U.S. v. 328 Pounds More or Less, of Wild Ginseng
| Decision Date | 09 December 2004 |
| Docket Number | No. CIV. 1:03CV288.,CIV. 1:03CV288. |
| Citation | 347 F.Supp.2d 241 |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | UNITED STATES of America, Plaintiff, v. 328 POUNDS, MORE OR LESS, OF WILD AMERICAN GINSENG, Defendant. |
Thomas R. Ascik, Asst. U.S. Attorney, Asheville, NC, for Plaintiff.
Clifford C. Marshall, Marshall & Roth, PLLC, Asheville, NC, J. Scott Broome, Rotatori, Bender, Gragel, Stoper & Alexander, Co., LPA, Cleveland, OH, for Claimants.
Michael J. Smith, St. Simons Island, GA, Claimant Pro Se.
THIS MATTER is before the Court on Plaintiff's motion for judgment on the pleadings against Claimants Hong Kong Hang Wo, Inc. ("HKHW"), American Root Enterprises, LLC ("ARE"), and Lorraine Chaffin; and Claimants ARE and HKHW's motion for leave to file a joint reply in response to the Plaintiff's reply in support of the motion for judgment on the pleadings.
On October 18, 2002, Special Agent Thomas Chisdock with the U.S. Fish and Wildlife Service pulled over Mark Chafin on Interstate 40-West at the first rest area in Tennessee after crossing the North Carolina-Tennessee state border. Affidavit of Thomas Chisdock, filed December 11, 2003, at 1-2. The agent seized approximately 328 pounds of North American wild ginseng from Chafin's automobile. Id., at 2. The ginseng was seized because Chafin had allegedly transported the ginseng across the state border as part of a commercial enterprise without obtaining valid export certificates from the North Carolina Department of Agriculture. Id., at 1-2. Criminal charges against Chaffin were dropped after his death.
On December 18, 2003, in response to a complaint filed by the United States, the Court issued an order and warrant for the arrest of the 328 pounds of ginseng. Order and Warrant for Arrest In Rem, filed December 18, 2004, at 1. Notice was served on all parties believed likely to claim an interest in the seized ginseng. See Public Notice of Action and Seizure of Property by United States, filed December 29, 2003. Claimants HKHW, ARE, and Lorraine Chaffin, through her father Michael Smith, filed claims asserting an interest in the ginseng in response to the Government's complaint. HKHW and ARE also properly filed answers in response to the Government's complaint.
On August 24 and August 31, 2004, the United States filed motions to dismiss and for judgment on the pleadings under Fed.R.Civ.P. 12(c) against Claimants ARE and HKHW, respectively, on the grounds that neither has a recognizable ownership interest in the ginseng subject to forfeiture proceedings and, therefore, has no Article III standing to challenge the forfeiture. The United States also moved for dismissal and judgment on the pleadings against Claimant Lorraine Chaffin on the grounds that she failed to properly file a claim and answer, and failed to deny the averments of the United States. Claimants HKHW and ARE filed timely responses to the motion for judgment on the pleadings, while Claimant Lorraine Chaffin failed to respond. The United States filed timely answers to the responses of both HKHW and ARE on October 15, 2004. On November 22, 2004, Claimants HKHW and ARE filed a joint reply to the United States' answers along with a motion for leave to file the joint reply. The United States has since filed an answer to the joint reply.
The Court grants the motion of Claimants HKHW and ARE for leave to file a joint reply; the United States has filed an answer to the joint reply and did not oppose the motion.
The United States moves for dismissal and judgment on the pleadings on the grounds that Claimants HKHW and ARE do not have a recognizable ownership interest in the ginseng subject to forfeiture proceedings and, therefore, do not have Article III standing to challenge the forfeiture.
In adjudicating a motion for judgment on the pleadings under Rule 12(c), the Court should apply the same standard as when evaluating a motion to dismiss under Rule 12(b)(6). Burbach Broad. Co. of Delaware v. Elkins Radio Corp., 278 F.3d 401, 406 (4th Cir.2002). "A motion to dismiss under [Rule 12(c)] tests the sufficiency of a [claim], it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of North Carolina v. Martin, 980 F.2d 943, 952 (4th Cir.1992). Therefore, the Court should grant a motion for judgment on the pleadings "`only ... if, after accepting all well pleaded allegations in the [non-moving party's claim] as true and drawing all reasonable factual inferences from those facts in [that party's favor], it appears certain that the [non-moving party] cannot prove any set of facts in support of [its] claim entitling [it] to relief."' Volvo Trademark Holding Aktiebolaget v. CLM Equip. Co., Inc., 236 F.Supp.2d 536, 540 (W.D.N.C.2002), aff'd in part, vacated in part on other grounds, 386 F.3d 581 (4th Cir.2004) (); see also, Bruce v. Riddle, 631 F.2d 272, 274 (4th Cir.1980) (applying standard under Rule 12(c)).
On October 14, 2002, Chang Ho, an officer of HKHW, agreed in a phone conversation with Mark Chaffin to purchase 120 pounds of ginseng, 100 pounds from Tennessee and 20 pounds from North Carolina. Response of HKHW to the United States' Motion to Dismiss and/or for Judgment on the Pleadings ["HKHW Response"], filed September 14, 2004, at 2. Pursuant to the agreement, HKHW sent a check in the amount of $46,275 on October 15, 2002, to Chaffin's business, Noblestar Ginseng International, for the 120 pounds of ginseng. Id. The check was negotiated by Chaffin on October 17, 2002. Id. HKHW received from Chaffin the 100 pounds of Tennessee ginseng with proper legal documentation, but never received the 20 pounds of North Carolina ginseng for which HKHW paid $8,275. Id. Additionally, on October 17, 2002, Chaffin called HKHW and offered to sell an additional 100 pounds of North Carolina ginseng, to which HKHW agreed. Id., at 3. Pursuant to this agreement, HKHW sent another check to Chaffin in the amount of $43,000 which was negotiated on October 22, 2002. Id. HKHW never received this additional 100 pounds of North Carolina ginseng from Chaffin. Id.
On October 18, 2002, David Kong, an officer of Claimant ARE, agreed to purchase 200 pounds of ginseng from Chaffin, 100 pounds from Tennessee and 100 pounds from North Carolina. Response of ARE to the United States' Motion to Dismiss and/or for Judgment on the Pleadings ["ARE Response"], filed September 14, 2004, at 2. On October 23, 2002, Claimant ARE sent Chaffin a check in the amount of $80,836 which was negotiated by Chaffin the same day. Id. While ARE received the Tennessee ginseng from Chaffin, it never received the 100 pounds of North Carolina ginseng, which made up $43,000 of the amount paid. Id., at 2-3.
A forfeiture proceeding is an "in rem action against the seized property brought under the fiction that the property itself is guilty of facilitating the crime." United States v. Real Property Described in Deeds Recorded at Book/Page 839/846, 639/840, 639/834, 639/287, and 610/727 Henderson County Registry and Insurance Proceeds, 962 F.Supp. 734, 736-37 (W.D.N.C.1997). In a forfeiture proceeding, the Government must first prove by a preponderance of the evidence that the property at issue in the proceeding is subject to forfeiture. United States v. Mondragon, 313 F.3d 862, 865 (4th Cir.2002) (citing 18 U.S.C. § 983(c)(1)). Once the Government has satisfied this standard, the burden then shifts to a claimant, who must prove by a preponderance of the evidence that he or she is entitled to some affirmative defense.1 United States v. 630 Ardmore Drive, City of Durham, Parkwood Township, Durham County, North Carolina, 178 F.Supp.2d 572, 580 (M.D.N.C.2001) (citing 18 U.S.C. § 983(d)). However, "[i]n order to contest a forfeiture, a claimant first must demonstrate a sufficient interest in the property to give him Article III standing; otherwise there is no case or controversy, in the constitutional sense, capable of adjudication in the federal courts." Real Property Described in Deeds, 962 F.Supp. at 737 (internal citations omitted). Therefore, a claimant contesting a forfeiture must put forth some evidence of ownership over the forfeited property. For purposes of standing to challenge a forfeiture, Congress has interpreted the term "owner" broadly "to include any person with a recognizable legal or equitable interest in the property seized." United States v. $3,000 in Cash, 906 F.Supp. 1061, 1065 (E.D.Va.1995) (citations omitted). However, a claimant must come forward with more than just "a mere assertion" of ownership, and a Court will "`generally look to indicia of dominion and control such as possession, title, and financial stake.'" Real Property Described in Deeds, 962 F.Supp. at 737 (quoting United States v. $38,570 U.S. Currency, 950 F.2d 1108, 1112 (5th Cir.1992)). In determining the scope of a claimant's ownership, "`it is appropriate to refer to state law [.]'" $3,000 in Cash, supra, (quoting United States v. Smith, 966 F.2d 1045, 1054 n. 10 (6th Cir.1992)).
The parties here dispute which state law governs the determination of HKHW and ARE's ownership interest in the ginseng; the Claimants allege Wisconsin law governs and the United States alleges North Carolina law governs. However, both North Carolina and Wisconsin have adopted Article II of the Uniform Commercial Code ("U.C.C.") to govern transactions in goods. See N.C. Gen.Stat. §§ 25-2-101 et seq.; Wisc. Stat. §§ 401.101 et seq. Article II...
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