U.S. v. One Lear Jet Aircraft, Serial No. 35A-280, Registration No. YN-BVO

Decision Date11 February 1988
Docket NumberNo. 85-5938,D,A-280,REGISTRATION,YN-BV,85-5938
Citation836 F.2d 1571
Parties, 10 Fed.R.Serv.3d 885 UNITED STATES of America, Plaintiff-Appellee, v. ONE LEAR JET AIRCRAFT, SERIAL NO. 35NO.efendant, Leybda Corp., Claimant-Appellant.
CourtU.S. Court of Appeals — Eleventh Circuit

Ira J. Kurzban, Kurzban, Kurzban & Weinger, P.A., Miami, Fla., for claimant-appellant.

Leon B. Kellner, U.S. Atty., Jonathan Goodman, David O. Leiwant, Sonia Escobio O'Donnell, Asst. U.S. Attys., Miami, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Florida.


JOHNSON, Circuit Judge:

This case involves a forfeiture proceeding initiated by the government against a Lear Jet under 8 U.S.C.A. Sec. 1324(b). The aircraft had been used to enter this country by persons who made material misrepresentations on their visa applications. Leybda Corporation intervened as a claimant to the plane, but after trial, the district court ruled that the aircraft was forfeited to the government. United States v. One Lear Jet Aircraft, 617 F.Supp. 769 (S.D.Fla.1985). Leybda did not file a stay of judgment with the district court or a supersedeas bond with the appellate court. Therefore, after the expiration of the automatic ten day stay provided by Fed.R.Civ.P. 62(a), the government removed the plane to a warehouse in Missouri. Leybda then filed a timely notice of appeal, and this Court affirmed the forfeiture judgment. United States v. One Lear Jet Aircraft, 808 F.2d 765 (11th Cir.1987). The panel held that it had jurisdiction to entertain this appeal even though the aircraft had been removed from the Court's territorial jurisdiction. This opinion was vacated by the full Court, which ordered in banc reconsideration of the in rem jurisdictional issue. 831 F.2d 221 (11th Cir.1987). We now hold that, because removal of the res from a court's territorial jurisdiction destroys that court's in rem jurisdiction, Pennington v. Fourth National Bank, 243 U.S. 269, 37 S.Ct. 282, 61 L.Ed. 713 (1917), this Court does not have jurisdiction to hear Leybda's appeal.

The general rule of in rem jurisdiction is that the court's power derives entirely from its control over the defendant res. Id. at 272, 37 S.Ct. at 283; L.B. Harvey Marine, Inc. v. M/V River Arc, 712 F.2d 458, 459 (11th Cir.1983). Where an appellant fails to file a stay of judgment or a supersedeas bond, and the res is removed from the court's territorial jurisdiction, the appellate court does not have in rem jurisdiction. Taylor v. Tracor Marine, Inc., 683 F.2d 1361, 1362 (11th Cir.1982), cert. denied, 460 U.S. 1012, 103 S.Ct. 1252, 75 L.Ed.2d 481 (1983); Parks v. B.F. Leaman & Sons, Inc., 279 F.2d 529, 532 (5th Cir.1960). This Circuit has recently reaffirmed this traditional rule. See Harvey Marine, 712 F.2d at 459; Taylor, 683 F.2d at 1362.

In Harvey Marine and Taylor, this Court dismissed appeals for lack of jurisdiction where the prevailing party had removed the res and where the losing claimants failed to stay the execution of the district court's order. Recent cases in other circuits have reached the same result. See, e.g., United States v. $79,000 in U.S. Currency, 801 F.2d 738, 739 (5th Cir.1986) ("Where no supersedeas is filed or steps taken to supersede judgment and the Marshal surrenders custody, neither the district court nor the appellate court retains in rem jurisdiction"); United States v. 66 Pieces of Jade & Gold Jewelry, 760 F.2d 970, 973 (9th Cir.1985) ("Because forfeiture proceedings are in rem, the court's subject matter jurisdiction is dependent on its continuing control over the property"); Bank of New Orleans & Trust Co. v. Marine Credit Corp., 583 F.2d 1063, 1068 (8th Cir.1978) ("Removal of the res from a court's jurisdiction, or distribution of a substitute res deposited in the registry of the court, destroys in rem jurisdiction"). These cases demonstrate that the traditional in rem rule retains vitality.

In Harvey Marine, this Court dismissed an appeal as moot where the ship against which an in rem action had been brought departed the Court's jurisdiction after the district court dissolved the in rem arrest warrant. 712 F.2d at 459. Harvey Marine had filed an appeal from the district court's order dissolving the arrest, but it failed to request a stay of that order and it did not file a supersedeas bond. Id. at 458. This Court stated that it could not "proceed to adjudication" where the res was no longer within the Court's territorial jurisdiction. In response to Harvey Marine's argument that it was "fundamentally unfair not to adjudicate the merits of the case," the Court noted that there were "various methods to protect appellate jurisdiction in an in rem case," id. at 459 (citing Bank of New Orleans, 583 F.2d at 1068-69; Parks, 279 F.2d 529), and it implied that Harvey Marine was at fault for failing to employ any of these methods.

Other courts have stated this position more forcefully, holding that the losing claimant to the res is obligated to take some action to preserve the res so that the parties' rights to it could be adjudicated at the district and appellate courts. These courts impose a duty on the claimant to seek a stay of execution of the district court's judgment pending appeal, to file a supersedeas bond, or to take other action to preserve the res. Bank of New Orleans, 583 F.2d at 1068. See also United States v. $57,480.05 in U.S. Currency and Other Coins, 722 F.2d 1457, 1458-59 (9th Cir.1984). Under these circumstances, a claimant who fails to act to preserve the res cannot complain when the appellate court dismisses his appeal for lack of in rem jurisdiction.

Taylor employs an analysis similar to that in Harvey Marine, and the cases reach similar results. In Taylor, crew members brought an action against their vessel to obtain their wages. The ship was seized and sold, but the proceeds were disbursed to priority lienholders. This Court noted that the crew members failed to seek a stay of the district court's order allowing disbursement of the funds; therefore, the res was not before the Court on appeal. 683 F.2d at 1362. Consequently, in rem jurisdiction was destroyed, rendering the crew's appeal moot. Id.

Our recent cases control the result in the case at bar. The present case involves a sequence of events which is similar to what occurred in Taylor and Harvey Marine. After trial below, the district court ordered the plane forfeited to the government. Leybda filed notice of appeal, but it failed to stay the district court's order. 1 Therefore, the judgment became final ten days after the court issued its decree, and the government was free to remove the plane from this Court's jurisdiction. That removal destroyed in rem jurisdiction. 2

In light of the in rem jurisdictional rule, the only way in which Leybda might avoid dismissal of its appeal is to fit this appeal within the Court's in personam jurisdiction. Precedent from the predecessor to this Court holds that when an original action was brought in rem and in personam, the court retained jurisdiction even after the res was removed from the jurisdiction. Inland Credit Corp. v. M/T Bow Egret, 552 F.2d 1148 (5th Cir.1977). Therefore, this Court must determine whether in personam jurisdiction existed in this case.

One might argue that jurisdiction in this case was not limited to in rem jurisdiction. For example, 28 U.S.C.A. Sec. 1345 provides that:

Except as otherwise provided by Act of Congress, the district courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States, or by any agency or officer thereof expressly authorized to sue by Act of Congress.

In addition, 28 U.S.C.A. Sec. 1355 provides that:

The district court shall have original jurisdiction, exclusive of the courts of the states, of any action or proceeding for the recovery or enforcement of any fine, penalty, or forfeiture, pecuniary or otherwise, incurred under any Act of Congress, except matters within the jurisdiction of the Court of International Trade under Section 1582 of this title.

In its forfeiture complaint, the government alleged that 28 U.S.C.A. Secs. 1345 & 1355 provided the district court with jurisdiction, and the district court proceeded with the complaint on that basis. One Lear Jet, 617 F.Supp. at 771. At first glance, Section 1345 (jurisdiction where the United States is a plaintiff) may be read to provide a jurisdictional basis that is independent of the presence of the res. 3

However, a closer examination of these sections indicates that they vest the district courts with subject matter jurisdiction over forfeitures under 8 U.S.C.A. Sec. 1324. This is irrelevant to the question of whether the panel had in rem or in personam jurisdiction to decide this appeal. In addition, the statute governing forfeitures under the customs laws suggests that these statutes do not supply an independent jurisdictional basis. In part, the customs laws state that, "the storage of property outside the judicial district or customs collection district in which it was seized shall in no way affect the jurisdiction of the court which would otherwise have jurisdiction over such property." 19 U.S.C.A. Sec. 1605. The legislative history of Section 1605 states that the statute was necessary to modify the traditional rule that the res "remain in the judicial district of seizure in order that the district court may have jurisdiction when condemnation proceedings are instituted." 1954 U.S. Code Cong. & Admin. News 3900, 3906. The provisions of Title 28 discussed above were in effect when Congress adopted Section 1605. If those provisions were intended to eliminate the traditional requirement that the res be within the territorial...

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