U.S. v. 66 Pieces of Jade and Gold Jewelry

• Decision Date: 14 May 1985
• Docket Number: MERCEDES-BEN,Nos. 83-6347,VIN,83-6348,s. 83-6347
• Citation: 760 F.2d 970
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. 66 PIECES OF JADE AND GOLD JEWELRY, Defendant, Warren Clark Anderson, Claimant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. ONE 197711603672001815, California License 250 UVL, its tools and appurtenances, Defendant. Micheline Ly Sing Lao, Claimant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 970

760 F.2d 970

1 Fed.R.Serv.3d 1241

UNITED STATES of America, Plaintiff-Appellee, v. 66 PIECES OF JADE AND GOLD JEWELRY, Defendant, Warren Clark Anderson, Claimant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. ONE 1977 MERCEDES-BENZ, VIN 11603672001815, California

License 250 UVL, its tools and appurtenances, Defendant.

Micheline Ly Sing Lao, Claimant-Appellant.

Nos. 83-6347, 83-6348.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 10, 1985.

Decided May 14, 1985.

Kathryn A. Snyder, San Diego, Cal., for plaintiff-appellee.

Phillip A. DeMassa, San Diego, Cal., for claimant-appellant.

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

Before NELSON, CANBY, and HALL, Circuit Judges.

CYNTHIA HOLCOMB HALL, Circuit Judge:

By these consolidated appeals, ¹ defendant-claimant-appellant Warren Clark Anderson ("Warren"), and claimant-appellant Michelene Ly Sing Lao challenge the district court's judgment forfeiting various pieces of jade and gold jewelry and a Mercedes-Benz automobile, and assessing a civil penalty against Warren.

BACKGROUND

The claimants in this case had a close personal relationship from 1973 to 1978. During this time Warren and Ms. Lao frequently travelled in and out of the United States. Ms. Lao is currently a citizen of Tahiti and the registered owner of the Mercedes automobile in question.

This action is based on Warren's failure to declare certain items of jewelry as required by 19 U.S.C. Sec. 1497 ("Sec. 1497"). The factual dispute in the district court centered around the conduct of Customs Inspector Theresa Law and Customs Agent Seth Nadel at the San Ysidro Port of Entry on July 2, 1981. When the Mercedes arrived at the primary inspection area, it was driven by Wayne Anderson, Warren's father, with Mrs. Anderson, Warren's mother, in the front seat and Warren in the back seat. Law asked the Andersons what they were bringing into the country. Mr. Anderson responded "nothing," and Law asked the question again. Law testified that she distinctly remembered using the word "anyone" in asking the question the second time. According to Law's testimony, the second time she asked the question Mr. Anderson again responded "No" and Warren shook his head no. The district court found that Law's testimony that she inquired twice as to whether anyone was bringing anything into the country was "not disputed in any credible way." The district court also concluded that whether Warren had shaken his head negatively was of no significance. The court reasoned that because Law's question was addressed to "anyone," a non-response was the equivalent of a negative shake of the head.

Law then took the Andersons to the secondary inspection area, left the Andersons, and searched the Mercedes. She found one jade carving and two briefcases in the back seat. She brought one locked briefcase back into the secondary inspection area and asked who owned it. Warren claimed the briefcase and commented that Law had no respect for his property. Warren also told Law that the latches had been broken previously, and then opened the padlock on the briefcase. Law took the briefcase back outside, and found the other jade and gold items at issue in the briefcase. Shortly thereafter Agent Nadel arrived to investigate the incident. Law informed him of the situation and Nadel placed Warren under arrest, read him his Miranda rights, and proceeded to interrogate him. During the interrogation Warren informed Nadel that he had been a practicing Buddhist since 1974 and that he carried the jade and gold Buddhas in and out of the country with him when he traveled.

Warren was indicted on charges of smuggling and passport fraud on July 15, 1981. On December 22, 1981, he was convicted of passport fraud, and the smuggling charges were dismissed. The government filed a complaint for forfeiture of the jewelry on February 11, 1982. On September 29, 1983, Judge Keep entered judgment for the government, ordering forfeiture of the jade and gold jewelry and the Mercedes, and assessing a civil penalty of $26,265 against Warren. Claimants failed to seek a stay of the judgment pending appeal, and the Mercedes and the jade and gold were turned over to the United States Customs Service by service of process of the United States Marshal in December, 1983.

DISCUSSION

1. Jurisdiction

This court has held that jurisdiction in a forfeiture action is defeated when the property in question, the res, is removed from the control of the court. United States v. United States Currency in the Amount of $110,000.00, 735 F.2d 326, 327 (9th Cir.1984); United States v. $57,480.05 United States Currency and Other Coins, 722 F.2d 1457, 1458-59 (9th Cir.1984); American Bank of Wage Claims v. Registry of the District Court of Guam, 431 F.2d 1215, 1218-19 (9th Cir.1970). Because forfeiture proceedings are in rem, the court's subject matter jurisdiction is dependent on its continuing control over the property. $57,480.05, 722 F.2d at 1458. Furthermore, once the property is released from the court's control, the court is powerless to effectuate a remedy because it lacks personal jurisdiction to order the persons holding the property to return it. Id. at 1459; American Bank, 431 F.2d at 1219. The court's control over the res can be protected by a stay of the district court's judgment pending appeal. $57,480.05, 722 F.2d at 1459. In this case, however, the claimants failed to obtain a stay, and the Mercedes and the jewelry have been turned over to the Customs Service. Warren argues that the jewelry was in the control of the district court as an exhibit and should not have been released to the Customs Service without an order of the court. We find that it would be inappropriate to have the availability of in rem subject matter jurisdiction determined by whether or not the property in question has been entered as an exhibit. Forfeiture claimants can protect their right to an appeal by seeking a stay of the district court's judgment whether the property has been made an exhibit or not. Where the claimants have failed to seek the stay available to them, we will not protect their right to an appeal by extending the concept of the court's control over exhibits to meet this situation. Under these circumstances, we lack subject matter jurisdiction to determine the validity of the forfeitures in question.

We have jurisdiction to determine the validity of the $26,265 civil penalty even though the jewelry and the Mercedes have been placed beyond the court's control. In addition to forfeiture, the amended complaint in the jewelry case sought a civil penalty from Warren as the person who failed to make the required declaration under Sec. 1497. The civil penalty claim is based on in personam jurisdiction over Warren in addition to the in rem jurisdiction of the civil forfeiture action. We find that the release of the res and the loss of in rem jurisdiction over the forfeited items does not affect this court's in personam jurisdiction to review the civil penalty assessed against Warren. See United States v. An Article of Drug Consisting of 4,680 Pails, 725 F.2d 976, 982-84 (5th Cir.1984) (in personam jurisdiction before and after release of res made continuing control over res non-essential to jurisdiction). Accordingly, those portions of these consolidated appeals which challenge the validity of the forfeitures are dismissed, and we turn to the merits of Warren's challenges to the civil penalty.

2. Failure to Declare the Jade and Gold

The district court found that the government was entitled to a civil penalty of $26,265, the value of the jewelry, because Warren failed to declare the jewelry as required under Sec. 1497. The district court's factual findings, such as the finding that Warren had an opportunity to make a declaration, are reviewable under the clearly erroneous standard. United States v. McConney, 728 F.2d 1195, 1200 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984); United States v. One Twin Engine Beech Airplane, 533 F.2d 1106, 1107-08 (9th Cir.1976). The questions of law, such as whether the conduct in question violated Sec. 1497, are reviewable de novo. One Twin Engine Beech Airplane, 533 F.2d at 1108.

In forfeiture cases, the government must first make a preliminary showing of probable cause to believe that the property was used in the violation. 19 U.S.C. Sec. 1615. The burden then falls upon the claimant either (1) to refute the government's showing of probable cause, or (2) to prove that the property was not used for the illegal purpose as alleged. Id. See United States v. One 56-Foot Yacht Named Tahuna, 702 F.2d 1276, 1281 (9th Cir.1983). If the claimant chooses to prove that there was no violation, he must do so by a preponderance of the evidence. Id. We agree with the district court that the government met its burden of showing probable cause. The record supports Judge Keep's finding that there was probable cause to believe that Warren violated Sec. 1497 by failing to declare the jewelry until after Law had discovered the items.

Warren argues that he did not violate Sec. 1497 because he was not given an opportunity to declare the jewelry or to amend his declaration. The district court found that Warren had an opportunity to declare the jewelry, and an opportunity to amend. These factual findings are not clearly erroneous. This court has held that the traveler has the burden of coming forward with items that have to be declared. United States v. Davis, 597 F.2d 1237, 1239 (9th Cir.1979) (citing United States v. Mirenda, 443 F.2d 1351, 1356-57 (9th Cir.), cert. denied, 404 U.S. 966, 92 S.Ct. 343, 30 L.Ed.2d 286 (1971)). Warren had the opportunity to declare the jewelry when Law asked whether anyone was bringing anything into the country, and the opportunity to amend his declaration when Law entered the secondary inspection area and he spoke to...