US v. Eleven Vehicles

• Decision Date: 09 September 1996
• Docket Number: Civil Action No. 91-6779.
• Citation: 937 F. Supp. 1143
• Parties: UNITED STATES of America, Plaintiff, v. ELEVEN VEHICLES, et al., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

937 F. Supp. 1143

UNITED STATES of America, Plaintiff, v. ELEVEN VEHICLES, et al., Defendants.

Civil Action No. 91-6779.

United States District Court, E.D. Pennsylvania.

August 30, 1996.

As Amended September 9, 1996.

COPYRIGHT MATERIAL OMITTED

Michael L. Levy, Pamela Foa, Assistant U.S. Attorney, Michael M. Baylson, Sonia C. Jaipaul, Robert Goldman, Ronald H. Levine, U.S. Attorney's Office, Philadelphia, PA, for U.S.

Charles H. Ivy, Scoggins, Ivy & Goodman, P.C., Atlanta, GA, for Robert Clyde Ivy, Irene Ivy.

Robert Clyde Ivy, Lancaster, PA, pro se.

Wayne K. Radcliffe, Lancaster, PA, pro se.

Marilyn J. Gelb, Philadelphia, PA, for Wayne K. Radcliffe.

Bruce A. Franzel, Philadelphia, PA, for Terrance P. Faulds.

Terrance P. Faulds, Holtwood, PA, pro se.

Irene Ivy, Lancaster, PA, pro se.

Fred D. Furman, Kleinbard, Bell & Brecker, Philadelphia, PA, for Kleinbard, Bell & Brecker.

James H. Foster, Mellon Bank, N.A., Harrisburg, PA, for Mellon Bank, N.A.

John H. Whitmoyer, Henry & Beaver, Lebanon, PA, for Lebanon Valley National Bank.

Mark E. Cedrone, Carroll & Cedrone, Philadelphia, PA, for Gerald Schuler.

Elaine K. Radcliffe, Lancaster, PA, pro se.

Michelle E. Radcliffe, Lancaster, PA, pro se.

MEMORANDUM

EDUARDO C. ROBRENO, District Judge.

This case comes before the Court on the motion of the Government for a certificate of reasonable cause pursuant to 28 U.S.C. § 2465, and the motion of claimants Robert Clyde Ivy and Irene Ivy for attorney's fees, expenses, and costs pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. For the reasons that follow, the Government's motion for a certificate of reasonable cause is granted. Claimants' motion for attorney's fees, expenses, and costs is granted in part and denied in part.

I. BACKGROUND

The underlying case involves the forfeiture of claimants' property as a result of Robert Clyde Ivy's alleged involvement with money laundering activities. The alleged criminal conduct is the subject of a criminal prosecution before another judge of this court, United States v. Armaments of South Africa, Ltd., Crim.Action No. 91-602 (E.D.Pa.). See also United States v. Jasin, Crim.Action No. 91-602-8, 1993 WL 259436, at *1-4 (E.D.Pa. July 7, 1993) (DuBois, J.). The Government instituted the forfeiture proceeding under 18 U.S.C. § 981(a)(1)(A) and § 981(a)(1)(C) on October 30, 1991, the day before Robert Clyde Ivy was indicted for money laundering activities and wire fraud.

Claimants moved for summary judgment, asserting that the Government lacked probable cause to establish that the subject properties were the proceeds of the predicate crimes, that the properties owned jointly or solely by Irene Ivy could not be forfeited due to her status as an innocent owner, and that retroactive application of the 1988 amendments to 18 U.S.C. § 981 violated the ex post facto clause. On October 21, 1993, this Court found that the Government had failed to establish probable cause to forfeit certain defendant properties, approximately 40%-45% of the original total seized, under 18 U.S.C. § 981(a)(1)(C) and ordered those properties released. United States v. Eleven Vehicles, 836 F.Supp. 1147 (E.D.Pa.1993) hereinafter Eleven Vehicles I. As to the remaining properties, the Court found that probable cause to forfeit existed under 18 U.S.C. § 981(a)(1)(A). The Court also concluded that the existence of a genuine issue of material fact as to Irene Ivy's lack of knowledge of the illicit activities alleged in the complaint precluded the granting of summary judgment in her favor on the innocent owner defense. Finally, the Court found that application of the forfeiture statute to properties acquired prior to enactment of the 1988 amendments did not violate the ex post facto clause.

On September 5, 1995, the Court granted in part claimants' second motion for summary judgment, ordering the release of certain of the remaining properties held by the Government, another 40%-45% of the original properties seized. The Order was predicated on a finding that the Government's reliance on the 1988 amendments to the federal money laundering statute, 18 U.S.C. § 981(a)(1)(A), for the forfeiture of properties which were acquired prior to the effective date of the amendments, constituted an impermissible retroactive application of law. See United States v. Eleven Vehicles, 898 F.Supp. 1143, 1155 (E.D.Pa.1995) hereinafter Eleven Vehicles II. The Court, however, denied claimants' motion for release of the balance of the properties, approximately 10%-20%, on the grounds that, as to the properties acquired after the effective date of the 1988 amendments, one automobile and two bank accounts, there remained an issue of fact as to whether the properties had been involved in money laundering.¹ Id.

On October 3, 1995, the Government moved to stay the Order of September 5, 1995, until either the expiration of the period for taking an appeal or, if an appeal were taken, 30 days after final disposition of such an appeal.² The Government contended that, because the issue of retroactive application of the 1988 amendments was one of first impression in this circuit, it needed time to consult with the Department of Justice in Washington, D.C., in order to determine whether to file an appeal. The Court granted the stay, allowing the Government until November 26, 1995, to complete its review of the case and to determine whether to appeal. See United States v. Eleven Vehicles, 1995 WL 635332 (E.D.Pa. Oct. 24, 1995).

On January 16, 1996, the Government again moved for a stay until twenty days after the Supreme Court published its decision on two pending cases concerning double jeopardy, United States v. $405,089.23 in U.S. Currency, 33 F.3d 1210 (9th Cir.1994), and United States v. Ursery, 59 F.3d 568 (6th Cir.1995).³ The Court denied this motion on January 29, 1996, and scheduled the case for a non-jury trial on February 5, 1996. Two days later, the Government moved for dismissal of its case against the remaining properties. On February 5, 1996, claimants cross-moved to have the matter dismissed with prejudice. Three days later, the Government moved for the issuance of a certificate of reasonable cause and clarified their motion, requesting that the Court dismiss the case without prejudice.

The Court dismissed the case with prejudice on March 13, 1996, and ordered the balance of the properties released forthwith. The Court retained jurisdiction to entertain the Government's motion for a certificate of reasonable cause and claimants' motion to establish entitlement to costs, attorney's fees, and expenses, both issues to which the Court now turns.

II. DISCUSSION

A. Certificate of Reasonable Cause

Section 2465 of title 28 of the United States Code, entitled, "Return of property to claimant; certificate of reasonable cause; liability for wrongful seizure," provides,

Upon the entry of judgment for the claimant in any proceeding to condemn or forfeit property seized under any Act of Congress, such property shall be returned forthwith to the claimant or his agent; but if it appears that there was reasonable cause for the seizure, the court shall cause a proper certificate thereof to be entered and the claimant shall not, in such case, be entitled to costs, nor shall the person who made the seizure, nor the prosecutor, be liable to suit or judgment on account of such suit or prosecution.

28 U.S.C. § 2465 (West 1994). The certificate of reasonable cause "protects the person at whose instance the seizure was made, should an action of trespass be brought against him by the claimant for the wrongful seizure of the latter's property." United States v. Frerichs, 106 U.S. (16 Otto) 160, 162, 1 S.Ct. 169, 170, 27 L.Ed. 128 (1882). In other words, the statute immunizes government officials from liability and bars successful claimants from recovering costs incurred from the seizure of their property in cases where these officials had "reasonable cause" to seize the property. See United States v. 255 Broadway, 795 F.Supp. 1225, 1229 (D.Mass.1992), aff'd, 9 F.3d 1000 (1st Cir. 1993).

For the purposes of issuing the certificate, "reasonable cause" is essentially the same as "probable cause." See Stacey v. Emery, 97 U.S. (7 Otto) 642, 646, 24 L.Ed. 1035 (1878) ("If there was a probable cause of seizure, there was a reasonable cause. If there was a reasonable cause of seizure, there was a probable cause.").

Probable cause to forfeit requires only a reasonable ground for belief of guilt, supported by less than prima facie proof but more than mere suspicion that the property is subject to forfeiture. In other words, the government has a relatively light burden of showing probable cause to believe that the subject property is forfeitable. Moreover, because there are so many variables in the probable cause equation, probable cause findings are not invariably bound by precedent.

255 Broadway, 9 F.3d at 1004 (citations and internal quotations omitted); see also United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051, 1071 (9th Cir.1994) ("The standard of probable cause to support a forfeiture is similar to that required for a search warrant. As the requirement is traditionally stated, the government's belief that the property is subject to forfeiture must be more than a mere suspicion but can be less than prima facie proof."); United States v. $67,220.00 in U.S. Currency, 957 F.2d 280, 284 (6th Cir. 1992) (defining standard as same). "Probable cause to believe that the property is involved in some illegal activity is not enough — the government must have probable cause to believe that the property is involved in the activity subject to the specific forfeiture statute it invokes." $191,910.00 in U.S. Currency, 16 F.3d at 1071.

"Because courts have held that 28 U.S.C. § 2465 was enacted to protect the officials responsible for the seizure of potentially forfeitable property, courts generally look to the moment of...