United States v. Mendoza

Citation487 F.Supp.3d 1118
Decision Date11 September 2020
Docket NumberNo. 1:20-cr-00688-WJ,1:20-cr-00688-WJ
Parties UNITED STATES of America, Plaintiff, v. Jose MENDOZA, Defendants.
CourtUnited States District Courts. 10th Circuit. District of New Mexico

Matthew Thomas Nelson, United States Attorney's Office, Peter J. Eicker, Office of the U.S. Attorney, Albuquerque, NM, for Plaintiff.

MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S MOTION TO STAY FORFEITURE PROCEEDINGS and

PROTECTIVE ORDER AS TO DEFENDANT'S CLAIMS FORMS

WILLIAM P. JOHNSON, CHIEF UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court upon Defendant Jose Mendoza's Motion to Stay Forfeiture Proceedings (the "Motion"). Doc. 61. For the reasons discussed in this Memorandum Opinion and Order, the Court finds that Defendant's predicament does not warrant a stay of the forfeiture proceedings at issue, but that, in the interest of Defendant's Constitutionally sanctified right to abstain from self-incrimination, his statements made in response to the Government's Seized Asset Claim form pursuant to 18. U.S.C. § 983(2) (the "claims forms") are protected in accordance with the below order.

BACKGROUND

On February 25, 2020, Defendant Jose Mendoza was indicted by a grand jury on conspiracy in violation of 21 U.S.C. § 846, distribution of 28 grams and more of cocaine base in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B), aiding and abetting in violation of 18 U.S.C. § 2, and use of a telephone to facilitate a drug trafficking offense in violation of 21 U.S.C. § 843(b). Doc. 1; Doc. 3. An arrest warrant was issued to the United States Government on February 26, and Defendant was arrested on February 27. Doc. 3. During the arrest, an appraised $173,182 in firearms, magazines, ammunition, vehicles and cash was seized and is now subject to forfeiture pursuant to 18 U.S.C. §§ 981(a)(1)(A), 1956(c)(7)(D) and 1961(1)(D), as well as 21 U.S.C. §§ 841, 881(b), 881(a)(11) and 881 (a)(6). See Doc. 61 at 2; Doc. 61-1 at 1-2. Following the arrest, an additional $30,162.63 was seized from ZIA Credit Union pursuant to 18 U.S.C. §§ 981(a)(1)(C), 1956(c)(7) and 1961(1), as well as 21 U.S.C. §§ 881(a)(6) and 881(b). See Doc. 61-1 at 6-13.

In April of 2020, Defendant was given notice of the Government's intent to proceed civilly to forfeit Defendant's ownership rights as to the seized funds and property. See Doc. 61-1. In said correspondence, Defendant was notified of five options he had with respect to the forfeiture:

(1) Petition the Government within 30 days seeking the remission of the forfeiture. Petition must describe the property involved, identify the date and place of the seizure, include all facts Defendant believes may warrant relief from forfeiture, and include proof of Defendant's interest in or claim to the property.
(2) Make an offer in compromise to the Government in the form of a monetary settlement, which Government may accept or reject.
(3) Abandon the property or state no claim to or interest therein.
(4) Request a referral of the matter to the U.S. Attorney, who will have the authority to file a forfeiture action against the property in federal court, by completing a Seized Asset Claim form requiring Defendant to identify the assets in which his interest is claimed, state his interest in such property, and make such statements under oath, subject to penalty of perjury.
(5) Take no action, authorizing the Government to commence forfeiture action.

See Doc. 61-1. Defendant now contends that 18. U.S.C. § 983(2), the statutory basis of the requirement that he as claimant identify the property and his interests in the property subject to forfeiture, is unconstitutional as applied to his circumstances, as to respond to the Government in any way sufficient to secure the property would violate his Fifth Amendment right against compulsory self-incrimination with respect to the concurrent criminal proceedings against him. See Doc. 61 at 2-3. The Government responds by (1) distinguishing this case, an administrative forfeiture proceeding, from a civil proceeding,1 and states that the Court accordingly lacks jurisdiction at this time to grant Defendant his requested relief; and (2) alleging a lack of factual support for the contention that stating an ownership interest in seized property could inadvertently provide evidence against Defendant with respect to his pending criminal proceedings. Doc. 61 at 2-3.

LAW

The Government may not sanction an individual for asserting a Constitutional privilege against forced self-incrimination for the purposes of compelling testimony. Lefkowitz v. Cunningham , 431 U.S. 801, 806, 97 S.Ct. 2132, 53 L.Ed.2d 1 (1977). The Sixth Circuit has held that "the forfeiture penalty is closely related to a criminal sanction," and, specifically, the Supreme Court has found that civil forfeiture actions are included as a form of government sanction under the Eighth Amendment's Excessive Fines Clause. United States v. U.S. Currency , 626 F.2d 11, 15 (6th Cir. 1980) (internal citations omitted), cert. denied, 449 U.S. 993, 101 S.Ct. 529, 66 L.Ed.2d 290 (1980) ; see Austin v. United States , 509 U.S. 602, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993). This is because the Fourth, Fifth and Fourteenth Amendments declare sacrosanct individual property rights, and protect citizens from the deprivation of such rights without due process of law. See United States v. James Daniel Good Real Prop. , 510 U.S. 43, 61, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993) (declaring that "[i]ndividual freedom finds tangible expression in property rights" and finding that though the Fourth Amendment limits the government's power to seize property for purposes of forfeiture, seizure must also comport with the Due Process Clause.).

However, the protections against self-incrimination in light of pending property forfeiture are coloured by the nature of the sanction and the posture of the proceedings. In fact, there is no absolute right protecting individuals from the choice of testifying in a civil matter and asserting a Fifth Amendment privilege. Creative Consumer Concepts, Inc. v. Kreisler , 563 F.3d 1070, 1080-81 (10th Cir. 2009). In determining whether a defendant should be afforded a safeguard against such a choice, the Court must consider the extent to which a defendant's Due Process rights are implicated because "allowing a civil case to proceed against a defendant who also may be subject to criminal prosecution involving the same matter may undermine the defendant's Fifth Amendment privilege." See Id. ; see also Hobley v. Chicago Police Commander Burge , 225 F.R.D. 221, 225 (N.D. Ill. 2004). In particular, as it relates to a stay of civil proceedings with concurring and related criminal proceedings, a decision must be made on a case-by-case basis, in light of the circumstances and competing interests. Keating v. Office of Thrift Supervision , 45 F.3d 322, 324 (9th Cir. 1995) (internal citations omitted). The Ninth Circuit has articulated the following factors as precepts of such an analysis:

(1) the interest of the plaintiffs in proceeding expeditiously with this litigation or any particular aspect of it, and the potential prejudice to plaintiffs of a delay;
(2) the burden which any particular aspect of the proceedings may impose on defendants;
(3) the convenience of the court in the management of its cases, and the efficient use of judicial resources;
(4) the interests of persons not parties to the civil litigation; and
(5) the interest of the public in the pending civil and criminal litigation.

Id. While not wholly adopting the Ninth Circuit's factors, the Tenth Circuit has indeed taken Keating ’s holding that any decision on whether to stay a civil proceeding pending the outcome of criminal proceedings "must consider the extent to which a party's Fifth Amendment rights are implicated," and has stated outright that certain rules, particularly those of invoking the Fifth Amendment in this context and the corresponding permissibility of drawing negative inferences therefrom, apply similarly to administrative proceedings. Kreisler , 563 F.3d at 1080 ; MacKay v. DEA , 664 F.3d 808, 819 (10th Cir. 2011) (deliberately likening "civil" proceedings to "administrative" proceedings as the terms were used in Keating ).

"A district court may also stay a civil proceeding in deference to a parallel criminal proceeding for other reasons, such as to prevent either party from taking advantage of broader civil discovery rights or to prevent the exposure of the criminal defense strategy to the prosecution." Kreisler , 563 F.3d at 1080 (citing SEC v. Dresser Indus., Inc. , 628 F.2d 1368, 1375-76, 202 U.S.App.D.C. 345 (D.C. Cir. 1980) ). And if a court decides not to stay a civil proceeding while the defendant's Fifth Amendment privilege is threatened, it must seek to accommodate such privilege by selecting a means which strikes a fair balance between both parties. United States v. $133,420.00 in United States Currency , 672 F.3d 629, 644 (9th Cir. 2012) (finding that courts must seek to accommodate a defendant's right against self-incrimination in a civil forfeiture proceeding with means that strike a fair balance between both parties) (internal quotations and citations omitted).

DISCUSSION

A preeminent feature of American Constitutional freedom, the Fifth Amendment has long shielded citizens from compulsory self-incrimination, and forfeiture penalties constitute the type of sanction courts consider to be instruments of compulsion, at least at the preliminary stage of inquiry. U.S. Const. amend. V ("no person ... shall be compelled in any criminal case to be a witness against himself."); Austin , 509 U.S. at 618, 113 S.Ct. 2801 ("[This Court] consistently has recognized that forfeiture serves, at least in part, to punish the owner."); see also United States v. Ursery , 518 U.S. 267, 287, 116 S.Ct. 2135, 135 L.Ed.2d 549 (1996) (forfeiture constitutes punishment except in instances where a high or specified threshold of punitiveness is necessary to trigger the violation of...

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