Ivers v. United States

• Decision Date: 29 September 1975
• Docket Number: No. C-75-464 SC.,C-75-464 SC.
• Citation: 413 F. Supp. 394
• Parties: Gerald Ronald IVERS, also known as James Ivan Thurston, Plaintiff, v. UNITED STATES of America et al., Defendants. The UNITED STATES of America, Cross-Claimant, v. FORTY THOUSAND NINE HUNDRED NINETY-EIGHT DOLLARS EIGHTY-SIX CENTS ($40,998.86) IN UNITED STATES CURRENCY, Cross-Defendant, Gerald Ronald Ivers, also known as James Ivan Thurston, Claimant.
• Court: U.S. District Court — Northern District of California

413 F. Supp. 394

Gerald Ronald IVERS, also known as James Ivan Thurston, Plaintiff, v. UNITED STATES of America et al., Defendants.

The UNITED STATES of America, Cross-Claimant, v. FORTY THOUSAND NINE HUNDRED NINETY-EIGHT DOLLARS EIGHTY-SIX CENTS ($40,998.86) IN UNITED STATES CURRENCY, Cross-Defendant, Gerald Ronald Ivers, also known as James Ivan Thurston, Claimant.

No. C-75-464 SC.

United States District Court, N. D. California.

September 29, 1975.

Neil Jon Bloomfield, Fairfax, Cal., for plaintiff.

James L. Browning, Jr., U. S. Atty., by Michael C. D'Amelio, Asst. U. S. Atty., San Francisco, Cal., for defendants.

MEMORANDUM DECISION

CONTI, District Judge.

This case is presently before the court on cross-motions for summary judgment, the parties having submitted the case on the pleadings, an agreed statement of facts and other evidence presently on file.

The relevant facts in this case are primarily undisputed, although the parties argue conflicting interpretations of those facts. Plaintiff Gerald Ronald Ivers is a Canadian citizen. In 1967 and 1968, plaintiff, then known as James Ivan Thurston, was deported from the United States. On October 6, 1973, he entered this country at San Francisco International Airport on a flight from Vancouver, British Columbia. Upon processing through Customs at San Francisco, plaintiff was asked by a customs inspector whether he was carrying any currency. Ivers responded that he possessed about $1,000, which he took out of his trousers pocket and which was determined to amount, in fact, to $1,148.00 in U.S. currency. The customs inspector then asked plaintiff if he had any more money, to which plaintiff responded in the negative. Plaintiff was then searched by customs officials, who discovered an additional $39,850.86 in U.S. currency, which had been strapped across his stomach underneath his trousers and shirt. Notwithstanding the fact that he transported a total $40,998.86 in U.S. currency into this country, plaintiff failed to report on Customs Form 4790 that he was bringing in excess of $5,000 into the United States. Plaintiff, however, contends that he was ignorant and unaware of any law or duty to declare any such cash upon his person.

On the same date, plaintiff was arrested by the Government on the basis of his failure to comply with 31 U.S.C. § 1101, which requires the reporting of the importation of currency in excess of $5,000. Simultaneously, the $40,998.86 was seized for forfeiture under claimed authority of 31 U.S.C. § 1102. Plaintiff was also arrested for violating 31 U.S.C. § 1058, which provides a criminal penalty for wilful violations of Section 1101. On February 19, 1974, plaintiff entered a plea of guilty to the criminal charge and was sentenced to six months imprisonment and fined $1,000.00. Plaintiff served said sentence from March through September, 1973.

Plaintiff brought the instant action claiming he was entitled to return of his seized currency on the ground that the Government has failed to institute forfeiture proceedings in a timely manner. Defendant has counterclaimed alleging that, on the merits, it is entitled to forfeiture of the seized currency.

The court will first consider plaintiff's contentions that defendant unnecessarily delayed instituting forfeiture proceedings, since a determination on that issue in plaintiff's favor would obviate the need to consider the merits of defendant's counterclaim.

I. Effect of Government's Delay in Proceeding.

We are concerned here with the legal effect of the Government's alleged delay in instituting judicial forfeiture proceedings for a purported violation of 31 U.S.C. § 1101 through 1105, which constitute that segment of the Bank Secrecy Act which regulates the reporting of imports and exports of monetary instruments. Although those statutory provisions have been effective since October 1970, we have been unable to discover any published opinion which has considered the substantive and procedural requirements of those sections as they apply to a specific alleged violation. We are, therefore, faced with a number of interrelated issues of first impression bearing on the case at bar. Since a proper understanding of the reporting requirements necessitates an examination of the sections as they relate to one another, we have set forth the relevant portions of the sections in the margin.¹

Although there is no express statutory requirement within those sections which dictates that the Government must promptly after seizure commence judicial forfeiture proceedings, plaintiff nonetheless alleges that the Constitution mandates such prompt action, and that the Government's prolonged delay in connection with the case at bar requires return of the money seized. Plaintiff's general proposition calling for prompt action by the Government finds significant support from the Supreme Court as well as from other authorities.

We find the "promptness" mandate announced as early as 1931 in dicta from Sturges v. Clark D. Pease, Inc., 48 F.2d 1035, 1039 (2d Cir. 1931):

"Though the merchandise which has been unlawfully imported is subject to seizure and forfeiture . . . and has been actually seized by the customs authorities, we think that the collector may be required to assert his right to file a libel for forfeiture with promptitude."

Language of similar import has been expressed in Upham v. Dill, 195 F.Supp. 5, 9 (S.D.N.Y.1961); Goldman v. American Dealers Service, 135 F.2d 398, 401-402 (2d Cir. 1943), and In re No. 32 East Sixty-Seventh Street, 96 F.2d 153, 156 (2d Cir. 1938) which considered seizures for respective violations of the customs, postal and customs laws.

We find more elaborate discussion of the "promptness" mandate among a more recent group of cases cited by plaintiff. In United States v. Thirty-Seven Photographs, 402 U.S. 363, 91 S.Ct. 1400, 28 L.Ed.2d 822 (1971), the Supreme Court considered the timeliness requirement as it applied to photographs which were seized by customs agents as being obscene under Section 305 of the Tariff Act of 1930. (19 U.S.C. § 1305(a)). In order to avoid declaring the statute unconstitutional, the Court read into the seizure provisions certain time constraints which would require the Government to move toward a prompt judicial determination. The court reasoned that the Constitution mandated such a time requirement in order to protect against illegal censorship.

Also cited by plaintiff are Sarkisian v. United States, 472 F.2d 468 (10th Cir. 1973); United States v. A Quantity of Gold Jewelry, 379 F.Supp. 283 (C.D.Cal.1974), and United States v. One 1971 Opel G. T., 360 F.Supp. 638 (C.D.Cal.1973). In Sarkisian, the Government was ordered to return gold jewelry which had been seized by customs officials. That holding was based on the ground that the Government delayed some nine months between the time it completed its administrative investigation and its filing of its action for forfeiture and that such a delay was in violation of the prompt action required under the reasoning of Thirty-Seven Photographs and under 19 U.S.C. §§ 1602 through 1604. The 1971 Opel court followed a similar approach in ruling that those statutes required the Collector to promptly commence court proceedings for forfeiture of a seized automobile. That court also suggested that a delay in carrying out court proceedings might also be in violation of the Constitution where the property seized is of a wasting nature such that it would become substantially worthless before there could be a judicial determination. Finally, in the Gold Jewelry case, the claimants had, pursuant to statute, attempted to post surety bonds in exchange for the return of the seized gold jewelry, which efforts had been rejected. Under such circumstances, the court held the fact that the Government had prolonged the institution of forfeiture proceedings violated claimants' constitutional rights and compelled the release of the seized property.

Each of the above cases relied upon by plaintiff can be distinguished from the case at bar. The Thirty-Seven Photographs decision was aimed at protecting unauthorized and illegal censorship,² not presently at issue. The thrust of Sarkisian and 1971 Opel, insofar as they relied on the timeliness requirements of Sections 1602 through 1604,³ carries little weight in the analysis of the case at bar. And the Gold Jewelry case can be distinguished on the basis of the fact that claimant therein had been refused the statutory opportunity to post full surety bond and that the Government continued in its delay thereafter.

However, even after those cases are carefully examined so as to reveal that they do not directly control the case at bar, they continue to stand for the general proposition that the Government cannot unduly and unjustifiably delay in proceeding to a final determination of which party should have proper and legal title to and possession of seized property. In that general proposition we expressly concur.

We do not, however, agree with plaintiff's argument that his pursuit of an administrative determination does not forgive the Government from proceeding forthwith to a judicial determination. Plaintiff's argument is two-pronged. First, he contends that 31 U.S.C. § 1104 does not provide for an administrative determination, and that the Department of the Treasury's attempted procedures thereunder were therefore unauthorized. Second, he claims that even if an administrative proceeding is provided for, the Government must promptly commence forfeiture proceeding in a court of competent jurisdiction, whether or not a claimant has sought administrative relief.

A. Effect of Section 1104.

Section 1104 provides in pertinent part that the Secretary "may . . . remit any forfeiture". It is suggested that such language provides for remission only after forfeiture, and that forfeiture is not accomplished unless and until a judicial decision has been rendered in favor of the...