Mesa Valderrama v. U.S.

• Decision Date: 22 July 2005
• Docket Number: No. 04-14834.,04-14834.
• Citation: 417 F.3d 1189
• Parties: Fernando MESA VALDERRAMA, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

417 F.3d 1189

Fernando MESA VALDERRAMA, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 04-14834.

United States Court of Appeals, Eleventh Circuit.

July 22, 2005.

COPYRIGHT MATERIAL OMITTED

Gerson M. Joseph, Sandler Travis & Rosenberg, Plantation, FL, William Vito Roppolo, Jr., Baker & McKenzie, LLP, Miami, FL, for Plaintiff-Appellant.

Madeleine R. Shirley, Anne R. Schultz, Asst. U.S. Atty., Jeanne M. Mullenhoff, Miami, FL, for U.S.

Appeal from the United States District Court for the Southern District of Florida.

Before DUBINA and WILSON, Circuit Judges, and COOGLER^*, District Judge.

DUBINA, Circuit Judge:

Appellant, Fernando Mesa Valderrama ("Mesa"), appeals the district court's order granting the Government's Motion to Dismiss Mesa's Motion to Set Aside Administrative Forfeiture, pursuant to 18 U.S.C. § 983(e). For the reasons that follow, we affirm.

I. BACKGROUND

A. Facts

Mesa is a resident and citizen of Bogota, Colombia. In 1990, Mesa purchased three investment policies from Eagle Star International Life ("Eagle Star"). Eagle Star held the policies in accounts located on the Isle of Man. Mesa made annual contributions to the policies for over a decade, but in March 2002 he requested a partial withdrawal of $100,000 from his accounts. Prior to this request, Mesa had never withdrawn money from the accounts.

On or about April 18, 2002, Eagle Star informed Mesa that it would mail a check, drawn from JP Morgan Chase Manhattan Bank, for $100,000 to its office in Bogota, Colombia. Eagle Star shipped the check in an Airborne Express package addressed to Jorge Santallana ("Santallana"), the Eagle Star registered agent in Bogota, Colombia. United States Customs officials in Miami, Florida, seized the check en route from the Isle of Man to Bogota, Colombia. According to the Government, Customs seized the check for an alleged violation of 18 U.S.C. § 1956, laundering of a monetary instrument.

On May 7, 2002, Mark F. Edwards ("Edwards"), an officer with the Customs Office of Fines, Penalties, and Forfeitures, sent written notice of the check's seizure to Santallana. The notice identified the seized check as "one (1) Chase Manhattan Bank for $100,000, in U.S. Dollars" that was "subject to forfeiture under the provisions of [T]itle 18, United States Code, [S]ection 981 for violation of [T]itle 18, United States Code, [S]ection 1956 in that the monies are the proceeds of unlawful activity." The notice informed Santallana that all correspondence must include the referenced seizure case number. The notice also detailed the legal options available in response to the seizure. Customs included in the notice important documents, such as an "Election of Proceedings" form. The notice instructed the recipient to check options 1 or 3 on the Election of Proceedings Form in order to contest the agency's forfeiture action, and it advised the recipient that he had 35 days from the date of the letter to notify Customs of his decision. Option 1 in the Election of Proceedings form provided:

I REQUEST THAT U.S. CUSTOMS DELAY FORFEITURE PROCEEDINGS AND CONSIDER MY PETITION OR OFFER ADMINISTRATIVELY. My Petition or offer is attached herewith. By making this request I understand that I am giving up my right for the immediate commencement of administrative forfeiture proceedings as provided under 19 U.S.C. 1607 and 19 CFR Part 162. If administrative forfeiture has begun, it will be stopped until my petition or offer is considered. However, I understand that at any time I can request, in writing, that U.S. Customs begin administrative forfeiture proceedings and they will continue to consider my petition or offer. I also understand that at any time I can file a claim with U.S. Customs (as described in Box 3 below) and their consideration of my petition or offer will stop and the case will be sent to the U.S. Attorney for court action.

Option 3 provided:

I REQUEST THAT U.S. CUSTOMS SEND MY CASE FOR COURT ACTION. Please immediately send the case to the U.S. Attorney for court action. I have fully completed, signed and attached a SEIZED ASSET CLAIM FORM as required by law. I understand that if I have not fully completed this form, U.S. Customs will treat my submission as a petition for relief (as described in Box 1, above).

On May 31, 2002, Mesa responded to Customs's letter, choosing option 1: filing an administrative petition to contest the forfeiture. On June 10, 2002, Mesa filed his administrative petition, in which he claimed that the funds in the accounts were not the proceeds of unlawful activity and requested the return of his check. Following a Customs's investigation, in April 2003, Special Agent Daniel Flores ("Agent Flores") of the Department of Homeland Security, Immigration and Customs Enforcement ("ICE") contacted Mesa. After some correspondence and conversation, including at least one in-person meeting, Mesa and Agent Flores agreed to a settlement whereby Mesa would waive his claim to $40,000 and the Government would return $60,000.¹ Agent Flores informed Mesa that he would prepare the settlement agreement and send it to Mesa.

On June 30, 2003, United States Customs and Border Protection ("CBP") sent Mesa a letter denying his request for administrative relief from forfeiture. At this time Mesa had not received a written settlement agreement from Agent Flores. The denial letter informed Mesa that administrative forfeiture proceedings would be initiated thirty days from the date of the letter. Mesa claims that he disregarded this letter because of his settlement agreement with Agent Flores. In August 2003, CBP sent Mesa another letter informing him that CBP would soon initiate summary forfeiture proceedings regarding Mesa's check. However, the letter also advised Mesa that within 20 days from the time CBP first published notice of the proceedings, Mesa could elect to have the matter referred to federal court for judicial forfeiture proceedings. Again, Mesa disregarded the letter. Beginning on August 14, 2003, the Notice of Seizure and Intent to Forfeit the check was published in the Miami Daily Business Review for three successive weeks. On September 3, 2003, the check was summarily forfeited and a declaration of forfeiture against the check was issued the following day. After learning Mesa had obtained new counsel and receiving a request on Mesa's behalf to reinstate the case and refer it to the United States Attorney for judicial forfeiture proceedings, on September 18, 2003, Customs sent Mesa's attorney correspondence detailing the foregoing forfeiture proceedings and explaining that there was no basis to reinstate the case.

Although Customs had forfeited Mesa's check, he believed that Customs would be unable to redeem the check because he had not endorsed it. Therefore, Mesa contacted Eagle Star and requested a new check. On or about November 25, 2003, however, Eagle Star informed Mesa by letter that pursuant to instructions received from Customs, Eagle Star could not issue a new check.

B. Procedural History

On March 22, 2004, more than six months after learning that Customs had administratively forfeited his check, Mesa filed a Motion to Set Aside Administrative Forfeiture, pursuant to 18 U.S.C. § 983(e) and 28 U.S.C. § 1331, in district court. In support of his motion, Mesa argued that:

1. The non-negotiable check was not subject to administrative forfeiture proceedings as a matter of law;

2. Customs's warrantless seizure of the check violated the Fourth Amendment and applicable statutory authority;

3. Customs's warrantless constructive seizure of the Accounts violated the Fourth Amendment and applicable statutory authority;

4. Customs failed to serve the statutorily mandated notice that it had seized the Accounts thereby violating the Fifth Amendment and rendering the forfeiture void ab initio;

5. Customs failed to serve the statutorily mandated notice that it had commenced summary administrative forfeiture proceedings, thereby violating the Fifth Amendment and rendering the forfeiture void ab initio.

The Government filed a Motion to Dismiss, arguing that the court lacked subject matter jurisdiction to address Mesa's first three arguments because a claimant may only raise procedural due process claims concerning an administrative forfeiture. The Government further alleged that Mesa's fourth argument was subject to dismissal because Mesa received constructive notice of the constructive seizure of his accounts. The Government also claimed that it complied with all notice requirements regarding the administrative forfeiture of Mesa's check, thus negating Mesa's fifth argument. Lastly, the Government urged the district court not to exercise its equitable jurisdiction to consider the case because Customs did not seize the check in callous disregard of Mesa's constitutional rights, and Mesa had an adequate remedy at law that he elected not to employ.

Mesa filed a motion in opposition to the Government's Motion to Dismiss, claiming that judicial forfeiture was the only option for forfeiting the check because the unendorsed check was not a monetary instrument. Mesa also argued that Customs had constructively seized his funds, and he challenged Customs's conclusion that the funds tied to the check were connected to illegal transactions for the exchange of United States currency for Colombian pesos.

After the government replied and Mesa filed a sur-reply, the district court issued a final order granting the Government's Motion to Dismiss. Valderrama v. United States, 326 F.Supp.2d 1333, 1339 (S.D.Fla. 2004). The district court concluded that it lacked subject matter jurisdiction over Mesa's challenges to the legitimacy of the administrative forfeiture proceeding and the Government's alleged warrantless seizure of his property. Furthermore, the district court found that Mesa could not contest the agency's administrative forfeiture declaration because he had received adequate...