UNITED STATES OF AMERICA, )
) (USDC No. SA CV 96-1185-AHS)
Plaintiff/Appellee, ) (USDC No. SA CR 91-66-AHS)
)
V. )
)
GARY H. MAROLF, in re application )
for return of seized property 1981 Mango )
Motor sailboat named "Asmara" )
)
Defendant/Appellant )
___________________________________ )
SHAWN R. PEREZ
P.O. Box 3119
Dana Point, CA 92629
(714)661-9674
Attorney for Appellant
GARY H. MAROLF
TABLE OF AUTHORITIES ii
Argument 1
I. FORFEITURE STATUTES GIVE THE GOVERNMENT POWERS THAT MUST BE EXERCISED IN A PRECISE MANNER. 1
II. A PARTY COLLATERALLY ATTACKING A FORFEITURE UNDER RULE 41(E) MAY SEEK THE RETURN OF PROPERTY, OR WHERE THE PROPERTY CANNOT BE RETURNED, THE COURT MAY FASHION AN APPROPRIATE REMEDY FOR RELIEF. 3
III. THE GOVERNMENT'S DEFENSE OF LACHES MUST FAIL 5
IV. CONCLUSION 8
CERTIFICATE OF COMPLIANCE 9
Case Law
Boero v. Drug Enforcement Administration,
111 F.3d 301 (2d Cir. 1997) 2
Boone v. Mechanical Specialties,
609 F.2d 956 (9th Cir. 1979) 7
Carey v.Piphus, 435 U.S. 247,
98 S.Ct. 1042, 55 L.Ed.2d 252 (1978) 4
International T. & T. Corp. v. General T. & E. Corp.,
518 F.2d 913 (9th Cir. 1975) 7
Marshall Leasing, Inc. v. United States,
893 F.2d 1096 (9th Cir. 1990) 3, 4
Mora v. United States,
955 F.2d 156 (2d Cir. 1992) 4
Onwubiko v. United States,
969 F.2d 1392 (2d Cir. 1992) 2
Shouse v. Pierce County,
559 F.2d 1142 (9th Cir. 1977) 7
Soviero v. United States,
967 F.2d 791 (2d Cir. 1992) 4
United States v. $277,000 U.S.Currency,
69 F.3d 1491 (9th Cir. 1995) 4
United States v. Claggett,
3 F.3d 1355 (9th Cir. 1993) 3
United States v. Giovanelli,
998 F.2d 116 (2d Cir. 1993) 2, 3, 6
United States v. Marolf,
1997 U.S. Dist. LEXIS 10210 (C.D. Cal. 1997) 6
United States v. Martinson,
809 F.2d 1364 (9th Cir. 1987) 3, 4
United States v. One Ford Coach, 307 U.S. 219,
59 S. Ct. 861, 83 L. Ed. 1249 (1939) 1
United States v. Ten Thousand Dollars in United States Currency,
860 F.2d 1511 (9th Cir. 1988) 2
Wauchope v. Dept. of State,
985 F.2d 1407 (9th Cir. 1993) 5
United States Code
19 U.S.C. § 1621 1
28 U.S.C. § 1346 2
28 U.S.C. § 1346 (a)(2) 2
28 U.S.C. § 2255 6
Federal Rules of Criminal Procedure
Fed. R. Crim. P. Rule 41(e) 2, 3
UNITED STATES OF AMERICA, )
) (USDC No. SA CV 96-1185-AHS)
Plaintiff/Appellee, ) (USDC No. SA CR 91-66-AHS)
)
V. )
)
GARY H. MAROLF, in re application )
for return of seized property 1981 Mango )
Motor sailboat named "Asmara" )
)
Defendant/Appellant )
___________________________________ )
FORFEITURE STATUTES GIVE THE GOVERNMENT POWERS THAT MUST BE EXERCISED IN A PRECISE MANNER.
Forfeiture statutes give the government vast and important powers, but they must be exercised in the precise manner the statutes provide. United States v. One Ford Coach, 307 U.S. 219, 226, 59 S. Ct. 861, 865, 83 L. Ed. 1249 (1939) In the instant case, the government failed to exercise that power in the time frame prescribed by 19 U.S.C. § 1621.
Without belaboring that which is clearly established as a matter of law, admitted as a matter of fact, and determined by the court below, the government failed to file a forfeiture action against Marolf's ownership of the Asmara prior to the exhaustion of the government's five year statute of limitations. The forfeiture is therefore void.
The government's argument relies entirely upon the Second Circuit Decision inBoero v. Drug Enforcement Administration, 111 F.3d 301 (2d Cir. 1997) in which the Court of Appeals remanded the case for a determination on the merits. However, as the government again fails to recognize, the claimant in that case filed his action prior to the exhaustion of the statute of limitations.
The most important factor in Boero is that in the Second Circuit, the filing of a motion seeking a return of seized property after the conclusion of the underlying criminal case is treated as commencing a civil action pursuant to 28 U.S.C. § 1346, rather than as a motion pursuant to Fed. R. Crim. P. Rule 41(e). See United States v. Giovanelli, 998 F.2d 116, 118-19 (2d Cir. 1993); Onwubiko v. United States, 969 F.2d 1392, 1396-97 (2d Cir. 1992); see also 28 U.S.C. § 1346 (a)(2) (vesting original jurisdiction in district courts over various claims against the United States not exceeding $ 10,000).
As a result, the Claimant in Boero instituted a civil action prior to the running of the statute of limitations and thereby invoked the jurisdiction of the district court to render a determination of the forfeiture on the merits. This is essentially the same action as if the procedures are followed in filing a claim in the administrative forfeiture in order to seek a judicial determination of the forfeiture.
In Onwubiko, the Second Circuit stated that
[a]n administrative forfeiture removes the res from the district court and, therefore, typically marks an end to the court's in rem jurisdiction, see, e.g., United States v. Ten Thousand Dollars ($ 10,000) in United States Currency, 860 F.2d 1511, 1513 (9th Cir. 1988); nevertheless, an exception to this general rule lies if the property is taken accidentally, fraudulently, or improperly. Id. Put another way, if an administrative forfeiture is procedurally deficient, the court has jurisdiction to correct the deficiency.
Onwubiko, 969 F.2d at 1398.
In the instant case however, Marolf did not invoke the jurisdiction of the district court for the return of property until after the statute of limitations had been exhausted. As a result, the case at bar is more analogous to the Second Circuit case, United States v. Giovanelli, 998 F.2d 116 (2nd. Cir. 1993), wherein the court returned the property of a claimant who withheld his Rule 41(e) until after the statute of limitations had run, despite actual notice by the testimony of an agent regarding the forfeiture.
The court of appeals in Giovanelli found that forfeiture statutes "must be exercised in the precise manner the statutes provide. (Citations omitted) The statutes impose no duty on a defendant to prevent the government from losing its rights through carelessness." Giovanelli, at 119. Because the statute of limitations ran before proper notice under the statute was given, the administrative forfeiture was declared void and the property was rightly returned to the claimant.
The Asmara, or its value at the time of the seizure, should be returned to Marolf.
A PARTY COLLATERALLY ATTACKING A FORFEITURE UNDER RULE 41(E) MAY SEEK THE RETURN OF PROPERTY, OR WHERE THE PROPERTY CANNOT BE RETURNED, THE COURT MAY FASHION AN APPROPRIATE REMEDY FOR RELIEF.
The Ninth Circuit has clearly stated that "[a] district court has jurisdiction to entertain motions to return property seized by the government when there are no criminal proceedings pending against the movant." United States v. Martinson, 809 F.2d 1364,1366-67 (9th Cir. 1987). See, United States v. Claggett, 3 F.3d 1355 (9th Cir. 1993). (the claimant did not file a claim in the first place and Attorney General was not obligated to institute judicial forfeiture proceedings. As a result no other remedy was available. Case remanded to determine sufficiency of notice.). A party collaterally attacking a forfeiture action may seek return of the forfeited property as an equitable remedy (41(e)). Marshall Leasing, Inc. v. United States, 893 F.2d 1096, 1099 (9th Cir. 1990) (specifically concluding that the plaintiff should be able to present to the district court a claim alleging constitutionally deficient notice and seeking recovery of forfeited property. Id. at 1099-1101). The fact that the property itself cannot be returned does not defeat a claim in equity. Martinson, at 1367-1368 (court in equity may adjust remedies so as to grant the necessary relief.); Soviero v. United States, 967 F.2d 791, 792-93 (2d Cir. 1992) (case not moot where property destroyed because equitable jurisdiction of court gives it power to fashion appropriate relief); Mora v. United States, 955 F.2d 156, 158-59 (2d Cir. 1992) (same).
In the instant case the value of the Asmara was established at $240,000.00. It is believed that the vessel was sold at auction.
In United States v. $277,000 U.S.Currency, 69 F.3d 1491 (9th Cir. 1995), the court of appeals held that to the extent that the government has profited from the use of property (i.e., earned interest), it must disgorge those earnings along with the property itself. Therefore, at a minimum, Marolf should receive the amount realized from the sale of the Asmara plus the interest earned on the proceeds from the sale.
The government claims, relying on Carey v. Piphus, 435 U.S. 247, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978), that the forfeiture should stand and that Marolf should be entitled only to nominal damages. As demonstrated above and in Marolf's opening brief, the forfeiture is void as a matter of law and cannot stand.
The Supreme Court in Carey granted certiorari to consider whether, in an action under 42 U.S.C § 1983 for the deprivation of procedural due process, a plaintiff must prove that he actually was injured by the deprivation before he may recover substantial "nonpunitive" damages. The Court held that even if the plaintiffs could not show an injury they would still be entitled to nominal damages.(1) Carey, at 266-67. The case was remanded in order for the plaintiff's to present evidence that mental and emotional distress was actually caused by the denial of procedural due process itself.
However, the instant case is not about damages stemming from the denial of due process. There is no question that Marolf was denied due process, and therefore he would be certainly entitled to at least nominal damages and perhaps attorney's fees. The focus of this case is whether after a denial of due process and the expiration of the statute of limitations, the government, or the district court sua sponte, can bring an action for judicial forfeiture when the statute expressly provides for a five year statute of limitations. The government no longer has the power bestowed on it by the legislature to seek forfeiture of the vessel. There can be no remand to determine the forfeiture on the merits because to do so would render § 1621 meaningless. Further, it should be recognized that at the time the district court made a determination on the merits, there was no judicial forfeiture pending. The Court had already declared the administrative forfeiture void.
THE GOVERNMENT'S DEFENSE OF LACHES MUST FAIL.
In order for the government to prevail on its defense of laches, the government must show that there was inexcusable delay in the assertion of a known right and that it has been prejudiced.
Wauchope v. Dept. of State, 985 F.2d 1407 (9th Cir. 1993).
As the court stated below,
[a]lthough the government is undoubtedly prejudiced by the fact that the statute of limitations now precludes it from filing judicial forfeiture proceedings, it was not defendant's delay so much as the government's own carelessness that precipitated this state of affairs. (Citation omitted).
...
Although defendant Marolf delayed in filing his Rule 41(e) motion, perhaps even purposefully waiting until after the statute had run, it was not his duty "to prevent the government from "losing its rights due to carelessness." United States v. Giovanelli, 998 F.2d 116 (2d Cir. 1993)(2)
United States v. Marolf, 1997 U.S. Dist. LEXIS 10210 at *31-34
A careful review of all the pleadings filed in Marolf's criminal case and appeal, his §2255 Motion to Vacate and the 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. 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 was 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.
Therefore, the defense of laches must fail.
Based on the foregoing argument, Marolf respectfully requests that this Court reverse the district court's order of forfeiture and order the return of the Asmara, or its value at the time of the seizure.
Dated: January 18, 1998 Respectfully submitted,
SHAWN R. PEREZ, ESQ.
Attorney for Appellant
GARY H. MAROLF
Pursuant to Ninth Circuit Rule 32(e)(4), I certify that the Appellant's Opening Brief conforms to the following:
All lines in the brief are double spaced and is comprise of a monospaced typeface of not less than 10.5 characters per inch and does not exceed 20 pages in length.
Dated: January 16, 1998 Respectfully submitted,
SHAWN R. PEREZ
Attorney for Appellant
UNITED STATES OF AMERICA, )
) (USDC No. SA CV 96-1185-AHS)
Plaintiff/Appellee, ) (USDC No. SA CR 91-66-AHS)
)
V. )
) DECLARATION OF SERVICE
GARY H. MAROLF, in re application )
for return of seized property 1981 Mango )
Motor sailboat named "Asmara" )
)
Defendant/Appellant )
___________________________________ )
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 January 18, 1998, I served the foregoing documents described as Appellant's Reply Brief 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 Ford, AUSA
Federal Building, Suite 7516
300 North Los Angeles Street
Los Angeles, CA 90012
I declare under penalty of perjury that the foregoing is true and correct.
Executed on January 18, 1998, at Dana Point, California.
_____________________
SHAWN R. PEREZ, ESQ.
1. It is also important to note that the Supreme Court pointed out that the "potential liability of § 1983 defendants for attorney's fees, provides additional and by no means inconsequential assurance that agents of the State will not deliberately ignore due process rights." Carey, 435 U.S. at 257 n.11.
2. Ironically the district court relied on Giavanelli in determining that the defense of laches must fail, but dismissed the holding of this analogous case wherein the property was returned based on the claimant's defense of the statute of limitations.