Com. v. One 2004 Audi Sedan Auto.

• Citation: 921 N.E.2d 85,456 Mass. 34
• Decision Date: 09 February 2010
• Docket Number: SJC-10424
• Parties: COMMONWEALTH v. ONE 2004 AUDI SEDAN AUTOMOBILE & others.<SMALL><SUP>1</SUP></SMALL>
• Court: United States State Supreme Judicial Court of Massachusetts

921 N.E.2d 85

456 Mass. 34

COMMONWEALTH v. ONE 2004 AUDI SEDAN AUTOMOBILE & others.¹

SJC-10424

Supreme Judicial Court of Massachusetts, Norfolk.

Argued October 6, 2009.

Decided February 9, 2010.

Susanne M. O'Neil, Special Assistant District Attorney, for the Commonwealth.

Edward H. Sharkansky (Dana Alan Curhan, Boston, with him) for the intervener.

Present: MARSHALL, C.J., IRELAND, SPINA, COWIN, CORDY, BOTSFORD, & GANTS, JJ.

GANTS, J.

On February 17, 2006, State police officers arrested Bruce Kneller and charged him with possession of a class E substance with intent to distribute, G.L. c. 94C, § 32D (a). At the time of arrest, the police seized Kneller's 2004 Audi Sedan automobile and $4,359 in United States currency. The following day the police obtained and executed a search warrant at a Bank of America branch in Randolph, where Kneller had an account. As a result of the search, funds held in Kneller's account, which had a balance of $226,511.92, were temporarily frozen. On February 24, 2006, the Commonwealth brought this civil forfeiture action under G.L. c. 94C, § 47 (a) (3), (5) and (d), alleging that the Audi sedan, currency, and frozen bank account funds were related to Kneller's Internetbased illegal steroid distribution operation. At the same time, the Commonwealth also moved ex parte under G.L. c. 94C, § 47 (f) (1), for a preliminary order to secure the frozen funds pending final adjudication. This order was granted on February 27, 2006.

On March 21, 2006, the judge allowed Kneller's motion to intervene; Kneller filed an answer to the Commonwealth's complaint and moved to stay the proceedings. The motion to stay was allowed on May 16, 2006. On February 14, 2007, Kneller moved to dismiss the complaint only as to forfeiture of the bank account funds. After a hearing, the judge on May 1, 2007, allowed the motion to dismiss, concluding that, "[a]ccepting all of the factual allegations as true and construing all reasonable inferences in the Commonwealth's favor ... the complaint and supporting affidavits fail to aver sufficient facts to support a nexus between the funds in the bank account and Kneller's illegal drug activity, and thus fail to meet the probable cause standard." The Commonwealth petitioned a single justice of the Appeals Court for relief pursuant to G.L. c. 231, § 118, first par. The single justice allowed the Commonwealth's application for leave to pursue an interlocutory appeal and stayed the proceedings in the Superior Court. The Appeals Court vacated the allowance of the motion to dismiss, and remanded the case to the Superior Court for further proceedings. Commonwealth v. One 2004 Audi Sedan Auto., 73 Mass.App.Ct. 311, 321, 897 N.E.2d 1030 (2008). Kneller appealed, and we granted his application for further appellate review.

We now vacate the allowance of the motion to dismiss and remand the case to the Superior Court for further proceedings consistent with this opinion. We also declare that, where the Commonwealth under G.L. c. 94C, § 47 (f) (1), has obtained an ex parte preliminary order to seize or secure property pending final adjudication of the forfeiture proceeding, a person claiming ownership of the property, after filing a motion and memorandum, supported by affidavits, is entitled to an adversary hearing to challenge the issuance of the preliminary order.

1. The first issue we confront is the standard to be applied to a motion to dismiss an action brought under our civil forfeiture statute, G.L. c. 94C, § 47, an issue we have not previously addressed. The Commonwealth contends that the standard under Mass. R. Civ. P. 12(b)(6), 365 Mass. 754 (1974), is the same in civil forfeiture cases as in other civil cases—whether the factual allegations in the complaint, assumed to be true, granting the pleader all reasonable inferences that may be drawn from those factual allegations, possess enough "heft" plausibly to suggest that the pleader is entitled to relief. Iannacchino v. Ford Motor Co., 451 Mass. 623, 636, 888 N.E.2d 879 (2008), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).² Kneller contends that the judge was correct in concluding that, in a motion to dismiss a civil forfeiture action, the "Commonwealth bears the burden of establishing probable cause that the items seized are subject to forfeiture." To determine the appropriate standard, we need first to examine the language and history of the civil forfeiture statute.

Under the civil forfeiture statute, a district attorney or the Attorney General, by motion in a criminal proceeding or by filing a civil action in the nature of a proceeding in rem, may seek an order from the Superior Court of forfeiture of various types of property, including "[a]ll moneys ... furnished or intended to be furnished by any person in exchange for a controlled substance[,] ... all proceeds traceable to such an exchange, including ... all moneys ... used or intended to be used to facilitate any violation of [the controlled substances statutes]." G.L. c. 94C, § 47 (a) (5). Where a person other than the Commonwealth claims to own the property at issue in the forfeiture proceeding, the Commonwealth at trial "shall have the burden of proving to the court the existence of probable cause to institute the action." G.L. c. 94C, § 47 (d). If the Commonwealth sustains its burden, the burden shifts to the claimant to prove that the property is not subject to forfeiture.³ Id.

Prior to its amendment in 1989, see St.1989, c. 653, §§ 73-80, the civil forfeiture statute provided that the Commonwealth at trial had "the burden of proving all material facts by a preponderance of the evidence." G.L. c. 94C, § 47, inserted by St.1971, c. 1071, § 1. With the 1989 amendment, the Legislature imposed a burden of proof on the Commonwealth that was virtually identical to the burden of proof imposed on the Federal government in Federal forfeiture actions. Compare G.L. c. 94C, § 47 (d), as appearing in St.1989, c. 653, § 79 ("the commonwealth shall have the burden of proving to the court the existence of probable cause to institute the action") with 19 U.S.C. § 1615 (1994) ("probable cause shall be first shown [by the government] for the institution of such suit or action, to be judged of by the court"). As a result, we have concluded that it is "reasonable to think that the Legislature revised [G.L. c. 94C,] § 47 (d), to achieve the result reached by the Federal statutes as construed by the Federal courts." Commonwealth v. Fourteen Thousand Two Hundred Dollars, 421 Mass. 1, 8, 653 N.E.2d 153 (1995). Congress subsequently altered that burden of proof with the Civil Asset Forfeiture Reform Act of 2000, Pub.L. 106-185, 114 Stat. 202 (2000) (CAFRA) (codified principally at 18 U.S.C. § 983 [2006]),⁴ but the Legislature has not followed suit. Therefore, in interpreting G.L. c. 94C, § 47 (d), we look not to CAFRA, but to the interpretation of the Federal forfeiture statute that preceded CAFRA.

We note initially that under G.L. c. 94C, § 47 (d), as under 19 U.S.C. § 1615, the government's burden is not to prove probable cause but to prove "the existence of probable cause to institute the action." See Bankers Life & Cas. Co. v. Commissioner of Ins., 427 Mass. 136, 140, 691 N.E.2d 929 (1998), quoting 2A B. Singer, Sutherland Statutory Construction § 46.06 (5th ed. 1992) (basic tenet of statutory construction is that statute must give effect "to all its provisions, so that no part will be inoperative or superfluous"). We have held that, in a forfeiture proceeding, this burden is "similar to its burden in seeking an indictment and less than its burden at a probable cause hearing to determine whether someone should be held for trial." Commonwealth v. Fourteen Thousand Two Hundred Dollars, supra at 9, 653 N.E.2d 153. We explained that the nub of the distinction is that, in seeking an indictment from a grand jury, the Commonwealth may present reliable hearsay, but at a probable cause hearing it is limited to admissible evidence. Id. at 8-9, 653 N.E.2d 153. "In the forfeiture situation, ... if the Commonwealth proves probable cause to proceed, in the form of sound reason to believe that the money-drug nexus exists, although the Commonwealth does not have sufficient evidence to prove its case at trial, the Commonwealth acts responsibly by instituting the action and leaving to a claimant the statutory burden of proving entitlement to the property at issue." Id. at 9, 653 N.E.2d 153. In other words, the Commonwealth's burden in a civil forfeiture proceeding is not necessarily to prove, with admissible evidence, probable cause that the property at issue derived from illegal narcotics or facilitated a violation of the controlled substances laws, but to prove that the Commonwealth had reliable information in its possession that established probable cause of such a nexus and that justified the initiation of the in rem proceeding.

Ironically, the likely origin of this focus in G.L. c. 94C, § 47 (d), on "the existence of probable cause to institute the action" derives from provisions of pre-CAFRA Federal civil forfeiture law that differ markedly from our civil forfeiture statute (emphasis added). Under 21 U.S.C. § 881(b) (1994), there were two avenues by which the United States Attorney General could seize property pending final adjudication of forfeiture without a judicial finding of probable cause. The first avenue was to file a complaint in any Federal District Court having jurisdiction over the property. Once the complaint was filed, Rule C(3) of the Supplemental Rules for Certain Admiralty and Maritime Claims, 28 U.S.C. app. 840 (1994) (Supplemental Rules) provided that "if the conditions for an action in rem appear to exist, an order so stating and authorizing a warrant for the arrest of the ... property that is the subject of the action shall issue and be delivered to the clerk who shall prepare the warrant." Perhaps because...