U.S. v. $40,877.59 in U.S. Currency

• Decision Date: 17 August 1994
• Docket Number: No. 93-2401,93-2401
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. $40,877.59 IN UNITED STATES CURRENCY, Defendant, Anas Malik Dohan, Claimant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1151

32 F.3d 1151

UNITED STATES of America, Plaintiff-Appellee, v. $40,877.59 IN UNITED STATES CURRENCY, Defendant, Anas Malik Dohan, Claimant-Appellant.

No. 93-2401.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 3, 1994.

Decided Aug. 17, 1994.

Donna Eide (argued), Office of the U.S. Atty., Indianapolis, IN, for plaintiff-appellee.

Michael Vatis, Mayer, Brown & Platt, Washington, DC, for defendant.

Michael Vatis, Alan E. Untereiner (argued), Michael R. Bromwich, Mayer, Brown & Platt, Washington, DC, for appellant.

Before CUMMINGS and CUDAHY, Circuit Judges, and ROSZKOWSKI, District Judge. ^*

ROSZKOWSKI, District Judge.

This is an appeal from a default judgment entered by the district court for the Southern District of Indiana. The district court applied the fugitive disentitlement doctrine to bar the claimant-appellant from contesting the forfeiture of the defendant funds. In this action, filed pursuant to 18 U.S.C. Sec. 981, we are called upon to decide whether that doctrine should be expanded to apply to civil forfeitures to bar fugitive-claimants from defending against the seizure of their property by the United States government. For the reasons that follow, we hold that the doctrine should not be applied in such actions.

Claimant-Appellant, Anas Malik Dohan, is an Iraqi businessman residing in Amman, Jordan. In October of 1989, Dohan made a brief trip to the United States, apparently his first and only trip to this country. While visiting his brother in Indianapolis, Indiana, Dohan opened an account at the Indiana National Bank. The funds in that account are the subject of this forfeiture action.

The following summer, in August of 1990, Iraq invaded Kuwait, precipitating the Persian Gulf War. Immediately thereafter, President George Bush issued Executive Orders 12722 and 12724 which prohibited the exportation of goods to Iraq. In April of 1991, Dohan and two other individuals were indicted in the Eastern District of Virginia for the violation of those Executive Orders by allegedly shipping, or conspiring to ship, high technology equipment to Iraq. One defendant, Mohammad Jafar, was tried and acquitted; the charges against another co-defendant, Zaid Jafar, were dismissed. Dohan remains the subject of that federal indictment. He has resided in Jordan since the Gulf War and has not travelled to the United States to defend the charges.

On October 31, 1991, United States Customs Service agents seized all of the funds in Dohan's bank account, and the government initiated forfeiture proceedings in the Southern District of Indiana alleging that the defendant funds were involved in illegal transactions or attempted transactions by Dohan. On December 21, 1992, Dohan filed a claim of ownership to the funds. The government moved to strike Dohan's claim, contending that he was a fugitive from justice and therefore "disentitled" from defending against the forfeiture action. The district court granted the motion. The government then moved for a default judgment, which the court granted on May 27, 1993. Thus, without a hearing of any kind, judgment was entered forfeiting the defendant funds to the United States.

The fugitive disentitlement doctrine began as an equitable doctrine of criminal appellate procedure to be applied at the discretion of the appellate court. It was developed over a century ago by the Supreme Court in Smith v. United States, 94 U.S. 97, 24 L.Ed. 32 (1876), where it was used to dismiss the appeal of a convicted criminal who became a fugitive during the pendency of his appeal. In early opinions, the Court applied the doctrine out of concern that a judgment adverse to the fugitive-appellant would not be enforceable against him. Id. at 97; Bonahan v. Nebraska, 125 U.S. 692, 8 S.Ct. 1390, 31 L.Ed. 854 (1887); Eisler v. United States, 338 U.S. 189, 69 S.Ct. 1453, 93 L.Ed. 1897 (1949). The Court also thought it unfair that the fugitive-appellant could accept the benefits from a favorable adjudication of his appeal, but could choose to avoid the consequences of an adverse adjudication. Smith, 94 U.S. at 97.

Since then, the Supreme Court has offered other rationale for the doctrine. The Court has reasoned that a fugitive's escape acts as a waiver of his right to appeal; that disentitlement serves an important deterrent function; and that disentitlement promotes an efficient and dignified appellate practice. Molinaro v. New Jersey, 396 U.S. 365, 366, 90 S.Ct. 498, 498, 24 L.Ed.2d 586 (1970); Estelle v. Dorrough, 420 U.S. 534, 537, 95 S.Ct. 1173, 1175, 43 L.Ed.2d 377 (1975); Ortega-Rodriguez v. United States, --- U.S. ----, ----, 113 S.Ct. 1199, 1204-05, 122 L.Ed.2d 581 (1993).

Some circuits have expanded the doctrine, using it in civil suits against a fugitive from a separate criminal case who seeks affirmative relief from the court. See, e.g., Doyle v. United States, 668 F.2d 1365 (D.C.Cir.1981), cert. denied, 455 U.S. 1002, 102 S.Ct. 1636, 71 L.Ed.2d 870 (1982); Schuster v. United States, 765 F.2d 1047 (11th Cir.1985); Conforte v. Commissioner, 692 F.2d 587 (9th Cir.1982); Broadway v. City of Montgomery, 530 F.2d 657 (5th Cir.1976). Four Circuits have expanded the doctrine further, upholding its use by district courts in civil forfeiture proceedings to bar fugitives from defending against the confiscation of their property by the United States government. These cases hold that a claimant who is a fugitive in a related criminal proceeding should not be allowed to defend against the forfeiture because he has "flouted" the authority of the court and thus waived his right to due process. See, e.g., United States v. Eng, 951 F.2d 461 (2d Cir.1991); United States v. $45,940 in United States Currency, 739 F.2d 792 (2d Cir.1984); United States v. $129,374 in United States Currency, 769 F.2d 583 (9th Cir.1985), cert. denied sub nom. Geiger v. United States, 474 U.S. 1086, 106 S.Ct. 863, 88 L.Ed.2d 901 (1986); United States v. Timbers Preserve, Routt County, Colorado, 999 F.2d 452 (10th Cir.1993); United States v. One Parcel of Real Estate at 7707 S.W. 74th Lane, Miami, Dade County, Florida, 868 F.2d 1214 (11th Cir.1989).

The First Circuit was confronted with this issue in a forfeiture action, but rejected the use of the doctrine in the particular case. United States v. Pole 3172, Hopkinton, 852 F.2d 636, 643-44 (1st Cir.1988). That court has not ruled on the applicability of the doctrine to civil forfeitures in general. Id. The Third Circuit has not decided the issue, but has indicated that they would probably allow the use of the doctrine in civil forfeitures based on United States v. Eng. United States v. Contents of Accounts Nos. 3034504504 and 144-07143 at Merrill Lynch, Pierce, Fenner and Smith, Inc., 971 F.2d 974, 987 n. 9 (3rd Cir.1992).

The Sixth Circuit, however, has disallowed the use of the doctrine in civil forfeitures. In United States v. $83,320 in United States Currency, 682 F.2d 573 (6th Cir.1982), the court was asked to dismiss the appeal of the claimant because he was a fugitive. They refused to do so, holding that Molinaro and related cases were sufficiently distinguishable from forfeiture cases as to make an expansion of the doctrine unwarranted. Id. at 576. The court was also concerned about the rights of non-fugitives whose claims would be barred because the fugitive could not bring a claim. Id. They held that a claimant's fugitive status should not be allowed to prevent others who may have an interest in the defendant property from asserting a claim. ¹

The Supreme Court has not reviewed any case in which the doctrine was used by a district court in a civil forfeiture proceeding to bar a fugitive from asserting a claim to the property. However, the Supreme Court has established that notwithstanding an individual's status, where he is vulnerable to being sued, he has the right to defend himself in the action brought against him; that the constitutional right to defend is inseparable from the liability to suit. McVeigh v. United States, 78 U.S. (11 Wall.) 259, 20 L.Ed. 80 (1870); Hovey v. Elliott, 167 U.S. 409, 17 S.Ct. 841, 42 L.Ed. 215 (1897). We think that the right to defend applies to fugitives as well.

In McVeigh v. United States, the Supreme Court ruled that an alien enemy had the right to defend his property in a forfeiture proceeding initiated by the government. 78 U.S. 259. The government contended that McVeigh, as an alien enemy, "could have no locus standi in that forum." Id. at 267. But the Court held that "if assailed there, he could defend there. The liability and the right are inseparable. A different result would be a blot upon our jurisprudence and civilization.... Whatever may be the extent of the disability of an alien enemy to sue in the courts of the hostile country, it is clear that he is liable to be sued, and this carries with it the right to use all the means and appliances of defence." Id. (citations omitted).

The Supreme Court confronted a similar issue in Hovey v. Elliott, 167 U.S. 409, 17 S.Ct. 841, 42 L.Ed. 215. In that case, the Court considered whether a defendant's answer could be stricken and a default judgment entered against him because he was in contempt of court. The Court ruled that to deny a person the right to defend himself or his property as punishment for contempt is a violation of due process. Id. at 413-14, 17 S.Ct. at 843. Citing a long line of authority, the Court held that a contemnor is not entitled to be heard on matters of "mere favor", but cannot be deprived of his right to defend an action against his person or his property. Id. at 423-24, 17 S.Ct. at 846-47.

More recently, in United States v. Sharpe, 470 U.S. 675, 105 S.Ct. 1568, 84 L.Ed.2d 605 (1985), the Supreme Court applied this principle to the fugitive disentitlement doctrine. In Sharpe, the defendant's conviction was reversed on appeal to the Fourth Circuit. After the Supreme Court granted the government's petition for certiorari, the...