United States v. 200 Acres of Land Near FM 2686 Rio Grande City, 13–41299.

• Decision Date: 10 December 2014
• Docket Number: No. 13–41299.,13–41299.
• Citation: United States v. 200 Acres of Land Near FM 2686 Rio Grande City, 773 F.3d 654 (5th Cir. 2014)
• Parties: UNITED STATES of America, Plaintiff–Appellee v. REAL PROPERTY KNOWN AS 200 ACRES OF LAND NEAR FM 2686 RIO GRANDE CITY, TEXAS, Defendant. Dr. Carlos Ricardo Tirado Tamez, Claimant–Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

773 F.3d 654

UNITED STATES of America, Plaintiff–Appellee

v.REAL PROPERTY KNOWN AS 200 ACRES OF LAND NEAR FM 2686 RIO GRANDE CITY, TEXAS, Defendant.

Dr. Carlos Ricardo Tirado Tamez, Claimant–Appellant.

No. 13–41299.

United States Court of Appeals, Fifth Circuit.

Dec. 10, 2014.

Julie Kaye Hampton, Assistant U.S. Attorney, U.S. Attorney's Office, Corpus Christi, TX, for Plaintiff–Appellee.

Ricardo Amador Rodriguez, Attorney, McAllen, TX, for Claimant–Appellant.

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

Before STEWART, Chief Judge, and JONES, and HIGGINSON, Circuit Judges.

CARL E. STEWART, Chief Judge:

I. FACTUAL AND PROCEDURAL HISTORY

Plaintiff–Appellee (“United States”) filed a civil forfeiture complaint (“Complaint”) in rem on 200 acres of land near Farm to Market Road 2686 in Rio Grande City, Starr County, Texas (“Property”). The United States alleged Carlos Alberto Oliva–Castillo (“Oliva”) to be the true owner of the Property and that Oliva purchased the property with proceeds from the sale of illegal drugs. Oliva's criminal case is ongoing in the Southern District of Texas. A copy of the Complaint was posted on the Property by agents of the Department of Homeland Security Investigations. On December 23, 2011, the United States also published notice of the forfeiture action on an official government internet website—www.forfeiture.gov—for at least thirty consecutive days pursuant to Rule G(4)(a)(iv)(C) of the Supplemental Rule for Admiralty or Maritime Claims and Asset Forfeiture Actions (“Supplemental Rule G”). On December 7, 2011, and December 28, 2011, Dr. Carlos Ricardo Tirado Tamez (“Dr. Tirado”) filed an answer and amended answer, respectively, to the Complaint claiming to be the owner of the Property. Upon motion by the United States, the district court struck Dr. Tirado's responses for failure to file a sworn claim under Supplemental Rule G.

In February 2012, Dr. Tirado and his wife Cristina Rodriguez de Tirado (collectively, “Claimants”) filed a special appearance, a motion to quash and dismiss for insufficient process and service (“Motion to Quash”), a motion to dismiss for improper venue (“Venue Motion”), verified claims, a response, and an answer. The court denied the motions to quash and dismiss. In further attempts to serve Dr. Tirado, the United States executed a Mutual Legal Assistance Treaty Request (“MLAT Request”) through the Treaty on Cooperation between the United Mexican States and the United States of America for Mutual Legal Assistance (“Treaty”) to Mexico. After many attempts by Mexican authorities to serve Claimants via the MLAT, the United States unsuccessfully attempted service via certified international mail and by email to counsel for Dr. Tirado. The United States then moved to constructively serve Dr. Tirado by publication in Texas, which the district court granted. On April 3, 2013, the district court found that constructive service of process had been accomplished and permitted the parties to begin discovery. Dr. Tirado failed to provide initial disclosures to the United States as ordered by the magistrate judge. The United States served requests for production on the Claimants on April 17, 2013, by certified mail. On May 28, 2013, the United States sent a copy of the same requests via facsimile and email—along with a letter requesting receipt of production. Claimants did not respond.

Claimants were scheduled for depositions on June 20, 2013. Notice of the depositions was received at the office of Dr. Tirado's counsel on May 20, 2013. On June 7, 2013, the Magistrate Judge denied Dr. Tirado's motion to stay the case and granted in part the United States' motion to compel discovery. The court gave Dr. Tirado until June 17, 2013, to turn over documents to the United States relating to the Property, as the United States needed these documents before the scheduled depositions. The court warned that further discovery failures could lead to sanctions, including striking of the pleadings. The United States filed a show cause motion on June 18, 2013, as to why Dr. Tirado had not turned over any of the requested documents. At the show cause hearing, the court again ordered production of the requested documents and ordered the depositions to go forward as scheduled. Claimants and counsel for Claimants failed to appear at the depositions on June 20, 2013.

The United States moved the court to sanction the Claimants for failure to obey the court's discovery orders by striking their pleadings with prejudice and requiring Claimants to pay the reasonable expenses incurred as a result of their failure to appear for the depositions. Pursuant to Federal Rule of Civil Procedure 37, the district court granted the United States' motion for sanctions and entered default judgment against the Claimants. On November 26, 2013, the district court entered an agreed final judgment of forfeiture against the Property. Dr. Tirado appeals the default judgment and the final judgment of forfeiture arguing improper venue, insufficient service of process, and violation of his due process rights due to the default judgment.

II. DISCUSSION

A. Venue

We review all questions concerning venue for abuse of discretion. In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir.2004) (per curiam); United States v. Asibor, 109 F.3d 1023, 1037 (5th Cir.1997). Dr. Tirado argues that venue is improper in the Corpus Christi Division of the Southern District of Texas because the Property is located in the McAllen Division of the Southern District of Texas. Dr. Tirado thus argues the case must be dismissed because 28 U.S.C. § 1406(a) —which discusses the cure of venue defects—requires that “[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss” the case.

Chapter 87 of Title 28 of the United States Code contains venue statutes, and Chapter 85 contains statutes related to jurisdiction. 28 U.S.C. §§ 1330 –69, 1390 –1413. The venue statute related to in rem civil forfeiture states “[a] civil proceeding for the forfeiture of property may be prosecuted in any district where such property is found.” § 1395(b) (emphasis added). The jurisdictional statute related to civil forfeiture allows such actions to be brought in either “the district court for the district in which any of the acts or omissions giving rise to the forfeiture occurred” or “any other district ... specifically provided for in” § 1395. § 1355(b)(1)(A), (B) (emphasis added).

The Property in this case is in Starr County, which is in the McAllen Division of the Southern District of Texas. The fact that it is located in the territory covered by the McAllen Division does not make venue improper in the Corpus Christi Division because both divisions are within the Southern District of Texas. See § 1395(b). Had Congress intended to limit venue for in rem civil forfeiture to the division in which the property lies, it would have so stated. Additionally, 21 U.S.C. § 881(j) states that:

[i]n addition to the venue provided for in section 1395 of title 28 or any other provision of law ... a proceeding for forfeiture under this section may be brought in the judicial district in which the defendant owning such property is found or in the judicial district in which the criminal prosecution is brought.

(emphasis added). Oliva's criminal prosecution is ongoing in the Southern District of Texas. Thus, under this statute, venue is also appropriate in the Corpus Christi Division of the Southern District of Texas, as no distinction is made by § 881(j) about what division within the district is appropriate. Congress, via 28 U.S.C. §§ 1355(b)(1), 1395(b), and 21 U.S.C. § 881(j), specifically clarified venue requirements in civil forfeiture cases. None of these statutes require filing the case within a specific division of a district.

Moreover, no Fifth Circuit caselaw supports Dr. Tirado's contention. Our caselaw is scant on the issue of improper venue based on a filing in the wrong division, but one district court case, discussing the general venue statute for civil cases, sheds light: “28 U.S.C. § 1391 [ ] speaks in terms of districts not divisions .... Thus, if venue is proper in the Houston Division of the Southern District of Texas it is ipso facto proper in the Galveston Division—as well as in the Divisions of Corpus Christi, Victoria, Brownsville, McAllen and Laredo.” Says v. M/V DAVID C DEVALL, 161 F.Supp.2d 752, 753 (S.D.Tex.2001). Numerous lower courts within the Fifth Circuit have cited Says for this proposition, but we have not held as such. See, e.g., Lacour v. Thompson, No. 13–3169, 2014 WL 3542120, at *1 n. 1 (W.D.La. July 16, 2014). The issue of whether a particular division within a district can be improper under the general venue statute, § 1391, is not before us, however. The narrow issue presented is whether, in an in rem civil forfeiture case, venue is improper when the property lies outside of the division where the action was filed, but within the same district. To that end, Congress has spoken in terms of districts, not divisions. See 28 U.S.C. §§ 1355(b)(1), 1395(b) ; 21 U.S.C. § 881(j). As such, we hold that in an in rem civil forfeiture case, if venue is proper in a district, it is proper in any division within that district.¹ The district court did not abuse its discretion in denying Dr. Tirado's Venue Motion, and we affirm.

B. Service of Process

We next consider whether the district court erred in authorizing service of process by publication. We review the district court's determination of facts in a forfeiture case for clear error. United States v. Turner, 460 Fed.Appx. 346, 347 (5th Cir.2012) (per curiam). We review district court rulings on motions to quash service for abuse of discretion. Gartin v. Par Pharm. Cos., Inc., 289 Fed.Appx. 688, 691–92 (5th Cir.2008) (per curiam). Dr. Tirado argues the United States was required to use the method of process set out in the Hague Convention...