Ivers v. U.S.

• Decision Date: 18 September 1978
• Docket Number: Nos. 76-1074,76-1075,s. 76-1074
• Citation: 581 F.2d 1362
• Parties: Gerald Ronald IVERS, a/k/a James Ivan Thurston, Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees. Gerald Ronald IVERS, a/k/a James Ivan Thurston, Claimant and Plaintiff-Appellee, v. UNITED STATES of America, Cross-Claimant and Defendant-Appellant, Forty Thousand Nine Hundred Ninety Eight Dollars Eighty Six Cents ($40,998.86) in U. S. Currency, Cross-Defendant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1362

581 F.2d 1362

Gerald Ronald IVERS, a/k/a James Ivan Thurston, Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees.

Gerald Ronald IVERS, a/k/a James Ivan Thurston, Claimant and Plaintiff-Appellee, v. UNITED STATES of America, Cross-Claimant and Defendant-Appellant,

Forty Thousand Nine Hundred Ninety Eight Dollars Eighty Six

Cents ($40,998.86) in U. S. Currency, Cross-Defendant.

Nos. 76-1074, 76-1075.

United States Court of Appeals, Ninth Circuit.

Sept. 18, 1978.

Neil Jon Bloomfield, C. Clay Greene (argued), Sausalito, Cal., for Gerald Ronald Ivers.

Michael C. D'Amelio, Asst. U. S. Atty. (argued), San Francisco, Cal., for the U. S.

Appeal from the United States District Court for the Northern District of California.

Before KILKENNY and GOODWIN, Circuit Judges, and PALMIERI, ^* District Judge.

PALMIERI, District Judge:

On October 6, 1973, appellant Gerald Ronald Ivers, a Canadian citizen who had been twice deported from the United States under the name James Ivan Thurston, entered this country at the San Francisco International Airport on a flight from Vancouver, British Columbia. At that time he was carrying a total of $40,998.86 in United States currency, which he failed to report on the requisite Customs form, as required by 31 U.S.C. § 1101. ¹ These unlawful actions subjected him to a panoply of legal procedures and penalties, both criminal and civil, including the seizure and forfeiture of his money, which underlie the present appeal.

This suit was commenced on March 11, 1975, when Ivers filed a complaint seeking the return of the funds seized from him by the Customs authorities. This relief was sought on the grounds, Inter alia, that he was unaware of the duty to report his currency, that the continued retention of the funds by the Government without its seeking a judicial determination of forfeiture constituted a deprivation of his property without due process of law, and that such a retention amounted to a cruel and unusual punishment. The Government answered and counterclaimed for a judgment of forfeiture. Both parties moved for summary judgment, and the case was submitted to the district court on an agreed statement of facts.

After filing a thorough narrative opinion, reported at 413 F.Supp. 394 (N.D.Cal.1975), the district court entered judgment for the Government on October 8, 1975, decreeing the funds seized from Ivers forfeited and awarding costs to the Government. In response to a motion by the plaintiff, however, on November 4, 1975, the district court entered an amended judgment, ordering the Government to remit $5000 of the seized funds, on the ground that it was exempt from the reporting requirements of 31 U.S.C. § 1101.

Because of the nature of the claims made below and reiterated on this appeal, it is necessary to review the underlying facts in some detail.

I.

Upon passing through Customs at the San Francisco International Airport Ivers was asked by a Customs inspector whether he was carrying any currency. Ivers responded that he had about $1000 and produced a quantity of currency from his trousers pocket, which was determined by the inspector to amount to $1,148. In response to a further inquiry, Ivers indicated that he had no more money. A search of his person revealed, however, that he was carrying an additional $39,850.86 in a money belt which was strapped across his stomach beneath his outer clothing. Ivers was thereupon arrested for violation of 31 U.S.C. § 1058, ² which provides a criminal penalty for willful violations of the reporting requirement contained in 31 U.S.C. § 1101. The $40,998.86 was seized pursuant to 31 U.S.C. § 1102. ³ Ivers was also charged with entering the United States after deportation in violation of 8 U.S.C. § 1326.

Ivers pleaded guilty to both criminal charges before a United States Magistrate and was sentenced to two concurrent sentences of six months each and fined $1000. He commenced his jail sentence on March 18, 1974, and upon its completion in September of that year was deported to Canada.

On October 31, 1973, some three and one-half weeks after seizure, the District Director of Customs sent Ivers a letter informing him that his $40,998.86 had been seized under the provisions of Public Law 91-508 (31 U.S.C. § 1101 Et seq.), that he had the right to petition for relief from the penalty under section 618 of the Tariff Act, ⁴ and that if no such petition were received within sixty days, forfeiture proceedings would be instituted. In a letter dated February 4, 1974, Ivers' original attorney, Lawrence Marquette, requested an extension of time in which to file a petition for administrative relief until April 5, 1974. He further requested that "during the pendency of this extension no forfeiture proceedings be commenced by the United States or any of its agencies." In support of this request Mr. Marquette expressed his belief that the outcome of the criminal actions which had been brought against Ivers were "circumstances which should be presented as mitigating factors in any petition for remission." The requested extension was granted by the District Director in a letter of February 5, 1974.

Ivers submitted his petition for relief under 31 U.S.C. § 1104 ⁵ on March 1, 1974. The Customs Service accepted this petition and commenced investigation into its merits. On July 15, 1974, Ivers' present counsel, Neil Bloomfield, who had been retained after the apparent disappearance from the case of Mr. Marquette, advised the San Francisco Seizure and Penalty Officer of the substitution of counsel and requested a copy of the petition that had been filed on Ivers' behalf. A copy was sent to Mr. Bloomfield on August 28, 1974. On November 10, 1974, Mr. Bloomfield submitted an amendment to the petition and, in a cover letter, indicated his view that "it would be a taking of property without due process to retain the funds without a judicial proceeding." He stated at that time that "(i)f the District Director of Customs does not remit the funds, naturally, the matter will have to be litigated."

The Customs Service rendered a decision denying Ivers' petition on February 11, 1975. The District Director notified Ivers of this decision by letter on February 19, 1975, and forwarded the case to the United States Attorney in San Francisco for commencement of forfeiture proceedings. These proceedings, as we have seen, were eventually brought by way of counterclaim to Ivers' suit, which was filed March 11, 1975.

II.

Ivers has contended throughout these proceedings that he was ignorant of any obligation to declare his currency. This contention, however, cannot survive his plea of guilty to 31 U.S.C. § 1058. That section makes it a crime "willfully" to violate any provision of Chapter 21 of Title 31, in this case, 31 U.S.C. § 1101. Recent cases confirm that willfulness is an essential element of a violation of 31 U.S.C. § 1058 and that a specific intent to commit the crime must be shown. United States v. Granda, 565 F.2d 922 (5th Cir. 1978); United States v. San Juan, 545 F.2d 314 (2d Cir. 1976). The transcript of the proceedings before the United States Magistrate at the time of the entry of Ivers' plea, while covering a number of passages noted as inaudible, adequately demonstrates an awareness of these principles on the part of all present. Our review of the transcript, moreover, relevant portions of which are quoted in the margin, ⁶ satisfies us that a sufficient factual basis for the plea was established and that it was therefore validly entered under Rule 11 of the Federal Rules of Criminal Procedure. While a non-frivolous argument to the contrary might well have been made to a finder of fact had Ivers chosen to proceed to trial, we must take his plea of guilty to be an admission of each and every essential element of the crime charged, including the element of knowledge and willfulness. This being so, Ivers is now, in a suit arising out of the same transaction and involving the same parties, collaterally estopped from denying that he willfully and knowingly failed to report the currency in his possession. United States v. One 1964 MG, 408 F.Supp. 1025, 1028 (W.D.Wash.1976). See Nathan v. Tenna Corp., 560 F.2d 761, 763 (7th Cir. 1977); Brazzell v. Adams, 493 F.2d 489, 490 (5th Cir. 1974); 1B Moore's Federal Practice P 0.418(1).

Ivers' plea of guilty to a violation of 31 U.S.C. § 1058, then, along with the agreed statement of facts submitted to the court, provided the district court with a sufficient factual basis upon which to enter a summary judgment of forfeiture under 31 U.S.C. § 1102. Any material issue of fact which might have prevented the entry of such judgment was conclusively resolved by Ivers' plea. Had a judgment of forfeiture been sought and obtained immediately following the seizure of Ivers' property, there could be no doubt of its validity. Whether other considerations in this case compel a different conclusion will be the subject of the following sections.

III.

The basic issue on this appeal is whether the passage of time between the seizure of appellant Ivers' currency and the eventual institution of judicial forfeiture proceedings operated to deprive him of his property without due process of law. The district court resolved this question in the negative, resting its conclusion on alternative grounds: 1) that the Government was excused from its obligation promptly to institute judicial forfeiture proceedings while the investigation and resolution of Ivers' petition for administrative relief had not yet been completed; and 2) that in any event the Government's delay was excusable and justified under the circumstances of this case. After a review of some general principles, we discuss these grounds in turn.

A

When a statute provides for the forfeiture of property as a consequence of the commission of an unlawful act, "the forfeiture takes effect immediately upon the commission of the act," constituting ...