BRENDA GRANTLAND, ESQ.

Attorney for Appellants

265 Miller Ave.

Mill Valley, CA 94941

(415) 380-9108

(415) 380-9208 fax

[Note to FEAR Brief-Bank readers: the page numbers are probably off now because of translation to another word processing format]
 

Table of Authorities iii
 

Related Appeal iv
 

Issues Presented 1
 

Statement of the Case 2
 

Statement of Facts 3
 

The searches of the Titan Court and Memphis Street properties 5
 

The criminal case 6
 

The forfeiture case 7
 
 

Argument 10
 

I. THE TRIAL COURT ERRED IN REFUSING TO ALLOW CLAIMANTS TO MOVE TO SUPPRESS EVIDENCE 10
 

II. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR THE GOVERNMENT 13
 

A. THE COURT APPLIED THE WRONG STANDARD FOR SUMMARY JUDGMENT 13
 

B. THE COURT IMPROPERLY RELIED UPON THE MAGISTRATE JUDGE'S EX PARTE RULING ON THE SEIZURE WARRANT AS ESTABLISHING PROBABLE CAUSE 17
 

1. THE TRIAL JUDGE MUST MAKE A SEPARATE FINDING OF PROBABLE CAUSE TO FORFEIT FOR EACH PIECE OF SEIZED PROPERTY 17
 

2. NO PROBABLE CAUSE WAS SHOWN FOR THE FORFEITURE OF THE $2,800 CASH 18
 

C. THE COURT ERRED IN REJECTING FRANCES MAY'S INNOCENT OWNER DEFENSE 20
 

III. THE TRIAL COURT ERRED IN FORFEITING UNIT 10, SINCE THERE WAS NO EVIDENCE THAT IT WAS USED TO FACILITATE DRUG TRAFFICKING 24
 

A. THE COURT BELOW ERRED IN APPLYING A SUBJECTIVE TEST FOR DEFINING A "LOT OR TRACT" 24
 

B. THERE WAS NO EVIDENCE TO SUPPORT THE COURT'S CONCLUSION THAT UNIT 10 WAS SEPARATELY USED TO FACILITATE DRUG TRAFFICKING IN UNIT 9 27
 

IV. THE TRIAL COURT ERRED IN HOLDING THAT FRANCES MAY OWNED NO DEFENSIBLE INTEREST IN MARITAL PROPERTY 30
 

A. FRANCES MAY OWNS A DEFENSIBLE INTEREST IN UNIT 10 TITAN COURT 30
 

B. A WIFE OWNS AT LEAST AN EQUITABLE INTEREST IN CASH FOUND IN HER HOME, AND CASH TAKEN FROM A JOINT BANK ACCOUNT 33
 

C. THERE IS NO AUTHORITY FOR DENYING AN INNOCENT SPOUSE AN INNOCENT OWNERSHIP DEFENSE WHEN THE SPOUSE IS A JOINT TENANT 35
 

V. THE DISTRICT COURT APPLIED THE WRONG STANDARD IN DETERMINING WHETHER THE FORFEITURE WAS DISPROPORTIONATE TO THE OFFENSE 37
 

Conclusion 44
 

Request for Oral Argument 45
 

Certificate of Service 46
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Cases
 

Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990) 13
 

Austin v. United States, ___ U.S. ___, 113 S.Ct. 2801 (1993) 14, 38, 40, 43, 44
 

Blue Circle Cement, Inc. v. Board of County Commissioners, 1994 WL 273412 (10th Cir. June 22, 1994) 13
 

Boyd v. United States, 116 U.S. 616, 633-34 (1886) 12
 

Celotex Corporation v. Catrett, 477 U.S. 317, 331 (1986) 16
 

Dolan v. City of Tigard, ___ U.S. Law Week ___ (1994) 44
 

In Re Questions Submitted by United States District Court, 517 P.2d 1331 (Colo. 1974) 32
 

In Re Winship, 397 U.S. 358 (1970) 14
 

Mares v. ConAgra Poultry Co., 971 F.2d 492, 495 (10th Cir. 1992) 13
 

One 1958 Plymouth Sedan v. Commonwealth of Pennsylvania, 380 U.S. 693 (1965) 12
 

Solem v. Helm, 463 U.S. 277 (1983) 38, 43, 44
 

United States v. $55,518.05, 728 F.2d 192 (3rd Cir. 1984) 21
 

United States v. $149,442.43, 965 F.2d 868 (10th Cir. 1992) 12, 19
 

United States v. 6625 Zumirez Drive, 845 F. Supp. 725 (C.D. Ca. 1994) 42
 

United States v. Alexander, 113 S.Ct. 2766 (1993) 43
 

United States v. Borromeo, 1 F.3d 219 (4th Cir. 1993) 38
 

United States v. Busher, 817 F.2d 1409 (9th Cir. 1987) 43
 

United States v. Griffin, 7 F.3d 1512 (10th Cir. 1993) 10
 

United States v. Hardage, 985 F.2d 1427, 1433 (10th Cir. 1993) 13
 

United States v. Harris, 903 F.2d 770, 778 (10th Cir. 1990) 43
 

United States v. James Daniel Good Real Property, --- U.S. at ----, 114 S.Ct. ___ (1993) 14, 41, 43
 

United States v. One Lot of U.S. Currency, ($68,000), 927 F.2d 30 (1st Cir. 1991) 21
 

United States v. Parcel Located at 9638 Chicago Heights, St. Louis, Mo., ___ F.3d ___ 1994 WL 259428 (8th Cir. No. 93-3350, decided June 15, 1994) 41
 

United States v. Pole No. 3172, Hopkinton, 852 F.2d 636 (1st Cir. 1988) 18
 

United States v. Premises Known as 717 S. Woodward St., 2 F.3d 529 (3rd Cir. 1993) 23
 

United States v. Real Property Known and Numbered as Rural Route 1, Box 137-B, Cutler, Ohio, 1994 WL 199231, 6th Cir. No. 93-3167, May 24, 1994 17, 18
 

United States v. Reynolds, 856 F.2d 675 (4th Cir. 1988) 26, 27
 

United States v. RR # 1, Box 224, Dalton, 14 F.3d 864 (3d Cir. 1994) 39 - 42
 

United States v. Santoro, 866 F.2d 1538 (4th Cir. 1989) 26
 

United States v. Smith, 966 F.2d 1045 (6th Cir. 1992) 27-29
 

United States v. Waupekenay, 973 F.2d 1533 (10th Cir. 1992) 10
 

Constitutional Provisions
 

Eighth Amendment 9, 38, 39, 41, 42, 43
 

Statutes and Court Rules
 

Fed.R.Civ.P. 56(e) 16
 

21 U.S.C. § 881 30, 31
 

Other Authorities
 

Joint Explanatory Statement of Titles II and III, Pub. L. No. 95-633, 95th Congress 2nd Session, reprinted in U.S.Code Cong. & Admin. News 9496, 9518, 9522-23 31
 
 

The criminal appeal of Philip May is also pending before this court, in United States v. Philip May, No. 92-1289.
 

1. Whether the trial court erred in refusing to allow claimants to move to suppress evidence.

2. Whether the trial court erred in granting summary judgment for the government.

3. Whether the trial court erred in forfeiting unit 10, when there was no evidence that it was used to facilitate drug trafficking, but was "tainted" according to the government's theory because it adjoined Unit 9.

4. Whether the trial court erred in holding that Frances May owned no defensible interest in marital property, and therefore could not assert an innocent owner defense at all.

5. Whether the district court applied the wrong standard in determining whether the forfeiture was disproportionate to the offense.

This civil forfeiture action was brought under 21 U.S.C. §881 against several parcels of real estate, including Philip and Frances May's residence and commercial property, their automobiles and cash. The initial seizure warrant named virtually everything the couple owned, including the contents of their residence and personal items, and their adult son's condominium.

Philip May was charged with drug offenses in a parallel criminal prosecution, District court Case 92-CR-33-1. He was convicted after a jury trial, and was sentenced on September 12, 1992, to ten years' imprisonment. Philip May's criminal case is now pending appeal, in Circuit Court case number 92-1289. Claimant/appellant Frances May, Philip May's wife, has never been charged with any offense.

Following Philip May's criminal conviction, this civil forfeiture case proceeded to discovery and cross motions for summary judgment. After completion of discovery, Assistant U.S. Attorney Mark Pestal saw that the Mays had shown ample legitimate income from their residential interior construction business, Door & Trim Systems, Inc., to justify their modest accumulation of assets, and voluntarily dismissed the counts predicated on a "drug proceeds" theory. This dismissal resulted in the return of many of the items seized, including their son Eric May's condominium, some undeveloped land, the inventory and equipment of the construction business, and several vehicles. Order To Relinquish Custody of Certain Defendant Properties, filed 3-11-94 (attached).

Philip May filed motions to suppress evidence,⁽¹⁾ which were summarily denied without a hearing, the court ruling that motions to suppress evidence cannot be filed in a civil forfeiture case.⁽²⁾

Motions for summary judgment, cross-motions and replies, were filed by the parties, along with supporting affidavits and documents.⁽³⁾ The court below granted summary judgment to the government as to all items of property, rejecting Frances May's innocent owner defense, and Philip May's disproportionality defense.⁽⁴⁾

Philip and Frances May have been married since 1969. They had three children, two of whom are still minors,⁽⁵⁾ and built, from the ground up, a successful interior construction business, Door & Trim Systems, Inc.

Unbeknownst to Frances May, in the year prior to his arrest, Philip had been having an affair with Lisa Tarasuik, an employee of Door & Trim Systems, Inc.. After a dispute over some unauthorized checks Lisa had written on the company's account, Philip fired her in July 1991. According to Lisa Tarasuik's testimony at Philip May's criminal trial, Philip began engaging in cocaine trafficking with Lisa shortly thereafter.

On October 29, 1991, Philip May and Lisa Tarasuik were arrested for cocaine trafficking, in a reverse sting operation.

The series of events leading to Philip May's arrest began on October 24, 1991 when an informant told police that a friend of his named Sladek had a female friend, Lisa, who was looking to buy a kilo of cocaine. He said the female's past source of cocaine had dried up. Appl. Appx. 67.

The officers decided to set up a reverse sting, whereby police would attempt to sell Lisa a quantity of cocaine, so that they could arrest her for it. They told the informant to set up the deal for the following night, at the No Frills Bar. Appl. Appx. 67.

Sladek paged Lisa to set up the deal. Sladek told the informant that Lisa come to the No Frills Bar at 8 p.m. on October 25. After several more calls to Lisa's pager, Sladek returned and told the officers that Lisa would not be coming, because her boyfriend didn't want her to come. Appl. Appx. 67.

On October 29, Sladek contacted the informant and said Lisa was now ready to do business. He sat up a meeting for that night at 7:30, at the No Frills Bar. The police began surveillance of No Frills at 7 p.m.. At 7:48, Sladek paged the informant and told him he and Lisa were on the way. At 8:27 p.m., Sladek & Lisa walked into bar. The informant and Sladek left Lisa alone to talk to Rich. They negotiated a deal, in which Lisa would purchase half a "package" of cocaine for $13,500. Lisa said she would have to call her "husband" because he had the money. She left to make a phone call. Appl. Appx. 67.

At around 8:30, Lisa was observed approaching a Honda in the parking lot, getting something out of the trunk, and then briefly getting inside to talk to the driver. Lisa returned to the bar and showed the police the cash, and police arrested her, while other officers arrested Philip May, the driver of the Honda. Appl. Appx. 67.

Police questioned Philip on the way to the police station, and for hours at the station. Philip answered their questions. They asked him to consent to a warrantless search of his home and business properties. Finally at 12:40 a.m. on October 30, after four hours of questioning, Philip signed the consent form. Appl. Appx. 122. The officers told him that he would have the right to discontinue the searches at any time. Appl. Appx. 79.
 

The Searches of the Titan Court and Memphis Street properties

Some time before 2:50 a.m., the police took Philip May to his residence, located at 1277 S. Memphis Street, to conduct the search. Once inside, Philip was told to retrieve his keys to his business, and then he was immediately taken away by police while officers continued the search. Appl. Appx. 79.

Frances May was not asked to consent to the search of her residence, and did not give her consent. Appl. Appx. 356.

At 2:50 a.m., the officers arrived at 9844 Titan Court. Philip May was briefly taken into the premises, and was asked to execute another written consent form, because of the long passage of time. Again he was immediately taken away after the police gained entry. Appl. Appx. 78.

The searches continued for some time after Philip May was taken away. Police reports show six baggies containing cocaine were found hidden in a file cabinet in the basement of the May residence. In another part of the house, $2,800 in cash was found in a dresser drawer. A pistol and a shotgun were also recovered from the residence. No other evidence of drug use or sales was recovered from the residence. Appl. Appx. 78.

Police recovered from Unit 9, at 9844 Titan Court: a triple beam scale, hidden inside the computer closet; a white box containing 3 baggies of cocaine (total ) and a cocaine grinder, in a storage area above the office. No other indicia of sales or use of drugs was recovered from Unit 9. Appl. Appx. 79.

The search of Unit 10 Titan Court turned up no evidence of any crime.
 

The criminal case

After the arrest, Lisa Tarasuik made a deal with police to testify against Philip May at trial in exchange for leniency in her case. Philip went to trial and was convicted of possession with intent to distribute cocaine, conspiracy to distribute cocaine, attempted possession with intent to distribute, and carrying a firearm during a drug offense. Appl. Appx. 43 ¶ 6. He was sentenced to 10 years in prison. In addition he was fined $12,500, and ordered to pay all the costs of his imprisonment and parole, which will exceed $100,000. Appl. Appx. 361.

Taken in the light most favorable to the government, the testimony at trial shows that Philip May's involvement in cocaine trafficking was a recent development. Lisa Tarasuik testified at trial that the first time that she and Philip even discussed dealing cocaine together was two to three months before their arrest -- or approximately mid-July 1991 -- after Lisa was fired from Door & Trim Systems, Inc.. Appl. Appx. 361.

Other, circumstantial evidence corroborates that assertion. Most notably, Philip and Frances May's bank records show that the only suspicious banking transactions occurred between July and October, 1991. The cash transactions Philip made at his bank in September, 1991 were suspicious enough to trigger the bank teller to file a "suspicious transaction" report with the police. The paper trail Philip left behind was the sign of a novice at drug dealing. Appl. Appx. 127 - 136.
 

The forfeiture case

After the criminal trial and the completion of civil discovery, the United States reviewed the evidence against Philip and Frances May and agreed to release several items of seized property, and to dismiss their "drug proceeds" theory against every item except the cash. The following items remained after the dismissal:

1. The family residence, located at 1277 S. Memphis Street, titled in the names of Philip and Frances May as joint tenants.

2. The business properties, 9844 Titan Court, Units 9 and 10, two separate parcels in a commercial condominium building. Unit 9 was titled in the name of Philip May only.⁽⁶⁾ Unit 10 was titled in the names of both Philip and Frances May.
 

3. $13,050 in cash which Philip May brought to the No Frills Bar, and which Lisa attempted to use to buy cocaine from the police, on the night of their arrest.
 

4. $2,800 in cash taken from a dresser drawer in the May residence during the October 30, 1991 search.

Appl. Appx. 106.

On February 24, 1994, Philip May filed three pro se motions to suppress evidence -- one each for the May residence, the Titan Court business properties, and Lisa Tarasuik's apartment.⁽⁷⁾ Those motions were denied by the district court without any consideration of their merits, the court stating that "this is a civil case, not a criminal case." Order filed 3-9-94 (attached).

The parties then filed cross-motions for summary judgment.

The government's motions for summary judgment argued that the United States had demonstrated probable cause in their motion for summary judgment, since Philip May had been convicted of drug distribution, and therefore that the burden was now on claimants to prove by a preponderance of the evidence a defense to forfeiture. Appl. Appx. 47 - 48.

Frances May moved for summary judgment on the issue of her innocent ownership of half the $13,050 seized during Philip's arrest. Frances was able to document a paper trail tracing the $13,050 back to a joint checking account she held with her husband. She showed that the $2,800 seized from her home was her sole and separate property. She argued that she was entitled to a one-half interest in each parcel of real estate, even Unit 9, Titan Court, which was purchased with marital funds, but was inadvertently placed in her husband's name alone. She also argued that Unit 10 Titan Court was not forfeitable at all, since it was never used to facilitate any drug offense. Appl. Appx. 271.

Philip May opposed summary judgment of his interest, arguing that Unit 10 was not forfeitable, and that forfeiture of the seized property, in addition to his sentence to 10 years' imprisonment (mandatory minimum), a $12,500 fine, and an assessment of approximately $100,000 cost of incarceration would be excessive punishment under the Eighth Amendment and Austin v. United States, 113 S.Ct. 2801 (1993). Appl. Appx. 344, 360.

On April 27, 1994, the district court granted summary judgment for the government as to every item of property -- rejecting Frances May's innocent owner defense without a hearing. The court held that Frances May had failed to meet her burden of proving innocent ownership by a preponderance of the evidence, and therefore the government would be entitled to summary judgment. Implicit in the court's ruling are a number of findings of fact, in each of which the court resolved disputed facts in favor of the government. Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94 (attached).

Claimants filed notices of appeal on June 17, 1994. Appl. Appx. 402, 404.
 
 

I. THE TRIAL COURT ERRED IN REFUSING TO ALLOW CLAIMANTS TO MOVE TO SUPPRESS EVIDENCE
 

The standard of review of the denial of a motion to suppress has been established in criminal cases. "The trial court's findings of fact must be accepted by an appellate court unless they are clearly erroneous." United States v. Griffin, 7 F.3d 1512 (10th Cir. 1993). However, the court below made no findings of fact, but merely denied the suppression motions without considering their merits, holding that suppression motions may not be filed in civil forfeiture cases. That determination, that the Fourth Amendment does not apply to forfeiture cases, is a ruling of law, which the court of appeals reviews de novo. United States v. Waupekenay, 973 F.2d 1533, 1535 (10th Cir.1992).

On February 24, 1994, Philip May filed pro se⁽⁸⁾ motions to suppress the evidence seized at the residence and Unit 9 Titan Court.⁽⁹⁾ He argued that, although the police had obtained his written consent to conduct warrantless searches of his residence and business properties, police breached the terms of the consent. The written consent form which he signed stated that Philip had been told that he had the right to stop the search at any time.⁽¹⁰⁾ Despite that assurance, once the police gained entry to the home, they had Philip May retrieve his keys to the Titan Court properties, and immediately took Philip to Titan Court while police conducted the search of the residence.⁽¹¹⁾ At the Titan Court address, police obtained a new written new consent form from Philip (because so much time had passed since the original consent form was signed). Again, once the police gained entry to the building, officers took Philip away while other officers conducted the search.

In his suppression motions, Philip argued that removing him from the scene while the searches were being conducted prevented him from exercising his right to revoke his consent, and that, once removed from the premises he no longer consented to the search.

Without reaching the merits of any of these arguments, and without conducting an evidentiary hearing, the court summarily denied the suppression motion, stating that motions to suppress cannot be raised in civil forfeiture cases.⁽¹²⁾

The trial court was clearly wrong about the law. The U.S. Supreme Court has long held that motions to suppress evidence may be filed in civil forfeiture cases.

[P]roceedings instituted for the purpose of declaring the forfeiture of a man's property by reason of offenses committed by him, though they may be civil in form, are in their nature criminal. In this very case the ground of forfeiture . . . consists of certain acts of fraud committed against the public revenue . . . ; and it is declared, that the offender shall be fined . . . or be imprisoned . . .; and in addition to such fine such merchandise shall be forfeited. These are the penalties affixed to the criminal acts, the forfeiture sought by this suit being one of them. . . . The [case], though technically a civil proceeding, is in substance and effect a criminal one. . . . As, therefore, suits for penalties and forfeitures incurred by the commission of offenses against the law, are of this quasi criminal nature, we think that they are within the reason of criminal proceedings for all the purposes of the fourth amendment of the constitution.
 

One 1958 Plymouth Sedan v. Commonwealth of Pennsylvania 380 U.S. 693, 697-98 (1965), quoting Boyd v. United States, 116 U.S. 616, 633-34 (1886). The Tenth Circuit has applied Plymouth Sedan to allow suppression motions in civil forfeiture cases. United States v. $149,442.43, 965 F.2d 868, 872 (10th Cir. 1992).

Claimant-Appellant Frances May pointed out the court's error in refusing to allow a suppression motion, in her Response to Plaintiff's Motion For Summary Judgment, filed April 8, 1994,⁽¹³⁾ and joined in Philip May's motion.⁽¹⁴⁾ The court, however, left the ruling in place.

Because the motion to suppress was rejected without a hearing, this issue should be remanded to the trial court for an evidentiary hearing on the motion to suppress.
 

II. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR THE GOVERNMENT
 
 

A. THE COURT APPLIED THE WRONG STANDARD FOR SUMMARY JUDGMENT
 

The standard of review for a denial of summary judgment was recently set out by the Tenth Circuit in Blue Circle Cement, Inc. v. Board of County Commissioners of County of Rogers, 1994 WL 273412, p. 2, (10th Cir., 1994)

We review de novo the district court's summary judgment order and apply the same legal standard used by the court under Fed. R. Civ. P. 56(c). Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990). Summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that 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). Our de novo standard of review applies both to the court's federal constitutional legal conclusions and its determination of state law. Mares v. ConAgra Poultry Co., 971 F.2d 492, 495 (10th Cir. 1992). In applying this standard, we construe the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment. United States v. Hardage, 985 F.2d 1427, 1433 (10th Cir. 1993).
 

The court below applied the wrong standard in ruling on summary judgment. Instead of determining whether there were material facts in dispute, the court applied the burdens of proof historically utilized at trial in civil forfeiture cases,⁽¹⁵⁾ and resolved disputed facts in favor of the government.

The district court's order states:

The United States argues that the facts clearly provide probable cause to support forfeiture by summary judgment absent a claimant's affirmative defense provable by a preponderance of the evidence. . .
 

In order for the United States to forfeit property under 21 U.S.C. §881 it bears the initial burden of showing probable cause that the property to be forfeited was used illegally. . . .
 

Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94, p. 5 (attached).

The court did not determine whether there material facts in dispute with regard to the government's "burden" of demonstrating probable cause, but merely relied upon the fact that a magistrate judge had made an ex parte determination of probable cause in issuing the seizure warrant.

By issuing the warrant for arrest of the defendant property, the Court has already made the determination that probable cause existed to show that the Defendant property is forfeitable. . . .
 

Thus, the United States claims that they have already established probable cause and the burden has now been shifted to the claimants to show by a preponderance of the evidence that the defendant property was not the proceeds from the sale[⁽¹⁶⁾] of controlled substances or intended to be furnished for the purchase of controlled substances or used to facilitate illegal drug trafficking.
 

Id. at p. 5 - 6.

The court held that the burden of proof had shifted to the claimants:

Once probable cause has been established, the burden shifts to a claimant to prove by a preponderance of the evidence an affirmative defense to forfeiture. . . . A claimant cannot sustain her burden with a mere conclusory denial of guilt or an unsubstantiated assertion of an innocent owner defense.
 

Id. p. 6 (citations omitted).

The court then granted summary judgment for the government, finding that Frances May's innocent owner defense was not proven by the preponderance of evidence.

Claimant Frances May is not entitled to summary judgment on her innocent-owner defenses as they have not been established by a preponderance of the evidence.

Id. p. 12. The court makes no further mention of Frances May's innocent ownership defense before granting summary judgment against her.

All of these rulings were in error.
 

A. THE COURT APPLIED THE WRONG STANDARD FOR SUMMARY JUDGMENT
 

Although the burdens of proof that the court below used may have been the correct standard for trial,⁽¹⁷⁾ they are not the proper standard for summary judgment. In civil forfeiture cases, as any other civil case, summary judgment may not be granted if there is any genuine issue of material fact. A claimant need only come forward with some credible evidence in defense to create a genuine issue of material fact. The court's role in summary judgment is not to weigh the evidence, determine credibility, or make findings with regard to disputed fact, as the court below did.

As Frances May correctly argued in her Reply to Plaintiff's Opposition to Motion for Summary Judgment,

Because innocent ownership is an affirmative defense, [at trial] Frances May has the burden of proving her innocence by a preponderance of the evidence. However, no burden of proof comes into play when a fact is uncontested.
 

In motions for summary judgment, when the moving party has the burden of proof at trial on a particular issue, that party "must support its motion with credible evidence ... that would entitle it to a directed verdict if not controverted at trial." Celotex Corporation v. Catrett, 477 U.S. 317, 331 (1986) (Brennan, J., dissenting). Once the moving party establishes a fact by affidavit or otherwise, it is entitled to summary judgment unless the nonmoving party, in response, "come[s] forward with significant, probative evidence demonstrating the existence of a triable issue of fact." Id. See also Fed.R.Civ.P. 56(e).
 

Frances May's Reply to Plaintiff's Opposition to Motion for Summary Judgment, Appl. Appx. 383.
 

B. THE COURT IMPROPERLY RELIED UPON THE MAGISTRATE JUDGE'S EX PARTE RULING ON THE SEIZURE WARRANT AS ESTABLISHING PROBABLE CAUSE
 

After holding that the government's burden of proof on summary judgment is probable cause, the court dispensed with a probable cause showing by relying on the magistrate's ex parte finding of probable cause in issuing the seizure warrant. This is improper.

1. THE TRIAL JUDGE MUST MAKE A SEPARATE FINDING OF PROBABLE CAUSE TO FORFEIT FOR EACH PIECE OF SEIZED PROPERTY
 

As the Sixth Circuit recently held:

The district court erroneously equated the magistrate judge's inquiry into whether there is probable cause to support an arrest warrant and the inquiry undertaken in determining whether there is probable cause to forfeit defendant property. The First Circuit has explained:
 

[T]he probable cause determination of the magistrate and that in the complaint address two different questions: the first, whether the government has probable cause to hold the property until it can file a complaint against it, includes considerations of the need to protect the government's interest, and comes at an earlier stage in the proceedings; the second, whether the facts in the government's possession support an inference that the property is subject to forfeiture, must be more narrowly tailored to precisely identify the portion of the property the government can keep. United States v. Pole No. 3172, Hopkinton, 852 F.2d 636, 639 (1st Cir. 1988).
 

United States v. Real Property Known and Numbered as Rural Route 1, Box 137-B, Cutler, Ohio, 1994 WL 199231 p. 3, 6th Cir. No. 93-3167, May 24, 1994.

The magistrate judge, the Sixth Circuit held,

makes an initial determination of probable cause without the benefit of all the evidence. If a district court could simply adopt a magistrate judge's ex parte finding of probable cause, a claimant would be denied any meaningful opportunity to challenge this finding. Accordingly, the district court's conclusion that the issue of probable cause was moot was in error.
 

Id. p. 4 (footnotes omitted).

The Sixth Circuit rejected the government's argument that the error was harmless since the record below demonstrated probable cause, and concluded that denying the claimant an opportunity to be heard on the issue of probable cause could not be harmless error. Id. n. 4.

The same rule applies here.

2. NO PROBABLE CAUSE WAS SHOWN FOR THE FORFEITURE OF THE $2,800 CASH
 

In the Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94 p. 13 (attached), the trial court makes a factual determination that the $2,800 in cash seized from the residence is forfeitable:

The facts show that the defendant $2,800 is forfeitable under §881(a)(6) either as the proceeds of illegal drug activity, money intended to be given in exchange for controlled substances, or intended or used to facilitate drug trafficking.
 

Claimant Frances May argues that the $2,800 in cash belonged solely to her. However, the defendant cash was at the residence either as proceeds from the sale of cocaine or was to be furnished for the purchase of controlled substances or to facilitate Mr. May's and Ms. Tarasuik's drug trafficking. Similarly, other circumstantial evidence indicates Mr. May's control of the $2,800[⁽¹⁸⁾

] thereby eliminating any claim of ownership by another claimant.
 

As Frances May stated in her Reply to Plaintiff's Response To Her Motion for Summary Judgment, Appl. Appx. 387 - 389.

Although probable cause is an extremely low burden of proof, the government cannot meet that burden here. Probable cause is more than a mere suspicion, which is all that the government can show with regards to the $2800 in cash.
 

The government cannot point to any direct or circumstantial evidence connecting that money with any criminal activity.
 

This is not a case in which any legal presumptions apply.
 

The amount of cash is not large enough to create any presumptions from its mere size, such as the hundreds of thousands of dollars in cash found in United States v. $149,442.43, 965 F.2d 868 (10th Cir. 1992). . . .
 

This is also not a case in which the size of the cash found in the property was excessive considering the legitimate sources of income shown by claimants. . . .
 

This is also not a case where a presumption arises from the proximity of cash to contraband. Although some cocaine was found in the residence during the search in which the $2,800 cash was seized, [the money and the cocaine] were found in separate rooms. The cocaine was well hidden, and there was no other contraband or indicia of criminal activity recovered anywhere in the residence. . . .
 

Furthermore, the order itself recognizes that Frances May disputed the government's claim that the $2,800 was the proceeds of drug trafficking when it states: "Claimant Frances May argues that the $2,800 in cash belonged solely to her." Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94, p. 13 (attached). Thus, at the very least, the issue of whether the $2,800 is forfeitable is an issue for trial.
 

C. THE COURT ERRED IN REJECTING FRANCES MAY'S INNOCENT OWNER DEFENSE
 

Frances May submitted an affidavit, in support of her motion for summary judgment,⁽¹⁹⁾ in which she declared under penalty of perjury:

I am the wife of Philip May, who was arrested for cocaine trafficking on October 29, 1991. We have been married since 1969, and have three children. Unbeknownst to me, in the months prior to his arrest, Philip was having an affair with Lisa Tarasuik, an employee of our business, Door & Trim Systems. Police claim that Lisa and Philip were also engaging in cocaine trafficking together, during the three month period prior to their arrest.

I neither knew of nor consented to any drug trafficking by my husband, Philip May, nor did I consent to the presence of cocaine in our house, or our business properties.
 

This was sufficient to put Frances May's defense of innocent ownership at issue, thus precluding summary judgment for the government.

The court below held Frances May had not met her "burden" to withstand summary judgment, because "[a] claimant cannot sustain her burden with a mere conclusory denial of guilt or an unsubstantiated assertion of an innocent owner defense."⁽²⁰⁾

The two cases cited by the court below are inapposite. In United States v. One Lot of U.S. Currency ($68,000), 927 F.2d 30 (1st Cir. 1991), the government presented sworn factual allegations demonstrating probable cause and the claimant failed to come forward with any evidence to rebut them or establish a defense. Here, claimants submitted sufficient evidence and affidavits to, at least, create a factual issue with regard to their defenses.

In United States v. $55,518.05, 728 F.2d 192 (3rd Cir. 1984), (hereinafter cited as "$55,518 (Golden)") the issue was

whether Golden's mere assertion that the money "was neither furnished nor intended to be furnished by any person in exchange for a controlled substance," . . . constitutes a meritorious defense.
 

Id., at 196. This case is not on point. First, it was not decided on cross-motions for summary judgment, but on Golden's motion to vacate a default judgment. In order to vacate a default, the claimant must show "a meritorious defense" -- a different standard from that required on summary judgment.

Secondly, the government had alleged specific facts showing probable cause to believe the money was intended to be used to purchase cocaine, and the claimant had not rebutted those facts.

Golden neither denies any of these averments, nor questions whether the government has established probable cause. He merely asserts that the money "was neither furnished nor intended to be furnished by any person in exchange for a controlled substance. . . ." Furthermore, he fails to set forth any allegations containing facts which, if proven at trial, would constitute a meritorious defense to the forfeiture.
 

Id. The court further pointed out that Golden failed to offer any evidence or affidavits showing where the large sum of money came from, or otherwise dispelling the suspicious circumstances of its presence at the scene of a drug transaction.

In contrast, in this case, Frances May established, by affidavit and documentary evidence,⁽²¹⁾ the specific sources of the $2,800 cash seized from the home and the $13,050 seized from Philip May at the time of his arrest.

Frances May also stated in her affidavit that she did not know of or consent to drug trafficking by her husband, nor did she consent to the presence of cocaine in their residence or business properties.

The Court below implied that a claimant's "conclusory denial" of knowledge or consent to illegal drug activity would not be enough to survive summary judgment in favor of the government. The courts have not upheld such an impossible burden.

The Third Circuit held in United States v. Premises Known as 717 S. Woodward St., 2 F.3d 529, 534 (3rd Cir. 1993):

Since a claimant advancing an innocent owner defense has the ultimate burden of proof on the issue of an absence of knowledge, he or she can successfully resist a motion for summary judgment only by coming forward with competent evidence tending to show an absence of knowledge. An affidavit of the claimant denying knowledge is competent evidence tending to show this and in the absence of other evidence rendering it incredible, such an affidavit creates a genuine issue of material fact.
 

Woodward St., 2 F.3d at 534.

Furthermore, in this case, the government offered no evidence, circumstantial or otherwise, to contradict Frances May's assertion of her lack of knowledge or consent.

In fact, contrary to the judge's findings, Frances May's innocent ownership was conceded by the government. The Pretrial Order, signed the government and filed in open court on April 6, 1994, states at Appl. Appx. 326:

It is undisputed that Frances May is an innocent owner, and therefore that she would be entitled to keep her entire interest in the defendant properties. There is a dispute over whether Frances May owns any interest in [some of the seized properties].
 

Thus, it was error for the court to have rejected Frances May's innocent owner defense on summary judgment. At the very
 

least the court should have granted partial summary judgment to Frances May on the issue of her lack of knowledge and consent.

III. THE TRIAL COURT ERRED IN FORFEITING UNIT 10, SINCE THERE WAS NO EVIDENCE THAT IT WAS USED TO FACILITATE DRUG TRAFFICKING
 

During the search of the Titan Street business properties, cocaine and other indicia of drug trafficking were found in Unit 9, but no contraband, paraphernalia, or any other indicia of crime was found in Unit 10. Nevertheless, the court below summarily forfeited both parcels to the government, treating them as one tract, and alternatively, stating that Unit 10 had a sufficient "nexus" to Unit 9 to taint both parcels.
 

A. THE COURT BELOW ERRED IN APPLYING A SUBJECTIVE TEST FOR DEFINING A "LOT OR TRACT"
 

The court below reasoned that Units 9 and 10, Titan Court should be treated as one "lot or tract" of land, even though they were purchased at separated times, in two separate deeds. In doing so, the court below develops a subjective test for "lot or tract" which has no support in forfeiture case law.

The defendant property consists of two adjoining industrial condominiums that were utilized by Mr. May in his business Door & Trim Systems, Inc. The defendant Unit 9 of 9844 South Titan Court is owned free and clear by Philip S. May. The defendant United 10 is owned in joint tenancy by Philip S. May and Frances A. May. When originally constructed, Units 9 and 10 were separated by a party wall. This wall was removed by Mr. May. The physical plant of the company was located inside of the two units. The property's use is an one whole tract and not individual units. [sic]
 

That the cocaine was found only in Unit 9 is irrelevant. Each unit as "real property" had a sufficient nexus with the illegal activity. . . . Unit 10, in light of its indistinguishable connection with the whole building also meets the test of facilitating the possession of cocaine. . . .
 

The evidence shows probable cause to forfeit Units 9 and 10 based upon their nexus to the illegal activity of providing an inconspicuous storage area for the cocaine and paraphernalia. Both units are forfeitable without regard to whether cocaine was physically located on all parts of the property at the time of discovery. It is sufficient that the property serve to facilitate the illegal activity by concealing its presence. United States v. Smith, 966 F.2d 1045, 1055 (6th Cir. 1992) (holding that adjoining tracts of farmland were forfeitable, even though marijuana plants were only found on one tract.) Here, the relative location and use of Units 9 and 10 in the business are directly analogous to the adjoining tracts of farmland, both of which were forfeitable in Smith. Both units were used together for the operation of door & Trim's carpentry business.
 

Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94, pp. 10 - 11 (attached) (emphasis added).

These subjective standards -- the property's use as one whole tract and not individual units, or an indistinguishable connection with the whole building, the relative location, and use together for the operation of a business -- are not supported by case law.

The drug forfeiture statute, 21 U.S.C. §881 makes forfeitable:

all real property, including any right, title and interest in the whole of any lot or tract of land and any appurtenances or improvements.

Numerous litigants have asked the courts to adopt a subjective test for defining a "lot or tract" of land. For example, claimants often argue that only a portion of their 50-acre tract was used to facilitate drug trafficking, and therefore the court should draw some other boundary line, such as where a road cuts through the property, as the boundary separating what's forfeitable from what isn't.

In United States v. Santoro, 866 F.2d 1538, 1543 (4th Cir., 1989) the court stated:

The property, although divided by a road, is legally described as a single, undivided tract. The claimants' subjective characterization of the property as two tracts cannot serve as the legal basis for determining the number of tracts present for purposes of 21 U.S.C. § 881(a)(7). We adopt the reasoning of the court below that the "whole of any lot or tract of land" must be determined from the duly recorded instruments and documents filed in the county offices where the defendant property is located.
 

In United States v. Reynolds, 856 F.2d 675 (4th Cir. 1988) the claimant owned two adjacent parcels of land, one of which had been used to facilitate drug trafficking. The court denied forfeiture of one parcel and ordered the other parcel forfeited. The claimant appealed, arguing that the court should only forfeit a small portion of the second tract -- the portion which had been used to facilitate drug distribution.

Reynolds contends that "tract" should be defined narrowly to be consistent with legislative purpose. However, Reynolds does not provide a plausible alternative source for the definition of "tract" to supplant the natural source for its definition: the instrument creating an interest in the property. In particular, we do not think, contrary to Reynolds' argument, that § 881(a)(7) admits of ad hoc definitions of "tract" by federal courts on a case-by-case basis.
 

Reynolds, at 677.

The Sixth Circuit so concluded in United States v. Smith, 966 F.2d 1045 (6th Cir. 1992) -- a case incorrectly cited by the court below as supporting a subjective test for "lot or tract:"

Thus, we hold that tracts of real property subject to forfeiture under section 853 are defined by the instruments and documents that created the defendant's interest in the property.
 

Smith, at 1054.
 

B. THERE WAS NO EVIDENCE TO SUPPORT THE COURT'S CONCLUSION THAT UNIT 10 WAS SEPARATELY USED TO FACILITATE DRUG TRAFFICKING IN UNIT 9

In its Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94, p. 11, (attached), the court below alternatively held that, even if Units 9 and 10 were two separate parcels, there was a sufficient "nexus" to support forfeiture of Unit 10 on a facilitation theory. However, the facts upon which the court relied in finding that Unit 10 facilitated the possession of cocaine are hazy.

The evidence shows probable cause to forfeit Units 9 and 10 based upon their nexus to the illegal activity of providing an inconspicuous storage area for the cocaine and paraphernalia. . . . It is sufficient that the property serve to facilitate the illegal activity by concealing its presence. United States v. Smith, 966 F.2d 1045, 1055 (6th Cir. 1992) (holding that adjoining tracts of farmland were forfeitable, even though marijuana plants were only found on one tract.) Here, the relative location and use of Units 9 and 10 in the business are directly analogous to the adjoining tracts of farmland, both of which were forfeitable in Smith. Both units were used together for the operation of door & Trim's carpentry business.
 

Clearly, the court below misconstrued the holding in Smith.

As Frances May argued in her Reply to Plaintiff's Response to Her Motion for Summary Judgment, Appl. Appx. 385:

Smith involved four contiguous tracts, which together made up the claimant's farm. After holding that the term "tract" is defined by the instrument that created the interest in the land, the court reviewed the facts as to each tract separately. It found tract 2 to be forfeitable because a marijuana seed bed was located there. Tracts 1 and 4 were held forfeitable because they were used to conceal the marijuana garden on tract 2,
 

because the cornfield in which the officers located the large marijuana patch extended across Tract 1 and Tract 4, Tract 4 facilitated the commission of the offense by concealing the patch on Tract 1.
 

[quoting Smith, at 1055.] No contraband was ever found on Tract 3, which contained the residence, and the trial court refused to forfeit it. On appeal, the government argued that the residence was used "to guard the marijuana and to conceal the entire operation by making the farm appear to be a legitimate use of the land." The court held that there was no evidence that the house was used to guard the marijuana, and that its mere proximity is insufficient to show it was used to conceal the cultivation on the adjacent tracts.
 

Thus, in Smith, the Sixth Circuit affirmed the trial court's ruling denying forfeiture of the third tract, on which the residence sat. United States v. Smith, 966 F.2d 1045, 1053 (6th Cir. 1992).

Similarly, there is no evidence in this case that Unit 10 in any way facilitated the possession of cocaine in Unit 9. Both Units 9 and 10 had separate entrances, so Unit 10 did not facilitate cocaine possession by providing a method of ingress to Unit 9. There was no structure, barrier, or other physical feature in Unit 10 that would in any way help conceal the cocaine hidden in Unit 9. In fact, the amount of cocaine found was so small in size, that it could easily be concealed anywhere. This is not like a marijuana field which is hidden from view of the street by a cornfield.

Furthermore, the "nexus" cannot be supplied by the fact that both units were used to facilitate the construction business located in the two parcels. The "nexus" must establish that each parcel of property was used to facilitate a forfeitable offense -- not a legitimate business. Under the court's reasoning, the four adjacent parcels in Smith would all be forfeitable as part of the same working farm. But the Sixth Circuit rejected that theory, and looked at each parcel separately to determine which parcels were used to facilitate marijuana cultivation.

Since Units 9 and 10 are two separate "lots" or "tracts" under the deeds conveying the properties to the Mays, as well as in tax assessor's records, Unit 10 cannot be forfeited for tainting acts committed on Unit 9. In the absence of any evidence indicating that Unit 10 was separately used to facilitate drug trafficking or possession, Unit 10 is not forfeitable.
 

IV. THE TRIAL COURT ERRED IN HOLDING THAT FRANCES MAY OWNED NO DEFENSIBLE INTEREST IN MARITAL PROPERTY
 

After discussing Colorado law regarding the "vesting" of marital property rights upon divorce, the court below concludes that Frances May, as a wife, has no ownership interest in marital property. The district court stated:

An unvested or inchoate interest in marital property is insufficient to constitute ownership under 21 U.S.C. §881. Under Colorado law, a spouse's right to the other spouse's property does not vest until death or divorce. In Re Questions Submitted by United States District Court, 517 P.2d 1331, 1333 (Colo. 1974)(en banc).
 

Except for those rights which vest upon filing of the divorce action, we in no way change the Colorado law that a husband's property is free from any vested interest of the wife and, with [a] possible exception or two, he can sell it or give it away.
 

Id. at 1335 (emphasis added).
 

A spouse under Colorado law is free to dispose of his or her property in any manner as no interest in the other spouse vests until divorce. . . . Thus, she [Frances May] cannot maintain a claim for any interest [in] the properties.
 

Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94, p. 12 (attached).
 

A. FRANCES MAY OWNS A DEFENSIBLE INTEREST IN UNIT 10 TITAN COURT
 

A number of cases have held that an innocent spouse cannot defend, under the "innocent owner" provisions, a marital property interest in real estate when the innocent spouse's name is not on the title. However, an analysis of these cases in light of the forfeiture statute's legislative history shows that, to the extent they cut off an innocent person's legal or equitable interest in their property, those cases are wrongly decided.

The statutory innocent owner defense of §881(a)(6) and (a)(7) provides that "no property shall be forfeited under this paragraph, to the extent of the interest of an owner." The use of the term "the interest of an owner" -- instead of "the owner" -- indicates that Congress envisioned protection for anyone owning an "interest" in the property -- not just the record title holder of the property.

When Congress amended §881 in 1978, it indicated in the legislative history to the statute that, in construing the innocent owner provisions, the

term "owner" should be broadly interpreted to include any person with a recognizable legal or equitable interest in the property seized.
 

Joint Explanatory Statement of Titles II and III, Pub. L. No. 95-633, 95th Congress 2nd Session, reprinted in U.S.Code Cong. & Admin. News 9496, 9518, 9522-23 (emphasis added).

Using this broad definition of "ownership" set out in the legislative history to §881, the courts have recognized all sorts of equitable interests in forfeitable property which can be defended by an innocent owner -- including liens, trusts, and even equitable remedies such as constructive trusts.

Under the same reasoning, a spouse whose name does not appear on the title should nevertheless retain an "equitable" interest in marital property, or else the spouse would not be able to lay claim to that interest upon the filing of a divorce action.

Furthermore, Colorado marital property law was interpreted in In Re Questions Submitted by the United States District Court, 517 P.2d 1331, 1335 (Colo. 2974), as containing some exceptions to the general rule that a marital interest does not "vest" until the death of a spouse, divorce, or the filing of a divorce action

During the marriage, and absent any divorce action, the parties have their separate property and, possibly subject to an exception or two, can dispose of it as he or she desires. That right, prior to the dissolution action and possibly subject to an exception or two, is completely inchoate. (emphasis added)
 

For an innocent spouse and family, an event as calamitous as seizure of virtually everything a married couple owns should create such an exception. After all, the effects on an innocent spouse of losing her husband to prison, and along with him her source of child support -- in addition to losing property to government seizure -- is not unlike death or divorce, either in degree or effect.

Finally, as Frances May argued below in her Reply:⁽²²⁾

With regards to [the forfeiture of] real estate, title is not controlling as the means of showing ownership. If it were, "straw owners" who hold title to property to hide the profits of drug dealers would be able to successfully defend it from forfeiture. Instead, forfeiture law allows the government to present evidence showing the "straw owner" holds title, but does not own the property, and permits the government to put on evidence showing the true, or beneficial owner of the property is the wrongdoer. Such evidence generally includes evidence of the source of the funds used to purchase the property, and evidence of who asserts dominion and control over it. Thus, for purposes of federal forfeiture law, title to real estate creates a presumption of ownership, which can be rebutted by evidence showing otherwise.
 
 

B. A WIFE OWNS AT LEAST AN EQUITABLE INTEREST IN CASH FOUND IN HER HOME, AND CASH TAKEN FROM A JOINT BANK ACCOUNT
 

The legislative history of §881 shows an intent to protect the interests of any innocent "owner" of a legal or equitable interest in seized property. When the property at stake is fungible property -- such as money -- which cannot be titled, the application of marital property creates absurd results.

The broad sweep of Judge Finesilver's order denied Frances May any interest in any property she owns jointly with her husband, including joint bank accounts and cash.

A spouse under Colorado law is free to dispose of his or her property in any manner as no interest in the other spouse vests until divorce. . . . Thus, she [Frances May] cannot maintain a claim for any interest [in] the properties.

Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94 p. 12 (attached). The district court concluded that "Francis May is unable to claim an ownership interest" in the $13,050 seized from Philip May, even though she was able to clearly trace the funds back to a joint bank account she held with her husband.⁽²³⁾ Because the court found that the $2,800 in cash seized from Frances May's residence was also "within the control of Philip May,"⁽²⁴⁾ -- even though there was no indication that Philip ever exercised any dominion over it -- the court concluded Frances could own no interest in it.

If the district court's holding was correct, a spouse could never raise an innocent owner defense.

It is illogical to contend that a wife owns no interest in a bank account she owns jointly with her husband, or cash which she has on hand. The flaw in the district court's argument is that, in relying on the husband's freedom "to dispose of his property in any manner" during the marriage, the court ignores the wife's equal right to jointly owned funds.

Frances May had an equal right to dispose of the money in the joint bank account, in any manner, without her husband's consent. That right evidences an interest in the bank account equal to her husband's.

When the federal government confiscates property, it does so subject to the rights of joint owners, including spouses. Thus, Frances May has a sufficient "legal or equitable" interest in the funds withdrawn from her joint bank account to assert an innocent ownership defense with regard to her interest.

Therefore, Frances May is entitled to a trial on the issue of her innocent ownership interest in marital property. Because the $13,050 in cash seized from Philip May came from joint marital bank accounts, Frances May's interest is 50% of $13,050, or $675.

Her interest in the $2,800 in cash seized from her home is even more obviously property over which she has a right to defend her ownership. She stated in her affidavit that the cash was her sole property, her share of the proceeds of the sale of a jointly owned van which she and her husband had decided to divide equally, and each use as they pleased. The district court's observation that

[a] spouse under Colorado law is free to dispose of his or her property in any manner as no interest in the other spouse vests until divorce.⁽²⁵⁾
 

supports Frances May's assertion of sole ownership of the $2,800 in cash.

Under this principle, sole and separate property of an innocent owner is not forfeitable at all. Therefore, Frances May is entitled to the entirety of the $2,800 of seized cash.
 

C. THERE IS NO AUTHORITY FOR DENYING AN INNOCENT SPOUSE AN INNOCENT OWNERSHIP DEFENSE WHEN THE SPOUSE IS A JOINT TENANT
 

The most disturbing aspect of the district court's overbroad order is his ruling that Frances May had no ownership interest in her residence, in which she held title with her husband as joint tenants. It is seems inconceivable that any judge could have intentionally made such a ruling, but the language of the Order does not bear any other construction. The order states:

A spouse under Colorado law is free to dispose of his or her property in any manner as no interest in the other spouse vests until divorce. . . . Thus, [Frances May] cannot maintain a claim for any interest in the properties. . . .⁽²⁶⁾
 

The court then deals with the forfeitability of specific items of seized property, starting with the residence. The district court held:

2. 1277 South Memphis Street
 

The facts show that the above defendant property is subject to forfeiture under 21 U.S.C. §881(a)(7). The defendant 1277 South Memphis Street is owned in joint tenancy by Philip S. May and Frances A. May. Approximately 165 grams of cocaine were found in the residence along with the defendant $2,800 and several weapons.
 

Applying the same legal analysis as used above, the property was used to facilitate an illegal activity: among other things, Mr. May brought the cocaine to the residence. Thus, the facts show that the above defendant property is subject to forfeiture under 21 U.S.C. §881(a)(7).
 

Nothing more is mentioned about Frances May's interest as a joint tenant and innocent owner. The final paragraphs of the Order make it clear that the court forfeited all the property to the government.

V. THE DISTRICT COURT APPLIED THE WRONG STANDARD IN DETERMINING WHETHER THE FORFEITURE WAS DISPROPORTIONATE TO THE OFFENSE
 
 

In his Response to the Government's Motion for Summary Judgment, Appl. Appx. 360, Philip May alleged that he had already been punished and fined for the offense he was convicted of committing, and that forfeiture of the defendant properties would exact a disproportionate penalty to the offense committed.

In support of this argument, Philip May stated that the government's evidence, viewed in the light most favorable to the government, showed that he was involved in cocaine trafficking only two to three months prior to his arrest on October 29, 1991. Appl. Appx. 361 ¶ 6. Testimony used against him in his criminal trial indicates that Philip May's total monetary involvement in drug dealing was $24,000, of which $13,050 was seized at the time of his arrest. Appl. Appx. 364. The $13,050 was alleged to have been intended to purchase cocaine from police in a reverse sting. Because it was seized before cocaine was purchased, no profits were realized from the lost $13,050 investment. The portion of the remaining $10,950 which can be attributed to "profits" from drug dealing was not established.

The sum total of cocaine seized during the investigation of Philip May amounted to 215 grams, or slightly less than an ounce. Appl. Appx. 364.

Philip May was sentenced to 10 years in prison. In addition he was fined $12,500, payable as determined by the probation office, and was ordered to pay all the costs of his imprisonment and parole, which will exceed $100,000. Appl. Appx. 361.

Claimants contend that the forfeiture of the defendant properties, in addition to the fine, prison sentence, and order that Philip pay the cost of his incarceration and probation, constitute an excessive punishment in violation of the Eighth Amendment.

When the U.S. Supreme Court decided in Austin v. United States, ___ U.S. ___, 113 S.Ct. 2801 (1993) that civil forfeiture was punishment, subject to the limitations of the Excessive Fines clause of the Eighth Amendment, it left it up to the lower courts, in the first instance, to develop a standard for determining proportionality.

The Federal Circuit Courts of Appeals that have considered the issue of the test to be employed in determining proportionality under Austin, are not in agreement on the standard to employ. However they do share certain features.

The Fourth Circuit established a very simple test in United States v. Borromeo, 1 F.3d 219, 221 (4th Cir. 1993):

the proportionality between the value of the instrumentality sought to be forfeited and the amount needed to effectuate the legitimate remedial purposes of the forfeiture. . .
 

The Third Circuit advised the trial courts to look to the Supreme Court's standard for proportionality set out in Solem v. Helm, 463 U.S. 277 (1983). In Solem,

[t]he Supreme Court held that the Cruel and Unusual Punishment Clause of the Eighth Amendment implicitly required criminal punishments to be at least loosely proportionate to the crime of conviction. Id. at 290, 103 S.Ct. at 3009. . . .
 

In Solem, the Supreme Court identified three objective criteria for use in an Eighth Amendment proportionality analysis: "(i) the gravity of the offense and the harshness of the penalty; (ii) the sentences imposed on other criminals in the same jurisdiction; and (iii) the sentences imposed for commission of the same crime in other jurisdictions." Id. at 292, 103 S.Ct. at 3010.
 

The Supreme Court also said that in weighing these factors a court should take into account the "absolute magnitude of the crime" and the "culpability of the offender." Id. at 292-94, 103 S.Ct. at 3010-12.
 

United States v. RR 1, Box 224, Dalton, 14 F.3d 864 (3d Cir. 1994).

The court below did not consider these tests, but adopted the test crafted by the Justice Department, which states that a civil forfeiture would not be disproportionate if:

A. The criminal activity involving the property has been sufficiently extensive in terms of time and/or spacial use of the property; or
 

B. The role of the property was integral or indispensable to the commission of the crime(s) in question, or
 

C. The particular property was deliberately selected to secure a special advantage in the commission of the crime.
 

Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94 p. 8 (attached).

The district court adopted this test without any critical analysis as to why it would be appropriate. The court merely stated that the Department of Justice "developed this standard in light of the pre- and post-Austin case law with an end toward fidelity to Congressional intent and forfeiture's historical usage."

This test is obviously not the test that the Supreme Court envisioned when it decided, in Austin, that civil forfeiture is punishment. Clearly, the Justice Department developed it with an end toward preserving the historical fiction that the property, not the property owner, is on trial.

The problem with the Justice Department test is that it attempts to determine what would be appropriate punishment for an inanimate object, ignoring the property owners' rights. The three prongs of the test -- only one of which is needed to validate a disproportionate forfeiture -- focus only on the role of the property. The test does not even consider the degree of involvement of the property owner, the one being punished by the forfeiture.

The Justice Department obviously relied on the test proposed by Justice Scalia's in his concurring opinion in Austin, which considers whether

the relationship of the property to the offense . . . [w]as . . . close enough to render the property, under traditional standards, `guilty' and hence forfeitable?
 

113 S.Ct. at 2815.

Two Circuit Courts have already criticized and rejected Justice Scalia's test. The Third Circuit held in Dalton:

In considering the relationship between the property and the alleged criminal offense and evaluating whether a proposed forfeiture is an unconstitutionally excessive fine, we suggest the district court should avoid conflating the Eighth Amendment inquiry with Sec. 881(a)(7)'s nexus requirement, although the two share some characteristics.
 

We also note the discomfort Justice Thomas expressed over the broad sweep of the civil forfeiture statute at issue. United States v. James Daniel Good Real Property, --- U.S. at ---- n. 2, 114 S.Ct. at 515 n. 2 (1993) (Thomas, J., concurring in part and dissenting in part). Justice Thomas observes:
 

A strong argument can be made, however, that Sec. 881(a)(7) is so broad that it differs not only in degree, but in kind, from its historical antecedents.... Indeed, it is unclear whether the central theory behind in rem forfeiture, the fiction "that the thing is primarily considered the offender," ... can fully justify the immense scope of Sec. 881(a)(7). Under this provision, "large tracts of land [and improvements thereon] which have no connection with crime other than being the location where a drug transaction occurred," ... are subject to forfeiture. It is difficult to see how such real property is necessarily in any sense "guilty" of an offense....
 

Given that current practice under Sec. 881(a)(7) appears to be far removed from the legal fiction upon which the civil forfeiture doctrine is based, it may be necessary--in an appropriate case--to reevaluate our generally deferential approach to legislative judgments in this area of civil forfeiture.
 

Dalton, 14 F.3d at 873, quoting United States v. James Daniel Good Real Property, 114 S.Ct. at 515 (citations omitted).

In United States v. Parcel Located at 9638 Chicago Heights, St. Louis, Mo., ___ F.3d ___ 1994 WL 259428, pp. 2, 3 (8th Cir. No. 93-3350, decided June 15, 1994), the Eighth Circuit also rejected Justice Scalia's proposed test:

[T]he district court adopted the test for excessiveness articulated in Justice Scalia's concurrence to Austin and we feel compelled to point out our dissatisfaction with that test.
 

Justice Scalia suggested that the question of whether a forfeiture constitutes an excessive fine should turn exclusively on the relationship between the forfeited property and the offense. Austin, 113 S. Ct. at 2815 (Scalia, J., concurring). However, the Austin majority made it clear that the Court was not adopting Justice Scalia's formulation. The Court stated:
 

Justice Scalia suggests that the sole measure of an in rem forfeiture's excessiveness is the relationship between the forfeited property and the offense. We do not rule out the possibility that the connection between the property and the offense may be relevant, but our decision today in no way limits the Court of Appeals from considering other factors in determining whether the forfeiture of Austin's property was excessive.
 

Id. at 2812, n. 15 (citation omitted). . . .

We note, however, that the test applied by the district court is inadequate because it conflates the Eighth Amendment excessive fine analysis with the section 881(a)(7) nexus requirement. While the two inquiries share some characteristics, the Eighth Amendment requires a broader analysis. See, e.g., United States v. RR # 1, Box 224, 14 F.3d 864, 873 (3d Cir. 1994); United States v. 6625 Zumirez Drive, 845 F. Supp. 725 (C.D. Ca. 1994). The district court's test did not consider the monetary value of the property, the extent of criminal activity associated with the property, the fact that the property was a residence, the effect of forfeiture on innocent occupants of the residence, including children, or any other factors that an excessive fine analysis might require.
 

1994 WL 259428 pp. 2 - 3.
 

In fashioning the proper test for the Tenth Circuit, this court should consider the analysis quoted above from the three federal Circuits that have ruled on the issue. Additionally, the court can find valuable instruction from pre-Austin criminal forfeiture cases.⁽²⁷⁾

The Tenth Circuit applied the Solem v. Helm factors to determine proportionality in a pre-Austin criminal forfeiture action. United States v. Harris, 903 F.2d 770, 778 (10th Cir. 1990) ("We have considered the factors set forth in Solem v. Helm, 463 U.S. 277, 290-292 . . . (1983), and when judged against those factors, this forfeiture is not violative of the Eighth Amendment requirement of proportionality.")

The widely cited case of United States v. Busher, 817 F.2d 1409 (9th Cir. 1987) also applied the Solem v. Helm factors in measuring proportionality in a RICO criminal forfeiture.

These cases seem to present the most logical test, given the fact that it is derived from an earlier Supreme Court case. This test also appears to reflect the current thinking of the Supreme Court.

Just this term, after both the Austin and James Daniel Good decisions, the U.S. Supreme Court has applied the equivalent of a "loose proportionality" test to property rights in a non-punitive setting. In Dolan v. City of Tigard, ___ U.S. Law Week ___ (1994), the Supreme Court held that, in order for a property regulation to exact an interest from a property owner as a condition of the property owner's being given permission to make a particular use of his property, the "takings clause" of the Fifth Amendment requires "rough proportionality" between the property owner's desired use and the conditions the government seeks to exact as a condition of granting permission for the use.

If Dolan were placed on a continuum with Austin and Solem, the similarities become obvious. Dolan, at one end, deals with completely "remedial" legislation (that is, with no punitive aspect) enacted under the police power for the public good. Solem, at the other end, involves a purely punitive criminal prosecution. Austin, in the middle, involves a blend of both. Cutting across all of them, however, is the proportionality requirement, requiring a fair correlation between the property taken and the legal justification for the taking.

In light of these authorities, this Court should fashion a multi-factor test that adopts the factors of the Supreme Court in Solem and Austin, and weighs the property owner's involvement in the crime, against the degree to which taking his property without just compensation punishes him.

For the foregoing reasons, the entry of summary judgment must be reversed, and the case remanded for a re-determination of the cross-motions for summary judgment, applying the proper standards. A suppression hearing should be held to determine whether the police violated the terms of the written consent Philip May gave to the search of his residence and business, and any suppressed evidence should not be considered in ruling on the cross-motions for summary judgment, nor introduced at trial.

Finally, this Court should fashion a test for determining proportionality which will stand the test of time. Piecemeal tests varying from district court to district court allow unfair and disproportionate punishments to continue, as disparate forfeitures are handed out by different courts.

Oral argument is necessary because this case presents important issues of first impression in this Circuit, regarding the proper standard to be applied in determining proportionality under Austin.
 

Respectfully submitted,
 

________________________

BRENDA GRANTLAND

Attorney for Claimant

265 Miller Avenue

Mill Valley, CA 94941

(415) 380-9108

(415) 380-9208 (fax)
 
 

I hereby certify that a copy of the foregoing brief was served, by mail, upon Assistant U.S. Attorney Mark Pestal, 1961 Stout Street, #1100, Denver, CO 80294-0101, this __________ day of _______________________, 1994.
 

________________________

Brenda Grantland, Esq.
 

1. Appl. Appx. 31, 33.

2. Order filed 3-9-94 (attached).

3. Appl. Appx. 39, 271, 309, 344, 352, 360, 372, 374, 380.

4. Order Regarding Cross Motions For Summary Judgment, filed 4-27-94 (attached).

5. Their oldest son, Eric, was an adult living in his own condominium at the time of his father's arrest.

6. United 9 was purchased with marital funds. The absence of Frances May's name from the deed for Unit 9 was an oversight. Appl. Appx. 287.

7. Philip May may not have standing to challenge the search of Lisa Tarasuik's apartment, but the other two suppression motions present substantial Fourth Amendment issues.

8. Because his previously retained counsel was granted leave to withdraw for non-payment of fees, and Philip May lacked the funds to hire counsel, he was forced to represent himself for several months in these proceedings. After the government released some of the property in March 1994, he retained counsel.

9. Appl. Appx. 31, 33.

10. Appl. Appx. 290 - 291.

11. Appl. Appx. 290.

12. "IT IS ORDERED that the Motions to Suppress Evidence (3), filed February 24, 1994, are denied. This is a civil case, not a criminal case." Order filed 3-9-94 (attached).

13. Appl. Appx. 352.

14. Appl. Appx. 329.

15. These burdens of proof may now be unconstitutional after the Supreme Court's pronouncement, in Austin v. United States, 113 S.Ct. 2801 (1993), that civil forfeiture under §881 is punishment. A civil burden of proof would not seem to square with the Supreme Court's holding in In Re Winship, 397 U.S. 358 (1970), that the government must prove guilt beyond a reasonable doubt before a juvenile may be "punished" in a juvenile delinquency proceeding. The Supreme Court's recent ruling in United States v. James Daniel Good Real Property, 114 S.Ct. 492 (1993) further strengthened the amount of Due Process that is required in civil forfeiture cases. When this case finally gets to trial, the proper burden of proof will be an issue for a motion in limine.

16. This is incorrect. Because the United States had dismissed its proceeds theory against the defendant real estate, claimants had no burden of proving that the property was not derived from drug proceeds.

17. Because of recent Supreme Court pronouncements regarding the amount of process that is due claimants in §881 civil forfeiture cases, these traditional burdens of proof may no longer be constitutional. See footnote 8 supra.

18. The court below fails to identify this "other circumstantial evidence." The only "circumstantial evidence" in the record of "Mr. May's control of the $2,800" is Frances May's statement at her deposition, that Philip May knew about the cash she kept at home, and that she thought he would have had access to it because she didn't keep it locked up. Appl. Appx. 321 - 322. That certainly does not suggest that Philip May exercised "control" over the $2,800 to the exclusion of Frances May.

19. Appl. Appx. 286.

20. Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94, p. 6 (attached).

21. Appl. Appx. 271 - 308.

22. Appl. Appx. 391.

23. Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94, p. 13 (attached).

24. Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94, p. 13 (attached).

25. Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94, p. 12 (attached).

26. Order Regarding Cross-Motions For Summary Judgment, filed 4-27-94, p. 12 (attached).

27. Although prior to Austin, the courts uniformly rejected proportionality defenses in civil forfeiture cases, there is ample authority for Eighth Amendment proportionality challenges in criminal forfeiture cases. Austin's companion case, United States v. Alexander, 113 S.Ct. 2766 (1993) made it clear that the same standard for excessiveness applies to both civil and criminal forfeitures.