United States v. $229,850.00 in U.S. Currency

• Decision Date: 25 September 2014
• Docket Number: No. CV 13–1316–TUC–CRP.,CV 13–1316–TUC–CRP.
• Citation: 50 F.Supp.3d 1171
• Court: U.S. District Court — District of Arizona
• Parties: UNITED STATES of America, Plaintiff, v. $229,850.00 IN U.S. CURRENCY, Defendant. Robert and Debra Osborne, Claimants.

?50 F.Supp.3d 1171

UNITED STATES of America, Plaintiff,
v.
$229,850.00 IN U.S. CURRENCY, Defendant.
Robert and Debra Osborne, Claimants.

No. CV 13–1316–TUC–CRP.

United States District Court, D. Arizona.

Signed Sept. 25, 2014

Motion denied.

[50 F.Supp.3d 1172]

Cynthia L. Weisman, Stephen R. Kotz, US Attorneys Office, Albuquerque, NM, for Plaintiff.

ORDER
CHARLES R. PYLE, United States Magistrate Judge.

The Government filed this forfeiture action pursuant to 21 U.S.C. § 881(a)(6).

[50 F.Supp.3d 1173]

(Complaint (Doc. 1)). The Claimants in this case, Dr. Robert Osborne and his wife Debra Osborne seek dismissal pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim, arguing that the Complaint is untimely. (Doc. 9). The Magistrate Judge has jurisdiction over this matter pursuant to the parties' consent. See 28 U.S.C. § 636(c). The Osbornes' Motion to Dismiss came on for oral argument on July 29, 2014. ( See Transcript (Doc. 26)). For the following reasons, the Court converts the Motion to Dismiss to a motion for summary judgment and denies the motion.

The facts are not in dispute. On May 9, 2013, the government seized the Defendant currency. On June 18, 2013, FBI Headquarters mailed Notice Letters to each of the Osbornes informing that the forfeiture was conducted pursuant to 21 U.S.C. § 881, 19 U.S.C. § 1602–1619, 18 U.S.C. § 983, and 28 C.F.R. Part 8. (Response (Doc. 16), Exh. 1A). The Notice Letters also informed that:

If you want to contest the seizure or forfeiture of the property in court, you must file a claim of ownership with the FBI by July 23, 2013. The claim is filed when it is received by the FBI Forfeiture Paralegal Specialist of the FBI Field Division mentioned below.¹

( Id.) (emphasis added). Through counsel, the Osbornes submitted a Claim dated July 9, 2013. (Response, Exh. 2A). The Osbornes sent the Claim by certified mail on July 9, 2014. ( Id.) In their Answer and Motion to Dismiss, the Osbornes assert that the Claim was received by the FBI on July 10, 2013. (Answer, (Doc. 7) p. 3 ² (citing tracking number); Motion p. 1 (citing Answer)). The government does not dispute that the Claim arrived at the FBI mailroom on July 10, 2013. ( See Response

[50 F.Supp.3d 1175]

(Doc. 16), p. 1 (indicating the FBI mailroom in Phoenix, Arizona, received the Claim on July 10, 2013 according to the U.S. Postal service tracking number indicated in the Answer)). Rather, the government contends that the Claim was not received by the “appropriate official” ( i.e. the FBI Forfeiture Paralegal Specialist) until July 11, 2013. Thus, the government contends it had 90 days from that date to file the Complaint.

The Claim bears a “received” date of 7/11/13 (the date appears to be hand written). (Response, Exh. 2A). The government submitted the Declaration of FSA Data Analyst Brianne Johnson who states that she: stamped and dated the Osbornes' Claim on July 11, 2013; the day she stamped the Osbornes' claim, she was undergoing training by FBI Forfeiture Paralegal Specialist Christa Roberts who trained her to immediately open and date stamp incoming claims and petitions, then give them to either Roberts or the other Forfeiture Paralegal Specialist; and standard procedure is to date stamp the claims on the day they are received from the mailroom. (Response, Exh. 2). The government also submits the declaration of Christa Roberts, FBI Forfeiture Paralegal Specialist, who confirms Johnson's statements regarding receipt of the Osbornes' Claim and dating it as received on July 11, 2013. (Response, Exh. 1). Roberts goes on to state that the FBI office has a large mailroom, staffed by two employees, that receives mail for distribution to FBI offices in cities throughout Arizona. ( Id.). She states that “[t]here is always a delay from receipt of mail in the mailroom to delivery into the forfeiture mailbox, due to required security measures and sorting procedures for incoming mail.... It is not unusual for mail to be placed in the forfeiture mailbox late in the afternoon, or the following morning. As a result, often the Forfeiture Unit has a receipt date the day after mail was received from the mailroom.” ( Id. at ¶ 7). “Upon receipt from the mailroom, the Forfeiture Unit immediately opens and date stamps all incoming claims and petitions.” ( Id. at ¶ 6).

On October 9, 2013 (91 days after July 10, 2013 and 90 days after July 11, 2013), the government filed the civil complaint in this action. The Osbornes assert that the complaint is untimely filed pursuant to 18 U.S.C. § 983(a)(3)(A) because this civil action was filed later than 90 days after they filed their Claim given that their Claim was received by the FBI mailroom on July 10, 2013. The government counters that § 983(a)(2)(A) requires that the claim be filed with the “appropriate official” and, therefore, the claim is not “filed” until received by that official, who in this case is the FBI Forfeiture Paralegal Specialist. The government also cites regulations indicating that with respect to a personal written notice of administrative forfeiture, such as that received by the Osbornes, “Appropriate official” means: “the office or official identified in the ... personal written notice in accordance with [28 C.F.R.] § 8.9.” 28 C.F.R. § 8.2. Pursuant to § 8.9, the notice must: “State the identity of the appropriate official of the seizing agency and the address where the claim must be filed....” 28 C.F.R. § 8.9(b)(2)(iv); see also 28 C.F.R. § 8.10(a) (indicating the claimant must file a claim with the “appropriate official”). The government points out that the Notices sent to the Osbornes were clear that the “claim is filed when it is received by the FBI Forfeiture Paralegal of [sic] FBI Field Division....” (Government's Supplemental Authority, Attachment 1 (Doc. 22–1), p. 2 (citing Response, Exh. 1)). According to the government, the claim was received by the “appropriate official” ( i.e., the FBI Forfeiture Paralegal Specialist) on July 11, 2013 and thus, the government had 90

[50 F.Supp.3d 1176]

days from that date to file the complaint. ( Id. at p. 2). Alternatively, if the Court determines the Complaint is late, then the government requests equitable tolling.

In 2000, Congress enacted the Civil Asset Forfeiture Reform Act (“CAFRA”), 18 U.S.C. § 983, to provide increased protections for claimants. United States v. Ritchie, 342 F.3d 903, 910 n. 1 (9th Cir.2003); see also Stefan D. Cassella, The Civil Asset Forfeiture Reform Act of 2000: Expanded Government Forfeiture Authority and Strict Deadlines Imposed on All Parties, 27 J.Legis. 97, 122–25 (2001) (“Cassella”). “The enactment of CAFRA was, in part, a reaction to the perception that there was some inequity in imposing strict deadlines and sanctions on property owners contesting civil forfeiture actions, while not imposing similar deadlines and sanctions on the government. The logic was that if property owners were required to file claims within a fixed period of time, and were made to suffer consequences for failing to do so, the government should face deadlines and suffer consequences as well.” Cassella, at pp. 122–25. CAFRA imposed the 90–day deadline for the government to file a complaint set out at 18 U.S.C. § 983(a)(3)(A). The 90–day time limit is mandatory and “[t]he requirement that the Government release the seized property where it fails to file a timely complaint for forfeiture is the ‘sanction’ that CAFRA imposes for such failure.” United States v. One 2007 Harley Davidson Street Glide Motorcycle, 982 F.Supp.2d 634 (D.Md.2013) (citing United States v. Wilson, 699 F.3d 789, 791 (4th Cir.2012)). Moreover, because forfeitures are disfavored, forfeiture laws are strictly construed against the government. Ritchie, 342 F.3d at 910.

The Osbornes argue that the government “ought not be able to manipulate the deadlines to evade the delay reforms[ ]” enacted by CAFRA. (Motion, p. 5). The Court agrees.

Not only must the government file a complaint no later than 90 days after receipt of a claim, but a claimant must file a claim within a deadline as well. See Beck v. United States, 2011 WL 862952, *1 (D.Md. Mar. 10, 2011) (“The Government's notice sets the deadline for filing a claim for seized property, subject to the restriction that the deadline may not be ‘earlier than 35 days after the date the letter is mailed.’ ”) (quoting 18 U.S.C. § 983(a)(2)(B)); ( See also Tr. at p. 15 (counsel for government confirming that Claimants had 35 days to file a claim)). Here, the Osbornes did as instructed, and mailed their Claim pursuant to the directions they received from the government.³ Roberts' declaration makes clear that “[t]here is always a delay from receipt of mail in the mailroom to delivery into the forfeiture mailbox....” (Response, Exh. 1, ¶ 7). Yet, there is no objective means for a claimant to be aware of and plan for such delay. Nor did the notice letter inform the claimant to send the claim so that it would be timely received by the paralegal accounting for a delay of any specified or unspecified period. In sum, “[t]he strict construction required of [ section 983(a)(3)(A) ] ... is a two way street. Had claimant ... been merely one day late in filing his claim, no doubt the government would take the position that the

[50 F.Supp.3d 1177]

claim would be barred—and properly so.” United States v. Funds in the Amount of $314,900.00 in U.S. Currency, CV 05–3012 (N.D. Ill. December 21, 2005 Order, p. 4) (citing In re Forfeiture of $34,905.00 in U.S. Currency, 96 F.Supp.2d 1116, 1119 (D.Or.2000) (DEA required to forfeit property where claimant failed to file claim within statutory period)). At oral argument, counsel for the government confirmed that if a claim arrived at the mailroom on last day for filing a claim and did not reach the appropriate official until the following day, the claim would be deemed untimely. (Tr. at pp. 15, 21). Thus, “a requirement that filing occurs only when a claim reaches ‘the...