United States v. One 1951 Douglas DC-6 Aircraft

• Citation: 475 F. Supp. 1056
• Decision Date: 31 August 1979
• Docket Number: 79-2118.,No. 78-2418,78-2418
• Court: U.S. District Court — Western District of Tennessee
• Parties: UNITED STATES of America, Plaintiff, v. ONE 1951 DOUGLAS DC-6 AIRCRAFT et al., Defendants. Ernesto ZARAGOZA Y., Plaintiff, v. The UNITED STATES of America et al., Defendants.

475 F. Supp. 1056

UNITED STATES of America, Plaintiff, v. ONE 1951 DOUGLAS DC-6 AIRCRAFT et al., Defendants.

Ernesto ZARAGOZA Y., Plaintiff, v. The UNITED STATES of America et al., Defendants.

Nos. 78-2418, 79-2118.

United States District Court, W. D. Tennessee, W. D.

August 31, 1979.

Devon L. Gosnell, Asst. U. S. Atty., Memphis, Tenn., for USA in both cases.

Michael J. Meehan, Tucson, Ariz., for plaintiff in 79-2118.

Richard D. Burris, Tucson, Ariz., for Estate of Brian Corp.

Allan Neef, Detroit, Mich., for Cryderman Air Service.

ORDER

WELLFORD, District Judge.

The United States brings civil action No. 78-2418 under 19 U.S.C. § 1595a for forfeiture of an aircraft, weapons, and ammunition allegedly employed by Brian J. Corp¹ and others in a federal criminal offense. Although the answer of Corp's representative denies the government's claim for forfeiture, the record in the related criminal case establishes as against Corp's successors and all other persons that the aircraft and tackle were lawfully seized by federal officers at Memphis International Airport on April 26, 1977. See 19 U.S.C. § 1615; United States v. Corp, et al., No. 77-20118 (November 23, 1977); and the Order of May 31, 1979, in this cause. The weapons and ammunition have been decreed forfeited and have reportedly been delivered to Customs authorities in New Orleans, Louisiana.

The right of the United States to forfeit and sell the DC-6 aircraft is challenged on constitutional and statutory grounds by Ernesto Zaragoza Y., a Mexican citizen. Zaragoza filed a civil action and petition for mandamus in the District of Arizona against the United States, an unidentified Customs Officer, Corp's legal heir, and a corporation allegedly holding title to the aircraft. The complaint alleges that Corp granted Zaragoza a security interest in the aircraft; that $60,000 is owing from Corp's successors on an underlying note; that Zaragoza was uninvolved in the aircraft's illicit use and sought to avoid the same; and that the continued retention and forfeiture of the aircraft by the government will deprive him of a constitutionally-protected property interest without due process of law.

The government moved to dismiss Zaragoza's complaint for lack of subject-matter jurisdiction. Zaragoza opposed and moved for summary judgment on the ground that the government's delay in commencing the forfeiture proceedings was unconstitutional as a matter of law. Although not a party to the proceedings in this District, Zaragoza moved to dismiss the forfeiture action or transfer venue thereof to the District of Arizona. The Arizona Court declined to rule on the motions before it and transferred Zaragoza's action to this District. This Court accepted transfer and denied Zaragoza's motions in the forfeiture action. Memoranda on the jurisdictional and constitutional issues have been filed and considered.

At the outset, the Court must question its jurisdiction even to entertain Zaragoza's statutory and constitutional claims. As noted tentatively in prior orders, Congress has provided a statutory scheme for the disposition of rights in seized property, allocating jurisdiction between executive and judicial agencies for different purposes. The Tariff Act of 1930, 19 U.S.C. §§ 1202 et seq., requires that seizures of property under the Customs laws be reported "immediately" to Customs officials and "promptly" to the United States Attorney for the district of seizure or violation. §§ 1602, 1603. The United States Attorney must then "immediately" investigate the facts of the case and, if appropriate, commence "forthwith" a judicial action to forfeit the property. § 1604. The judgment in such an action vests full ownership of the property in the United States for sale and disposition of proceeds by the Secretary of the Treasury. §§ 1595a, 1613. See also United States v. Stowell, 133 U.S. 1, 10 S.Ct. 244, 33 L.Ed. 555 (1890); Ivers v. United States, 581 F.2d 1362, 1367 (9th Cir. 1978).²

At any time between seizure and sale of forfeited property, any interest-holder may petition the Secretary of the Treasury for remission or mitigation of the forfeiture. If the Secretary or his delegate finds that the property was implicated in criminal activity without unlawful intent or willful negligence on the part of the petitioner, he may afford relief. § 1618. Even after disposition of the property, an innocent interest-holder may obtain remission of an appropriate share of the sale proceeds on the same grounds by petition to the Treasury Department. § 1613.

If an interest-holder files a claim for seized property with Customs prior to the judicial forfeiture proceeding, the Tariff Act provides that his claim comes on before the District Court in that proceeding, with the burden of proving the claim upon the interest-holder. § 1615. Judicial jurisdiction over the competing claims of government and interest-holder in this proceeding traditionally has been limited to determining whether the defendant vessel or property was in fact involved in criminal activity, for the Act prescribes forfeiture upon a showing of probable cause that property is employed "in any way" in a Customs violation. 19 U.S.C. § 1595a; The Squanto, 13 F.2d 548 (2d Cir. 1926); United States v. One 1975 Mercedes 280S, 590 F.2d 196 (6th Cir. 1978). Any remission in favor of an innocent interest-holder has been deemed solely an "act of grace" by the executive branch, and the weight of authority continues to be that a decision by Treasury officials to deny a petition under 19 U.S.C. §§ 1618 or 1613 is not subject to judicial review. United States v. One 1961 Cadillac, 337 F.2d 730, 733 (6th Cir. 1964); United States v. One 1972 Mercedes-Benz 250, 545 F.2d 1233, 1236 (9th Cir. 1976).

At the same time, however, the Supreme Court has postulated circumstances under which the due process guarantee might require relief from a criminal forfeiture, Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 689, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974); and there is emerging lower court authority that claimant/interest-holders may challenge the government's compliance with forfeiture procedures on statutory and constitutional grounds, either in defending the forfeiture action itself, United States v. Edwards, 368 F.2d 722 (4th Cir. 1966); United States v. One 1970 Buick Riviera, 463 F.2d 1168 (5th Cir. 1972); United States v. One 1972 Chevrolet Blazer Vehicle, 563 F.2d 1386 (9th Cir. 1977); or by separate action against the government. States Marine Lines v. Shultz, 498 F.2d 1146 (4th Cir. 1974); Lee v. Thornton, 538 F.2d 27 (2d Cir. 1976), rev'd. on other grounds, 420 U.S. 139, 95 S.Ct. 853, 43 L.Ed.2d 85. The Supreme Court has approved such review in dicta. United States v. U. S. Coin and Currency, 401 U.S. 715, 721, 91 S.Ct. 1041, 28 L.Ed.2d 434 (1971) (citing United States v. Edwards, supra); Calero-Toledo v. Pearson Yacht Leasing Co., supra, 416 U.S. at 677 n. 11, 94 S.Ct. 2080 (jurisdiction under 28 U.S.C. § 1331).³

Based on the foregoing authorities, the Court concludes that Zaragoza may at least assert his statutory and constitutional claims in defense of the government's forfeiture action in this Court. In view of this finding, the motion to dismiss filed by the government in the Arizona court is denied. Until such time as Zaragoza establishes a valid constitutional defense to forfeiture, the Court need not decide whether there is pendent or diversity jurisdiction to adjudicate his claims against Corp's estate and the purported title-holder of the aircraft. Zaragoza's additional claims under 28 U.S.C. §§ 1356 and 1361 are duplicitous and need not be considered independently.

Zaragoza asserts two different constitutional arguments for denial of forfeiture to the government and the substitution of a judicial sale to satisfy his security interest. The Treasury Department has already considered and rejected petitions from both Zaragoza and the purported owner of the aircraft. Zaragoza's first argument, then, is solely procedural: that the government so delayed its investigation and institution of forfeiture proceedings that he has been deprived of a right to prompt adjudication of his property interest. This argument was the basis for Zaragoza's motion for summary judgment in the Arizona district court. Upon review of the facts and authorities submitted, the Court finds no merit in this argument.

The Supreme Court has identified strict due process requirements in the seizure and forfeiture of communicative material also protected by the First Amendment, United States v. 37 Photographs, 402 U.S. 363, 91 S.Ct. 1400, 28 L.Ed.2d 822 (1971); but has thus far distinguished forfeiture proceedings from the operation of general property protections in other areas. United States v. U. S. Coin and Currency, supra; Calero-Toledo v. Pearson Yacht Leasing Co., supra. Forfeiture has been denied on the ground of unreasonable delay, but none of the cases cited by Zaragoza would bar the government's action in this case.

This forfeiture grows out of extended criminal proceedings against the purported owner of the property and others. See Ivers v. United States, supra, 581 F.2d at 1372. The government asserts that when the aircraft was seized on April 26, 1977, both the Bureau of Customs and the United States Attorney for this District were notified immediately as prescribed in 19 U.S.C. §§ 1602, 1603. Zaragoza has not rebutted this contention. Corp, who was arrested by Memphis Police officers concurrently with the seizure, had immediate notice thereof. On June 6, 1977, the Bureau of Customs formally notified Corp's business of the seizure and of administrative procedures for asserting any rights in the aircraft. Zaragoza was not similarly notified because, as he concedes, his security interest in the aircraft was not filed with the Federal Aviation Administration and thus was not known to the government.

Federal officers obtained a...