U.S. v. Nava, 03-30010.

Decision Date18 April 2005
Docket NumberNo. 03-30010.,03-30010.
Citation404 F.3d 1119
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Victor Robert NAVA, Sr., aka Big Vic, Defendant, and Victoria Nava, Defendant-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Jack E. Sands, Attorney at Law, Billings, MT, for the appellant.

William W. Mercer and James E. Seykora, U.S. Attorney's Office, Billings, MT, for appellee United States of America.

Appeal from the United States District Court for the District of Montana; Jack D. Shanstrom, District Judge, Presiding. D.C. No. CR-00-00121-JDS.

Before: O'SCANNLAIN, RYMER, and BYBEE, Circuit Judges.

Opinion by Judge BYBEE; Dissent by Judge RYMER.

BYBEE, Circuit Judge:

Victor "Big Vic" Nava, Sr., was convicted of conspiracy to distribute and possession with intent to distribute methamphetamine. The jury also rendered a special verdict that several properties were used to facilitate his crimes or were proceeds of them and should be forfeited to the government pursuant to 21 U.S.C. § 853. Victor's daughter, Victoria Nava, petitioned the district court claiming that she held legal title to two of the properties. The district court denied Victoria's petition to set aside the forfeiture.

We must decide whether forfeiture was proper where Victor has never held title to the two forfeited properties. We reverse and remand.

I. BACKGROUND AND PROCEEDINGS
A

The government may seek the forfeiture of property in either a civil or a criminal proceeding. The principal civil drug forfeiture provision, 21 U.S.C. § 881, operates in rem against the property itself on the theory that the property itself is guilty of wrongdoing. See Austin v. United States, 509 U.S. 602, 614-18, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993); United States v. Lester, 85 F.3d 1409, 1414 n. 8 (9th Cir.1996) ("[A] civil forfeiture is an in rem proceeding in which liability attaches to a particular property and not particular institutions or individuals." (quoting United States v. $814,254.76 in United States Currency, 51 F.3d 207, 210-11 (9th Cir.1995))). In contrast, criminal forfeiture provisions operate in personam against the assets of the defendant and serve as part of the penalty for the defendant's conviction. See, e.g., 18 U.S.C. § 1963; 21 U.S.C. § 853; see also United States v. $814,254.76, 51 F.3d at 210-11 ("A criminal forfeiture is an in personam judgment against a person convicted of a crime" (citing Alexander v. United States, 509 U.S. 544, 558-59 n. 4, 113 S.Ct. 2766, 125 L.Ed.2d 441 (1993))); United States v. Certain Real Property at 2525 Leroy Lane, 910 F.2d 343, 346 (6th Cir.1990) (§ 853 "authorizes an in personam action against a defendant in a criminal case, and forfeiture in such a case is imposed as a sanction against the defendant upon his conviction.").

In a proceeding under § 853, "the sole legal issue before the court is the ownership interests of the competing parties, a consideration that is often irrelevant in an in rem civil forfeiture action, which turns instead on the culpability of the owner and the role of the property in the prohibited activity." United States v. McHan, 345 F.3d 262, 281 (4th Cir.2003) (Luttig, J., concurring in part and concurring in the judgment in part); see also United States v. $814,254.76, 51 F.3d at 210-11. Because the principal criminal forfeiture statute for drug offenses, 21 U.S.C. § 853, acts in personam, it permits the forfeiture of the defendant's interests only, not the property of innocent parties. See United States v. Chavez, 323 F.3d 1216, 1219 (9th Cir.2003) (citing Lester, 85 F.3d at 1413). The instant case involves a criminal forfeiture under § 853 because the jury convicted Victor of multiple qualifying drug offenses.1

Section 853 provides that any person convicted of a violation of specified drug laws, punishable by more than a year of imprisonment, shall forfeit to the United States

(1) any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of such violation; [and]

(2) any of the person's property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, such violation.

21 U.S.C. § 853(a). The title to the forfeited property vests in the United States at the time the defendant commits the unlawful acts, id. § 853(c), although it attaches only upon the defendant's conviction. Cf. Totaro, 345 F.3d at 993 (citing United States v. Ginsburg, 773 F.2d 798, 801 (7th Cir.1985) ("[W]hile the government's interests in the profits or proceeds of the racketeering activity does not attach until conviction, its interest vests at the time of the act that constitutes the [RICO] violation." (emphasis in original))). At sentencing, the district court must order forfeiture of the property in addition to imposing any other sentence. See 21 U.S.C. § 853(a).

Section 853(n) specifies procedures under which third parties may assert their interests in the forfeited property. After the court enters the preliminary order of forfeiture as part of the defendant's sentence, the United States must publish notice of the order. 21 U.S.C. § 853(n)(1). A third party claiming an interest in the property may then petition for an ancillary hearing. Id. § 853(n)(2). A third party's petition asserting an interest in the property must "set forth the nature and extent of the petitioner's right, title, or interest in the property, the time and circumstances of the petitioner's acquisition of the right, title, or interest in the property, any additional facts supporting the petitioner's claim, and the relief sought." Id. § 853(n)(3).

The petitioner may prevail only upon showing, by a preponderance of the evidence, that he possessed a vested or superior legal right, title, or interest in the property at the time the criminal acts took place, or that he was a bona fide purchaser for value. Id. § 853(n)(6). In particular, the court amends the order of forfeiture only upon the petitioner's showing, by a preponderance of the evidence, that

(A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or

(B) the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section.

Id. § 853(n)(6); see also Hooper, 229 F.3d at 821; United States v. Kennedy, 201 F.3d 1324, 1334-35 (11th Cir.2000); United States v. Morgan, 224 F.3d 339, 341 (4th Cir.2000). The petitioner bears the burden of proving his right, title, or interest under § 853(n)(6). "Congress chose to place the burden of proof on the third-party during the ancillary proceeding, since the government would necessarily have carried its burden of proving that the defendant's interest in the property was subject to forfeiture during the criminal trial." United States v. Gilbert, 244 F.3d 888, 911 (11th Cir.2001) (citation omitted).

Section 853(n) is the exclusive proceeding in which third parties may claim interests in property subject to criminal forfeiture. Libretti v. United States, 516 U.S. 29, 44, 116 S.Ct. 356, 133 L.Ed.2d 271 (1995) ("Once the government has secured a stipulation as to forfeitability, third-party claimants can establish their entitlement to a return of the assets only by means of a hearing afforded under 21 U.S.C. § 853(n)." (emphasis added)). The statute specifically bars third parties from intervening in the trial or the appeal of a criminal case to assert their interests, or from bringing independent suits against the United States once an indictment alleging that the property is subject to forfeiture has been filed. 21 U.S.C. § 853(k). We have held that third parties must await the defendant's conviction before filing proceedings to protect their interest in the property and must await the court's order of forfeiture before requesting an ancillary hearing. United States v. Crozier, 777 F.2d 1376, 1382-83 (9th Cir.1985).

B

A superseding indictment charged Victor with multiple counts of possessing marijuana and methamphetamine with intent to distribute and conspiring to possess those drugs, in violation of 21 U.S.C. §§ 841(a)(1) and 846. It alleged that the conspiracy spanned "from on or about July 11, 1997, or before, and up to and including October 6, 1999," and the possession occurred "on or about October 6, 1999." In September 2002, Victor signed a plea agreement which required him to plead guilty to drug possession and conspiracy counts. As part of the agreement, he also consented to forfeit three properties as proceeds obtained from the drug violations or property used or intended to be used to commit and facilitate the violations. The two properties that are the subject of this appeal, one at 414 South 25th Street ("the 414 property") and another at 1102 South 28th Street ("the 1102 property"), and the third property at 317 South 31st Street ("the 317 property"), are all in Billings, Montana. Victor subsequently withdrew from the plea agreement and proceeded to trial.

A jury convicted Victor of conspiracy to possess with intent to distribute methamphetamine and marijuana, and possession of those and other illegal drugs. In a special verdict, the jury found that the three properties had been "used or intended to be used to facilitate" Victor's crimes or were proceeds of his crimes. Accordingly, the district court ordered the houses forfeited.2

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