U.S. v. One Lincoln Navigator 1998

• Decision Date: 19 May 2003
• Docket Number: No. 02-3177.,02-3177.
• Citation: 328 F.3d 1011
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. ONE LINCOLN NAVIGATOR 1998, Defendant. Freddie Bearden; Wanda Breedlove Andrews, Claimants-Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

328 F.3d 1011

UNITED STATES of America, Plaintiff-Appellee, v. ONE LINCOLN NAVIGATOR 1998, Defendant.

Freddie Bearden; Wanda Breedlove Andrews, Claimants-Appellants.

No. 02-3177.

United States Court of Appeals, Eighth Circuit.

Submitted: January 14, 2003.

Filed: May 19, 2003.

Terrence Cain, argued, Little Rock, AR, for Appellant.

Todd L. Newton, argued, Assistant U.S. Attorney, Little Rock, AR (H.E. (Bud) Cummins, on the brief), for Appellee.

Before LOKEN,^* FAGG, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

LOKEN, Chief Judge.

The United States seized the 1998 Lincoln Navigator used by Eric Austin in distributing crack cocaine and commenced this civil action to forfeit the vehicle under 21 U.S.C. § 881(a)(4) and (j). Freddie Bearden, Austin's grandmother, and Wanda Breedlove Andrews, Austin's mother, then filed claims contesting the forfeiture on the ground that each is an innocent owner of the Navigator. See 18 U.S.C. § 983(a)(4) & (d). The district court granted summary judgment in favor of the United States, concluding that neither Bearden nor Andrews has standing to contest the forfeiture. The court based this decision in part on its findings as to their credibility at a prior evidentiary hearing. Bearden and Andrews appeal. We conclude that they have Article III standing to contest the forfeiture. In addition, the district court's decision that they lack statutory standing was a ruling on the merits of their claims that violated their right to a jury trial. Accordingly, we reverse and remand.

After filing ownership claims, Bearden and Andrews petitioned the district court for immediate release of the Navigator to them on grounds of substantial hardship. See 18 U.S.C. § 983(f)(1) & (3).¹ The court held an evidentiary hearing on the petition at which Bearden, Andrews, and Austin testified to the following background facts. Bearden purchased the Navigator in March 1999 with $37,000 of the settlement proceeds she received from a California lawsuit. The Arkansas Certificate of Title for the car lists Andrews as its owner. Bearden testified she placed the title in Andrews's name so that Bearden would not lose her disability benefits. Following the purchase, Bearden paid most ownership expenses, including taxes, insurance, repairs, and gasoline. While admitting that Austin put most of the miles on the Navigator with her permission, Bearden testified that she used the Navigator to drive another daughter to and from work, that the daughter lost her job when the car was seized, and that losing the car was a hardship on Bearden and her family.

At the close of the hearing, the district court denied the petition for immediate release, finding that Austin "had the great lion share of the use of this car" and therefore "I don't think ... there could have been all that much hardship to the other members of the family who never were driving it much anyway." The court expressly noted conflicts and problems in the testimony of Bearden, Andrews, and Austin. Two weeks later, the government moved for summary judgment dismissing the innocent ownership claims on the grounds that Bearden and Andrews do not meet the statutory definition of owners and, in addition, cannot prove they are innocent owners within the meaning of 18 U.S.C. § 983(d)(2)(A). On the same day, claimants requested a jury trial. Based upon the evidence introduced at the hardship hearing, the district court granted the government's motion, concluding that claimants lack standing to contest the forfeiture because "Bearden possessed only bare legal title to the Navigator although she had allegedly paid for the vehicle," and Andrews "does not have any ownership in the Navigator although the Navigator was titled in her name."

Article III standing is a threshold question in every federal court case. "[T]he question is whether the person whose standing is challenged is a proper party to request an adjudication of a particular issue." United States v. 1998 BMW "I" Convertible, 235 F.3d 397, 399 (8th Cir.2000), quoting Flast v. Cohen, 392 U.S. 83, 99-100, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968). In a forfeiture case, a claimant's Article III standing turns on whether the claimant has a sufficient ownership interest in the property to create a case or controversy. This threshold burden is not rigorous: "To have standing, a claimant need not prove the underlying merits of the claim. The claimant need only show a colorable interest in the property, redressable, at least in part, by a return of the property." United States v. 7725 Unity Ave. N., 294 F.3d 954, 957 (8th Cir.2002) (citation omitted). We have held in numerous cases that a colorable ownership interest "may be evidenced in a number of ways including showings of actual possession, control, title and financial stake." United States v. One 1945 Douglas C-54 (DC-4) Aircraft, 647 F.2d 864, 866 (8th Cir.1981); see 7725 Unity Ave., 294 F.3d at 956; 1998 BMW, 235 F.3d at 399; United States v. One 1990 Chevrolet Corvette, 37 F.3d 421, 422 (8th Cir.1994).

Ownership interests are defined by the law of the State in which the interest arose, here, Arkansas. 7725 Unity Ave., 294 F.3d at 956. On the undisputed facts of this record, applying Arkansas law, it is clear that Bearden and Andrews have Article III standing to challenge the forfeiture. Ms. Bearden paid for the Navigator. Thus, she has the greatest financial stake in the car. At oral argument, counsel for the government admitted that he knew of no case in which a claimant with a personal financial stake in property was denied Article III standing to challenge its forfeiture. As for Ms. Andrews, the Arkansas motor vehicle statutes define "owner" as "a person who holds the legal title of a vehicle." Ark.Code Ann. § 27-14-203. The certificate of title to the Navigator was issued to Andrews, which means she is the car's registered owner. See Ark.Code Ann. § 27-14-713. While the certificate of title by itself only evidences title, it establishes a prima facie case of ownership. See Beatty v. USAA Cas. Ins. Co., 330 Ark. 354, 954 S.W.2d 250, 252 (1997); House v. Hodges, 227 Ark. 458, 299 S.W.2d 201, 204 (1957). In these circumstances, although there is evidence that Andrews has only "bare legal title," we conclude that is sufficient to confer Article III standing to contest the forfeiture.

For the foregoing reasons, Bearden and Andrews have Article III standing to challenge the government's forfeiture claim on the merits. The merits of their claims turn on whether either or both can establish an "innocent owner's interest" in the property that "shall not be forfeited." 18 U.S.C. § 983(d)(1). To qualify as an innocent owner, each claimant must prove she has an ownership interest as defined in the statute. As relevant here, the statute defines the term "owner" to include "a person with an ownership interest in the specific property sought to be forfeited," and to exclude "a nominee who exercises no dominion or control over the property." 18 U.S.C. § 983(d)(6). Although many cases refer to this issue as part of the "standing" inquiry, it is in fact an element of the innocent owner's claim on the merits. When claimants have Article III standing but fail to prove an ownership interest that meets these statutory criteria, the "statement that Claimants lacked `standing' is simply another way of stating that Claimants had failed to establish on the merits a property interest entitling them to relief." United States v. Hooper, 229 F.3d 818, 820 n. 4 (9th Cir.2000); see United States v. $9.041,598,68, 163 F.3d 238, 245 (5th Cir.1998); United States v. 2001 Honda Accord EX, 245 F.Supp.2d 602, 607 n. 4 (M.D.Pa. 2003).

The distinction between Article III and statutory standing is critical in this case because of claimants' request for a jury trial.² If a threshold issue of Article III standing raises material fact disputes, including credibility issues, the district court may conduct an evidentiary hearing and resolve them. See 1998 BMW, 235 F.3d at 400. The district court proceeded in this manner, quite properly using the evidentiary hearing on the hardship issue to help resolve what the government presented as a threshold issue of standing. But the disputed issue was statutory standing — whether claimants' colorable ownership interests are subject to forfeiture. This issue goes to the merits and therefore must be decided in accordance with Rule 56 standards, viewing the evidence in the light most favorable to Bearden and Andrews and leaving credibility issues to the ultimate finder of fact. Misled by the government's intermingling of Article III and statutory...