U.S. v. Vertol H21C Registration No. N8540, 74-3071

• Citation: 545 F.2d 648
• Decision Date: 01 November 1976
• Docket Number: No. 74-3071,74-3071
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. VERTOL H21C, REGISTRATION NO. N8540, in rem, Defendant, Aviation Contractors, Inc., Claimant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 648

545 F.2d 648 UNITED STATES of America, Plaintiff-Appellant,
v.
VERTOL H21C, REGISTRATION NO. N8540, in rem, Defendant,
Aviation Contractors, Inc., Claimant-Appellee. No. 74-3071. United States Court of Appeals,
Ninth Circuit. Nov. 1, 1976.

Page 649

Richard I. Chaifetz, Atty. (argued), of Crim. Div., U. S. Dept. of Justice, Washington, D. C., for plaintiff-appellant.

Maribeth Halloran (argued), of Lorenz, Greene, Kelley & Halloran, San Francisco, Cal., for claimant-appellee.

Before MERRILL and HUFSTEDLER, Circuit Judges, and KING, ^* District Judge.

KING, District Judge:

On October 2, 1972, the Federal Aviation Administration (hereinafter "FAA") unilaterally determined that Aviation Contractors, Inc. (hereinafter "Aviation") had violated certain FAA regulations relating to helicopters. ¹ Pursuant to its authority under 49 U.S.C. § 1471(a)(1) the FAA determined to seek $6,000 in civil penalties from Aviation. On October 13, 1972, acting under 49 U.S.C. § 1473(b)(2), ² the FAA seized the defendant helicopter. On November 15, 1972, this in rem action against the helicopter was begun. The government sought to have the district court impose the $6,000 in civil penalties which the FAA claimed that Aviation should be assessed. ³ On the same day that the in rem action was begun the aircraft passed into the custody of the United States Marshal upon the issuance of a

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warrant of arrest by the court clerk. On May 31, 1974, acting pursuant to 49 U.S.C. § 1473(b)(3), the FAA released the helicopter to Aviation in exchange for a certificate of deposit in the amount of $6,000.

On June 5, 1974, the district court denied the government's motion for summary judgment ordering Aviation to pay the $6,000 penalty. At the same time, the court granted Aviation's motion for the release of the $6,000 certificate of deposit on the ground that the helicopter for which it had been substituted had been seized without affording Aviation due process of law. It is with the latter aspect of the district court's decision that this appeal is concerned.

Preliminarily, we reject Aviation's contention that the district court's order was not a "final decision" within the meaning of 28 U.S.C. § 1291 and that therefore this court does not have jurisdiction to hear this appeal. As the first sentence of both the complaint and the district court's opinion make clear, this was an in rem action against the helicopter. The release of the helicopter (and the substituted security) ended the in rem action. See American Bank of Wage Claims v. Registry of the District Court of Guam, 431 F.2d 1215 (9th Cir. 1970), and Seabord & Caribbran Transport Corp. v. Hafen-Dampfschiffahrt A.G. Hapag-Hadac Seebaderdienst, 329 F.2d 538 (5th Cir. 1964). Aviation's argument that the FAA may now proceed to collect the $6,000 penalty, see 49 U.S.C.A. § 1473(b)(1), does not in any way defeat this court's jurisdiction.

Turning to the merits of this appeal, we agree with the district court that the procedure followed in effecting the seizure of the aircraft in this case denied Aviation due process of law. ⁴ There can be no dispute that Aviation was deprived of its property within the meaning of the Fifth Amendment and was therefore entitled to due process protections. That the deprivation was only temporary can make no difference. See North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 606, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975). Finding this deprivation, however, only begins our inquiry since the Supreme Court has recently taken several different approaches in determining the necessity for pre-seizure hearings. In one case the Court stated:

(w)e have repeatedly held that no hearing at the preliminary stage is required by due process so long as the requisite hearing is held before the final administrative order becomes effective. . . . It is sufficient, where only property rights are concerned, that there is at some stage an opportunity for a hearing and a judicial determination. Mitchell v. W. T. Grant Co., 416 U.S. 600, 612, 94 S.Ct. 1895, 1902, 40 L.Ed.2d 406 (1972), quoting Ewing v. Mytinger & Casselberry, 339 U.S. 594, 70 S.Ct. 870, 94 L.Ed. 1088 (1950).

On the other hand, the Supreme Court has also said that:

There are "extraordinary situations" that justify postponing notice and opportunity for a hearing. These situations, however, must be truly unusual. Only in a few limited situations has this Court allowed outright seizure without opportunity for a prior hearing. Fuentes v. Shevin, 407 U.S. 67, 90, 92 S.Ct. 1983, 1999, 32 L.Ed.2d 556 (1972) (citations and footnotes omitted).

In its most recent opinion in this area, the Supreme Court left unclear whether the "hearing at some stage" approach of Mitchell or the "extraordinary situation" requirement of Fuentes should guide the courts in the future. See North Georgia Finishing, Inc. v. Di-Chem, Inc., supra, 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d 751. Fortunately, we need not choose between these approaches to resolve this case. Rather, we shall adopt still another approach utilized by the Supreme Court and determine the constitutionality of this seizure by comparing "the precise nature of the...