US v. US CURRENCY IN THE AMOUNT OF $23,481.00

• Decision Date: 29 June 1990
• Docket Number: No. 89-CV-2642.,89-CV-2642.
• Citation: 740 F. Supp. 950
• Parties: UNITED STATES of America, Plaintiff, v. UNITED STATES CURRENCY IN THE AMOUNT OF TWENTY THREE THOUSAND FOUR HUNDRED EIGHTY ONE DOLLARS, ($23,481), MORE OR LESS, Defendant.
• Court: U.S. District Court — Eastern District of New York

740 F. Supp. 950

UNITED STATES of America, Plaintiff, v. UNITED STATES CURRENCY IN THE AMOUNT OF TWENTY THREE THOUSAND FOUR HUNDRED EIGHTY ONE DOLLARS, ($23,481), MORE OR LESS, Defendant.

No. 89-CV-2642.

United States District Court, E.D. New York.

June 29, 1990.

Andrew J. Maloney, U.S. Atty., E.D. N.Y., Brooklyn, N.Y., for plaintiff; Michelle Ritholz, Asst. U.S. Atty., of counsel.

Jane Michaelson, Baltimore, Md., for defendant.

MEMORANDUM-DECISION AND ORDER

BARTELS, District Judge.

In this in rem forfeiture action arising under 31 U.S.C. §§ 5316 and 5317, the United States has moved, and intervenor-claimants of the defendant currency have cross-moved, for summary judgment under Fed. R.Civ.P. 56. In addition, the claimants have moved for a change of venue under 28 U.S.C. § 1404(a) claiming forum non conveniens, and for dismissal of the action for lack of in rem jurisdiction under Fed.R. Civ.P. 12(b)(2).

Facts

On November 9, 1988, at John F. Kennedy International Airport ("JFK") in Queens, New York, Joseph A. Ojo was an outbound passenger boarding Nigerian Airlines Flight 851 en route to Nigeria. Before boarding the flight, Ojo was asked to fill out a customs form in which he was required to report, pursuant to 31 U.S.C. § 5316, whether he was transporting monetary instruments in excess of $10,000. Ojo declared only $4,000. Due to Ojo's nervous manner and bulky appearance, the customs official conducted a search of Ojo and found he was carrying the defendant currency in the amount of $23,481. Ojo was arrested, and the defendant currency was seized at JFK and transferred by U.S. Customs officials to United States Customs Service office in Manhattan.

Ojo subsequently plead guilty before Chief Judge Platt to violating 31 U.S.C. §§ 5316 and 5322, was sentenced to three years probation, and was fined $25,050.

On August 10, 1989, the United States as Plaintiff filed a Verified Complaint In Rem against the money that was seized from Ojo at JFK — i.e., the defendant United States Currency in the amount of $23,481— to condemn and forfeit the use of the currency in accordance with 31 U.S.C. §§ 5316 and 5317.¹ On the same day, a Warrant for Arrest for Article In Rem was issued to the Marshal of the Eastern District of New York. On October 2, 1989, in Manhattan, the currency was formally arrested pursuant to the warrant, and it remains stored in a bank account maintained by the U.S. Customs Service in the Southern District of New York. Nine persons, including Ojo, have intervened in the present case, claiming that various portions of the defendant currency belong to them. The claimants all live in or near Maryland.

The Plaintiff argues that it is entitled to summary judgment because the undisputed facts show that Ojo was attempting to transfer the defendant United States currency from the United States to a place outside the United States without completing the requisite currency reporting form in violation of 31 U.S.C. § 5316, thus entitling the Plaintiff to the forfeiture of the defendant currency as a matter of law under 31 U.S.C. § 5317.

On the other hand, the eight claimants other than Ojo have submitted affidavits stating that they individually gave various sums of money to Ojo to transport to their families in Nigeria. The claimants argue that this Court lacks jurisdiction because jurisdiction was destroyed when the currency was transferred from the Eastern District to the Southern District; that, for the convenience of the claimants, a change of venue to the District of Maryland would be proper; and that, since Ojo was not acting within the scope of his authority when he violated § 5316, they are entitled to summary judgment as a matter of law.

Discussion

I.

United States district courts are court of limited jurisdiction whose authority to hear a case must be based upon both a constitutional grant and congressional authorization. 4 Wright & Miller, Federal Practice & Procedure, § 1063 at 226 (1987). Therefore, before turning to the forfeiture claims, the question of jurisdiction must be addressed.

This Court has subject matter jurisdiction over this forfeiture action pursuant to 28 U.S.C. § 1345, which grants the district courts exclusive jurisdiction over all actions in which the United States is a plaintiff, and by 28 U.S.C. § 1355, which provides that the District Court shall have original exclusive jurisdiction of all actions or proceedings for forfeitures under any Act of Congress. 28 U.S.C. § 1345 (1988); 28 U.S.C. § 1355 (1988); United States v. One Parcel of Real Property with Improvements Thereon, Known as 5708 Beacon Drive, Austin, Texas, Situated In Travis County, Texas, 712 F.Supp. 525, 526 (S.D. Miss.1988).

However, a grant of authority by Congress over a particular subject matter or type of action is not enough for a court to exercise jurisdiction over a particular controversy. More is necessary. A federal court must also have jurisdiction over the defendant's person, his property, or the res that is the subject of the suit. Wright & Miller at 224. See, e.g., Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977); International Shoe v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Where the defendant is a "res" or thing, for the Court to exercise jurisdiction "the only essentials ... are presence of the res within its borders, its seizure at the commencement of the proceedings and the opportunity of the owner to be heard." Pennington v. Fourth Nat'l Bank, 243 U.S. 269, 272, 37 S.Ct. 282, 61 L.Ed. 713 (1917).

Thus, since in rem jurisdiction is predicated upon the presence of the res within the judicial district, see Beale, Harv. L.Rev. 107, 108 (1913), the question presented by the claimants is whether this Court's in rem jurisdiction was destroyed when the res was removed from this district after it was seized.² Since this is a case involving customs, in deciding whether jurisdiction exists in this forfeiture action, reference is to the applicable customs law. United States of America v. One 1974 Cessna Model 310R Aircraft, Serial No. 310R0203, F.A.A. Registration No. N5083J, 432 F.Supp. 364, 368 (D.S.C.1977).

In the present case the governing statute is 19 U.S.C. § 1605. Section 1605 provides:

All vessels, vehicles, aircraft, merchandise, and baggage seized under the provisions of the customs laws ..., unless otherwise provided by law, shall be placed and remain in the custody of the appropriate customs officer for the district in which the seizure was made to await disposition according to law.

Pending such disposition, the property shall be stored in such place as, in the custom officer's opinion, is most convenient and appropriate with due regard to the expense involved, whether or not the place of storage is within the judicial district or the customs collection district in which it was seized; and the storage of the property outside the judicial district or customs collection district in which it was seized shall in no way affect the jurisdiction of the court which would otherwise have jurisdiction over such property.

19 U.S.C. § 1605 (1988). Although the claimants argue that this statute specifically addresses "vessels, vehicles, merchandise and baggage" which would require special storage areas, and thus is not applicable in this case involving money, "merchandise" is defined as "goods, wares, and chattel of every description ... and monetary instruments," 19 U.S.C. § 1401(c) (1988) (emphasis added)³, and the phrase "monetary instruments" is further defined to include United States currency, 31 U.S.C. § 5312(a)(3)(A) (1988). Therefore, when the currency was transferred from the territory of the Eastern District of New York, the in rem jurisdiction of this Court was in no way affected since the currency was first seized in this district by United States customs officers and was thereafter removed to the territory of the Southern District of New York for storage.

The next question is the matter of venue and it is clear that under 28 U.S.C. § 1395(b), the venue for a civil proceeding for forfeiture of property is properly laid in the district where such property is "found." 28 U.S.C. § 1395(b) (1988). Since the currency was "found" in this district, the only district where venue is proper in this civil in rem forfeiture action against the United States currency is the Eastern District of New York. See United States v. $358,613.00 United States Currency, 703 F.Supp. 452, 454 (W.D.N.C.1989); 1A J. Moore, Moore's Federal Practice ¶ 0.3456.-4 at 4401-02 (1989). Thus, a transfer of venue due to forum non conveniens would be inappropriate because venue is proper in no other district.

II.

In this case, both parties move for summary judgment. Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment is appropriate where "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R. Civ.P. 56(c). In a summary judgment motion, it is not the function of the Court to weigh the evidence presented and determine the truth of the matter, but, to determine whether there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

Forfeiture statutes, which derive from English common law, generally provide that an owner's interest in the property may be forfeited even though the owner was not a participant in and had no knowledge of the illegal acts which brought about the forfeiture. See, United States v. Stowell, 133 U.S. 1, 13-14, 10 S.Ct. 244, 246, 33 L.Ed. 555 (1889); Goldsmith-Grant Co. v. United States, 254 U.S. 505, 511, 41 S.Ct. 189, 191, 65 L.Ed. 376 (1921); Various Items of Personal Property v. United States, 282...