Linarez v. U.S. Dept. of Justice

• Decision Date: 02 September 1993
• Docket Number: No. 92-1794,92-1794
• Citation: 2 F.3d 208
• Parties: Alfredo LINAREZ, Plaintiff-Appellant, v. UNITED STATES DEPARTMENT OF JUSTICE, Drug Enforcement Administration, Marks Brothers Jewelers, Incorporated, and Village of Lombard Police Department, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 208

2 F.3d 208

Alfredo LINAREZ, Plaintiff-Appellant, v. UNITED STATES DEPARTMENT OF JUSTICE, Drug Enforcement Administration, Marks Brothers Jewelers Incorporated, and Village of Lombard Police Department, Defendants-Appellees.

No. 92-1794.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 14, 1993.

Decided Aug. 9, 1993.

Rehearing Denied Sept. 2, 1993.

Leonard S. Whitcup (argued), George D. Levy, Whitcup & Arce, Chicago, IL, for plaintiff-appellant.

Thomas P. Walsh, Asst. U.S. Atty., Fred Foreman, U.S. Atty., Ernest Y. Ling, Criminal Div., Daniel E. May (argued), Civil Div., Appellate Section, Chicago, IL, for defendants-appellees.

Before COFFEY, and KANNE, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

COFFEY, Circuit Judge.

Alfredo Linarez filed a complaint in district court seeking to recover $12,417 in United States currency that the Drug Enforcement Administration ("DEA") seized from him and administratively forfeited to the United States under the authority of 21 U.S.C. Secs. 881(a)(6), 881(b) (1988 & Supp. III 1991), and 19 U.S.C. Secs. 1602-1618 (1988 & Supp. III 1991). Linarez also sought to recover $634 from Marks Brothers Jewelers and $187 from the Village of Lombard, Illinois Police Department. The district court dismissed Linarez's complaint for lack of subject matter jurisdiction. We affirm.

I. BACKGROUND

On September 4, 1990, an employee of the Cole-Taylor Bank in Lombard, Illinois discovered a counterfeit $100 bill among a large deposit that had been made to the bank by Marks Brothers Jewelers. The bank contacted Detective John Lavery of the Lombard Police Department. Lavery learned that the $100 bill had come from one Alfredo Linarez, a frequent customer of the jewelry store, who had paid $13,000 in United States currency for a Rolex watch a few days earlier. He also learned that Linarez and his son, Eduardo, recently had paid cash for four other Rolex watches that were valued at $5,000 apiece. A trained narcotics-detection dog was brought to the bank to examine the $100 bill, and the dog alerted positively to the presence of a controlled substance on the bill. When it examined the balance of the $13,000 that the bank still had in its possession (a sum of $11,000) the dog once again alerted positively to the presence of a controlled substance on the currency.

On September 6, 1990, Detective Lavery learned that Linarez and Eduardo had returned to Marks Brothers to purchase a Rolex brand ring for $1200 cash. Lavery seized the currency after a trained narcotics-detection dog alerted positively to the presence of a controlled substance on it. The next day, pursuant to a search warrant that was issued by an Illinois state court, Lavery seized the $11,000 from the Cole-Taylor Bank. On September 12, 1990, Lavery conducted a consensual search of Linarez's wallet and found $217 cash. Once again, a narcotics-detection dog alerted positively to the presence of a controlled substance on the currency and, once again, Lavery seized it.

On July 4, 1991, the above-described currency (a total of $12,417) was transferred to the DEA for institution of federal forfeiture proceedings "because it had been used or acquired to facilitate a drug related offense." ¹ It is difficult to understand the issues in this appeal without first understanding the statutory scheme for forfeiture proceedings, so we give a brief explanation here.

The Comprehensive Drug Abuse Prevention and Control Act of 1970, Pub.L. No. 91-513, Title II, Sec. 511, 84 Stat. 1276 (codified as amended at 21 U.S.C. Sec. 881(a) (1988 & Supp. III 1991)), provides for the civil forfeiture of property that has been used either to facilitate narcotic transactions or to acquire the proceeds of such criminal activity. To be subject to forfeiture under the Act, the property must fall into one of eight categories defined by 21 U.S.C. Sec. 881(a). One of these categories, Sec. 881(a)(6), provides for the forfeiture of illicitly obtained wealth. ²

Section 881(b) authorizes the seizure of any property that is subject to forfeiture under Sec. 881(a) "upon process issued pursuant to the Supplemental Rules of Certain Admiralty and Maritime Claims by any district court of the United States having jurisdiction over the property." Section 881(b)(1) goes on, however, to provide that seizure may be made without the requisite process if the seizure is incident to a search under a search warrant. Section 881(d) provides that the forfeiture of property seized in accordance with Sec. 881(b) is to be accomplished through the procedures set forth by the customs laws at 19 U.S.C. Secs. 1602-1618. Under the customs laws as they existed at the time of the seizure in this case, seized United States currency of $100,000 or less was subject to administrative forfeiture to the United States by the seizing agency without judicial involvement, but if the currency amounted to greater than $100,000, judicial forfeiture was required. 19 U.S.C. Secs. 1607(a)(4), 1610; 21 C.F.R. Secs. 1316.75, 1316.78 (1992). ³ The amount of money that was seized in this case, $12,417, obviously would allow the institution of administrative forfeiture proceedings.

To initiate administrative forfeiture proceedings, the seizing agency, in this case the DEA, must publish notice of the seizure and of its intent to forfeit the property once a week for at least three successive weeks in a newspaper of general circulation in the judicial district in which the forfeiture proceeding is brought. 19 U.S.C. Sec. 1607(a); 21 C.F.R. Sec. 1316.75 (1992). In addition, the agency must give personal written notice of the seizure and information on the applicable procedures to any party who appears to have an interest in the seized property. 19 U.S.C. Sec. 1607(a).

The customs laws also provide the procedures for contesting an administrative forfeiture. A person claiming an interest in the seized property has two choices. First, he can file a petition for remission or mitigation of the forfeiture within thirty days after his receipt of the notice of seizure. 19 U.S.C. Sec. 1618; 21 C.F.R. Sec. 1316.79 (1992). Alternatively, he "may at any time within twenty days from the date of the first publication of the notice of seizure file ... a claim stating his interest therein" along with a cost bond of $5000 or ten percent of the value of the property, whichever is less, but not less than $250. 19 U.S.C. Sec. 1608. The proper and timely filing of a claim and cost bond has the legal effect of halting the administrative proceedings and forcing the seizing agency to refer the matter to the United States Attorney for the institution of judicial forfeiture proceedings. 19 U.S.C. Secs. 1603(b), 1608; 21 C.F.R. Sec. 1316.76(b) (1992). Failure of an interested party to file the requisite claim and bond, however, results in a declaration of forfeiture by the seizing agency and the vesting of title in the United States free and clear of any liens and encumbrances. 19 U.S.C. Sec. 1609(b); 21 C.F.R. Sec. 1316.77 (1992).

The DEA on August 12, 1991, sent a notice of seizure by certified mail to Linarez's last known address, "2414 Oak Park, Berwyn, Illinois." This notice expressly stated that notice of the seizure of the $12,417 would be published three successive weeks in USA Today beginning on August 21, 1991. The notice described in detail the procedures that Linarez could utilize to contest the forfeiture. It stated that Linarez could submit a petition for remission or mitigation within thirty days from his receipt of the notice and apprised him that if he desired to file a claim of ownership of the currency with the DEA, he had to do so within twenty days of the first date of publication of the notice of seizure in the USA Today. The notice also set forth, in bold text, the address to which Linarez should send any petition for remission or mitigation, claim of ownership and bond, or other correspondence. On August 19, 1991, the DEA received a signed certified mail return receipt reflecting delivery of the notice to Linarez's address.

Linarez did not avail himself of the administrative procedures for challenging the seizure and proposed forfeiture by filing a petition for remission or mitigation within thirty days after August 19, 1991, or by filing a claim of ownership and bond with the DEA within twenty days after August 21, 1991. Instead, on September 11, 1991, he filed a complaint in the district court seeking to recover the $12,417, as well as $634 from Marks Brothers Jewelers and $187 from the Village of Lombard Police Department, money that he claimed the parties had retained for their own use without justification. He alleged that the DEA had seized the currency without probable cause in violation of his Fourth Amendment right to be free from unreasonable seizures. The government moved to dismiss Linarez's complaint for lack of subject matter jurisdiction or, in the alternative, for summary judgment. It asserted that Linarez's failure to file a claim of ownership and bond within twenty days after August 21, 1991, deprived the district court of jurisdiction to adjudicate the complaint. In response to the government's motion Linarez moved for summary judgment and made two allegations that he had not made in his complaint: that the DEA had failed to publish the notice of seizure in compliance with 19 U.S.C. Sec. 1607(a), and that the delay between seizure of the currency in September of 1990 to the commencement of forfeiture proceedings in July of 1991 had deprived him of his right to a speedy trial. He did not respond to the government's jurisdictional arguments. The district court granted the government's motion to dismiss, stating that it lacked jurisdiction over Linarez's complaint because Linarez sought recovery of the seized currency, and "an administrative forfeiture proceeding is the exclusive recovery forum for items that are not being held for use as evidence."

II. ISSUES

Linarez...