Sarit v. U.S. Drug Enforcement Admin.

Decision Date04 January 1993
Docket NumberNo. 92-2001,92-2001
Citation987 F.2d 10
PartiesJorge SARIT and Dennie Espaillat, Plaintiffs, Appellants, v. U.S. DRUG ENFORCEMENT ADMINISTRATION, et al., Defendants, Appellees. . Heard
CourtU.S. Court of Appeals — First Circuit

David N. Cicilline, Providence, RI, for appellants.

Rachel V. Lee, Trial Atty., Civil Div., U.S. Dept. of Justice, with whom Stuart M. Gerson, Asst. Atty. Gen., U.S. Dept. of Justice, Helene M. Goldberg, Director, Torts Branch, Civ. Div., U.S. Dept. of Justice, Washington, DC, Michael P. Iannotti, Asst. U.S. Atty. for the District of Rhode Island and Lincoln C. Almond, U.S. Atty. Providence, RI, for the District of Rhode Island were on brief, for appellees.

Before TORRUELLA, Circuit Judge, BOWNES, Senior Circuit Judge, CYR, Circuit Judge.

BOWNES, Senior Circuit Judge.

This case involves plaintiffs-appellants' attempts to recover $41,448.00 in U.S. currency, which was seized by the United States Drug Enforcement Administration ("DEA") and has now been forfeited. In their civil action under 28 U.S.C. § 1331 against the DEA and its agents, plaintiffs appeal two rulings by the district court. First, plaintiffs challenge the court's grant of partial summary judgment for the defendants upon its finding that plaintiffs had received constitutionally adequate notice of the administrative forfeiture proceeding. Second, plaintiffs challenge the court's dismissal of the case on the basis that, once it granted partial summary judgment on the Fifth Amendment notice claim, it no longer had jurisdiction to hear plaintiffs' Fourth Amendment claim. We affirm the decision of the district court.

I. Background

The procedural background of this case is important and we rehearse it in detail, proceeding chronologically. On July 28, 1989, DEA agents seized $41,448.00 from the plaintiffs' then-residence located at 114 Alvin Street in Providence, Rhode Island. The attendant search was conducted without a warrant. On August 21, 1989, plaintiffs' counsel filed a motion pursuant to Fed.R.Crim.P. 41(e), 1 seeking return of the currency. On September 1, Assistant U.S. Attorney Michael Iannotti objected to this motion and filed a memorandum of law which has played a focal role in the arguments before this court. In that memorandum, he informed plaintiffs and the district court that the currency was being held for administrative forfeiture pursuant to Title 21 U.S.C. § 881(d) and Title 19 U.S.C. § 1607. The memorandum provided the seizure number that had been assigned to the currency. The memorandum also stated that "a notice [would] be sent to all those who may have an interest in the currency," and that "publication [would] commence within the next two months." The Assistant U.S. Attorney averred that the assignment of a seizure number would permit the plaintiffs "at any time, without waiting for the DEA to take any further action, to file a claim and cost bond with the DEA thus causing the DEA to refer the matter to the U.S. Attorney for the initiation of judicial forfeiture proceedings" (emphasis in original).

On or about September 19, the DEA sent notice of the administrative forfeiture proceeding by certified mail to 114 Alvin Street, where the currency had been seized. The notice contained required information, not included in the memorandum, concerning procedures to be followed, deadlines to be met, and the right of a petitioner to proceed in forma pauperis in lieu of the posting of a cost bond. This notice was subsequently returned to the DEA "unclaimed." The DEA made no further attempts to notify the plaintiffs or their counsel of the pending forfeiture other than by publication.

On September 21, following a conference with the court pursuant to the 41(e) motion, plaintiffs sent a letter to the DEA advising it of their intention to file a claim under the Federal Tort Claims Act. The first publication notice, marking the beginning of the twenty-day period after which plaintiffs' right to file a claim and to post a cost bond would expire, appeared in the newspaper USA Today, on September 27. On October 13, the district court denied the plaintiffs' 41(e) motion on equitable grounds, deferring to the administrative forfeiture proceedings. The plaintiffs' right to file a claim with the DEA expired on October 17. On November 2, the administrative forfeiture was decreed and entered.

On November 8, the plaintiffs, having procured money to post a cost bond, filed a formal claim with the DEA. Plaintiffs also moved for reconsideration of their 41(e) motion. On December 21, defendants objected to the motion for reconsideration and included, in their accompanying memorandum, the information that the currency had already been administratively forfeited. The court denied plaintiffs' motion as moot because the forfeiture had been completed. After learning that their property had been forfeited, plaintiffs filed a motion to vacate the forfeiture on December 29, which motion was dismissed by the court for lack of jurisdiction. Underscoring its awareness that plaintiffs had been trying to resolve this matter for several months, the court advised plaintiffs in its order that the proper method for collateral attack was a civil rights action under Title 28 U.S.C. § 1331.

Thereafter, plaintiffs filed a civil rights action against the DEA and its agents alleging violations of their rights under the Fifth Amendment, claiming insufficient notice of the administrative proceeding, and under the Fourth Amendment, claiming that the currency was seized in the course of a warrantless, non-consensual search. The district court initially denied defendants' motions to dismiss and for summary judgment, finding that the plaintiffs had stated a valid cause of action under 28 U.S.C. § 1331, by pleading violations of the Fourth and Fifth Amendments, and that sovereign immunity was waived under the Administrative Procedures Act, 5 U.S.C. § 701 et seq. The court found summary judgment inappropriate because of a dispute regarding consent in the Fourth Amendment claim, and the need for more evidence on the issue of adequate notice underlying the Fifth Amendment claim.

Both parties later filed motions for partial summary judgment on the issue of the adequacy of notice. The district court, on July 15, 1991, granted partial summary judgment for the defendants on the notice issue, finding it constitutionally sufficient that the government had sent notice to the address from which the currency had been seized. The court buttressed its conclusion with the fact that plaintiffs had received the Assistant U.S. Attorney's September 1 memorandum putting them on notice that a forfeiture proceeding would ensue.

Trial on the Fourth Amendment issue began on March 11. The defendants moved to dismiss the case for lack of jurisdiction. The plaintiffs moved for reconsideration of the court's grant of partial summary judgment on the notice issue. Upon deciding not to alter its grant of summary judgment, the court dismissed the case for lack of jurisdiction finding that, because the notice issue had been resolved against plaintiffs, they thereby lost the waiver of sovereign immunity that had allowed the court to entertain the case in the first instance.

II. Discussion
A. Notice/Due Process

We begin by addressing plaintiffs' claim that defendants failed adequately to notify them of the administrative forfeiture proceeding. Because the district court granted defendants' motion for summary judgment on this issue, our review is plenary, and we construe all factual inferences in favor of plaintiffs. See Damaris Rivera-Ruiz v. Leonardo Gonzalez-Rivera, 983 F.2d 332, 333 (1st Cir.1993) (citing E.H. Ashley & Co. v. Wells Fargo Alarm Servs., 907 F.2d 1274, 1277 (1st Cir.1990)).

Notice of impending forfeiture proceedings involving seizures valued at $500,000 or less is governed by Title 19 U.S.C. § 1607, which provides in pertinent part:

[T]he appropriate customs officer shall cause a notice of the seizure of such articles and the intention to forfeit and sell or otherwise dispose of the same according to law to be published for at least three successive weeks in such manner as the Secretary of the Treasury may direct. Written notice of seizure together with information on the applicable procedures shall be sent to each party who appears to have an interest in the seized article.

The regulations interpreting the publication requirement provide for publication in "a newspaper of general circulation in the judicial district in which the processing for forfeiture is brought." 21 C.F.R. § 1316.75(a) (1992). The publication notice must do the following:

(1) Describe the property seized and show the motor and serial numbers, if any; (2) state the time, cause, and place of seizure; and (3) state that any person desiring to claim the property may, within 20 days from the date of first publication of the notice, file with the custodian or DEA Asset Forfeiture Section a claim to the property and a bond with satisfactory sureties in the sum of $5,000 or ten percent of the value of the claimed property whichever is lower, but not less than $250.

21 C.F.R. § 1316.75(b) (1992).

There is no dispute that defendants sent notice with all required information to plaintiffs' last known address, the address from which the currency was seized. There is also no dispute that defendants issued proper notice by publication. Thus, defendants met the requirements of the statute.

Plaintiffs contend that defendants failed to satisfy the notice requirements of the Due Process Clause of the Fifth Amendment. Relying upon the Supreme Court's opinion in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950), plaintiffs argue that the notice in this case was not "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present...

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