U.S. v. Approx. 600 Sacks, Green Coffee Beans, Civil No. 02-2656 (JAG).

• Decision Date: 12 August 2005
• Docket Number: Civil No. 02-2656 (JAG).
• Citation: 381 F.Supp.2d 57
• Parties: UNITED STATES of America, Plaintiff v. APPROXIMATELY 600 SACKS OF GREEN COFFEE BEANS SEIZED FROM CAFÉ RICO, INC., Defendant Café Rico, Inc., Claimant.
• Court: U.S. District Court — District of Puerto Rico

Page 57

381 F.Supp.2d 57

UNITED STATES of America, Plaintiff v. APPROXIMATELY 600 SACKS OF GREEN COFFEE BEANS SEIZED FROM CAFÉ RICO, INC., Defendant Café Rico, Inc., Claimant.

Civil No. 02-2656 (JAG).

United States District Court, D. Puerto Rico.

August 12, 2005.

COPYRIGHT MATERIAL OMITTED

Maritza Gonzalez, United States Attorney's Office, San Juan, PR, for Plaintiffs.

Juan A. Ramos-Diaz, Luis J. Acevedo-Bengoechea, Carla Ferrari-Lugo, Ramos Diaz, Acevedo & Gonzalez CSP, San Juan, PR, for Defendants.

OPINION AND ORDER

GARCIA-GREGORY, District Judge.

On November 08, 2002, the United States of America ("the Government") instituted a civil forfeiture claim against the Defendant, Approximately 600 Sacks of Green Coffee Beans Seized from Café Rico, Inc. (Docket No. 1).¹ The Government argues that Café Rico's beans are forfeitable because the beans are not from Puerto Rico, and because importation records reveal no payment of duties for these beans, in violation of 19 U.S.C. §§ 1304, 1319, and 1595(a).² Additionally, the Government alleges that Café Rico's beans are forfeitable because they were pronounced not fit for human consumption by the FDA, in violation of 21 U.S.C. § 334.

After the Government implemented the forfeiture, Café Rico requested a judicial proceeding, and instituted a counterclaim against the government, requesting damages for an allegedly unconstitutional and improper forfeiture (Docket No. 14). On December 10, 2004, the Government moved for summary judgment (Docket No. 43). On December 17, 2004, the Government moved to dismiss the counterclaim (Docket No. 46). On January 5, 2005, Café Rico opposed both of the Government's motions, alleging that the Government was relying on improperly conducted tests, and that there are genuine issues of material fact as to whether the forfeited beans are from outside Puerto Rico, and whether they are fit for human consumption (Docket No. 58).

For the reasons discussed below, the Court GRANTS the government's motion for summary judgment, and GRANTS the government's motion to dismiss Café Rico's counterclaim.

FACTUAL BACKGROUND³

On November 27, 2002, United States Customs Service agents ("USCS agents") executed a search warrant from the United States District Court for the District of Puerto Rico and searched the facilities of Beneficiado de Café Hacienda Pintado and/or Café Luri ("Pintado/Luri") in Yauco, Puerto Rico. The USCS agents seized approximately sixty-five "quintales"⁴ of coffee beans from Pintado/Luri and took a coffee bean sample from each sack on the premises. The agents sent the coffee bean samples to Savannah, Georgia, for "country of origin" analysis in the USCS laboratory, which revealed that the coffee beans are not from Puerto Rico.

On December 21, 2001, the PRDA noticed signs of "broca" insect damage (Hypothenemus hampei, Ferr) on Café Rico beans while conducting a routine inspection. Based on the suspicion of "broca" damage, the PRDA obtained a warrant for the seizure of 600 sacks of beans from Café Rico, from which samples were sent to and analyzed by the United States Food and Drug Administration ("FDA"). The FDA found that the beans had been damaged by "broca" and that this and the presence of other insects, dead and alive, rendered the coffee beans unfit for human consumption in the United States and its territories. Furthermore, because there is no "broca" in Puerto Rico, "broca" can damage the Puerto Rican coffee crop. On March 5, 2002, the 600 bean sacks were seized pursuant to a warrant issued by United States Magistrate-Judge Aida Delgado Colon.

In addition to the foregoing, the USCS investigation revealed that Pintado/Luri sold coffee beans to Café Rico for the 2001-2002 coffee crop season, but found no records from the port of entry of San Juan, Puerto Rico, indicating payment on these beans, which amounts to a violation of 19 U.S.C. § 1595a.

To this, Café Rico simply claims that it purchases its coffee from over 250 small coffee producers and that it is impossible for it to know from whom exactly a particular set of beans comes. Café Rico also claims that the USCS finding that the beans are not from Puerto Rico was based on an improper test; that signs of "broca" damage were minimal; that the insects present would be purified by roasting; and that the FDA's determination that the beans were unfit for human consumption is therefore erroneous.

STANDARD OF REVIEW

A. Summary Judgment Standard

The court's discretion to grant summary judgment is governed by Rule 56 of the Federal Rules of Civil Procedure. Rule 56 states, in pertinent part, that the court may grant summary judgment only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); See also Santiago-Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52. (1st Cir.2000).

Summary judgment is appropriate if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." See Fed.R.Civ.P. 56(c). The party moving for summary judgment bears the burden of showing the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Once a properly supported motion has been presented before the court, the opposing party has the burden of demonstrating that a trial-worthy issue exists that would warrant the court's denial of the motion for summary judgment. For issues where the opposing party bears the ultimate burden of proof, that party cannot merely rely on the absence of competent evidence, but must affirmatively point to specific facts that demonstrate the existence of an authentic dispute. See Suarez v. Pueblo Int'l, Inc., 229 F.3d 49 (1st Cir.2000).

In order for a factual controversy to prevent summary judgment, the contested facts must be "material" and the dispute must be "genuine". "Material" means that a contested fact has the potential to change the outcome of the suit under governing law. The issue is "genuine" when a reasonable jury could return a verdict for the nonmoving party based on the evidence. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). It is well settled that "[t]he mere existence of a scintilla of evidence" is insufficient to defeat a properly supported motion for summary judgment." Id. at 252. It is therefore necessary that "a party opposing summary judgment must present definite, competent evidence to rebut the motion." Maldonado-Denis v. Castillo-Rodriguez, 23 F.3d 576, 581 (1st Cir.1994).

In making this assessment, the court "must view the entire record in the light most hospitable to the party opposing summary judgment, indulging in all reasonable inferences in that party's favor." Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.1990). The court may safely ignore "conclusory allegations, improbable inferences, and unsupported speculation." Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir.1990).

B. Summary Judgment in Civil Forfeiture Cases

In cases of civil forfeitures, summary judgment must be evaluated in the context of the relevant statutes. The burden of proof in civil forfeitures is controlled by the Civil Asset Forfeiture Reform Act of 2000, ("CAFRA"), Pub.L. No. 106-185, 114 Stat. 202 (2000). CAFRA changed the Government's initial burden of proof in civil forfeiture actions. Previously, the Government had to show probable cause for the forfeiture; now it must establish that the property is subject to forfeiture by a preponderance of the evidence. Once this is established, the burden shifts to the claimant to show, by a preponderance of the evidence, that it is an innocent owner, in which case its interest in the property cannot be forfeited. See 18 U.S.C. 983(d)(1), (2),(3). Claimants cannot assert the innocent owner defense, however, in cases of contraband or otherwise illegal property. See 18 U.S.C. 983(d)(4).

In evaluating the evidence presented by either party to meet its burden of proof under CAFRA and Title 18 U.S.C., courts may be called upon to review the findings and decisions of administrative agencies. Pursuant to 5 U.S.C. 706(2)(A), a court reviewing such a decision must "defer heavily to agency within agency's sphere of interest", particularly when the decision is of a scientific nature. United States. v. Members of Estate of Boothby, 16 F.3d 19, 21-22 (1st Cir.1994); Town of Norfolk v. Army Corp. of Engineers, 968 F.2d 1438, 1445-46 (1st Cir.1992). Accordingly, the standard of review presents "high hurdles to parties challenging fact-based decisions of administrative agencies ... [the court may] correct errors of law, but, otherwise, the court is limited to a search for arbitrary or capricious behavior." Boothby, 16 F.3d at 21.

DISCUSSION

A. The coffee beans are forfeitable

1. Country of Origin Analysis

The government submits that Café Rico's property is subject to forfeiture because the USCS found that the beans were not from Puerto Rico and that no duty was paid on the beans, which means that the beans were brought into the United States illegally and are contraband. Because the government made its case through a preponderance of the evidence, relying on agency findings that are entitled to deference by this Court, Café Rico also needs a preponderance of the evidence to rebut the government's proffer.

Café Rico claims that the USCS' "country of origin" analysis of the beans was improperly conducted. Café Rico's expert never explains his claim that a proper "country of origin" analysis would show that the beans are from Puerto Rico or present evidence to support this finding. The expert just concludes that had the test been conducted differently, it would show that the beans' most likely place of...