U.S. v. U.S. Currency in the Amount of $2,857.00

• Decision Date: 02 November 1984
• Docket Number: No. 83-3107,83-3107
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. UNITED STATES CURRENCY IN THE AMOUNT OF $2,857.00, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 208

754 F.2d 208

UNITED STATES of America, Plaintiff-Appellee, v. UNITED STATES CURRENCY IN THE AMOUNT OF $2,857.00 Defendant-Appellant.

No. 83-3107.

United States Court of Appeals Seventh Circuit.

Submitted Nov. 2, 1984. ^*

Decided Jan. 28, 1985.

J. Frank Hanley, II, Indianapolis, Ind., for defendant-appellant.

Lloyd B. Monroe, Asst. U.S. Atty., Sarah Evans Barker, U.S. Atty., Indianapolis, Ind., for plaintiff-appellee.

Before WOOD and FLAUM, Circuit Judges, and HAYNSWORTH, Senior Circuit Judge. ^**

FLAUM, Circuit Judge.

This appeal is taken from the district court's grant of summary judgment to the United States in a forfeiture action against $2,857 in United States currency. The issues presented by this case concern the relationships between an administrative summary forfeiture proceeding, an administrative petition for remission or mitigation of forfeiture, and a judicial forfeiture proceeding. For the reasons stated below, we affirm the judgment of the district court.

I.

United States currency in the amount of $2,857 was seized from claimant-appellant Dale J. Raymer on October 21, 1982, by agents of the Drug Enforcement Administration ("DEA"). The seizure was incident to a search of Raymer's residence under a search warrant. The DEA seized the currency pursuant to 21 U.S.C. Sec. 881(a)(6), alleging that the money was furnished or intended to be furnished in exchange for a controlled substance. The DEA promptly instituted a summary forfeiture proceeding against the currency under 19 U.S.C. Sec. 1608 (1982). ¹ In a letter dated December 16, 1982, the DEA formally notified Raymer that it was taking steps to forfeit the currency, and further advised him of the procedures he could utilize to contest the forfeiture.

Raymer filed a timely claim to the currency and a cost bond of $250 with the DEA on December 31, 1982, pursuant to 19 U.S.C. Sec. 1608. See also 19 C.F.R. Sec. 162.47 (1984). As required by statute, the DEA then forwarded all paperwork to the United States Attorney for the Southern District of Indiana, where the currency was seized, for the institution of judicial condemnation proceedings. See 19 U.S.C. Sec. 1608; 19 C.F.R. Sec. 162.47(d) (1984); 21 C.F.R. Sec. 1316.76(a) (1984). The DEA sent Raymer a letter notifying him of the transfer on January 6, 1983.

On January 7, 1983, Raymer filed a verified petition for remission or mitigation of the forfeiture with the DEA pursuant to 19 U.S.C. Sec. 1618. See also 21 C.F.R. Sec. 1316.79 (1984). Upon receipt of Raymer's petition for remission on January 10, the DEA forwarded it to the U.S. Attorney and notified Raymer that it had done so in a letter received by Raymer's counsel on February 4, 1983.

The U.S. Attorney, meanwhile, instituted a judicial condemnation proceeding against the currency on January 26, 1983, by filing a complaint in the United States District Court for the Southern District of Indiana. Raymer was served with a copy of the complaint. On February 1, the district court issued orders for warrant of arrest of property and for publication of notice pursuant to Supplemental Rule C(3) and (4) of the Supplemental Rules of Civil Procedure for Certain Admiralty and Maritime Claims. ² A copy of the order for publication of notice was sent to Raymer's counsel. The order specifically required all persons who had an interest in the currency to file a claim in the district court within ten days of the date of publication, and to serve and file an answer within twenty days of the filing of their claim. The notice was published in the Indianapolis Commercial on six separate occasions between February 11, 1983, and March 25, 1983.

On February 4, 1983, Raymer served and filed an answer to the complaint for forfeiture. Raymer did not file any claim to the currency in the district court, as required by the order for publication of notice and Supplemental Rule C(6).

On May 4, 1983, the government moved for summary judgment on the grounds that no claim had been filed as required by Supplemental Rule C(6) and that the time for filing such a claim had passed. The government argued that Raymer, having failed to file a verified claim, had no standing to file an answer. Since his answer was therefore null and void, the government concluded that it was entitled to judgment as a matter of law.

In response to the motion for summary judgment, Raymer argued that the Supplemental Rules were not applicable to this case and that his answer fulfilled any jurisdictional requirement of the district court.

The district court granted the government's motion for summary judgment on October 28, 1983, and entered judgment for the United States. The court ordered the currency paid into the United States Treasury.

On appeal, Raymer argues that (1) the Supplemental Rules governing notice and the filing of a claim do not apply to this proceeding; (2) the claim he filed with the DEA sufficiently fulfilled the district court's claim requirement; (3) the petition for remission he filed with the DEA fulfilled the district court's claim requirement; (4) he was deprived of his property without due process of law because he had no notice that his DEA claim was insufficient for the district court; and (5) the government waived any defect in his DEA claim by not objecting earlier.

II.

There is no question that all of the Supplemental Rules of Civil Procedure apply to this judicial forfeiture proceeding, see supra note 2, and that Raymer failed to file a verified claim to the currency in the district court as required by Supplemental Rule C(6). Raymer's argument that the claim he filed at the administrative level should be deemed to fulfill the district court's claim requirement reflects a basic misunderstanding of the relationship between an administrative summary forfeiture proceeding and a judicial forfeiture proceeding. We therefore begin with a brief explanation of the relationship between the two proceedings.

A. Summary Forfeiture

Prior to 1844, the only way the government could effect a forfeiture of goods it had seized was to promptly institute a suit for forfeiture. See McGuire v. Winslow, 26 Fed. 304, 306 (C.C.N.D.N.Y.1886). This judicial forfeiture suit was tried in the district court as a proceeding in rem, in which all interested parties could intervene and contest the forfeiture. Id. By act of April 2, 1844, Congress enabled the government to utilize a summary forfeiture procedure in cases where the value of the property seized was $100 or less. Act of April 2, 1844, ch. 8, 5 Stat. 653. The purpose of the summary forfeiture procedure was to save the government the time and expense of a judicial condemnation proceeding in cases where the value of the seized property was small. See Conway v. Stannard, 84 U.S. (17 Wall.) 398, 404, 21 L.Ed. 649 (1873); United States v. One Tintoretto Painting Entitled "The Holy Family With Saint Catherine and Honored Donor", 691 F.2d 603, 608 (2d Cir.1982); McGuire v. Winslow, 26 Fed. at 307. The jurisdictional limit, established at $100 in 1844, was $10,000 at the time of the seizure in this case. See 19 U.S.C. Sec. 1607 (1982). ³

A summary forfeiture proceeding takes place at the administrative level, and begins when the agency making the seizure publishes notice of the seizure for three successive weeks in a newspaper of general circulation in the judicial district in which the seizure occurred. See 19 U.S.C. Sec. 1607; 19 C.F.R. Sec. 162.45(b)(1) (1984). If no claim to the seized property is filed within twenty days from the date of the first publication of the notice of seizure, the agency declares the property forfeited. See 19 U.S.C. Sec. 1609. The summary forfeiture proceeding is stopped, however, if any person files a claim to the seized property within the twenty-day period, stating his interest therein, and deposits with the agency a $250 bond to the United States conditioned that if the property is condemned the obligor shall pay all costs and expenses of the condemnation proceedings. See 19 U.S.C. Sec. 1608; 19 C.F.R. Sec. 162.47(c) (1984) (filing of claim and cost bond stops summary forfeiture proceeding); 21 C.F.R. Sec. 1316.76(b) (1984) (same); One Tintoretto Painting, 691 F.2d at 608 (same). Upon the filing of a claim and cost bond, the agency must forward all paperwork to the United States attorney for the district where the property was seized for the institution of judicial condemnation proceedings in the ordinary mode prescribed by law. See 19 U.S.C. Sec. 1608; 19 C.F.R. Sec. 162.47(d) (1984); 21 C.F.R. Sec. 1316.76(a) (1984); United States v. Eight Bales # S I.J.K., 227 F.Supp. 425, 427 (S.D.N.Y.1964) (once claim filed, summary procedure automatically stopped and matter referred to U.S. attorney for condemnation in usual manner).

In short, summary forfeiture is an administrative process that is available to the government only if the value of the property seized is less than the jurisdictional amount and if no claim to the property is filed within twenty days after the date of the first publication of the notice of seizure. The legal effect of an administrative claim and cost bond is solely to stop the summary forfeiture proceeding and force the government to institute a judicial condemnation proceeding. An administrative claim does not give the claimant any rights in the judicial condemnation proceeding; it only insures that a judicial proceeding will take place before the property is forfeited. The claimant then has the opportunity, if he meets the district court's procedural requirements, to contest the forfeiture in court.

B. Judicial Forfeiture

A judicial forfeiture proceeding is a civil action in rem. The United States attorney for the district where the seizure occurred commences a judicial forfeiture proceeding by filing a complaint as described in Supplemental Rule C(2). The complaint must describe with reasonable particularity the property that is the subject of the action, must...