UNITED STATES OF AMERICA                 )                 CASE NO.: SA - CR-91-66 AHS
                                                                     )
        Plaintiff,                                                 )
vs.                                                                 )                 REPLY TO GOVERNMENT'S
                                                                     )                 OPPOSITION TO MOTION FOR
GARY H. MAROLF                                     )                 RETURN OF SEIZED PROPERTY
        Defendant.                                             )
____________________________________)

In re Application of:
GARY H. MAROLF                                                                                           Date: March 7, 1997
for Return of Seized Property:                                                                                Time: 10:00 a.m.
                                                                                                                             Place: Courtroom 1
1981 MANGO MOTOR-SAILBOAT
NAMED "ASMARA"
___________________________________
 

Defendant/Movant, Gary H. Marolf, files the following Reply to the United States' opposition to his Motion for Return of Seized Property pursuant to Rule 41(e) of the Federal Rules of Criminal Procedure.

A. The Motion is Not Barred By Laches

The government concedes in its motion that the DEA did not give Marolf any notice of the administrative forfeiture proceedings. However, the government contends that the motion is barred by the doctrine of laches because Marolf knew of the forfeiture at least as early as May 11, 1995, and if not barred by laches, then the court should arbitrarily void the statute of limitations and allow Marolf to proceed on the merits.

A careful review of all the pleadings filed in Marolf's §2255 Motion to Vacate and his appeal of its denial, makes it crystal clear that the government knew that they failed to give notice, acknowledged that they failed to give notice, were aware of the impending statute of limitations and yet they failed to serve notice prior to its exhaustion, despite the power and ability to do so.

The tenor of the opposition filed by the government is that it was Marolf's affirmative duty and responsibility to inform the government that they should re-file the administrative forfeiture, despite the fact that the DEA and the government already knew that notice was not given.

Additionally, the government fails to realize that the filing of Marolf's §2255 did give them actual notice that Marolf was in fact challenging the forfeiture by claiming that he was previously punished by the forfeiture of the Asmara, without notice.

In the government's response to the motion to vacate Marolf's sentence, the government claimed that the appropriate remedy was to vacate the forfeiture. (Exhibit "A", p.43, ln. 19-27, of government's response to Marolf's §2255)

As a result of their continued acquiescence to a conceded failure to notify Marolf, the government now claims that Marolf claim is barred by laches.

Laches is an equitable time limitation on a party's right to bring suit. The doctrine bars an action where a party's unexcused or unreasonable delay has prejudiced his adversary. International T. & T. Corp. v. General T. & E. Corp., 518 F.2d 913, 926 (9th Cir. 1975). "The bare fact of delay creates a rebuttable presumption of prejudice." Id. It protects against difficulties caused by the unreasonable delay in bringing an action, not against problems created by the pendency of a lawsuit after it is filed. Shouse v. Pierce County, 559 F.2d 1142, 1147 (9th Cir. 1977).

Based on the fact that the government had all the knowledge necessary to determine that the forfeiture was void, from at least May 1995, and in fact had the knowledge in December of 1992, it is apparent that the doctrine works against them, more than for them.

First of all, Marolf did bring an action based on the forfeiture within the five year statute of limitations. Nothing precluded the government from taking action at that time.

Furthermore, the government was not prejudiced. There was ample time to file the necessary documents to commence forfeiture proceedings. The burden on the government to file and serve the notice of forfeiture was not unduly onerous.

Marolf's claim is not a "sleeping claim." He has diligently pursued his relief from this forfeiture since May 1995, well within the statute of limitations. As the Ninth Circuit Court of Appeals said in Boone, "[i]n the absence of any type of continuing administrative proceedings (as opposed to a sleeping claim), we do not believe that Mechanical was under an affirmative obligation to prepare ..." Boone v. Mechanical Specialties, 609 F.2d 956, 960 (9th Cir. 1979) (Italic emphasis added.) In the instant case, the forfeiture was at issue and being litigated for more than a year before the statute of limitations ran.

In Wauchope v. United States Department of State, 985 F.2d 1407 (9th Cir. 1993), the government's sole assertion of prejudice was its claim that if the plaintiffs prevailed it would be forced to confer citizenship on them despite the plaintiffs waiting years to apply for citizenship. The Ninth Circuit, in finding that the district court properly rejected the laches defense, held that "the mere prospect that a defendant might lose a case does not suffice to warrant the imposition of laches as a barrier to a plaintiff's action. 'The prejudice requirement does not mean merely that the defendant will be worse off if the relief is granted than he would be if it were not; that sort of prejudice could be claimed by all defendants all of the time.'" Id at 1412 (citing, Transworld Airlines, Inc. v. American Coupon Exchange, Inc., 913 F.2d 676, 696 (9th Cir. 1990)

The mere fact that the government might lose this case is not sufficient to warrant the imposition of a laches barrier to Marolf's motion for return of seized property.

B. Marolf Did Not Delay

As previously stated, Marolf began to pursue his remedies for relief in the forfeiture under the premise that the vessel was a first punishment for the offense of his conviction. The government was made aware of this fact and argued that he was not a party to the forfeiture.

Marolf did not remain silent while the statute of limitations slowly ticked, yet the government failed to assert their right in the forfeiture by affirmatively giving notice to Marolf.

The government's opposition relies heavily on United States v. Deninno, 103 F.3d 82 (10th Cir. 1996). This reliance is misplaced in that the government's claim in Deninno was not barred by the statute of limitations. In Deninno, the Court of Appeals went beyond the procedural default and addressed the issues raised by the defendant's motion, despite the fact that the district court did not rule on those issues. ("'We are free to affirm a district court decision on any grounds for which there is a record sufficient to permit conclusions of law, even grounds not relied upon by the district court.'") Deninno, at n.2, (quoting Medina v. City & County of Denver, 960 F.2d 1493, 1495 (10th Cir. 1992)) In essence, the Court found in favor of the defendant on the issues of procedural default, but the statute of limitations not being at issue, ruled on the merits.

Henceforth, the authority relied by the government is of no consequence in the case at bar.

C. Under Supreme Court Precedent, Marolf Need Not Have a Meritorious Defense.

In Peralta v. Heights Medical Center, 485 U.S. 80, 108 S.Ct. 896, 99 L.Ed.2d 75 (1988), the Supreme Court specifically held that a lower court's decision, finding that default judgment must stand absent a showing of a meritorious defense to the action in which judgment was entered without proper notice, is "[b]y reason of the Due Process Clause ... plainly infirm. Id. at 86-87.

Where a person has been deprived of property in a manner contrary to the most basic tenets of due process, 'it is no answer to say that in his particular case due process of law would have led to the same result because he had no adequate defense upon the merits.' Coe v. Armour Fertilizer Works, 237 U. S. 413, 424 (1915). As we observed in Armstrong v. Manzo, (citation omitted), only 'wiping the slate clean . . . would have restored the petitioner to the position he would have occupied had due process of law been accorded to him in the first place.' The Due Process Clause demands no less in this case.

Id. at 87.

D. The Statute of Limitations Has Run.

The government contends that the proper remedy in this case is to reopen the forfeiture case and proceed on the merits. (GR 17) The premise for their argument is based on the holdings of a series of cases in which the matters were remanded for a determination on the merits. (See, e.g. Barrera-Montenegro v. USA and Drug Enforcement Administration, 74 F.3d 657 (5th Cir. 1996); Muhammed v. Drug Enforcement Agency, 92 F.3d 648 (8th Cir. 1996);Glasgow v. United States Drug Enforcement Administration, 12 F.3d 795 (8th Cir. 1993))

However, this argument and the aforementioned cases miss the mark. None of the forfeiture proceedings were barred by the statute of limitations.

In this case, the government realized their mistake in 1992 and failed to act. Though the government again became aware that the forfeiture was void for lack of notice, they failed to give notice to Marolf before the expiration of the statute of limitations.

In United States v. $8,850 in U.S. Currency, 461 U.S. 555, 103 S.Ct. 2005 (1983), the Supreme Court set forth factors that examine the government's delay in pursuing a forfeiture action. Those factors weigh heavily in favor of Marolf.

In the instant case, the length of the delay is substantial and conceded by the government. The government's belief that the forfeiture was proper belies the facts. DEA agent Dianna Potts realized that Marolf was not given notice in December of 1992. The United States Attorney's office realized that notice was not given in May of 1995. The government's burden of giving notice is not unduly onerous, and any argument to the contrary is certainly specious. The government was certainly aware of the problem and had the power to remedy the situation by serving the appropriate documents on Marolf prior to the exhaustion of the statute.

While the Fourth Amendment places limits on the Government's power to seize property for purposes of forfeiture, it does not provide the sole measure of constitutional protection that must be afforded property owners in forfeiture proceedings. (Citations omitted) Where the Government seizes property not to preserve evidence of criminal wrongdoing but to assert ownership and control over the property, its action must also comply with the Due Process Clause. (Citations omitted) ¶ The Due Process Clause of the Fifth Amendment guarantees that 'no person shall . . . be deprived of life, liberty, or property, without due process of law.' Our precedents establish the general rule that individuals must receive notice and an opportunity to be heard before the Government deprives them of property.

Fairness can rarely be obtained by secret, one-sided determination of facts decisive of rights. . . . No better instrument has been devised for arriving at truth than to give a person in jeopardy of serious loss notice of the case against him and opportunity to meet it.

The purpose of an adversary hearing is to ensure the requisite neutrality that must inform all governmental decision making. That protection is of particular importance here, where the Government has a direct pecuniary interest in the outcome of the proceeding. (citations omitted)

In the instant case, the government chose not to notify Marolf of the forfeiture at any time during the pendency of his criminal action, his §2255, or the appeal thereon. They were cognizant of the statute of limitations and yet they failed to act diligently in correcting their malfeasance.

As confirmed by the United States Supreme Court in James Daniel Goode, the applicable statute of limitations in this case is five years pursuant to 19 U.S.C. § 1621. The statute provides in part:

No suit or action to recover any pecuniary penalty or forfeiture of property accruing under the customs laws shall be instituted unless such suit or action is commenced within five years after the time when the alleged offense was discovered. (Bold emphasis added.)

In finding a forfeiture action foreclosed by the five year statute of limitations, the court in $116,000, explained its reasoning thus:

Statutes of limitation are statutes of repose representing a 'pervasive legislative judgment that it is unjust to fail to put the adversary on notice to defend within a specified period of time and that the right to be free of stale claims in time comes to prevail over the right to prosecute them.'" ) (Citations omitted).

E. Forfeiture Statutes Must Be Strictly Construed Against the Government.

Forfeiture statutes are strictly construed against the government. See United States v. One 1936 Model Ford V-8 DeLuxe Coach, 307 U.S. 219, 226 (1939). Accordingly, "the burden on the government to adhere to procedural rules should be heavier than on claimants." United States v. $ 38,000.00 in United States Currency, 816 F.2d 1538, 1547 (11th Cir. 1987).

The statute of limitations has run. There is no authority to support the government's argument that the Court should void the statute of limitations and allow the forfeiture to proceed on the merits.

F. CONCLUSION.

For the reasons stated above, Marolf respectfully requests that the Court exercise its equitable powers and order the government to return the Asmara to Marolf, or alternatively, to order the government to pay to Marolf the value of the Asmara at the time of the taking, interest on that amount from the time of the taking and reasonable attorney fees under the Equal Access to Justice act.

Dated: February 24, 1997 Respectfully submitted,
 
 

SHAWN R. PEREZ
Attorney for Defendant/Movant
GARY H. MAROLF
 

UNITED STATES OF AMERICA )

)

Plaintiff, ) SA CR-91-66-AHS

vs. ) DECLARATION OF SERVICE

)

GARY H. MAROLF )

)

Defendant. )

______________________________)
 

I, Shawn R. Perez, am employed in the County of Orange, State of California. I am over the age of 18 and not a party to the within action; my business address is P.O. Box 3119, Dana Point, California.
 

On February 25,1997, I served the foregoing documents described as Reply to Government's Opposition to Motion for Return of Property in the above entitled action by depositing in the United States Post Office in Dana Point, CA and addressed as follows:
 

OFFICE OF THE UNITED STATES ATTORNEY
Carla A. Ford,AUSA
Federal Building, Suite 7516
300 North Los Angeles Street
Los Angeles, CA 9001
 

I declare under penalty of perjury that the foregoing is true and correct.
 

Executed on February 25,1997, at Dana Point, California.
 

____________________________
SHAWN R. PEREZ, ESQ.