice, we held that the claimant's court challenge to the forfeiture was not foreclosed. Id. at 1160-61.

In United States v. Giovanelli, a forfeiture was found to be "a nullity in view of the government's utter failure to make the slightest effort to notify defendant of the forfeiture action." 998 F.2d 116, 119 (2d Cir.1993). Because the government had not contested the claimant's ownership of the property but had only challenged his right to bring the action--an issue decided in the claimant's favor--we reversed the district court's denial of the defendant's claim for return of the seized currency, reached the merits of the claim, and awarded Giovanelli return of his property. Id. at 119-120. In so doing, we explained that if there had been an issue regarding the forfeiture that had not been conclusively determined, we would have remanded the case to the district court for further proceedings, "including proper pleadings and adjudication of defendant's entitlement to the seized funds." Id. at 119.

Further, in Onwubiko, we concluded that an administrative forfeiture of currency had been improperly effectuated, because the DEA had conditioned a claimant's right to avoid the DEA's discretionary powers (and to put the DEA to its proof in court) upon his payment of a cost bond; the DEA should have known that payment was impossible, given that the DEA held all of his money. 969 F.2d at 1399. In light...