U.S. v. Premises Known as 608 Taylor Ave., Apartment 302, Pittsburgh, Pa., No. 77-2408

• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
• Writing for the Court: Blair A. Griffith, U. S. Atty.; Before GIBBONS, ROSENN and HUNTER; JAMES HUNTER, III; ROSENN
• Citation: 584 F.2d 1297
• Parties: UNITED STATES of America v. PREMISES KNOWN AS 608 TAYLOR AVE., APARTMENT 302, PITTSBURGH, PENNSYLVANIA, et al. Appeal of Harold MARGOLIS.
• Docket Number: No. 77-2408
• Decision Date: 21 September 1978

Page 1297

584 F.2d 1297 UNITED STATES of America
v.
PREMISES KNOWN AS 608 TAYLOR AVE., APARTMENT 302,
PITTSBURGH, PENNSYLVANIA, et al.
Appeal of Harold MARGOLIS. No. 77-2408. United States Court of Appeals,
Third Circuit. Argued June 5, 1978.
Decided Sept. 21, 1978.

Page 1299

Blair A. Griffith, U. S. Atty., J. Alan Johnson, Bruce A. Antikowiak, Asst. U. S. Attys., Pittsburgh, Pa., for appellee.

Leonard I. Sharon, Pittsburgh, Pa., Lee H. Adler, Beckley, W. Va., Michael L. Rosenfield, Albuquerque, N. M., for appellant.

Before GIBBONS, ROSENN and HUNTER, Circuit Judges.

OPINION

JAMES HUNTER, III, Circuit Judge:

In this appeal we consider the limitations upon the government's retention of property legally seized pursuant to a search warrant. Appellant Harold Margolis made a motion for return of goods, including approximately $12,000 in currency, seized by agents of the Federal Bureau of Investigation. He contends that the government's continued possession of the property violates due process. The district court ruled that the government may retain seized property for a reasonable time before instituting criminal proceedings and denied relief. We agree with the rule adopted, but believe that the court should also have determined whether the retention reasonably related to the government's interests in the property. Accordingly, we vacate the order denying the motion and remand.

I

On February 1, 1977, Special Agents of the Federal Bureau of Investigation conducted a search of fifteen residences within the Western District of Pennsylvania. The search was made pursuant to a warrant pertaining to gambling contraband used in violation of 18 U.S.C. § 1955. ¹ During the search at the home of Harold Margolis, the agents seized, among other items, $11,975 in United States currency. ²

On April 20, 1977 Margolis filed a "Motion for Return of Goods Seized." To our knowledge, no criminal proceedings of any sort have been commenced against Margolis, and no forfeiture proceedings have been brought against the property. In the motion Margolis indicated that he had no objection to the government's photographing the currency or making notations of the serial numbers and denominations before the cash was returned. Margolis stipulated for purposes of the motion that the search warrant and seizure were valid. He contended that the retention of the property violated his fifth amendment due process rights.

The district court on May 3 denied the motion. ³ The court followed the rule in

Page 1300

Shea v. Gabriel, 520 F.2d 879, 882 (1st Cir. 1975), that the government's retention of seized property without commencing some sort of proceeding would violate the Constitution if the delay took on "unreasonable proportions." The court held that the three-month delay was not unreasonable and denied the motion.

On July 13, 1977, Margolis filed a "Petition for Reconsideration" of the May 3 order, and requested return of the $11,975. The trial judge treated the petition as a renewed motion for return of goods in light of the continued failure of the government to commence any proceedings against Margolis or the property. An evidentiary hearing was held. In an opinion and order filed September 22, the trial court found that the currency was related to an ongoing investigation. Also, the court found that the sort of investigation involved often resulted in a one to two-year delay after a search before an indictment is brought. Under the rule announced in its previous opinion, the district court held that the government was still acting reasonably and accordingly denied Margolis' motion. The court indicated that the motion could be renewed at such time as the government's "inaction or delay eventually deteriorates to unreasonable proportions and thereby infringes upon the movant's Fifth Amendment rights." Margolis filed a timely notice of appeal from that order denying the July 13 motion for return of seized goods.

II

At the outset we must address the question as to whether we have jurisdiction to hear this appeal. The only basis for jurisdiction raised by the parties is that the denial of the motion for the return of property is a "final decision" within the meaning of 28 U.S.C. § 1291. The Supreme Court has indicated that finality of an order relating to a potential criminal prosecution is governed by the independence of the order from the criminal proceeding. An order relating to a motion to suppress evidence, even before an indictment, is not an appealable order. Such a ruling is considered to be merely a step in the criminal process, and any rights involved are adequately protected in subsequent trial proceedings. DiBella v. United States, 369 U.S. 121, 82 S.Ct. 654, 7 L.Ed.2d 614 (1962). See G. M. Leasing Corp. v. United States, 429 U.S. 338, 359, 97 S.Ct. 619, 50 L.Ed.2d 530 (1977); Meister v. United States, 397 F.2d 268 (3d Cir. 1968). On the other hand, determination of a motion for the return of property was not considered to be intimately involved in the criminal process, since the property rights asserted in such a motion are often unrelated to those which will be involved in a criminal trial. Under some circumstances, orders denying such motions are immediately appealable. DiBella v. United States, supra, 369 U.S. at 131-32, 82 S.Ct. 654; United States v. Ryan, 402 U.S. 530, 533, 91 S.Ct. 1580, 29 L.Ed.2d 85 (1971); United States v. Fields, 425 F.2d 883 (3d Cir. 1970). The question of whether the motion is for the return of property or whether it also involves the suppression of evidence is to be resolved by examining the "essential character" of the proceedings below. Cogen v. United States, 278 U.S. 221, 225, 49 S.Ct. 118, 73 L.Ed. 275 (1929); Smith v. United States,377 F.2d 739, 742 (3d Cir. 1967). See Carroll v. United States, 354 U.S. 394, 404 n. 17, 77 S.Ct. 1332, 1 L.Ed.2d 1442 (1957); Shea v. Gabriel,supra, 520 F.2d at 881; United States v. Peachtree National Distributors,456 F.2d 442 (5th Cir. 1972); Meister v. United States, supra.

We hold that the essential character of Margolis' motion is solely for the return of property. For purposes of this proceeding, the movant has stipulated that the search and seizure were lawful. The

Page 1301

motion was argued only on the basis that the government violated due process by continuing to hold the property without bringing any action to which the property would relate. Such an argument does not relate to issues germane to a criminal trial which might result from the government's investigation. Margolis has offered to allow the government to photograph and otherwise preserve the evidentiary value of the cash which was seized. Thus, the effect of the motion if granted would not interfere with any criminal proceedings which might result. We believe that the motion below should be considered in substance to be independent from any future criminal proceedings.

Our finding that the motion was for the return of property does not end our inquiry. The policy of avoiding piecemeal appeals has been interpreted to deprive an order denying motion for the return of goods of finality when it relates to an already existing prosecution. The Court in DiBella explained:

Only if the motion is solely for the return of property and is in no way tied to a criminal prosecution In esse against the movant can the proceedings be regarded as independent.

369 U.S. at 131-32, 82 S.Ct. at 660. See United States v. Ryan, supra, 402 U.S. at 533, 91 S.Ct. 1580; Shea v. Gabriel, supra, 520 F.2d at 881-82; United States v. Alexander, 428 F.2d 1169, 1171 (8th Cir. 1970); Smith v. United States, supra. If a proceeding is pending, the movant is required to raise the motion for return of goods in that proceeding and to await a final order before taking an appeal.

In this case, no proceedings have been commenced against the movant or against the property. Indeed, part of Margolis' argument is that the government is delaying unreasonably in commencing any proceedings. The testimony indicated that the case is still in the "investigatory" rather than the "accusatory" stage. See Shea v. Gabriel, supra, 520 F.2d at 882. We do not decide precisely at what point criminal process becomes a prosecution "In esse " for purposes of DiBella, but hold that the bringing of a prosecution in this case is too remote from Margolis' motion to deprive the district court's order of finality. See Richey v. Smith, 515 F.2d 1239, 1242-43 (5th Cir. 1975). To hold otherwise would effectively deny appellate review of claims for unreasonable delay such as raised by Margolis.

III

Margolis argues that the Constitution places limitations on the government's retention of seized property. Since no proceedings of any kind have been commenced against appellant, we must consider his position to be the same as that of an innocent bystander whose property has been seized for possible use as evidence in a criminal investigation.

Appellant does not raise a claim under the fourth amendment that the search and seizure were unlawful, but contends that the prosecutor's continued possession of his property, particularly the currency, violates due process. ⁴ On appeal he takes the position that the government must return property "shortly" after a seizure, rather than after a reasonable time, as the district court held. He also argues that the government is required to return the currency if its evidentiary value can be fully preserved by other means, such as photographing the bills and recording serial numbers and denominations. He further suggests that if the government wishes to retain the bills themselves, he be given a check for their value or other compensation.

The government also opposes the reasonable-time rule adopted by the district court. Its position is that since the currency is being held chiefly for its evidentiary value,

Page 1302

the prosecutor may retain the property until the end of subsequent grand jury and trial...