United States v. JP Morgan Chase Bank Account Number Ending 8215 in the Name of Ladislao V. Samaniego, VL: $446,377.36

Decision Date01 September 2016
Docket NumberNo. 14-16070,14-16070
Citation835 F.3d 1159
Parties United States of America, Plaintiff-Appellee, v. JP Morgan Chase Bank Account Number Ending 8215 in the Name of Ladislao V. Samaniego, VL: $446,377.36; JP Morgan Chase Bank Account Number Ending 7058 in the Name of Manuel Castro, VL: $361, 070.25, Defendants, Ladislao V. Samaniego; Manuel Castro, Claimants-Appellants.
CourtU.S. Court of Appeals — Ninth Circuit

Taylor Clarke Young (argued) and Robert A. Mandel, Mandel Young PLC, Phoenix, Arizona, for Claimants-Appellants.

Monica N. Edelstein (argued), Assistant United States Attorney; Mark S. Kokanovich, Deputy Appellate Chief; John S. Leonardo, United States Attorney; United States Attorney's Office, Phoenix, Arizona; for Plaintiff-Appellee.

Before: RAYMOND C. FISHER, MILAN D. SMITH, JR., and JACQUELINE H. NGUYEN, Circuit Judges.

OPINION

M. SMITH

, Circuit Judge:

Ladislao Samaniego and Manuel Castro (collectively, Claimants) challenge the government's seizure of two J.P. Morgan Chase bank accounts in a civil asset-forfeiture action. One account, totaling $446,377.36, was held in the name of Samaniego; the other, totaling $361,070.25, in the name of Castro. In a verified complaint seeking forfeiture, the government contends that Claimants unlawfully used the accounts to launder money connected with illicit drug proceeds.

Claimants answered and filed verified claims in response to the complaint, alleging that they held ownership and possessory interests in the seized funds sufficient to confer standing. The parties filed cross-motions for summary judgment.1 The district court entered judgment in favor of the government, holding that Claimants failed to produce adequate evidence of their Article III and prudential standing to contest the forfeiture. We reverse.

STANDARD OF REVIEW AND JURISDICTION

We have jurisdiction pursuant to 28 U.S.C. § 1291

. We review summary judgment determinations de novo. Wright v.

Incline Vill. Gen. Improvement Dist. , 665 F.3d 1128, 1133 (9th Cir. 2011). Summary judgment is appropriate when, viewing the evidence in the light most favorable to the nonmoving party, “there is no genuine dispute as to any material fact.” Fed. R. Civ. P. 56(a) ; see also

Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine dispute of material fact exists if “there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Anderson v. Liberty Lobby, Inc ., 477 U.S. 242, 249–50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Because this appeal concerns a civil forfeiture matter, summary judgment procedures are construed “in light of the statutory law of forfeitures, and particularly the procedural requirements set forth therein.” United States v. Currency, U.S. $42,500.00 , 283 F.3d 977, 979 (9th Cir. 2002)

. Forfeiture proceedings are governed by statute and by the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure. See 18 U.S.C. § 983(a)(4)(A)

. The relevant rules provide that the government may move to strike a claim or answer for lack of standing. Fed. R. Civ. P. G(8)(c)(i)(B). Such a motion “may be presented as ... a motion to determine after a hearing or by summary judgment whether the claimant can carry the burden of establishing standing by a preponderance of the evidence.” Id. G(8)(c)(ii)(B).

FACTS AND PRIOR PROCEEDINGS

Ladislao Samaniego is the general manager and minority shareholder of a Mexican currency-exchange business called Centro Cambiario Sonorense, formerly Casa de Servicios de California (CSC). Samaniego and his longtime acquaintance Manuel Castro, both residents of Mexico, opened the two bank accounts that are the subject of this action as a result of CSC's business relationship with a company called Fruteria Welton.

Fruteria Welton is a Mexican grocery company with stores along the U.S.-Mexican border. In the course of its daily operations, Fruteria Welton acquires large amounts of Mexican and U.S. currency. Fruteria Welton, along with a related company Distribuidora Welton (collectively, Welton), is owned in part by Jorge Salas Alvarez. Welton enlisted the services of CSC to count, record, and deposit the currency that it acquired.

Samaniego considers Salas Alvarez his compadre , a term used to denote a close friend who holds the near-familial status of a godfather.2 Through an agreement with Salas Alvarez that has lasted seventeen years, CSC (and by extension, Samaniego) was permitted to use the currency it collected for its own purposes, as long as Welton did not require immediate use of the funds. CSC and Samaniego were also entitled to retain any profits arising from their temporary use of the funds. This longstanding arrangement was oral in nature.3 In this way, Samaniego alleges, he and CSC accrued a debt of roughly one million dollars to Welton, which required eventual repayment.

After Mexico enacted tighter restrictions on the maximum amounts of U.S. currency that could be deposited in Mexican banks, Samaniego endeavored to help Salas Alvarez transport Welton's excess U.S. currency across the border for deposit in U.S. banks. Samaniego claims he did it as a personal favor for Salas Alvarez, and without compensation, in order to “avoid having [his] compadre 's daughter being robbed along the way.” To better perform this function, Samaniego enlisted the help of his longtime acquaintance Manuel Castro. Castro was not formally engaged by Welton or CSC, but, from time to time, Samaniego would pay Castro one hundred dollars for his help in making deposits into the two seized accounts.

On May 31, 2011, Samaniego and Castro visited a Chase branch in Arizona to open a personal bank account held in Castro's name. On June 7, 2011, Samaniego also opened a personal Chase bank account under his own name in which both he and Castro deposited excess funds from Welton. Samaniego announced that the purpose of the bank accounts was to “accumulate all the money that [he] owe[d] to Jorge Salas in order to pay him.” Castro echoed that the money in the accounts belonged to Welton, and was being set aside to repay a debt to Welton. Collectively, these two bank accounts are the subject of the current forfeiture action.

On August 22, 2011, the government seized the two bank accounts opened by Claimants, based on the belief that the accounts were used in money laundering connected to the illegal drug trade. The government then filed a verified complaint for forfeiture of the two accounts. Claimants responded by filing an answer and verified claims. Following a round of discovery and briefing, the government moved for summary judgment.4 The district court granted the government's motion, holding that Claimants had not demonstrated a property interest in the seized funds sufficient to confer standing. Claimants filed a motion for reconsideration, which the district court denied.5 This timely appeal followed.

ANALYSIS
I. Claimants' Article III Standing

To satisfy constitutional standing requirements under Article III, a claimant contesting the government's civil forfeiture action must show “sufficient interest in the property to create a case or controversy.” United States v. Real Prop. Located at 475 Martin Lane , 545 F.3d 1134, 1140 (9th Cir. 2008)

(quotation marks omitted); see

Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). This showing need only constitute “a colorable interest” in the seized funds, generally through the demonstration of an ownership or possessory interest in the property. United States v. $133,420.00 in U.S. Currency , 672 F.3d 629, 637 (9th Cir. 2012) (quotation marks omitted). [A]n owner or possessor of property that has been seized necessarily suffers an injury that can be redressed at least in part by the return of the seized property.” Id . at 638 (quoting United States v. $515,060.42 , 152 F.3d 491, 497 (6th Cir. 1998) ).

The precise “manner and degree of evidence required” to demonstrate standing will vary according to the stage of litigation. Id.

(quoting Lujan , 504 U.S. at 561, 112 S.Ct. 2130 ). A claimant at the summary judgment phase must offer supporting evidence. Id. This evidence may take the form of affidavits alleging specific facts, coupled with the claimant's possession of the property when it was seized. Id. at 639. Although a claimant need not prove standing by a preponderance of the evidence to survive summary judgment, a court must determine that “a fair-minded jury could return a verdict for [the claimant] on the evidence presented.” Liberty Lobby , 477 U.S. at 252, 106 S.Ct. 2505. That is, the evidence set forth must be sufficient for a reasonable factfinder to conclude that the claimant has standing to challenge the forfeiture. See Fed. R. Civ. P. G(8)(c)(ii)(B).

A. Ownership Interest

A claimant's “unequivocal” assertion of ownership in the seized property, along with physical possession of the property at the time of seizure, can overcome the summary judgment hurdle. $133,420 in U.S. Currency , 672 F.3d at 639

. However, Claimants' ownership claims have been repeatedly controverted through their own deposition testimony and other record evidence. The district court did not err when it found Claimants' assertions of ownership to be no more than back-pedaling, “late-in-the-day declarations” insufficient to create a genuine dispute as to the ownership of the funds.

At various times, Claimants have asserted conflicting interests in the seized funds. For example, Claimants stated in their verified claims that the funds “belong[ed] to them.”6 During his deposition, however, Samaniego declared that “the money that was seized doesn't belong to us. It belongs to Fruteria and Distribuidora Welton, and we need to pay it back.” Castro's deposition testimony confirmed that the funds “belonged” to Welton. When asked why they did not open...

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