U.S. v. Lockheed L 188 Aircraft

• Decision Date: 15 February 1979
• Docket Number: L-188,No. 77-1131,No. N12VG,N12VG,77-1131
• Citation: 656 F.2d 390
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. LOCKHEEDAIRCRAFT, Registration, in rem, Defendant-Appellant, and International Air Leases, Inc., Claimant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 390

656 F.2d 390

UNITED STATES of America, Plaintiff-Appellee, v. LOCKHEED L-188 AIRCRAFT, Registration No. N12VG, in rem Defendant-Appellant and International Air Leases, Inc., Claimant-Appellant.

No. 77-1131.

United States Court of Appeals Ninth Circuit.

Feb. 15, 1979.

Marvin Zinman (argued), Los Angeles, Cal., for defendant-appellant.

Jack G. Collins, Asst. U. S. Atty. (argued), Portland, Ore., for plaintiff-appellee.

Appeal from the United States District Court for the District of Oregon.

Before VAN DUSEN, ^* WRIGHT and GOODWIN, Circuit Judges.

EUGENE A. WRIGHT, Circuit Judge:

International Air Leases, Inc. (IAL), owner of an aircraft seized by Federal Aviation Administration (FAA) officials for violation of FAA regulations, appeals from an in rem judgment against the aircraft for civil fines and penalties amounting to $165,600. IAL appeals also from pretrial orders dismissing its counterclaim based on the Tucker Act, 28 U.S.C. § 1346(a)(2) and denying leave to file an amended counterclaim based on the Federal Tort Claims Act (FTCA), 28 U.S.C. § 1346(b).

FACTS

IAL, based in Miami, leases aircraft "dry," that is, without supplying crew or participating in the operation of leased aircraft. It leased a Lockheed L-188 to Air Houston Corporation, which subleased it, with IAL's consent, to Air Flow Corporation.

Air Flow used the aircraft to carry passengers on gambling junkets from the Pacific Northwest and California to Reno and Las Vegas and return. IAL asserts that the aircraft was certified as airworthy when it left Miami, and that IAL had no connection with Air Flow's operations except to collect a flat monthly rent. ¹

Pursuant to 49 U.S.C. § 1473 and 14 C.F.R. § 13.17, the FAA seized the aircraft on February 8, 1974, believing that it had been involved in violations of FAA safety regulations by those conducting the gambling junkets. ² On February 15, the government filed in personam actions against Air Houston, Air Flow, and others, and an in rem action against the aircraft.

The aircraft was seized again on February 28 by a United States Marshal pursuant to process from the district court. It was released in June of 1974 when IAL posted a $25,000 bond which replaced the aircraft as the res of the in rem action.

In a jury trial, only IAL contested the government's claim to the aircraft. ³ The jury specifically found 552 separate violations of FAA regulations which subjected the aircraft to $165,600 in fines and penalties. The judgment in that amount was ordered satisfied from the $25,000 bond substituted for the aircraft. ⁴ The jury also found as to each violation that the pilot in command of the aircraft was involved in the violations, a finding which was essential to establishing in rem jurisdiction. ⁵

THE TUCKER ACT

IAL asserts a $10,000 claim ⁶ against the government, consisting primarily of loss of rental revenue resulting from the seizure of the aircraft. Because the government cannot be sued without its consent, United States v. Shaw, 309 U.S. 495, 500, 60 S.Ct. 659, 84 L.Ed. 888 (1940), IAL must demonstrate that the government has waived its immunity to the kind of claim it asserts. This is true of a counterclaim as well as of an original suit. United States v. Finn, 239 F.2d 679, 682 (9th Cir. 1956).

In the Tucker Act, the government consented to be sued in district court in civil actions or claims against the United States:

not exceeding $10,000 in amount, founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States 28 U.S.C. § 1346(a)(2) (1976). ⁷

or for liquidated or unliquidated damages in cases not sounding in tort.

The district court held that IAL's claim sounded in tort and was not cognizable under the Tucker Act. IAL maintains that it does not seek tort damages and characterizes its claim instead as one for damages arising from an unconstitutional forfeiture. So characterized, the claim comes within the Tucker Act's grant of jurisdiction to hear cases "founded . . . upon the Constitution." ⁸

In the Regional Rail Reorganization Act Cases, 419 U.S. 102, 125-26, 95 S.Ct. 335, 42 L.Ed.2d 320 (1974), the Supreme Court construed 28 U.S.C. § 1491 which defines Tucker Act jurisdiction in the Court of Claims. The language of § 1491 is identical to that of § 1346(a)(2) except that § 1491 does not contain a jurisdictional amount. The Court said that a claim for the taking of property without just compensation in violation of the Fifth Amendment "plainly would fall within the literal words of 'any claim against the United States founded . . . upon the Constitution.' " The same is true of claims for "the return of fines and costs based upon unconstitutional convictions." Neely v. United States, 546 F.2d 1059, 1063 (3rd Cir. 1976) (§ 1346(a)(1)).

Here, IAL contends that the seizure of its aircraft violated due process because the FAA neither notified it in advance of seizure nor held a pre-seizure hearing. The statutes and regulations which authorized the seizure do not require the FAA to give the notice or hearing that IAL argues is necessary. 49 U.S.C. §§ 1471(b), 1473(b)(2)(1976); 14 C.F.R. § 13.17 (1978).

Nevertheless, in United States v. Vertol H21C Reg. No. N8540, 545 F.2d 648 (9th Cir. 1976), this court held that seizure of a helicopter pursuant to these FAA provisions, without advance notice and opportunity for hearing, violated the due process clause of the Fifth Amendment because "the sole justification for the seizure was to facilitate the collection of the penalty sought by the FAA," 545 F.2d at 651; and there was "no showing of a 'special need for very prompt action,' to protect the government's interest." Id., comparing Fuentes v. Shevin, 407 U.S. 67, 91, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972) with Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 679, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974). ⁹

The procedural setting of this case differs from that in Vertol. There, the helicopter owners questioned the illegal seizure as a defense in the forfeiture proceedings. They moved for return of the $6,000 certificate of deposit substituted for the aircraft as the res of the in rem action. The district court granted the motion and this court affirmed. There was no discussion of the Tucker Act or any implication that the court needed an independent jurisdictional ground to entertain the defense.

Here, IAL questioned the illegal forfeiture in its counterclaim, seeking return of the aircraft and $10,000 in damages. As a threshold matter, it is clear that IAL's claim initially exceeded the $10,000 Tucker Act jurisdictional limit because the aircraft was worth at least $25,000. See United States v. Finn, 239 F.2d 679 (9th Cir. 1956).

After the counterclaim was filed, the $25,000 fund was substituted for the plane. The counterclaim was not amended to reflect this change, and the district court then dismissed it.

On appeal, IAL does not argue that it is entitled to the $25,000 fund substituted for the aircraft in addition to the $10,000 in damages. It asks that we vacate the $25,000 judgment "because the same would be subject to possible offset in the event IAL succeeds in establishing its damage claim." (Appellant's brief at 20). ¹⁰ It hopes to reduce the judgment by $10,000 if its Tucker Act claim is cognizable. ¹¹

The question before us, then, is whether the Tucker Act provides the jurisdictional basis for IAL to assert a counterclaim against the government in a forfeiture proceeding against IAL's property.

IAL cites cases in which plaintiffs used the Tucker Act to recover fines and penalties or the value of forfeited property, when the forfeiture or fine was illegal or unconstitutional. Jaekel v. United States, 304 F.Supp. 993 (S.D.N.Y.1969); Compagnie General Transatlantique v. United States, 21 F.2d 465 (S.D.N.Y.1927). The cited cases were original actions against the government by claimants of the property or the money paid. Although they support the proposition that the Tucker Act provides jurisdiction for such suits, see also Neely v. United States, 546 F.2d 1059 (3d Cir. 1976), they do not dispose of the question whether such claims can be asserted as counterclaims in forfeiture proceedings. ¹²

IAL alluded at oral argument to a second line of cases holding that claimants may sue under the Tucker Act for review of administrative decisions denying their applications for remission of forfeiture. United States v. Sturgeon, 529 F.2d 993 (8th Cir. 1976) (dictum); Lowther v. United States, 480 F.2d 1031 (10th Cir. 1973). Accord Bramble v. Richardson, 498 F.2d 968 (10th Cir. 1974). This court has acknowledged Tucker Act jurisdiction for such suits when the basis for the challenge is the unconstitutionality of the forfeiture, Simons v. United States, 497 F.2d 1046 (9th Cir. 1974), but again, they have arisen as original actions in district court. In those cases, claimants first sought and were denied administrative relief from the forfeiture. ¹³

IAL does, however, cite two cases in which owners of property were allowed to assert Tucker Act claims against the government during forfeiture proceedings or actions to collect penalties.

In United States v. Tanker Monsoon, 433 F.2d 95 (1st Cir. 1970), the government filed a libel in admiralty against the Monsoon, erroneously charging it with responsibility for an oil spill. Given the choice of cleaning it up or letting the government do so and subjecting the plaintiff to fines, the vessel owner chose to incur the clean-up costs, then counterclaim for recovery. The court In United States v. One 1965 Chevrolet Impala Convertible, 475 F.2d 882 (6th Cir. 1973), the district court vacated its judgment of forfeiture and ordered that the claimant be paid the proceeds of the sale of his automobile and depreciation on it from time of seizure to time of sale. The court of appeals concluded that the district court had...