U.S. v. Marolf
| Decision Date | 12 April 1999 |
| Docket Number | No. 97-56275,97-56275 |
| Citation | 173 F.3d 1213,1999 WL 198913 |
| Parties | 99 Cal. Daily Op. Serv. 2656, 1999 Daily Journal D.A.R. 3482 UNITED STATES of America, Plaintiff-Appellee, v. Gary H. MAROLF, in re application for return of seized property 1981 Mango Motor sailboat named "Asmara", Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Shawn R. Perez, Dana Point, California, for the defendant-appellant.
Carla A. Ford, Assistant United States Attorney, Los Angeles, California, for the plaintiff-appellee.
Appeal from the United States District Court for the Central District of California Alice Marie Stotler, District Judge, Presiding. D.C. No. CV-96-1185-AHS CR-91-66-AHS.
Before: PREGERSON, and RYMER, Circuit Judges, and PRO, District Judge. *
Opinion by Judge PRO; Concurrence by Judge RYMER.
Gary Marolf appeals the denial of his motion under Federal Rule of Criminal Procedure 41(e) for return of the 1981 AMAL/MANGO 23 dual-masted, 55-foot motor-sailboat "Asmara" or its monetary equivalent. See United States v. Marolf, 973 F.Supp. 1139 (C.D.Cal.1997). We affirm the district court's conclusion that the administrative forfeiture was constitutionally defective because of lack of notice to Marolf, and therefore hold that the administrative forfeiture is void. Marolf is thus entitled to his property unless the government may still initiate forfeiture proceedings. In this case, it may not because the five-year statute of limitations for doing so has run. See 19 U.S.C. § 1621. 1 The district court properly considered the application of laches to Marolf's action, and did not abuse its discretion in concluding that laches was inapplicable in this case. As there are no other grounds to excuse the government's failure to perfect the forfeiture within the statute of limitations period, we reverse the district court's adjudication of the forfeiture action and remand for a determination of the sum due Marolf.
On July 12, 1991, while investigating Marolf and others involved in a marijuana smuggling enterprise, the Drug Enforcement Administration ("DEA") seized the vessel Asmara which had been used to smuggle marijuana from Thailand into the United States. The DEA initiated administrative forfeiture proceedings against the vessel and published the required notice of seizure and intent to forfeit for three successive weeks in accord with 19 U.S.C. § 1607 (1994). No claims were received prior to the filing deadline, and on September 20, 1991, the DEA declared the vessel forfeited to the United States.
On September 16, 1991, Marolf was arrested for conspiracy to import marijuana into the United States in violation of 21 U.S.C. § 963 (1994). Although the DEA suspected Marolf's interest in the vessel as early as mid-July 1991, and two notice of seizure letters concerning the vessel were timely sent by the DEA to Marolf's co-defendant, Larry Morgan, no seizure notice was sent to Marolf. On December 10, 1991, the DEA learned that Marolf was the actual owner of the vessel, but again failed to send a notice of seizure to him as required by 19 U.S.C. § 1607.
On March 23, 1992, Marolf entered a guilty plea to one count of conspiracy to import approximately 900 kilograms of marijuana into the United States in violation of 21 U.S.C. § 963. On May 18, 1992, Marolf was sentenced to 121 months imprisonment.
On May 11, 1995, Marolf filed a motion pursuant to 28 U.S.C. § 2255 challenging his criminal conviction and sentence for conspiracy to import marijuana as unconstitutional double jeopardy in light of the prior forfeiture of the Asmara. Marolf also claimed that the forfeiture violated due process. On August 15, 1995, the district court denied Marolf's § 2255 motion and noted that the appropriate remedy for his claim of improper notice of the Asmara's forfeiture was to challenge the forfeiture process. We affirmed the denial of Marolf's § 2255 motion on July 9, 1996.
The statute of limitations for the government to file judicial forfeiture proceedings against the Asmara expired on July 11, 1996. See 19 U.S.C. § 1621 (1994). On December 2, 1996, Marolf filed the Rule 41(e) 2 motion which gives rise to this appeal.
By his motion, Marolf requested the return of the vessel Asmara or, as the parties agree the vessel has been sold by the government, its equivalent monetary value.
The district court determined that the proper remedy for the defective notice of forfeiture by the DEA was to void the forfeiture of the Asmara and to consider Marolf's Rule 41(e) motion on the merits, even though the five-year statute of limitations had expired. Marolf, 973 F.Supp. at 1151. On the merits, the district court found that Marolf could not refute the government's showing of probable cause to seize the Asmara nor could he prove by a preponderance of the evidence that the vessel was not used for an illegal purpose. Id. at 1152.
We review de novo the district court's denial of a Rule 41(e) motion, see United States v. Mills, 991 F.2d 609, 612 (9th Cir.1993) (citing In Re Grand Jury Subpoenas Dated Dec. 10, 1987, 926 F.2d 847, 855 (9th Cir.1991)), and its underlying factual findings for clear error, see Ahern v. Central Pac. Freight Lines, 846 F.2d 47, 48 (9th Cir.1988).
Rule 41(e) motions are treated as proceedings in equity when there are no criminal proceedings pending against the movant. See United States v. Martinson, 809 F.2d 1364, 1366 (9th Cir.1987).
Where the government provides constitutionally deficient notice of an administrative forfeiture, other courts of appeals have generally voided such actions and remanded for further proceedings. See, e.g., Muhammed v. DEA, Asset Forfeiture Unit, 92 F.3d 648, 654 (8th Cir.1996); Barrera-Montenegro v. United States, 74 F.3d 657, 661 (5th Cir.1996); United States v. Giraldo, 45 F.3d 509, 512 (1st Cir.1995). We have already held that a district court retains equitable jurisdiction to adjudicate claims of inadequate notice of administrative forfeitures. See United States v. Clagett, 3 F.3d 1355, 1356 (9th Cir.1993); see also Marshall Leasing, Inc. v. United States, 893 F.2d 1096, 1102-03 (9th Cir.1990) (); United States v. Ten Thousand Dollars ($10,000) in U.S. Currency, 860 F.2d 1511, 1513 (9th Cir.1988) (). We therefore affirm the district court's ruling that a constitutionally deficient notice of forfeiture renders such a forfeiture void. United States v. Marolf, 973 F.Supp. 1139 at 1148 (C.D.Cal.1997).
Despite the expiration of the limitations period, however, the district court proceeded to adjudicate Marolf's claim on the merits, relying primarily upon the Second Circuit Court of Appeals, decision in Boero v. DEA, 111 F.3d 301 (2d Cir.1997). In Boero, the trial court found that the DEA had failed to comply with the requisite notice requirement for an administrative forfeiture. Though the trial court had the power to correct the deficiency, it instead allowed the defendant-claimant to pursue an administrative remedy over five years from the date of initial seizure, notwithstanding the expiration of the limitations period. Id. at 305. On appeal, the Second Circuit Court of Appeals noted that "when the government is responsible for a known claimant's inability to present a claim, through the government's disregard of its statutory obligation to give notice (or otherwise), a hearing on the merits is available in the district court." Id. at 306. Accordingly, the Court in Boero vacated the trial court's judgment to the extent that it called for new administrative proceedings and directed the trial court to resolve the dispute on the merits. Id. at 307.
The Boero approach was specifically rejected by the Tenth Circuit in Clymore v. United States, 164 F.3d 569, 574 (10th Cir.1999), a decision rendered after the district court's ruling in this case. In a situation virtually identical to the one before this court, the Tenth Circuit Court of Appeals concluded that "[w]here obvious statute of limitations problems exist, we think the offending [i.e., inadequately noticed] forfeiture should be vacated and the statute of limitations allowed to operate, subject, of course, to any available government arguments against it." Id. at 574.
We agree with the Clymore decision to the extent it calls for the voiding of an inadequately noticed administrative forfeiture and the application of the five-year limitations period. We have previously stated that we are "particularly wary of civil forfeiture statutes, for they impose 'quasi-criminal' penalties without affording property owners all of the procedural protections afforded criminal defendants." United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051, 1068 (9th Cir.1994) (citation omitted). Generally, forfeitures "should be enforced only when within both letter and spirit of the law." U.S. v. One 1936 Model Ford V-8 De Luxe Coach, Motor No. 18-3306511, 307 U.S. 219, 226, 59 S.Ct. 861, 83 L.Ed. 1249 (1939), cited with approval in United States v. One 1985 Mercedes--Benz, 300 SD, VIN WDBC2OC6FA177831, 14 F.3d 465, 468 (9th Cir.1994).
In $191,910.00 in U.S. Currency, 16 F.3d at 1068-69, we strictly construed the currency forfeiture provisions of 19 U.S.C. § 1615 against the government. In concluding that the government must have probable cause at the initiation of civil forfeiture proceedings, rather than merely at the commencement of trial, we disapproved of the "minimal" procedural protections provided within the statute. Id. at 1069.
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