Opinion
Case No. 01-3277-JWL.
February 27, 2002.
MEMORANDUM AND ORDER
This civil equitable action, based on Federal Rule of Criminal Procedure 41(e), requires the court to quiet title to sums of money seized by Drug Enforcement Administration (DEA) agents in 1995 and later forfeited to the government in an administrative proceeding. This matter is presently before the court on defendant's motion for summary judgment (doc. #10) and plaintiff's cross-motion for summary judgment (doc. #13). Defendant seeks to quiet its title in the previously forfeited currency; plaintiff alleges a right to lawful possession and the equitable right to return of that property. As set forth in more detail below, defendant's motion for summary judgment is granted, plaintiff's cross-motion for summary judgment is denied, and the court quiets title to the property in favor of defendant.
I. Facts
On May 2, 1995, while driving a Chevrolet Blazer in Kansas City, Kansas, Mr. Anderson was stopped by police for outstanding traffic violations. During the stop, a passenger in the Blazer, Lisa Gaitan, gave police permission to search her luggage that was in the back of the vehicle. Officers opened the luggage and found a box, wrapped in duct tape, that contained $45,010.00. Mr. Anderson was arrested in connection with the outstanding traffic violations and $1,479.79 was taken from his person when he was taken into custody and transported to jail. An inventory search of the Blazer the following day uncovered an additional $9,000.00. The three sums of money, totaling $55,489.79, were seized by officers and turned over to the United States Marshal Service pending forfeiture proceedings.
On June 2, 1995, a federal search warrant was issued for Mr. Anderson's residence in Grandview, Missouri, based on an affidavit detailing the officers' information that Mr. Anderson was involved in a drug trafficking organization. In executing the search, agents discovered and seized a set of pocket drug scales, digital drug scales, a safe containing $50,520.00, a "street sweeper" shotgun and an assault rifle near the safe, and three semiautomatic handguns under the mattress in Mr. Anderson's bedroom.
Thereafter, Mr. Anderson was charged and arrested on narcotics violations. On August 9, 1996, a jury convicted him of conspiracy to distribute cocaine and possession with intent to distribute cocaine in violation of 21 U.S.C. § 841(a). In November 1996, the DEA began to take steps to administratively forfeit the currency seized from Mr. Anderson. On April 28, 1998, after no claims contesting the seizure and forfeiture were filed within the time allowed by statute, the DEA administratively forfeited the $55,489.79 and $50,520.00.
After the completion of the criminal proceedings against Mr. Anderson, he filed a motion for return of the $55,489.79 and the $50,520.00 pursuant to Federal Rule of Criminal Procedure 41(e). The court construed Mr. Anderson's motion as a civil complaint seeking return of the forfeited currency. See United States v. Clark, 84 F.3d 378, 381 (10th Cir. 1996) ("Where criminal proceedings against the movant have already been completed, a district court should treat a Rule 41(e) motion as a civil complaint" for equitable relief from forfeiture.). Thereafter, both parties filed motions for summary judgment.
II. Applicable Standards
In United States v. Clymore, 245 F.3d 1195 (10th Cir. 2001), the Tenth Circuit addressed "what proceedings . . . are appropriate when a Rule 41(e) or equitable civil motion involves property confiscated during an arrest for drug smuggling for which the defendant/claimant is later convicted, the administrative forfeiture of that property is later voided, and the statute of limitations for forfeiture proceedings has run." Id. at 1199. According to the Circuit, "[a]t the time the government takes possession of property used to commit drug offenses, it holds an unperfected right to title to it, and ownership will retroactively vest in the government from the time the illegal act was committed upon a judicial quieting of title to the property in favor of the government." Id. at 1200.
Although the government does not expressly concede in its papers that the forfeiture of the property at issue is void or that the statute of limitations has expired for new forfeiture proceedings, it also does not contend that it properly invoked its statutory remedy of administrative forfeiture. Rather, the government's papers address only whether the property is § 881(a) property, whether Mr. Anderson is an innocent owner, and whether the seizure was unlawful.
There are only two categories of owner that may have a superior interest to the government in § 881(a) property when the nexus between the property and the crime has been conclusively established at the criminal trial-one whose constitutional right against an illegal search and seizure has been offended or an innocent owner. Id. Thus, if the government shows that the character of the property has already been conclusively established as § 881(a) property in either a forfeiture action or a criminal proceeding (or can prove that the property is § 881(a) property at the Rule 41(e) hearing), then the property can be disgorged from the custody of the government only by a judicial or administrative order concluding that the property should be returned to an innocent owner or one aggrieved by an illegal seizure. Id. at 1201-02.
Finally, the government may seek to quiet its title to the property through a properly supported motion for summary judgment. Id. at 1202-03. Before the court may quiet title in this fashion, however, "it must determine that no genuine issues of material fact exist regarding the character of the property as § 881(a) property, [Mr. Anderson's] status as an innocent owner, and the legality of the government's seizure and possession." Id. at 1203.
III. Is the Property "Section 881(a) Property"?
In analyzing the parties' cross-motions for summary judgment, the court first addresses whether "the nexus between the property and the crime has been conclusively established at the criminal trial." See Clymore, 245 F.3d at 1200. The court's starting point is the Tenth Circuit's decision affirming Mr. Anderson's criminal convictions. See United States v. Anderson, 189 F.3d 1201 (10th Cir. 1999). In addressing the sufficiency of the evidence to support his convictions, the Tenth Circuit highlighted Lisa Gaitan's testimony:
She testified that after Mr. Anderson picked her up, they stopped by someone's house on the way to the station and Mr. Anderson went inside. He came out with a gray box about the size of a tissue box wrapped in gray tape. When they arrived at the bus station, Mr. Anderson went in and bought the ticket while she waited in the car. She had packed one bag for the trip and Mr. Anderson gave her another one. She put half her clothes in the other bag along with the box. After buying the ticket, they left to get something to eat and were stopped by the police on the way back to the station. At that point Mr. Anderson told her to say that she was going to a city other than Los Angeles. After Mr. Anderson was arrested for outstanding traffic violations and taken to a police car, Ms. Gaitan gave the police permission to check the bags and they discovered the box, opened it and found $45,000.Id. at 1206. According to the Circuit, Ms. Gaitan's testimony "provided the most persuasive evidence linking Mr. Anderson to [the conspiracy]." Id. Clearly, then, in the Circuit's opinion and as supported by the evidence at trial, the $45,000 was intimately connected to Mr. Anderson's crimes.
Moreover, the Circuit, in concluding that the evidence was sufficient to support the jury's finding that the charged conspiracy existed and that Mr. Anderson knowingly participated in it, highlighted the fact that the search of Mr. Anderson's residence revealed "a safe containing over $50,000" while Mr. Anderson had "no legitimate source of income." Id. at 1207. The Circuit clearly concluded that the evidence presented at trial demonstrated that the large sums of money possessed by Mr. Anderson were profits of the conspiracy. See id. at 1212.
Perhaps even more tellingly, Mr. Anderson does not even contend in his cross-motion for summary judgment that these sums were not connected to his crimes. Rather, he contends only that the $1,479.79 seized from his person following the traffic stop was not connected to drug trafficking. He has failed, however, to support this allegation with any competent Rule 56 evidence. Moreover, the government argues in its motion for summary judgment that the nexus between the confiscated currency and Mr. Anderson's drug crimes was conclusively established at trial and Mr. Anderson has failed to respond to the motion. In short, then, there is simply no question that the sums of money confiscated by the government were profits of the conspiracy and were therefore properly in the possession of the government as § 881(a) property.
IV. Were the Seizures Unlawful?
Having determined as a matter of law that the seized property is § 881(a) property, the court turns to analyze whether the seizures were unlawful such that the property should be disgorged from the custody of the government. See Clymore, 245 F.3d at 1202. In its motion for summary judgment, defendant contends that plaintiff is collaterally estopped from challenging the validity of the seizures. In his cross-motion for summary judgment, plaintiff vigorously contends that the seizures of the sums of money were unlawful. The court agrees with defendant that the doctrine of collateral estoppel precludes plaintiff from contesting the legality of the seizures.
As explained above, the $55,489.79 sum was seized following the May 2, 1995 traffic stop and subsequent arrest of plaintiff. Prior to his criminal trial, plaintiff moved to suppress evidence concerning the traffic stop, his subsequent arrest, and the seizure of the $55,489.79. On June 3 and 4, 1996, the court heard evidence regarding the motion to suppress and ultimately denied the motion. Plaintiff did not appeal the court's denial of his motion to suppress. The $50,520.00 sum was seized as a result of the execution of a search warrant. Plaintiff did not attempt to suppress the evidence discovered as a result of the search warrant and did not contest the search in any way. Moreover, plaintiff did not object to the introduction of such evidence at his criminal trial nor did he appeal the admission of such evidence. Thus, plaintiff has either challenged or had the opportunity to challenge the validity of the seizures during his criminal proceeding and he therefore is collaterally estopped from doing so here. See United States v. Mustek Paragon 600 Pro Flat-Bed Scanner S#B14009467, No. 98-6097, 1998 WL 756809, at *3 (10th Cir. Oct. 21, 1998) (in civil forfeiture action appellant was collaterally estopped from asserting unlawfulness of search warrant where he had the opportunity to challenge the validity of the search warrant during his state court criminal proceeding but voluntarily entered guilty plea instead).
Rule 36.3 permits citation to an unpublished decision when it has "persuasive value with respect to a material issue that has not been addressed in a published opinion" and "would assist the court in its disposition." 10th Cir.R. 36.3(B)(1) and (2).
Even assuming plaintiff was not collaterally estopped from challenging the legality of the seizures, the court nonetheless would conclude that the seizures were valid. With respect to the $55,489.79 sum, the court has already concluded that the seizure was valid and, for the reasons set forth in connection with the ruling on and denial of the motion to suppress, the court again concludes that the seizure was lawful. With respect to the $50,520.00 sum, plaintiff asserts in his cross-motion for summary judgment that the seizure was unlawful because the search warrant was obtained through false information. More specifically, plaintiff highlights three alleged inaccuracies in the warrant affidavit. After carefully reviewing plaintiff's papers, it is clear that he has not met his burden of demonstrating that a false statement knowingly, intentionally or with reckless disregard for the truth was included by the affiant in the warrant affidavit or that the allegedly false statements were necessary to the finding of probable cause. See Franks v. Delaware, 438 U.S. 154, 171 (1978). The first alleged inaccuracy, for example, concerns a 1991 arrest of plaintiff in Kansas City, Kansas. The affidavit states:
On April 25, 1991, Sylvester D. Anderson was arrested pursuant to outstanding warrants by the Kansas City, Missouri Police Department. As a result of this arrest, Sylvester D. Anderson was found to be in possession of five (5) bindles of cocaine, and $745.00 in U.S. Currency.
Significantly, plaintiff does not contend that this statement is false. Rather, he argues only that the United States has not produced records that this arrest occurred and that plaintiff was in possession of cocaine. As such, plaintiff has not met his burden under Franks v. Delaware. The second and third alleged inaccuracies highlighted by plaintiff concern the timing of when two witnesses (Deshire Davey and Juan Harkness) identified plaintiff as a participant in the conspiracy. However, plaintiff has presented insufficient evidence to show that the statements contained in the affidavit concerning these witnesses were false. At most, plaintiff's papers on this issue contain argument and bald conclusions. Thus, plaintiff's cross-motion for summary judgment is denied on this issue and, as there are no genuine issue of material fact regarding the legality of the seizures, defendant's motion is granted on this issue.
In any event, defendant has come forward with evidence in support of the statement by attaching a copy of the relevant arrest report, narcotic property report and property report.
The court also notes that defendant, in response to plaintiff's cross-motion for summary judgment, has set forth evidence tending to show that the statements contained in the warrant affidavit were accurate.
V. Is Plaintiff an Innocent Owner?
As no genuine issues of material fact exist regarding the legality of the government's seizure and possession of the § 881(a) property, the court next determines whether the property should nonetheless be returned to an "innocent owner." See Clymore, 245 F.3d at 1202. An innocent owner is an owner who "did not know of the conduct giving rise to forfeiture; or upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property." See United States v. 16328 So. 43rd East Avenue, Bixby, Tulsa County, Oklahoma, 275 F.3d 1281, 1284 n. 1 (10th Cir. 2002) (quoting 18 U.S.C. § 983(d)(2)(A)).
The record establishes that no issue of material fact exists as to whether plaintiff knew of the conduct giving rise to the forfeiture or whether plaintiff did anything to terminate such conduct. In fact, plaintiff does not even contend in his motion that he is an innocent owner of the currency and, again, he has failed to respond to the government's motion-a motion that clearly raises the innocent owner issue. Moreover, Mr. Anderson's conviction (and the Tenth Circuit's affirmance of that conviction) simply does not leave room for the possibility that Mr. Anderson did not know about the conduct giving rise to the forfeiture-his knowledge was proven beyond a reasonable doubt. Finally, there are no facts whatsoever in the record presently before the court or in the record of Mr. Anderson's criminal trial even remotely suggesting that Mr. Anderson made any attempt to terminate the conduct. Rather, the evidence demonstrates only that Mr. Anderson was a full and willing participant in the conspiracy. Mr. Anderson is not an innocent owner of the seized property.
In sum, the uncontroverted facts demonstrate that the seized property is properly characterized as § 881(a) property and, as there are no facts suggesting that Mr. Anderson is lawfully or equitably entitled to return of the property, the court quiets title to the property in favor of the government.
IT IS THEREFORE ORDERED BY THE COURT THAT defendant's motion for summary judgment (doc. #10) is granted and plaintiff's cross-motion for summary judgment (doc. #13) is denied. The court quiets title to the property in favor of the defendant and plaintiff's complaint is dismissed in its entirety.
IT IS SO ORDERED.