US v. One Parcel of Property

• Citation: 786 F. Supp. 1497
• Decision Date: 08 October 1991
• Docket Number: No. C 90-1012.,C 90-1012.
• Parties: UNITED STATES of America, Plaintiff, v. ONE PARCEL OF PROPERTY LOCATED AT 1606 BUTTERFIELD ROAD, DUBUQUE, IOWA, Defendant.
• Court: U.S. District Court — Northern District of Iowa

786 F. Supp. 1497

UNITED STATES of America, Plaintiff, v. ONE PARCEL OF PROPERTY LOCATED AT 1606 BUTTERFIELD ROAD, DUBUQUE, IOWA, Defendant.

No. C 90-1012.

United States District Court, N.D. Iowa, E.D.

October 8, 1991.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Martin J. McLaughlin, Asst. U.S. Atty., Cedar Rapids, Iowa, for U.S.

Leo A. McCarthy, Dubuque, Iowa, for defendant Harvest Sav. Bank.

Brian J. Kane, Michael J. Gau, Dubuque, Iowa, for defendant John Joseph Bly.

Michael F. Harrington, Legal Services Corp. of Iowa, Cedar Rapids, Iowa, Kevin G. Magee, Legal Services Corp. of Iowa, Dubuque, Iowa, for Judy Ann Bly.

ORDER

HANSEN, District Judge.

This matter is before the court on plaintiff's resisted motion for summary judgment, filed March 1, 1991; claimants Judy Bly and John Bly's unresisted request for oral argument, filed June 10, 1991; claimant Judy Bly's motion, filed September 19, 1991, to file supplemental brief in support of resistance to plaintiff's motion for summary judgment; and claimant John Bly's motion, filed September 23, 1991, to join claimant Judy Bly's motion to file a supplemental brief.

I. MOTION FOR ORAL ARGUMENTS

Plaintiff is seeking to forfeit the property of claimants under 21 U.S.C. § 881(a)(7), subject only to the interest of Harvest Savings Bank. Both plaintiff and claimants have submitted lengthy and thorough briefs addressing the motion for summary judgment. Further oral arguments on this issue are not necessary. Therefore, this court will deny the motion for oral argument.

II. MOTIONS TO FILE SUPPLEMENTAL BRIEF

Claimant Judy Bly's motion, filed September 19, 1991, to file a supplemental brief in support of her resistance to plaintiff's motion for summary judgment, and claimant John Bly's motion, filed September 23, 1991, to join claimant Judy Bly's motion to file a supplemental brief will be granted.

III. MOTION FOR SUMMARY JUDGMENT

A motion for summary judgment may be granted only if, after examining all of the evidence in the light most favorable to the nonmoving party, the court finds that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law. Kegel v. Runnels, 793 F.2d 924, 926 (8th Cir.1986). Once the movant has properly supported its motion, the nonmovant "may not rest upon the mere allegations or denials of its pleading, but ... must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). The nonmovant "may not simply rest on the hope of discrediting the movant's evidence at trial." Matter of Citizens Loan & Sav. Co., 621 F.2d 911, 913 (8th Cir.1980). "To preclude the entry of summary judgment, the nonmovant must show that, on an element essential to its case and on which it will bear the burden of proof at trial, there are genuine issues of material fact." Noll v. Petrovsky, 828 F.2d 461, 462 (8th Cir.1987), cert. denied, 484 U.S. 1014, 108 S.Ct. 718, 98 L.Ed.2d 668 (1988) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). Although "direct proof is not required to create a jury question, ... to avoid summary judgment, `the facts and circumstances relied upon must attain the dignity of substantial evidence and must not be such as merely to create a suspicion.'" Metge v. Baehler, 762 F.2d 621, 625 (8th Cir.1985), cert. denied, 474 U.S. 1057, 106 S.Ct. 798, 88 L.Ed.2d 774 (1986) (quoting Impro Products, Inc. v. Herrick, 715 F.2d 1267, 1272 (8th Cir.1983), cert. denied, 465 U.S. 1026, 104 S.Ct. 1282, 79 L.Ed.2d 686 (1984)). In applying these standards, the court must give the nonmoving party the benefit of all reasonable inferences to be drawn from the evidence. Krause v. Perryman, 827 F.2d 346, 350 (8th Cir.1987).

The relevant statute provides for the forfeiture of property "which is used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of a violation of this title punishable by more than one year's imprisonment." 21 U.S.C. § 881(a)(7). The government bears the initial burden of proving probable cause that the property was used to commit or facilitate a felony violation of Title 21. United States v. $91,960.00, 897 F.2d 1457, 1462 (8th Cir.1990) (citations omitted). Once probable cause is established, "the burden shifts to the claimant to demonstrate by a preponderance of the evidence that the property is not subject to forfeiture, or that a defense to forfeiture exists." Id. (quoting One Blue 1977 AMC Jeep CJ-5 v. United States, 783 F.2d 759, 761 (8th Cir.1986)).

A. Probable Cause

Probable cause exists where a reasonable belief of guilt is supported by more than a mere suspicion but less than prima facie proof. Id. (citing United States v. $22,287.00, United States Currency, 709 F.2d 442, 446-47 (6th Cir.1983)).

The facts establishing probable cause that the property was used to commit or facilitate a felony violation of Title 21 in this case are not in dispute. Both claimants and their guests consumed drugs at the defendant property. See plaintiff's brief in support of summary judgment, filed April 5, 1991, at 3. Before 1986, Roy Eckwood frequently purchased cocaine and marijuana from John Bly at the defendant property. See id. Also on the property, Renee Eckwood bought marijuana from claimants often and consumed illegal drugs with Judy Bly. See id. During 1988, Roxanne Waters received marijuana from Judy Bly and saw drug transactions and consumption take place at the defendant property. See id. at 3-4. On March 17, 1988, police officers searched the defendant property pursuant to a search warrant and found both drugs and drug paraphernalia. See id. at 4. On October 27, 1989, Judy Bly pled guilty and was sentenced for possession with intent to deliver a schedule I controlled substance (marijuana). See id. at 5. On December 21, 1989, a jury returned a guilty verdict against John Bly on five of the seven counts charged against him. See id. He was convicted and sentenced for the following crimes: sponsoring a gathering where controlled substances were unlawfully used; delivery of a schedule II controlled substance (cocaine); possession with intent to deliver a schedule I controlled substance (marijuana); delivery of a schedule I controlled substance (marijuana); knowingly keeping or permitting the keeping of a premises, dwelling, or building which is resorted to by persons using controlled substances. See id. The state court conviction and guilty plea under Iowa Code § 204.401, which uses essentially the same statutory language found in 21 U.S.C. § 841, is strong proof of a felony violation of Title 21.¹ Summary judgment on the issue of probable cause will be granted.

B. Affirmative Defenses

To prevail over the government's proof of probable cause, claimants must prove "by a preponderance of the evidence that the property is not subject to forfeiture, or that a defense to forfeiture exists." $91,960.00, 897 F.2d at 1462 (quoting One Blue 1977 AMC Jeep CJ-5 v. United States, 783 F.2d 759, 761 (8th Cir.1986)). Claimants have raised thirteen affirmative defenses to the proposed forfeiture in their answer, filed July 10, 1990. The government asserts summary judgment is appropriate on each defense raised by claimants.

1. Homestead Exemption Under State Law

Claimants assert several defenses relating to the assertion that the defendant property is exempt as a homestead and not subject to forfeiture. The federal forfeiture statute encompasses "all real property, including any right, title, and interest ... in the whole of any lot, tract of land and any appurtenance or improvements" used in the commission of a felony under Title 21. 21 U.S.C. § 881(a)(7). Section 881(h) states that "all right, title, and interest of property described in subsection (a) of this section shall vest in the United States upon the commission of the act giving rise to forfeiture under this section." Under Iowa law, however, a homestead, as defined in Iowa Code Chapter 561, cannot be forfeited pursuant to the Iowa forfeiture statute, Iowa Code Chapter 809, even when it has facilitated an illegal drug transaction. In re Property Seized from Bly, 456 N.W.2d 195 (Iowa 1990). Bly did not involve the federal forfeiture statute, 21 U.S.C. § 881. The Bly court noted that it "appears that a state law homestead would be forfeitable under federal law analogous to Iowa Code Chapter 809. See 21 U.S.C. § 881(a)(7)." Bly, 456 N.W.2d at 198 n. 4.

Claimants' first and fourth defenses are essentially questions of preemption. Claimants' first defense is that the relevant preemption statute, 21 U.S.C. § 903, precludes the federal government from forfeiting property that is not forfeitable under Iowa law. In their fourth defense, claimants assert that because Iowa law addresses homestead rights and federal law does not, the court should follow Iowa law with respect to forfeiture of a homestead.

The federal forfeiture statute addresses the issue of preemption in the following provision:

No provision of this subchapter shall be construed as indicating an intent on the part of Congress to occupy the field in which that provision operates, including criminal penalties, to the exclusion of any State law on the same subject matter which would otherwise be within the authority of the State, unless there is a positive conflict between that provision of this subchapter and the State law so that the two cannot consistently stand together.

21 U.S.C. § 903. Where a positive conflict exists, the Supremacy Clause requires the application of federal law. The federal law requiring the forfeiture of all real property, 21 U.S.C. §§ 881(a)(7) and 881(h), is in conflict with the state law allowing forfeiture for all property except for homestead property, In re Property Seized from Bly, 456 N.W.2d 195 (Iowa 1990). To carve out an exception for homestead under federal law would negate the plain meaning of...