United States v. 829 Calle De Madero

• Decision Date: 12 November 1996
• Docket Number: No. 96-2026,96-2026
• Parties: UNITED STATES OF AMERICA, Plaintiff - Appellee, v. 829 CALLE DE MADERO, CHAPARRAL, OTERO COUNTY, NEW MEXICO, Real Estate Located at, Defendant. VICTOR VILLALOBOS, VIRGINIA VILLALOBOS, Claimants - Appellants
• Court: U.S. Court of Appeals — Tenth Circuit

Page 734

100 F.3d 734

UNITED STATES OF AMERICA, Plaintiff - Appellee, v. 829 CALLE DE MADERO, CHAPARRAL, OTERO COUNTY, NEW MEXICO, Real Estate Located at, Defendant.

VICTOR VILLALOBOS, VIRGINIA VILLALOBOS, Claimants - Appellants.

No. 96-2026

United States Court of Appeals, Tenth Circuit

November 12, 1996

Appeal from the United States District Court for the District of New Mexico, (D.C. No. CIV 93-232 M) Stephen Stevers, Las Cruces, New Mexico, for ClaimantsAppellants Victor Villalobos and Virginia Villalobos.

David N. Williams, Assistant United States Attorney (John J. Kelly, United States Attorney, and Stephen R. Kotz, Assistant United States Attorney, with him on the brief), Albuquerque, New Mexico, for PlaintiffAppellee.

Before ANDERSON, KELLY and LUCERO, Circuit Judges.

PAUL KELLY, JR., Circuit Judge.

Claimants Victor Villalobos and Virginia Villalobos appeal the district court's order of forfeiture of residential real estate located at 829 Calle de Madero, Chaparral, New Mexico. They argue that this forfeiture violates the Excessive Fines Clause of the Eighth Amendment to the United States Constitution. We conclude that this forfeiture is not excessive and therefore affirm the district court's grant of summary judgment in favor of the United States.

Background

On June 23, 1996, Victor and Virginia Villalobos met two undercover officers for the El Paso County Sheriff's Office at a restaurant in El Paso, Texas, and negotiated the purchase of three kilograms of cocaine for $45,000. Mr. and Mrs. Villalobos requested that the exchange take place at their residence because they had $39,000 there. They were to provide the remaining $6,000 in five days. Later that day, the undercover officers arrived at the residence and went inside. Mr. Villalobos brought a brown paper bag containing approximately $39,000 in cash to the officers. The officers gave a pre-arranged signal, and the Villaloboses were arrested. They consented to a search of the property, which revealed the afore referenced cash in the brown paper bag, $5,000 in cash concealed behind the dresser drawers in the master bedroom, $16,900 in cash hidden between the paneling and insulation of a jacuzzi in the master bedroom, a programmable scanner operating in the kitchen, and a list of frequencies with two Drug Enforcement Agency frequencies marked.

Both Mr. and Mrs. Villalobos were convicted in the Twelfth Judicial District Court for the State of New Mexico on drug-related charges. Mr. Villalobos was sentenced to six years imprisonment for attempt to traffic in cocaine and for conspiracy to traffic in cocaine. Mrs. Villalobos received five years of probation for conspiracy to traffic in cocaine. In addition, approximately $56,000 and the scanner were forfeited to the State.

The United States initiated a civil forfeiture action under 21 U.S.C. Section(s) 881 (a)(6) and (a)(7), seeking forfeiture of the residence. The residence was the Villalobos family home, where Mr. and Mrs. Villalobos lived with their four children. The district court granted the Claimants' motion to strike the Section(s) 881(a)(6) claim, finding insufficient evidence that the Claimants' property was the proceeds of illegal activity. Summary judgment was granted in favor of the United States under Section(s) 881(a)(7). Claimants appeal the district court's grant of summary judgment.

Discussion

The Claimants argue that forfeiture of their home violates the Excessive Fines Clause of the Eighth Amendment to the United States Constitution. We review questions of constitutional law and dispositions on summary judgment de novo. Wilson v. Meeks, 98 F.3d 1247, 1252-53 (10th Cir.1996); United States v. Angulo-Lopez, 7 F.3d 1506, 1508 (10th Cir. 1993), cert. denied, _____ U.S. _____, 114 S. Ct. 1563, 128 L.Ed.2d 209 (1994).

The Excessive Fines Clause of the Eighth Amendment received scant attention until 1989, when the Supreme Court held that the Clause did not limit the amount of punitive damages which may be awarded in a civil suit to which the government is not a party. Browning-Ferris Indus. v. Kelco Disposal, 492 U.S. 257, 264 (1989). Browning-Ferris was soon followed by the Supreme Court's most prominent decision on the Clause to date. In Austin v. United States, 509 U.S. 602, 611-18 (1993), the Court examined the history of forfeitures in England and in the early days of this country and determined that forfeitures constitute payment to a sovereign as punishment for an offense. In addition, the Court noted Congress's intent to punish drug traffickers by enacting the civil forfeiture statute. Id. at 619-22. The Court also relied upon the civil forfeiture statute's inclusion of an innocent owner defense-a defense not raised in this appeal and, on these facts, certainly not applicable-in support of its conclusion that such forfeitures constitute punishment. Id. at 619. The Court consequently held that the Excessive Fines Clause applies to civil forfeitures under 21 U.S.C. Section(s) 881(a)(4) and (a)(7). Id. at 622.

We believe that Austin retreats from, at least for excessive fines consideration, the legal fiction that it is solely the guilt of the property-as opposed to the conduct of the owner or claimant-that is being punished. As Justice Blackmun noted, "If forfeiture had been understood not to punish the owner, there would have been no reason to reserve the case of a truly innocent owner. Indeed, it is only on the assumption that forfeiture serves in part to punish that the Court's past reservation of that question makes sense." Id. at 617. The Court was equally clear that, from earliest times, the word "fine" was understood to include "forfeiture." Id. at 614 n.7.

With this background-that "fine" encompasses "forfeiture" and that the purpose of a forfeiture is to punish the claimant-our focus, once the government has established that the property was "used, or intended to be used . . . to commit, or to facilitate the commission of, a violation of [Chapter 13, Subchapter I, of Title 21 of the United States Code]," 21 U.S.C. Section(s) 881(a)(7), shifts to the traditional tests employed to determine whether a violation of the Eighth Amendment Excessive Fines Clause has occurred.

Despite its holding that civil forfeitures impose punishment for purposes of the Excessive Fines Clause, the Austin majority refrained from establishing a methodology for determining when a forfeiture is excessive, leaving that task to the lower courts. 509 U.S. at 622-23. The majority's only guidance came in apparent rejection of the test proposed by Justice Scalia in his Austin concurrence. Justice Scalia's reasoning, at odds with the majority's rejection of the "guilty-property" fiction, counseled that the excessiveness inquiry in civil forfeitures differs from the inquiry in cases involving monetary fines, which compares the value of the fine in relation to the offense. Id. at 627 (Scalia, J., concurring). Instead, Justice Scalia concluded that "[t]he relevant inquiry for an excessive forfeiture under Section(s) 881 is the relationship of the property to the offense: Was it close enough to render the property, under traditional standards, `guilty' and hence forfeitable?" Id. at 628 (Scalia, J., concurring).

The majority in Austin, while rejecting Justice Scalia's approach, did acknowledge that the relationship between the property and the offense may be a relevant factor in the excessiveness inquiry, but stated that the lower courts were "in no way limit[ed] . . . from considering other factors . . . ." Id. at 623 n.15. Indeed, all of the circuits which have addressed this question since Austin have concluded that factors other than the relationship between the property and the offense are relevant. E.g., United States v. Chandler, 36 F.3d 358, 365 (4th Cir. 1994) (adopting a three-part instrumentality test which "considers (1) the nexus between the offense and the property and the extent of the property's role in the offense, (2) the role and culpability of the owner, and (3) the possibility of separating offending property that can readily be separated from the remainder"), cert. denied, _____ U.S. _____, 115 S. Ct. 1792, 131 L.Ed.2d 721 (1995).

The majority of the circuits which have addressed the question perform an analysis that purports to balance the severity of the fine, i.e., the forfeiture, with the seriousness of the underlying offense and the culpability of the owner. United States v. Real Property Located in El Dorado County at 6380 Little Canyon Road, El Dorado, Cal., 59 F.3d 974, 985-86 (9th Cir. 1995); United States v. Milbrand, 58 F.3d 841, 847-48 (2d Cir. 1995), cert. denied, _____ U.S. _____, 116 S. Ct. 1284, 134 L.Ed.2d 288 (1996); see also United States v. Bieri, 68 F.3d 232, 236 (8th Cir. 1995), cert. denied, _____ U.S. _____, 116 S. Ct. 1876, 135 L.Ed.2d 172 (1996); United States v. Premises Known as Rural Route No. 1 Box 224, 14 F.3d 864, 876 (3d Cir. 1994) (leaving the question open, but suggesting that both the nexus between the property and the offense and the relationship between the value of the forfeited property and the severity of the offense are relevant). Although there are differences between the tests articulated by the circuits which have adopted this approach, the tests roughly follow the same analytical process. First, the instrumentality or nexus test examines the connection between the forfeited property and the offense. This first prong of the test is required both by the statute as well as under Justice Scalia's approach, and the burden is on the government to prove that the connection exists. Second, the proportionality test compares the severity of the offense, the harshness of the sanction, and the culpability of the claimant. The burden of showing excessiveness is on the claimant.

The district court in this case applied the instrumentality test adopted by the Fourth Circuit in Chandler and concluded that the forfeiture was not...