BRENDA GRANTLAND, ESQ.
pro hac vice (California Bar #165899)
20 Sunnyside Suite A-PMB 204
Mill Valley CA 94941
415/380-9108 
Attorney for Defendants

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
ALBUQUERQUE DIVISION

UNITED STATES OF AMERICA		)   
						  	)
	Plaintiff,			  		)    Crim. No. 92-0486-JC
						  	)
	v.					  	)    
						  	)    DEFENDANTS’ OBJECTIONS
GABRIEL RODRIGUEZ AGUIRRE  		)    TO MAGISTRATE JUDGE’S
& ELENO AGUIRRE				)    RECOMMENDED FINDINGS
				  			)    REGARDING RULE 41(E)
	Defendants.				  	)    MOTION FOR RETURN OF   
							)    PROPERTY	
                                                                                    )		

	Defendants, Gabriel Rodriguez Aguirre, Eleno Aguirre, Doloras Contreras and Tony Bancomo, through undersigned counsel, hereby object to the Magistrate Judge’s Proposed Findings and Recommended Disposition regarding their Rule 41(e) motion. 
Facts
	Defendants filed their motion for return of property on April 19, 2000.   In it, they alleged:
Defendants contend that there was a large amount of personal property seized from them, and which appeared on itemized returns on the search warrants, which were never named or forfeited in [the] three civil forfeiture actions [which were filed against defendants’ properties].   A list of this property is attached as Appendix A to this motion.  They also contend that neither they, nor anyone else in their family, received any administrative forfeiture notices regarding the items of property listed in Appendix A, and therefore that it could not have been forfeited in compliance with the notice requirements of the Due Process clause.  Since the statute of limitations has run on any potential forfeiture action, if defendants’ contentions regarding these items are true they are entitled to return of this property. 	
Motion for Return of Property, para. 3.  Attached to their motion is a 10-page Declaration of Defendant Gabriel Rogriguez Aguirre Regarding Unforfeited Personal Property, which lists 127 items of personal property and their estimated value, and states where the items were found.  The real properties from which they were seized were properties seized from, and civilly forfeited from the defendants named in this motion.  
	Without holding an evidentiary hearing, or even requiring the government to respond to the defendants’ claim that these articles of personal property had either been administratively forfeited without notice to the defendants, or had never been administratively forfeited at all, the Magistrate Judge recommended that defendants’ Rule 41(e) motion be denied, for lack of standing, and laches.  On both issues, the Magistrate Judge deviated from the law of the Tenth Circuit.
DISCUSSION

I.	The Magistrate Judge erred in ruling defendants lacked standing
	The Magistrate Judge ruled that defendants did not have standing to move for the return the property -- apparently because defendants had not submitted receipts or some other “proof”^1  of their ownership of the property along with their Rule 41(e) motion.  

^1  Defendants did in fact submit, along with their Rule 41(e) motion,  an affidavit in which Gabriel Rodriguez Aguirre declared under penalty of perjury that these items were seized from him or his relatives during the execution of search warrants for their residences or other properties, and that many of the items appeared in the returns of search warrants.  These items also turned up in the government’s evidence list, and in testimony at trial.  The government submitted no evidence to contradict this declaration.

	The court stated: “Both an allegation of ownership and some evidence of ownership are required to establish standing sufficient to contest a civil forfeiture,” citing Torres v. $36,256.80, 25 F.3d 1154, 1157-58 (2^nd Cir. 1994) as authority for that proposition.  Proposed Findings ¶ 4.  The Magistrate Judge stated in paragraph 5:
In this case, Defendants offer only a list of vaguely described proeprty contained in Gabriel Rodriguez Aguirre’s Declaration Regarding Unforfeited Personal Property.  They offer no indicia of ownership, other than Gabriel Rodriguez Aguirre’s unsupported declaration that either he or his relatives own the property.  A conclusory allegation of ownership in vaguely described property is insufficient to confer standing to assert a claim for the property.  Defendants’ Rule 41(e) Motion should be denied because they have failed to demonstrate standing.

	The Magistrate Judge’s legal conclusions are not supported by the authorities he cites. 	Torres did not impose a heightened proof-of-standing requirement at the pleading stage.  In fact, the standing issue in that case arose on summary judgment, not at the pleading stage.  Torres involved a civil forfeiture case in which a wife filed a claim to a Certificate of Deposit titled in the name of her husband.  The district court granted summary judgment for the government, ruling that she did not have standing, but the Second Circuit reversed, holding she did have standing to assert a beneficial ownership interest in the CD, if she could prove, at trial, the elements of a constructive trust.  Nothing in that case suggested that a property owner who had property seized from him, which was never forfeited, would have to prove “standing” by documentary evidence, receipts, or otherwise in the pleading stage.  
	The other two cases cited by the Magistrate Judge in paragraph 4 similarly fail to support the legal standards applied in the Recommended Findings.  United States v. $321,470, 874 F.2d 298 (5^th Cir. 1989) was another case in which the standing analysis was made on summary judgment, after extensive discovery.  Although the court found the courier, from whom the $321,470 cash was seized, lacked standing to intervene in the forfeiture case, it was because the courier denied ownership, and refused to disclose the owner.  Drugs were recovered from the courier’s vehicle, and his actions fit a courier profile.  In ruling that he did not have standing, the court stated that even bailees may have standing if they can demonstrate a lawful possessory interest.  874 F.2d at 303-4.  A colorfully lawful possessory interest is enough to confer standing, the court held.  874 F.2d at 305.  
	The other case cited by the Magistrate Judge in paragraph four, United States v. $364,960, 661 F.2d 319 (5^th Cir. 1981), held that any person with a legally recognized interest, whether owner or lienholder, and whether the interest is legal or equitable in nature, has standing.  661 F.2d at 326.  That case acknowledges that there is a presumption of ownership from possession of property^2 but states the presumption can be rebutted by denial of ownership by the prospective claimant at the time of the seizure.

^2  This issue is discussed at length on pages 7-8, below.

	The Magistrate Judge’s statement in paragraph five that “[a] conclusory allegation of ownership in vaguely described property is insufficient to confer standing to assert a claim for the property” is unsupported by precedent as well.  The court did not cite any authority for that proposition, but it appears to have been lifted out of context and misconstrued, from United States v. $38,570, 950 F.2d 1108 (5^th Cir. 1992), where the court said: “[t]he mere assertion of legal title to property may not be sufficient to establish standing, for issues of actual possession, control, and financial stake must also be considered," 950 F.2d at 1113, quoting United States v. 2511 E. Fairmount Ave., 722 F.Supp. 1273, 1279 (D.Md. 1989).   It is noteworthy that the Fifth Circuit said “may not” and not “is not.”  Furthermore, the holding in $38,570  shows that the second half of the sentence –  “for issues of actual possession, control, and financial stake must also be considered" – is essential to the meaning of the sentence.  The Fifth Circuit held in $38,570  that the bare assertion of ownership, together with the allegations that the claimant was present at the scene when the cash was seized and appeared to exercise some form of dominion over it, sufficiently established standing. 
	Thus, the heightened proof-of-standing requirement at the pleading stage, used by the Magistrate Judge in this case, simply has no precedent, and certainly not in the Tenth Circuit, which has never required any evidence of ownership be submitted along with a claim.

A.		The Magistrate Judge deviated from Tenth Circuit precedent
	The Tenth Circuit’s test for standing is set out in Mount Evans Co. v. Madigan, 14 F.3d 1444, 1450-51 (10^th Cir. 1994):
"[T]he term 'standing' subsumes a blend of constitutional requirements and prudential considerations."  Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 471, 102 S.Ct. 752, 758, 70 L.Ed.2d 700 (1982) (citing Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975)).  Article III of the Constitution requires a plaintiff to show:  (1) he or she has personally suffered an injury in fact;  (2) the injury is fairly traceable to the challenged action of the defendant;  and (3) it is likely, not merely speculative, that the injury will be redressed by a favorable decision.  Beyond the constitutional requirements, a plaintiff must also satisfy the following set of prudential principles:  (1) the plaintiff generally must assert his or her own legal rights;  (2) the court must refrain from adjudicating "generalized grievances" most appropriately addressed by one of the other branches of government;  and (3) the plaintiff's complaint must fall within the zone of interest to be protected or regulated by the statute or constitutional guarantee in question.   We conduct a prudential standing analysis only after Article III standing has been established.   " 'Standing jurisprudence is a highly case-specific endeavor, turning on the precise allegations of the parties seeking relief'." 

Mount Evans Co. v. Madigan, 14 F.3d 1444, 1450-51 (10^th Cir. 1994) (internal citations omitted).
	The Tenth Circuit has never required claimants in forfeiture proceedings or Rule 41(e) motions to make a preliminary showing of standing when they are asserting an “ownership” interest.  In the only reported case defendants could find -- United States v. Le, 173 F.3d 1258 (10^th Cir. 1999) -- the court ruled that a criminal defendant lacked standing to litigate a Rule 41(e) motion claiming property which he had agreed to forfeit in his plea bargain.^3  Since Le had already relinquished ownership of the property, he no longer had a stake in the proceedings.   

^3 “Le expressly agreed to ‘forfeit and otherwise waive any ownership right he might possess in all items seized’ during the execution of the various warrants.”  173 F.3d at 1277-78.

	The only other Tenth Circuit cases dealing with standing in forfeiture cases or Rule 41(e) motions is a string of unreported decisions following the well-established principles that a claimant “must assert his or her own legal rights,” and that persons with only equitable, beneficial or tangential interests in the property do not have a sufficient stake in the property to defend against its forfeiture.  In United States v. One Cashier’s Check ($312,227.95), 162 F.3d 1175 (10^th Cir. 1998) (unpublished) the cashiers check was the proceeds of the sale of adulterated silicone breast implants, smuggled into the country by a physician.  The claimants were patients who had breast implants by that doctor and now had to have the adulterated devices removed.  The court dismissed their claims for lack of standing because they had claims only against the doctor, and lacked an “ownership” interest in the cashier’s check.  United States v. Libretti, 161 F.3d 18 (10^th Cir. 1998) (unpublished) held that a criminal defendant who missed the deadline for appealing the preliminary order of forfeiture (which was final as to him) could not appeal from the date of the final order of forfeiture (disposing of all third party claims) because he lacked standing to assert third party claims, and had missed his deadline for appealing the forfeiture order himself.  United States v. Brunson, 89 F.3d 851 (10^th Cir. 1996) (unpublished) held that a criminal defendant lacked standing to defend his ex-wife’s interest in forfeited substitute property.  
	None of the principles from those cases apply here.
	Gabriel Rodriguez Aguirre’s declaration, which accompanied the Rule 41(e) motion, states that the items of personal property were seized from him or his family members (meaning the other three defendants who joined with him in this motion) during the execution of search warrants for their residences and other premises owned or leased by them.  The government did not dispute that claim.  The government made no claim that someone else owned these items, and no other person came forward to claim these items.  In fact, the evidence submitted by defendants along with their Rule 41(e) motion went completely uncontested by the government.

B.		The legal standard used by the Magistrate Judge violates established precedents from outside this Circuit  	
	It was long ago established that seizure of property from someone is prima facie evidence of ownership.  	
The Government asserts that appellants have an obligation to prove that they are entitled to the money.  We do not believe, however, that the mere fact of seizure requires that entitlement be established anew. The seizure of property from someone is prima facie evidence of that person's entitlement, particularly when the seized property is money or negotiable instruments difficult to identify and trace. The whole thrust of the cases that we have cited is that when property is seized from a person, the court must return it to that person when it is no longer needed by the government.  The court is obligated to restore the status quo ante. Unless there are serious reasons (presented by the government or adverse claimants) to doubt a person's right to the property seized from him, he need not come forward with additional evidence of ownership.

United States v. Wright, 610 F.2d 930, 939 (D.C. Cir. 1979) (footnotes omitted), citing Northern Pacific Co. v. Lewis, 162 U.S. 366, 372, 16 S. Ct. 831, 833, 40 L. Ed. 1002 (1896) ("possession is prima facie evidence of some kind of rightful ownership or title.")   See also United States v. One 18^th Century Monstrance, 802 F.2d 837, 838 (5^th Cir. 1986) (the presumption of ownership from possession of property can be overcome by other evidence, such as the clear meaning of the contract between the claimant and the owner of the monstrance, showing the claimant was merely the broker);^4 United States v. $364,960, 661 F.2d 319, 327 (5^th Cir. 1981) (the presumption of ownership from possession may be rebutted by the claimant’s denial of ownership at the time of seizure.)	

^4  Other circuits, however, have held that even bailees have standing.  See e.g. United States v. $38,000, 816 F.2d 1538, 1544 (11^th Cir. 1987) (bailees have standing and may assert a claim against anyone but the owner.)

	In United States v. $38,000, 816 F.2d 1538, 1544 (11^th Cir. 1987) the court stated: “[t]here can be no doubt that [the] owner of the currency [] has Article III standing, and the government does not argue otherwise.”  The court went on to say that a claimant need not own the property to have standing.  A lesser interest, such as a possessory interest, is sufficient. Id. (citing cases).   Constructive possession by a bailee was enough to confer standing, the court held.  Id.
	Other circuits have made it clear that claimants are  not required to prove their claim of standing on the merits in their opening pleadings.  At this preliminary stage all that needs to be shown is a “facially colorable interest in the proceedings sufficient to satisfy the case-or-controversy requirement and ‘prudential considerations defining and limiting the role of the court.’”  United States v. 116 Emerson Street, 942 F.2d 74, 78 (1^st Cir. 1991).   
	An unrebutted allegation of ownership, together with the fact that these items were seized from the homes and other real estate belonging to or under the dominion and control of the defendants – is certainly enough to establish a “facially colorable interest.”

II.       The Magistrate Judge erred in ruling defendants’ claims were barred by laches
	In finding that defendants’ claims were barred by laches, the Magistrate Judge stated:

Plaintiffs’ argument that laches bars the Rule 41(e) is equally well-taken.  Rule 41(e) is an equitable remedy available only to a defendant who can show irreparable harm and an inadequate remedy at law.  See Clymore v. United States, 164 F.3d 569, 571 (10^th Cir. 1999).  “[H]e who seeks equity must do equity.”  Herald Co. v. Seawell, 472 F.2d 1081, 1099 (10^th Cir. 1972).  Defendants waited for over seven and a half years before filing their Rule 41(e) Motion.  Defendants’ seek to excuse this inordinate delay by pointing out that they were engaged in litigation and that the quantity of property seized was extensive.  The fact that they were engaged in litigation is unpersuasive.  Defendants were represented by counsel during the entire relevant period and filed challenges in the civil forfeiture cases.  Gabriel Rodriguez Aguirre and Eleno Rodriguez Aguirre’s criminal cases have been finalized since 1997.  The amount of property seized does not explain or excuse a seven year delay.  The protracted delay in the filing of Defendants Rule 41(e) Motion is unexplained, unjustified and inexcusable.  Under these circumstances, Defendants’ Rule 41(e) Motion should be denied based on the equitable doctrine of laches.

Magistrate Judge’s Proposed Findings p. 4.  	

	The Magistrate’s finding that the seven year delay was “unexplained, unjustified and inexcusable” ignores the explanation set out in pages 4 and 5 of Defendants’ Reply.  There, in addition to explaining how the defendants have been involved in protracted litigation – including three civil forfeiture cases, one involving 51 parcels of real estate among other things, and a criminal prosecution involving two extended jury trials and a direct appeal -- ever since the seizure (their §2255 petitions were denied by this Court only weeks ago), defendants explained:
These separate civil forfeiture cases each involved an extensive laundry list of seized property, and to a casual observer, or even someone who scrutinized the pleadings, it was obvious that the government had named in these forfeiture actions a staggering list of seized property, but it is not readily apparent that not every item which was seized and recorded in the returns on the search warrants was on one of the lists of property being forfeited.  

Defendants’ Reply pp. 4 and 5.  It took days of meticulously comparing lists of property seized, and items that defendants knew to have been on the properties at the time of the raids, against the lists of property forfeited in these three cases to find these missing items we are claiming here.  Because the defendants had been adjudicated in default early in the proceedings in these three civil forfeiture cases, they were not served with all of the pleadings in those cases, and had to get the lists of forfeited properties from the clerk to begin this comparison.
	Furthermore - and more importantly - the Magistrate Judge found laches based only on delay, ignoring the second prong of the Tenth Circuit’s test for laches.     
Laches, in legal significance, is not mere delay, but delay that works a disadvantage to another.  In order to prove the affirmative defense of laches, the [party asserting laches] must demonstrate  that there has been an unreasonable delay in asserting the claim and that [it] was materially prejudiced by that delay.

Hutchinson v. Pfeil, 105 F.3d 562, 564 (10th Cir.1997) (internal citations and quote marks omitted).  	
III.       The Magistrate Judge erred in ruling without an evidentiary hearing

	In United States v. Grover, 119 F.3d 850, 852 (10^th Cir. 1997) the Tenth Circuit held: 
Mr. Grover argues that he only surrendered possession of the property, and not ownership, and that it was the government's obligation to complete the transfer of ownership by instituting a civil forfeiture.  Because the limitations period has run, Mr. Grover contends that the government may no longer institute a civil forfeiture, and therefore, legal ownership of the property was never transferred to the government.  We agree with Mr. Grover that "nothing vests in the government until some legal step shall be taken," United States v. A Parcel of Land, 507 U.S. 111, 125, 113 S.Ct. 1126, 1135, 122 L.Ed.2d 469 (1993) (quoting United States v. Grundy, 7 U.S.  (3 Cranch) 337, 350-51, 2 L.Ed. 459 (1806)), and that until the government obtains a judgment of forfeiture, someone else owns the property and may assert defenses unless waived.  A Parcel of Land, 507 U.S. at 127, 113 S.Ct. at 1135.   We also agree with Mr. Grover that in this case no forfeiture has yet taken place.

United States v. Grover, 119 F.3d 850, 852 (10^th Cir. 1997).  As we have shown above, that “someone else” who owns the property is presumed to be the person from whom the property was taken.  Absent evidence contradicting the possessor’s ownership, the possessor is the owner as a matter of law. 
	Defendants have made a prima facie showing of entitlement to their unforfeited personal property, seized during execution of the search and seizure warrants.  The government has not presented any evidence whatsoever with regard to the circumstances of any administrative forfeiture proceedings regarding these items -- who notice was served on, where notice was sent, whether it was returned to sender -- or any other factual allegations which would indicate that the declarations of administrative forfeiture of the property (if any) would pass constitutional muster.  The government has not pointed out any evidence that any of these items was named or forfeited in the three massive civil forfeiture cases, and presumably they cannot, because defendants went over those lists with a fine tooth comb.  
	Therefore, it appears -- without any evidence to the contrary -- that these items of personal property seized from the defendants were either administratively forfeited without valid notice, or never forfeited at all, and, as in the Grover case above, since “no forfeiture has taken place” and the government’s statute of limitations has run, “someone else owns the property.”  That “someone else” is Gabriel Rodriguez Aguirre, Eleno Aguirre, Doloras Contreras and/or Tony Bancomo.
Conclusion
	WHEREFORE, for the foregoing reasons, this Court should order the property returned to the defendants, or, at the very least, open discovery and hold an evidentiary hearing to determine the circumstances regarding notice, allowing the government to raise any factual defenses it might  have to defendants’ claims to their property, and giving defendants an opportunity to rebut such evidence.  
	Whichever way this court rules, it is certain this case will be appealed.  Creating a proper record for appeal rather than tossing the defendants out on their ears without a hearing will hopefully avoid an automatic remand for such a hearing prior to an appeal on the merits.
							Respectfully submitted,

							BRENDA GRANTLAND
							Pro Hac Vice
							20 Sunnyside, Suite A-204
							Mill Valley, CA  94941
							(415) 380-9108

							DAVID PROPER	
							Local Counsel
							1980 E. Lohman
							Suite E
							Las Cruces, NM 88001
							505-526-5741

CERTIFICATE OF SERVICE
	I hereby certify that a copy of this Objections to Magistrate Judge’s Proposed Findings and Recommended Disposition was served upon AUSA Tom English, P.O. Box 607, Albuquerque, NM 87193, by first class mail, this ___________________ day of _________________, 2000.

							                                         
							BRENDA GRANTLAND