United States v. Funds in the Amount One Hundred Thousand One Hundred

• Decision Date: 19 September 2013
• Docket Number: No. 11–3706.,11–3706.
• Citation: 730 F.3d 711
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. FUNDS IN the AMOUNT OF ONE HUNDRED THOUSAND ONE HUNDRED AND TWENTY DOLLARS ($100,120.00), Defendant.
• Court: U.S. Court of Appeals — Seventh Circuit

730 F.3d 711

UNITED STATES of America, Plaintiff–Appellee,

v.FUNDS IN the AMOUNT OF ONE HUNDRED THOUSAND ONE HUNDRED AND TWENTY DOLLARS ($100,120.00), Defendant.

No. 11–3706.

United States Court of Appeals, Seventh Circuit.

Argued May 31, 2013.

Decided Sept. 19, 2013.

James M. Kuhn, Sr., Office of the United States Attorney, Chicago, IL, for Plaintiff–Appellee.

Stephen M. Komie, Attorney, Komie & Associates, Chicago, IL, for Appellant.

Before FLAUM, MANION, and ROVNER, Circuit Judges.

MANION, Circuit Judge.

After a Chicago Police Department drug dog alerted to a briefcase at Chicago's Union Station, Drug Enforcement Administration agents seized the briefcase and discovered that it contained $100,120.00 in United States currency. The federal government initiated a civil forfeiture proceeding against the currency, and the owners filed a claim for the currency. Ultimately, the district court granted the government's third motion for summary judgment and held that the undisputed facts proved by a preponderance of the evidence that the currency was either the proceeds of an illegal drug transaction, or was intended to facilitate such a transaction. The claimants appeal, and we reverse.

I. Facts

On December 4, 2002, Vincent Fallon purchased a one-way ticket for a train scheduled to travel from Chicago to Seattle on December 6. This conduct caused Drug Enforcement Administration Agent Eric Romano to suspect that Fallon might be a drug courier. Romano and Agent Sterling Terry approached Fallon after he had boarded the train at Chicago's Union Station, informed him they were doing a routine check, and proceeded to question him. Fallon provided the agents with identification and stated that he was unemployed, the address on his identification card was not current, and he was going to visit a friend in Seattle. Fallon refused to provide a current address, and Romano noticed that Fallon was sweating and trembling. Romano told Fallon he was looking for travelers with weapons, drugs, or more than $10,000 in currency, but Fallon denied carrying any such things. Fallon was traveling with a duffle bag and a brown briefcase, and he told the agents that he owned them both and knew what each contained. Fallon allowed the agents to search his duffle bag, but declined to permit them to open the briefcase. When Romano picked up the briefcase, he noticed that it was locked. He asked Fallon why the briefcase was locked, and Fallon responded that it contained personal effects and that he did not care to have anyone rummage through it. Fallon also stated that he did not have a key to open the briefcase (although he continued to maintain that it belonged to him). When pressed by Romano, Fallon admitted that the briefcase contained about $50,000 and stated that he intended to purchase a house in Seattle. Romano then told Fallon the briefcase would be held for further investigation, and directed Fallon to exit the train and accompany the agents.

At the Amtrak police office, Romano contacted the Chicago Police Department and requested a drug-detection dog. Meanwhile, in the presence of Fallon, Romano used a pocketknife to pry the briefcase open, and observed that it contained bundles of currency. He then closed the briefcase and questioned Fallon further. Fallon now claimed that the currency actually belonged to a third person for whom Fallon was investing it in glass blowing and glass art.

Thereafter, Chicago Police Officer Richard King arrived. Terry testified that Romano showed King the briefcase, and King testified that the agents told him that the briefcase contained suspected “narcotics transaction money.” Romano then placed the briefcase in the roll-call room of the Amtrak police office while King went to retrieve his drug dog, Deny.¹ No illegal drugs or suspected currency had been in the roll-call room that day, although drug sniffs had previously been conducted in the roll-call room (including some performed by Deny). King then brought Deny to the roll-call room and ordered him to search for drugs. Deny alerted to the briefcase.² After Deny's alert the agents confiscated the briefcase, which contained $100,120.00 in United States currency (“the Funds”).

The government initiated this civil forfeiture proceeding against the Funds. Fallon, and the owner of the Funds, Nicholas P. Marrocco, filed a joint claim for the Funds. (It is undisputed that Marrocco is the actual owner of the Funds. Thus, for simplicity's sake, we subsequently refer to the claimants as “Marrocco.”) Marrocco, who was not charged with any crime connected to the Funds, moved to quash the seizure of the Funds and argued that they were the fruit of an illegal search and should be suppressed. The district court granted Marrocco's motion because the court thought that although the agents had reasonable suspicion to temporarily hold the briefcase, they lacked probable cause to open it prior to Deny's alert. After the district court denied the government's motion for reconsideration, the government appealed. We reversed based on the inevitable discovery doctrine and, in the alternative, because Romano's illegal “opening of the briefcase with a knife had no effect on the subsequent discovery that the money was tainted by drugs.” See United States v. Marrocco, 578 F.3d 627, 637–42 (7th Cir.2009).

On remand, the government filed a motion for summary judgment. In response, Marrocco filed a motion in limine to exclude any evidence concerning Deny's alert to the briefcase. Relying on evidence that large quantities of United States currency are contaminated with illegal drugs, Marrocco also requested a hearing under Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and Federal Rule of Evidence 702 to challenge any evidence offered by the government purporting to establish that drug-dog alerts to currency demonstrate that the currency recently has been in contact with illegal drugs. The government withdrew its summary judgment motion, and the district court denied Marrocco's motion in limine and request for a Daubert hearing. In rejecting Marrocco's request for a Daubert hearing, the district court concluded that our precedent “puts to rest any argument that dog sniffs are universally unreliable based on the ‘currency contamination’ theory.”

The government subsequently filed a second motion for summary judgment. Marrocco's response relied, in part, upon expert affidavits averring that Deny's alert does not establish that the Funds recently were in contact with illegal drugs because drug-dog alerts to currency are generally unreliable, Deny's training was inadequate, and Deny's sniff was conducted in an unsound manner. The government moved to strike Marrocco's expert evidence. The district court denied the motion to strike, but ruled that the government could subsequently make any appropriate Daubert challenges to Marrocco's expert evidence. The district court also denied the government's motion for summary judgment, but granted leave to file a renewed motion supported by expert evidence.

Thereafter, the government filed its third motion for summary judgment and argued that the undisputed evidence demonstrated that the Funds were either the proceeds of an illegal drug transaction, or were intended to facilitate such a transaction, for four reasons. First, Fallon fit a drug courier profile. Second, Marrocco's tax returns, W–2 statements, and deposition testimony reveal that his expenses from 2000–2003 (approximately $111,625.00) exceeded his income from 1999–2002 ($96,006.90), and consequently Marrocco's legitimate sources of income were insufficient to account for the Funds.³ Third, records and affidavit testimony from King regarding Deny's training, certification, and past performance in the field prove that Deny was a reliable drug dog. And fourth, testimony from Romano and King establish that the methodology employed during the sniff of the briefcase was sound. (Despite the district court's earlier admonishment, the government did not provide expert evidence in its motion for summary judgment, but argued instead that such evidence was unnecessary to establish that a particular drug dog was reliable or that a particular sniff was sound.) The government also challenged Marrocco's expert evidence under Daubert and Rule 702.

In response, Marrocco argued that the evidence created genuine issues of material fact regarding whether Marrocco had a legitimate source for the Funds and whether Deny's alert demonstrated that the Funds recently had been in contact with illegal drugs.⁴ On the first issue, Marrocco relied primarily upon his affidavit testimony that the Funds were savings from his lawful employment over the course of his life. On the second issue, Marrocco again offered expert evidence that drug-dog alerts to currency are generally unreliable, Deny's training was inadequate, and Deny's sniff was conducted in an unsound manner.

Concluding that the undisputed evidence shows that Fallon matched a drug courier profile, the Funds could not be attributed to a legitimate source, and Deny's alert demonstrated that the Funds recently had been in contact with illegal drugs, the district court granted the government's motion for summary judgment. However, the district court did not resolve the government's Daubert and Rule 702 challenges. Marrocco appeals.

II. Discussion

On appeal, Marrocco reiterates his arguments that genuine disputes of material fact exist regarding whether the Funds could have come from a legitimate source and whether Deny's alert demonstrates that the Funds recently had been in contact with illegal drugs. Marrocco also contendsthat the district court applied an improper legal standard, and that the Funds should be suppressed because the search and seizure of the briefcase was unconstitutional.

We review a grant of summary judgment de novo. United States v. Funds in Amount of Thirty Thousand Six Hundred...