U.S. v. Marolf

• Decision Date: 11 July 1997
• Docket Number: No. SA CV 96-1185 AHS.,SA CV 96-1185 AHS.
• Citation: 973 F.Supp. 1139
• Court: U.S. District Court — Central District of California
• Parties: UNITED STATES of America, Plaintiff, v. Gary H. MAROLF, Defendant.

973 F.Supp. 1139

UNITED STATES of America, Plaintiff, v. Gary H. MAROLF, Defendant.

No. SA CV 96-1185 AHS.

United States District Court, C.D. California, Southern Division.

July 11, 1997.

Nora M. Manella, United States Attorney, Carla A. Ford, Assistant United States Attorney, Asset Forfeiture Section, Los Angeles, CA, for Plaintiff.

Shawn R. Perez, Dana Point, CA, for Defendants.

ORDER DENYING DEFENDANT'S MOTION FOR RETURN OF SEIZED PROPERTY

STOTLER, District Judge.

I. PROCEDURAL HISTORY

Defendant was arrested on September 16, 1991, and, on March 23, 1992, 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 (Count One of the First Superseding Information). The agreement preserved his right to appeal any adverse determination of his motions to suppress certain evidence. The Court denied defendant's motions, and the Court of Appeals affirmed this decision on June 30, 1993. On May 18, 1992, defendant was sentenced to 121 months imprisonment, four years of supervised release, and was ordered to pay a special assessment of $50.00.

On May 11, 1995, defendant filed a petition under 28 U.S.C. § 2255 seeking to vacate his sentence. The petition was denied by the Court on August 15, 1995, and the Court of Appeals affirmed on July 9, 1996.

On December 2, 1996, defendant filed the instant motion for the return of property under Fed.R.Crim.P. 41(e). The government filed its opposition to defendant's motion on February 21, 1997, and defendant filed his reply to the government's opposition on February 26, 1997. Oral argument on the motion was held on March 7, 1997. At the conclusion of the hearing on the motion, the Court ordered the parties to file supplemental briefs on the issue. Defendant's supplemental brief was filed on March 12, 1997; the government filed its opposition to defendant's supplemental brief on March 24, 1997.

II. FACTUAL OVERVIEW

A. Forfeiture of the Vessel

On July 12, 1991, in the course of investigating defendant and his co-conspirators in a marijuana smuggling enterprise, the Drug Enforcement Administration (DEA) seized a 1981 AMAL/MANGO motor-sailboat named "Asmara" (the vessel). It is this vessel that is the subject of defendant's motion here. Following its seizure, the DEA initiated administrative forfeiture proceedings against the vessel. Consequently, public notice of the seizure was published and notice of seizure letters were sent to defendant's codefendant, Larry Morgan. Notice was not sent to defendant.

No claims were received prior to the filing deadline, and the DEA declared the vessel forfeited to the United States on September 20, 1991. (Both parties represented during oral argument their understanding that the vessel has since been sold.) The DEA had reason to suspect, prior to the vessel's forfeiture, that the defendant may have had an interest in the vessel. On December 10, 1991, the DEA learned that the defendant was the owner of the vessel and was instructed that proper notification should be sent to him. It is uncontested that notice was never sent to defendant. The statute of limitations for the government to file judicial forfeiture proceedings against the vessel expired on July 11, 1996.

B. Defendant's § 2255 Motion

On May 11, 1995, defendant filed a motion pursuant to 28 U.S.C. § 2255 ("§ 2255 motion") challenging his criminal conviction and sentence for conspiracy to import marijuana as unconstitutional double jeopardy in light of the prior civil forfeiture of the vessel. He stated as a second ground that "the prior forfeiture was done without due process."

The government opposed defendant's § 2255 motion, arguing, in part, that since defendant was not a party to the civil forfeiture, and he voluntarily elected not to contest it, the civil forfeiture was not prior punishment.

This Court denied defendant's motion, holding that because the forfeiture was uncontested, jeopardy did not attach to defendant. The Court also noted in its August 15, 1995, order that if, as he argued, the government did not provide proper notice of the forfeiture, defendant's remedy was to "challenge the forfeiture proceeding as invalid." The Ninth Circuit affirmed the denial of defendant's motion on July 9, 1996.

III. SUMMARY OF PARTIES' POSITIONS

A. Defendant's Motion for Return of Seized Property

Defendant requests the Court to order the government to return to him the seized vessel, or alternatively, to pay him the value of the vessel at the time of the seizure. Defendant asserts that the Court has jurisdiction to hear the motion under Rule 41(e) of the Federal Rules of Criminal Procedure when, as here, there are no criminal proceedings pending against the movant. United States v. Martinson, 809 F.2d 1364, 1366-67 (9th Cir.1987).

Defendant contends that the government failed to notify him of the forfeiture, even though he was the legal owner of the vessel and the government knew his whereabouts at all times prior to the declaration of forfeiture. Defendant argues that this lack of notice violated his due process rights under the test articulated in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950). Thus, according to defendant, since he was deprived of property without due process of law, the forfeiture should be set aside. Peralta v. Heights Medical Center, 485 U.S. 80, 86-87, 108 S.Ct. 896, 899-900, 99 L.Ed.2d 75 (1988). Pointing to Coe v. Armour Fertilizer Works, 237 U.S. 413, 35 S.Ct. 625, 59 L.Ed. 1027 (1915), defendant also contends that "it is no answer to say that in his particular case due process of law would have led to the same result because he had no adequate defense on the merits." Id. at 424, 35 S.Ct. at 629.

B. Government's Opposition

The government asserts that the doctrine of laches bars defendant's motion because his inexcusable delay in contesting the forfeiture has prejudiced them, International Tel. & Tel. Corp. v. General Tel. & Elec. Corp., 518 F.2d 913, 926 (9th Cir.1975). The government concedes that the DEA failed to give defendant notice of the administrative forfeiture proceedings, but contends that defendant knew of the forfeiture (at least as of May 11, 1995, when he filed his § 2255 motion) yet did not notify the DEA of his intent to contest it. The government argues that defendant offers no reason for his delay and that the government has been prejudiced by his inaction because the statute of limitations to initiate judicial forfeiture proceedings against the vessel expired on July 11, 1996. The government further argues that had defendant raised the notice defense in May 1995, the DEA could have given proper notice, thereby allowing defendant to file a petition for remission, or a claim and cost bond in which case the matter would have been referred to the U.S. Attorney's Office for the filing of a judicial forfeiture action, and the parties could have litigated the forfeiture issue. Barrera-Montenegro v. United States, 74 F.3d 657, 661 (5th Cir.1996).

The government also argues that the forfeiture should not be set aside because defendant has no defense to the forfeiture and he was, therefore, not prejudiced by the lack of notice. United States v. Deninno, 103 F.3d 82, 83 (10th Cir.1996). According to the government, because defendant admitted all the facts necessary to justify the forfeiture when he pleaded guilty to Count One of the First Superseding Information, he could not have been prejudiced and thus the return of the vessel is unwarranted. See United States v. One 1970 Ford Pick-Up Truck, 537 F.Supp. 368, 370 (N.D.Ohio 1981); United States v. $36,125.00 United States Currency, 510 F.Supp. 303, 308 (E.D.La.1980); United States v. One 1973 Ford LTD, 409 F.Supp. 741, 743 (D.Nev.1976). It is the government's position that even if defendant had received proper notice, the result would have been the same since defendant indicated in his § 2255 motion that he chose not to contest the forfeiture.

If, however, the Court decides that the lack of notice voids the administrative forfeiture, the government asserts that the proper remedy is not to return the property, but to reopen the forfeiture proceedings and allow the parties to litigate the issue. Barrera-Montenegro, 74 F.3d at 661. This is proper, the government argues, even though the statute of limitations has expired, because the government was prevented from filing a civil forfeiture action earlier due to a Department of Justice policy that prevented the government from filing a judicial forfeiture complaint since no claims had been filed in the administrative forfeiture proceedings.

Further, the government asserts that under United States v. $8,850.00 United States Currency, 461 U.S. 555, 103 S.Ct. 2005, 76 L.Ed.2d 143 (1983), any delay in pursuing the forfeiture should not be held against it. An examination of the four factors set out in that decision — (1) length of the delay; (2) reason for the delay; (3) defendant's assertion of his right; and (4) prejudice to the defendant — cut, according to the government, in its favor because, although the delay was admittedly substantial, the government believed that the vessel had been properly forfeited, the instant motion is defendant's first attempt to retrieve the property, and the defendant was not prejudiced by the delay because he admitted all facts necessary to justify the forfeiture.

C. Defendant's Reply to Government's Opposition

Defendant contends that the doctrine of laches actually works against the government, rather than for them. He argues that an examination of the pleadings filed in his § 2255 motion reveals that the government knew as early as December of 1992[sic] that proper notice had not been given and, even so, it failed to re-open the forfeiture proceedings and give him proper notice. At that time the government was not precluded from doing so because the...