§240 Notice and Hearing in Real Property Cases
D.C. District Court
Alabama District Court
Florida District Court
Nevada District Court
Supreme Court finds pre-seizure notice and hearing required in civil forfeiture of real property. (240) Approximately 4 1/2 years after drugs were found in respondent’s home, the United States filed an in rem action to forfeit the house and surrounding real property. Without prior notice or an adversary hearing, the government seized the property and directed payment of future rents to the United States Marshal. The Ninth Circuit held that the seizure of the property without prior notice and a hearing violated the Due Process Clause and that failure to comply with internal reporting rules could require dismissal of the action as untimely. In a 5-4 decision authored by Justice Kennedy, the Supreme Court agreed in part with the Ninth Circuit’s finding that the Due Process Clause of the Fifth Amendment prohibits the government in a civil forfeiture case from seizing real property without first affording the owner notice and an opportunity to be heard. However, a unanimous Court overruled the Ninth Circuit on the issue of timeliness, finding that filing the action within the statute of limitations suffices to make it timely and that the cause should not be dismissed for failure to comply with certain other statutory directives for expeditious prosecution in forfeiture cases. U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993).
1st Circuit vacates forfeiture judgment and remands to district court where claimant did not have “fair notice” that his trial would begin less than 24 hours after he was transferred from federal prison in Pennsylvania to Puerto Rico to stand trial. (240) Pro se property owner admitted ferrying 16 kilograms of cocaine and knowing where another 250 kgs. of cocaine were stashed. The First Circuit found that government had probable cause for forfeiture of real property that claimant purchased with proceeds of drug transactions. Claimant contended that district court deprived him of a fair opportunity to prepare and present his defense by requiring him to proceed with trial when he had not been transferred in time to attend his final pretrial conference. He further contended that he was not given notice that his trial would begin the day after his transfer from federal prison in Pennsylvania to Puerto Rico. The First Circuit found first contention lacked merit, but agreed that trial judge abused his discretion in concluding that claimant had fair notice of his trial date from earlier order. The First Circuit vacated and remanded for further proceedings, including possible retrial of the forfeiture action. U.S. v. One Parcel of Land, Parcela 22, 2001 WL 958745 (1st Cir.2001) (unpublished).
2nd Circuit upholds seizure of commercial real property pursuant to ex parte warrant. (240) Claimant’s apartment building was seized without prior notice pursuant to a warrant obtained by an ex parte application to a magistrate. The 2nd Circuit found that this procedure did not violate due process. The court distinguished cases finding due process violations when a personal residence is seized without prior notice, noting that “the private interest involved here is ownership and possession of an apartment building solely for commercial purposes.” This case presented “exigent circumstances warranting the postponement of notice and the opportunity for an adversarial hearing.” First, the residents of the neighborhood had an interest in being free from the dangers presented by a large scale narcotics operation. Second, the government suspected the owner of the building was aware of the drug activity and possibly involved in it. Therefore, prior notice of the seizure might have hampered police efforts to enforce the narcotics laws and increase the risk to police and the community from the seizure. “The high level of ongoing narcotics trafficking in the building, coupled with [claimant’s] opportunity to contest the forfeiture at trial lead us to conclude that issuance of the seizure warrant by a neutral and detached magistrate was all the process that was due.” In light of the finding of exigent circumstances, this case may survive the Supreme Court’s decision in U.S. v. James Daniel Good Property, 510 U.S. 43 (1993). U.S. v. 141st Street Corporation, 911 F.2d 870 (2d Cir. 1990).
2nd Circuit holds that illegal seizure of property does not immunize the property from forfeiture. (240) The 2nd Circuit held that the government illegally seized the claimant’s residence without first giving him notice and an opportunity to be heard. However, after the seizure, the claimant was given a full opportunity to contest the forfeiture, before the district judge ordered the property forfeited to the government. Since the subsequent forfeiture was not based on any evidence gained from the illegal seizure, the Second Circuit upheld the forfeiture, noting that “illegal seizure of property, standing alone, will not immunize that property from forfeiture, so long as impermissibly obtained evidence is not used in the forfeiture proceeding.” U.S. v. Premises and Real Property at 4492 South Livonia Road, 889 F.2d 1258 (2d Cir. 1989).
2nd Circuit holds that due process requires notice and hearing before seizure of a person’s residence. (240) Balancing the interests on both sides, the 2nd Circuit held that due process requires that a person be given notice and an opportunity to be heard prior to the seizure of that person’s home. Residences merit special constitutional protection. Unlike some forms of property, “a home cannot be readily moved or dissipated.” Any exigency that might be posed by the threat of encumbrance or transfer “may be met by less restrictive means than seizure, for example by the filing of a lis pendens . . . along with a restraining order or bond requirement.” Here the government waited six months after drugs, money, and weapons were found in the residence, before it obtained an ex parte forfeiture seizure warrant from a magistrate. The district court’s decision upholding the seizure was erroneous. U.S. v. Premises and Real Property at 4492 South Livonia Road, 889 F.2d 1258 (2d Cir. 1989).
3rd Circuit refuses to dismiss forfeiture action despite fact that seizure without notice and hearing may have been unconstitutional. (240) Claimant asserted that the government’s seizure of her home without a pre-seizure notice and hearing was unconstitutional. The 3rd Circuit agreed that the government’s seizure may have been unlawful, but held that it did not require dismissal of the forfeiture proceedings since probable cause to seize the premises could be supported by untainted evidence. The indictment of claimant’s boyfriend, who had provided the funds for defendant to purchase her home, established probable cause to believe that he was involved in a drug importation scheme. Other evidence obtained independently of the illegal seizure gave the district court reasonable cause to believe that the property probably was derived from drug transactions. U.S. v. One Parcel of Real Property with Buildings, Appurtenances and Improvements Known as 190 Colebrook Road, 936 F.2d 632 (1st Cir. 1991).
4th Circuit reiterates that Good violation does not void a forfeiture. (240) Claimant filed a Fed. R. Civ. P. 60(b)(4) motion seeking to set aside the forfeiture of certain real property on the ground that he was not afforded pre-seizure notice and hearing, as required by U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). The Fourth Circuit agreed that he had not been afforded the required notice and hearing, but denied relief because a due process violation of this nature does not void a prior forfeiture. See U.S. v. Marsh, 105 F.3d 927, 931 (4th Cir. 1997). U.S. v. McMullin, 194 F.3d 1306 (4th Cir. 1999) (table) (unpublished).
4th Circuit holds James Daniel Good not retroactive. (240) In an opinion that is literally shorter than its full caption, the Fourth Circuit rejected claimant’s contention that his rights were violated when the government seized his real property without prior notice and hearing. The Supreme Court held in U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993), that in civil forfeiture proceedings against real property, absent exigent circumstances, the government must provide both pre-seizure notice and a meaningful opportunity to be heard. However, the seizure here occurred before Good, and the Fourth Circuit concluded that Good is not retroactive. U.S. v. Fort, 164 F.3d 626 (4th Cir. 1998) (table) (unpublished).
4th Circuit intimates Good hearing should address innocent owner defense. (240) The government filed a complaint for civil in rem forfeiture of a building alleged to be a “major center of drug-related and other criminal activities in the downtown” area of Jacksonville, North Carolina. The magistrate issued a warrant for arrest of the property authorizing entry and search, but precluding the government from taking possession until the owners were provided notice and hearing pursuant to U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). At the Good hearing, the magistrate restricted the evidence to the issue of probable cause for seizure and barred evidence offered to establish that the owner did not know of, or consent to, illegal use of the property. The government prevailed at the Good hearing and on its subsequent motion for summary judgment. On appeal, the Fourth Circuit found the evidence of probable cause “overwhelming.” The court intimated that the magistrate should have entertained evidence regarding the elements of an innocent owner defense during the Good hearing; however, “even if erroneous, the magistrate’s [action] at the pre-seizure proceedings in no way prevented [claimant] from introducing the same” evidence at the summary judgment stage. “[A] Good-violative seizure does not immunize property from forfeiture.” U.S. v. Willingham, 139 F.3d 896 (4th Cir. 1998) (table) (unpublished).
4th Circuit finds no remedy for Good violation where government obtains default judgment. (240) In early 1993, the government filed a complaint for in rem civil forfeiture of claimant’s property, and obtained a warrant for its arrest, based on an ex parte showing of probable cause to a magistrate judge. The government also filed a lis pendens. Thereafter, claimant was properly served with the complaint, warrant for arrest in rem, and accompanying orders. He nonetheless failed to file a claim or answer within the time limits specified by Supplemental Admiralty Rule C(6). The magistrate judge denied claimant’s motion to file a claim out of time because he had shown neither good cause nor excusable neglect for his untimely response, and granted the government a default judgment. In December 1993, while the case was still pending in the district court, the U.S. Supreme Court decided U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993), and held that due process requires pre-seizure notice and hearing. The Fourth Circuit acknowledged that, in general, Good applies to cases in litigation at the time it was decided. It held, however, that Good does not apply to one who lacks standing to contest a forfeiture because he failed to file a timely claim. Because claimant lacked standing, the court “did not have jurisdiction to enter an order as to the merits of the forfeiture at the instance of [claimant].” U.S. v. Ragin, 113 F.3d 1233 (4th Cir. 1997) (table) (unpublished).
5th Circuit holds that government at post-restraint hearing in civil forfeiture action only had to show probable cause existed to believe that restrained assets were subject to forfeiture in order to continue pretrial restraining order. (240) The government brought a civil forfeiture action under CAFRA against six parcels of real property and three annuities purchased with funds allegedly derived from a Medicaid fraud scheme. The government contemporaneously obtained a pretrial restraining order to enjoin the transfer of the defendant property. A claimant to the property, who was under indictment on federal charges as part of the same investigation that led to the civil forfeiture complaint, filed a motion to modify the restraining order to release funds needed to retain an attorney in the related criminal case. The district court denied the motion to modify the restraining order, finding that the government had established probable cause to believe that the restrained assets were subject to forfeiture. The restraining order was thus not modified. The 5th Circuit noted that the government’s ultimate burden of proof on the merits was preponderance of the evidence under CAFRA. Finding that the government, in its opposition to modify the restraining order, had established probable cause that the properties were purchased with funds that constituted proceeds of Medicaid fraud, the 5th Circuit affirmed. U.S. v. Melrose East Subdivision, Third Filing, East Baton Rouge Parish Louisiana, 2004 WL 52406 (5th Cir., Jan. 13, 2004).
5th Circuit allows government to evict owner from residence following forfeiture. (240) A property owner sought injunctive relief to prevent the government from evicting her from her residence following the forfeiture of the residence. The Fifth Circuit approved the dismissal of the complaint since there was no substantial likelihood that the owner would have prevailed on the merits of the case. Due process requires the government to give notice and a meaningful opportunity to be heard before seizing real property subject to forfeiture. Here, the owner signed an occupancy agreement permitting her to remain at the property until the forfeiture matter was resolved. A jury found the property subject to forfeiture, and the district court entered a judgment and final order of forfeiture in July 1991. In August 1992, an appellate court affirmed the forfeiture. The Marshal’s Service then notified the owner that she had 90 days to vacate the property. In light of this process, there was little likelihood that the owner would have prevailed on the merits. Rodriguez v. U.S., 66 F.3d 95 (5th Cir. 1995).
5th Circuit reverses stay of forfeiture proceedings where government failed to satisfy statutory requirements. (240) The government filed forfeiture actions against a shopping center and two residences, alleging that they constituted proceeds traceable to sales of illegal drugs. The government then obtained a stay of all proceedings pending the outcome of a criminal conspiracy case in the central district of California. None of the petitioners were named in the California case, and the 5th Circuit found that the petitioners would be deprived of the use of their property including their residence, for what could be a very long time, without ever having had an opportunity to know the evidence against them, challenge it, or even to have a hearing. Under the circumstances, the 5th Circuit concluded that the extraordinary remedy of mandamus was appropriate. The case was remanded to the district court to reconsider the stay and to consider the claimant’s pending motion to dismiss the forfeiture complaint against their residences. In re Ramu Corporation, 903 F.2d 312 (5th Cir. 1990).
6th Circuit finds jurisdiction depends on district court’s control over the res. (240) The government sought civil forfeiture of real and personal property of claimant previously convicted of gambling, prostitution, and money laundering offenses. Claimant contended that the district court lacked jurisdiction over the subject property because it was seized from him in violation of his due process rights under U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1990). The Sixth Circuit ruled that jurisdiction over the res in a civil forfeiture action is established by the district court’s control over the property, which was undisputed in this case. Even assuming arguendo that the res was initially seized in violation of claimant’s due process rights, that fact would not deprive the court of jurisdiction. U.S. v. One 1990 Cadillac, 1999 WL 777689 (6th Cir. 1999) (unpublished).
6th Circuit says failure to raise Good claim in timely fashion waives argument. (240) Claimant contested the forfeiture of his real property on the ground that the government seized it without providing prior notice and hearing as required by U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1990). However, claimant failed to raise the Good argument until three weeks before the scheduled trial date and well past the motions deadline imposed by the trial court. Accordingly, the Sixth Circuit held that claimant’s failure to raise the argument in a timely fashion constituted a waiver. U.S. v. One 1990 Cadillac, 1999 WL 777689 (6th Cir. 1999) (unpublished).
6th Circuit finds “exigent circumstances” excused seizure of home without prior notice and hearing. (240) Claimant was indicted (and later convicted) for bank fraud and money laundering. The government initiated civil forfeiture against his residence, and obtained and executed an arrest warrant in rem for the property. A probable cause hearing on the matter was held a year-and-a half later. U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993), held that, in the case of real property, due process requires pre-seizure notice and hearing, except in rare cases in which “exigent circumstances” exist. The Sixth Circuit wrote that, “In order to establish the existence of exigent circumstances, the government must demonstrate that means less restrictive than an ex parte seizure – including the filing of lis pendens, restraining order, or bond – would not adequately protect the Government’s interests in preventing the sale, destruction or continued unlawful use of the real property.” The court found exigent circumstances here because claimant’s history of forging documents such as mortgage releases created a risk that he might forge a release of the lis pendens and then sell the property to a bona fide purchaser who could mount an innocent owner defense to any forfeiture. Judge Daughtrey filed a vigorous dissent. U.S. v. Real Property Located at 1184 Drycreek Road, 174 F.3d 720 (6th Cir. 1999).
6th Circuit says remedy for Good violation is recovery of lost rents and profits. (240) The government seized claimant’s residence without a prior notice and hearing. The seizure occurred before the decision in U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993) (requiring pre-seizure notice and hearing in forfeitures of real property). Nevertheless, the Sixth Circuit found that Good applied because this case was on direct appeal when the Supreme Court decided Good. The court nonetheless rejected claimant’s request that the forfeiture be vacated. The court sided with the majority of circuits in holding that the proper remedy for a Good violation is return to the claimant of rents and profits obtained by the government during the period between the illegal seizure and a due process hearing. In dissent, Judge Daughtrey argued that this holding was dictum. She contended that “a more appropriate measure of damages … might well have been set at recompense for [claimant’s] inconvenience and the cost of replacement housing … from the time of the improper seizure until” the probable cause hearing. U.S. v. Real Property Located at 1184 Drycreek Road, 174 F.3d 720 (6th Cir. 1999).
6th Circuit finds record owner lacks standing to raise innocent owner defense to forfeiture. (240) The district court granted summary judgment for the government on the ground that claimant was “willfully blind” to drug trafficking activities occurring at a house of which she was the record owner. The Sixth Circuit affirmed the judgment, but on the different ground that as a matter of law claimant lacked standing to make a claim to the property. The house was given to claimant as a “gift” from a cousin. According to the panel majority, she never lived there, never rented the property, never collected rent from the occupants of the property, paid no insurance or taxes, conducted no maintenance, made no repairs, and had no idea why the property was given to her. The majority wrote: “While ownership of the property would ordinarily confer standing to contest the forfeiture, if the … the ownership is one of bare title without the usual indicia of dominion and control such that the claimant … is merely a nominal owner, standing is lacking.” The court also held that standing is a prerequisite to raising a challenge based on lack of prior notice and hearing under U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). Judge Daughtrey filed a vigorous dissent disputing the majority’s factual conclusions. U.S. v. Certain Real Property Located at 16397 Harden Circle, 145 F.3d 1334 (6th Cir. 1998) (table) (unpublished).
6th Circuit remands to evaluate whether property was seized so as to require Good hearing. (240) The district court, without a hearing or notice, found probable cause for the forfeiture of claimant’s house and issued a warrant of arrest in rem. The Marshal executed the arrest warrant, serving claimant and local officials with copies of the summons, complaint and warrant. The government also executed an occupancy agreement with claimant. Claimant argued that he was entitled to a pre-seizure hearing under U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). The Sixth Circuit agreed that if the house was “seized,” claimant was entitled to a Good hearing. It therefore remanded to determine whether the house was “seized.” The government’s exercise of authority, short of seizure, does not trigger the notice and hearing requirement. For example, a lis pendens or restraining order would not require a pre-seizure hearing. Here there was no allegation of actual interference with claimant’s use of his property. U.S. v. Real Property Known and Numbered as 429 South Main Street, New Lexington, Ohio, 52 F.3d 1416 (6th Cir. 1995).
6th Circuit says record owner need not show standing to obtain pre-seizure hearing. (240) Claimant was the owner of a house in which his niece lived, but he did not record the deed until after a search warrant had been executed there. In a forfeiture action against the property, the district court granted summary judgment to the government, finding that claimant held bare legal title and could not establish standing to contest the forfeiture. The Sixth Circuit reversed, holding that this violated claimant’s due process right to a pre-seizure hearing, as articulated in U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). That case supersedes Sixth Circuit decisions requiring a claimant to establish standing to challenge a forfeiture. Claimant, as record owner of the property, was entitled to a pre-seizure hearing to contest the government’s showing of probable cause and establish himself as an innocent owner. The government’s position would leave claimant in a Catch-22: as owner of the real property, he has a due process right to a pre-seizure hearing, yet being unable to show more than legal title, he lacks standing to challenge the forfeiture. Judge Boggs dissented. U.S. v. Certain Real Property Located at 16510 Ashton, Detroit, Wayne County, Michigan, 47 F.3d 1465 (6th Cir. 1995).
7th Circuit holds dismissal of forfeiture not remedy for Good violation. (240) In 1992, the government seized and sought forfeiture of claimants’ farm because it was used to grow marijuana. The seizure occurred a year before the Supreme Court decided U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993) (holding real property may not be seized without prior adversarial hearing). In 1996, claimants filed a motion to dismiss the forfeiture, arguing that the property had been seized in violation of Good. The Seventh Circuit held that the remedy for violating Good is repayment of the profits and rents that accrued to the government during the period of lawful seizure–not dismissal of the forfeiture action. Accordingly, the motion to dismiss was properly denied. U.S. v. 47 West 644 Route 38, 190 F.3d 781 (7th Cir. 1999).
7th Circuit says government need pay only lost rents as damages for Good violation. (240) The government seized claimants’ real and personal property without prior notice and hearing as part of a narcotics investigation. In U.S. v. All Assets and Equip. of West Side Bldg. Corp., 58 F.3d 1181 (7th Cir. 1995), the Seventh Circuit determined that the government violated the rule of U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993), when it seized the real property with prior notice and hearing and remanded for consideration of damages for this violation. Following remand, claimants appealed again. The court of appeals concluded that the district court was correct in awarding no damages for the Good violation beyond the lost rents accrued during the illegal deprivation of the property, which the government had already agreed to pay. Claimants were made whole by the rent payments; increasing the damage amount to cover utility, tax, and mortgage payments would result in unjust enrichment because these obligations were fixed costs for which claimants would have been liable with or without the seizure. U.S. v. All Assets and Equip. of West Side Bldg. Corp., 188 F.3d 440 (7th Cir. 1999).
7th Circuit upholds damage award of $1 for Good violation. (240) The district court found claimant’s real property forfeitable because it was used to facilitate his drug trafficking activities; however, the government seized the property without prior notice and hearing in violation of U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). The district court awarded nominal damages of $1.00 for the government’s lapse. The Seventh Circuit affirmed the award, finding that claimant failed to show he had suffered any financial loss during the period of unlawful restrictions on the property. U.S. v. One Parcel of Real Estate Located at 936 Northeast Glen Oak Avenue, 172 F.3d 54 (7th Cir. 1999) (table) (unpublished).
7th Circuit refuses to allow untimely James Daniel Good argument. (240) Claimant, who had been convicted and imprisoned for multiple narcotics offenses, contested the forfeiture of his real and personal property. Before U.S. v. Ursery, 518 U.S. 267 (1996), the district court granted summary judgment for claimant on the real property forfeitures on the ground that they violated the Double Jeopardy Clause. The government did not appeal. As for the personal property, the district court denied claimant’s double jeopardy claim because it was the proceeds of drug activity. Claimant appealed. The Seventh Circuit held the double jeopardy argument was foreclosed by Ursery. The court also refused to entertain an argument raised for the first time in a supplemental brief that the real property seizures violated the rule of U.S. v. James Daniel Good, 510 U.S. 43 (1993), because no pre-seizure notice and hearing was provided. (The defendant sought damages in addition to return of the real estate.) The Seventh Circuit distinguished cases such as U.S. v. All Assets of West Side Building, 58 F.3d 1181, 1191 (7th Cir. 1995), which permitted untimely Good claims, on the ground that Good had been decided late in the litigation of those cases, whereas the Good argument was available to this claimant at the time of the summary judgment motion, but he failed to raise it. U.S. v. One Parcel of Real Estate Located at Rural Route 9, 124 F.3d 206 (7th Cir. 1997) (not reported in F.Supp.).
7th Circuit rules Good violation was waived by failure to raise issue in district court. (240) Claimant was convicted of drug crimes and the government sought civil forfeiture of real and personal property which was either proceeds of or facilitated his crimes. Several of claimant’s close relatives, represented by claimant’s criminal lawyer, filed claims to the property. Claimant himself did not, at least until much later. After final judgments of forfeiture were entered against several pieces of real estate, claimant filed a motion to vacate the judgments under Rule 60(b), Fed. R. Civ. P. He argued that he was entitled to pre-seizure notice and hearing under U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993), and that failure to provide such a hearing entitled him to return of the property. The Seventh Circuit found that claimant’s failure to file a claim or raise any objection to the forfeiture procedure during the forfeiture proceedings acted as a waiver of any Good claim. Moreover, the remedy would be restoration of lost rents, not return of the property. U.S. v. 8136 S. Dobson Street, Chicago, Illinois, 125 F.3d 1076 (7th Cir. 1997).
7th Circuit says lack of Good hearing did not nullify forfeiture. (240) Claimants did not receive an adversary hearing before their real property was seized, as required by U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). The Seventh Circuit, disagreeing with the Eighth Circuit and agreeing with the Second, Third, and Ninth Circuits, held that the illegal seizure, by itself, did not nullify the forfeiture. However, the government was responsible for the profits derived from the property during the period of illegal seizure. Good clearly applied to the realty involved. However, it could not be extended to the other property seized. The other property—bank accounts and automobiles—possessed attributes of liquidity and mobility that would make the possibility of conversion substantial. U.S. v. All Assets and Equipment of West Side Building Corp., 58 F.3d 1181 (7th Cir. 1995).
8th Circuit dismisses forfeiture action for failure to provide pre-seizure hearing. (240) The government arrested and seized claimant’s residence without a pre-seizure hearing. In a civil forfeiture action, the district court granted summary judgment to the government. Claimant filed a motion for reconsideration in light of U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). The district court granted the motion for reconsideration and held that the government had violated claimant’s due process rights. However, the court refused to dismiss the forfeiture action, and ordered the government to return to claimant all of the rents and profits it had collected during the two years it possessed the residence before the grant of summary judgment in the forfeiture action. On appeal, the Eighth Circuit held that under circuit caselaw, the failure to provide a pre-seizure hearing before an arrest in rem in a civil forfeiture action requires dismissal of the forfeiture action. If statutory time constraints permit, the government is free to procure a valid arrest warrant after a pre-seizure hearing and begin new forfeiture proceedings. U.S. v. One Parcel of Real Property with Buildings Appurtenances and Improvements, 48 F.3d 289 (8th Cir. 1995).
8th Circuit holds that claimants waived objections to nature of preseizure hearing. (240) Claimants argued that the preseizure hearing they received did not comport with the Supreme Court’s decision in U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). The Eighth Circuit held that claimants waived any objection to the nature of the hearing. The magistrate judge offered claimants’ counsel the opportunity to argue regarding the scope of the hearing, and she declined to do so. At the end of the hearing, the magistrate judge again invited the parties to submit any additional briefs and cases they wished the court to consider. Counsel for claimants did not submit anything. Thus, the magistrate judge did not have the opportunity to consider arguments for a broader hearing. U.S. v. Three Parcels of Real Property, 43 F.3d 388 (8th Cir. 1994).
8th Circuit reverses forfeiture because claimant did not receive notice and hearing before seizure of residence. (240) Claimant was not given notice or a hearing before the seizure of her residence. The district court ordered the residence forfeited after claimant failed to respond to the government’s motion for summary judgment. The 8th Circuit reversed, based on U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). There, the Supreme Court held that the seizure of real property for forfeiture under §881(a)(7) violates due process if the property owner is not given notice and a hearing before the seizure. The case applies retroactively. Because the seizure was illegal, it was unnecessary to address claimant’s argument that the forfeiture was an excessive fine. However, the court noted that it was dissatisfied with the test for excessiveness used by the district court. The district court adopted the test articulated in Justice Scalia’s concurrence to Austin v. U.S., 509 U.S. 602 (1993). Under this test, the sole measure of whether a forfeiture is an excessive fine turns exclusively on the relationship between the forfeited property and the offense. This test is inadequate because it conflates the 8th Amendment excessive fine analysis with §881(a)(7)’s nexus requirement. U.S. v. One Parcel of Real Property, 27 F.3d 327 (8th Cir. 1994).
9th Circuit holds Good violation does not invalidate forfeiture or allow Rule 60(b)(4) relief. (240) A convicted criminal defendant moved pursuant to Fed. R. Civ. P. 60(b)(4) to vacate the civil forfeiture of his real property. He argued that the government violated the rule of U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993), by failing to provide pre-seizure notice and hearing. The Ninth Circuit found that, even if claimant’s allegations were true, a Good violation would not invalidate the forfeiture, and thus claimant was not entitled to relief under Rule 60(b)(4) which permits relief where a judgment is void. Moreover, because claimant did not file his motion within one year of the entry of judgment, he was not entitled to relief under Rule 60(b)(3) (concerning fraud or misconduct by an opposing party). U.S. v. Vacant Property, 129 F.3d 129 (9th Cir. 1997) (table) (unpublished).
9th Circuit reaffirms that James Daniel Good notice requirement is not retroactive. (240) Plaintiff sought damages because the government failed to provide notice and hearing prior to the seizure of his real property under the rule of U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). Relying on U.S. v. Real Property Located at 20832 Big Rock Drive, Malibu, Cal., 51 F.3d 1402, 1406 (9th Cir. 1995), the Ninth Circuit reaffirmed that Good only applies to cases decided after Good (or those pending or on direct appeal at the time Good was decided). Because the forfeiture of plaintiff’s property became final before the decision in Good, his complaint was properly dismissed. Bowman v. U.S., 132 F.3d 38 (9th Cir. 1997) (table) (unpublished).
9th Circuit holds lack of hearing before seizure of property violated due process. (240) In U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993), the Supreme Court held that the seizure of real property for forfeiture under 21 U.S.C. §881(a)(7) without prior notice and a hearing violates the owner’s due process rights. The Ninth Circuit held that Good applies retroactively in U.S. v. Real Property Located at 20832 Big Rock Drive, 51 F.3d 1402, 1405 (9th Cir. 1995). Thus, in this case, the Ninth Circuit held that the government’s failure to provide a preseizure hearing violated the claimant’s due process rights. Therefore, the claimant was entitled to damages for the loss of use and enjoyment of the property up to the time that he was given notice of the seizure and an opportunity to be heard. U.S. v. Real Property Located in El Dorado County, 59 F.3d 974 (9th Cir. 1995).
9th Circuit holds that prior approval from magistrate before seizure of real property cured any constitutional defect in 21 U.S.C. 881. (240) On its face, 21 U.S.C. §881 allows seizure of real property without prior judicial review. The 9th Circuit noted that a district court in Florida has held that, absent exigent circumstances, the constitution forbids such seizures. However, in this case the government sought prior approval from a magistrate before seizing the property. The court held that “[t]his precautionary prior judicial review sufficiently cured any possible constitutional defect.” U.S. v. Tax Lot 1500, 861 F.2d 232 (9th Cir. 1988).
10th Circuit finds violation of Good hearing rule may be basis for §1983 action against state officers. (240) Utah police officers arrested plaintiff in his home on drug charges. Thereafter, they convinced the county attorney to file a civil forfeiture action against the property, seized the residence, and barred plaintiff from returning. When the county attorney dismissed the forfeiture action, police continued to refuse plaintiff access to his home for three weeks. Plaintiff brought an action, pursuant to 42 U.S.C. §1983, for violation of his civil rights. Although most of his claims were properly dismissed on summary judgment, the Tenth Circuit found that seizure of the house without prior notice and hearing, combined with the exclusion of plaintiff from his property following dismissal of the forfeiture action, made out a cognizable claim. Molina v. Spanos, 1999 WL 626126 (10th Cir. 1999) (unpublished).
10th Circuit says Good violation does not invalidate subsequent forfeiture. (240) Claimant, a convicted drug trafficker, filed a motion for relief from judgment pursuant to Rule 60(b) Fed. R. Civ. P., eight years after the seizure of his real and personal property and four years after a civil forfeiture judgment entered against the real estate. The Tenth Circuit noted that the forfeiture judgment entered before the decision in U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993), and thus Good‘s requirement of pre-seizure notice and hearing for real estate was probably not applicable to this case. The court went on to observe that, even if Good were applicable to this case, a violation of the Good rule does not necessarily invalidate a subsequent forfeiture. So long as no impermissibly obtained evidence was introduced in the forfeiture proceeding (and it was not in this case), the only remedy is return of any rents accrued during the period of illegal seizure. Here, there were no such rents. U.S. v. 9520 S. 193rd E. Ave, Broken Arrow, OK, 172 F.3d 880 (10th Cir. 1999) (unpublished).
10th Circuit finds home seizure violated Good, but remands for finding of prejudice. (240) A drug smuggler entered into a purchase contract for a house in Taos, New Mexico, and paid the builder $150,000. The government seized the property without prior notice or a hearing, and the AUSA entered into an agreement with the builder to sell the house to a third party and surrender the $150,000 proceeds of the sale to the government. The government subsequently administratively forfeited the proceeds check. The smuggler was convicted of narcotics offenses, but sued for return of his property. The Tenth Circuit found that the seizure violated the rule of U.S. v. James Daniel Good Real Property, 510 U.S. 43, 62 (1993), requiring pre-seizure notice and hearing for the forfeiture of real property. However, the illegality of the initial seizure does not invalidate a subsequent forfeiture absent a showing of (1) a procedural default in the forfeiture action, and (2) prejudice affecting the claimant’s substantial rights. The court rejected plaintiff’s contention that the notice of forfeiture was deficient for failing to detail the illegal acts authorizing forfeiture. However, the court remanded for further proceedings on whether the two-year delay between the initial seizure and the forfeiture prejudiced the plaintiff. Juda v. Nerney, 149 F.3d 1190 (10th Cir. 1998) (table) (unpublished).
10th Circuit finds no exigent circumstances to justify lack of pre-seizure notice and hearing of real property seizure. (240) Claimant argued that the government violated its due process rights by seizing certain real property without first providing it with notice and an opportunity to be heard. The 10th Circuit agreed. Under U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993), in the absence of exigent circumstances, the due process clause prohibits the government in a civil forfeiture case from seizing real property without first affording the owner notice and an opportunity to be heard. The government’s interest in preventing claimant from further concealing its real property assets through subsequent transfers could be protected through less restrictive measures, i.e. a lis pendens, restraining order, or bond. The court ordered returned to claimant the rents collected on the property prior to the final forfeiture order. The forfeiture judgment could still stand, so long as impermissibly obtained evidence was not used in the forfeiture proceeding. U.S. v. 51 Pieces of Real Property, 17 F.3d 1306 (10th Cir. 1994).
10th Circuit holds that forfeiture notice to criminal attorney of trust’s alter ego satisfied due process. (240) In Colorado, the government brought a forfeiture action against real property in New Mexico, alleging the property was purchased in furtherance of a money laundering scheme by Austin. Legal title to the property was held by a business trust, and Austin was the trust’s alter ego. Notice of the seizure and forfeiture was sent to the trust in California, and to Austin through his criminal defense attorney. The 10th Circuit held that the notice to Austin’s defense attorney satisfied due process requirements. There was some doubt whether the notice to the address in California was adequate, since the government was aware that the person to whom the notice was sent had ceased activities with the trust in 1989. However, based on the district court’s unchallenged finding that Austin was the alter ego of the trust, notice to Austin was notice to the trust. U.S. v. 51 Pieces of Real Property, 17 F.3d 1306 (10th Cir. 1994).
11th Circuit finds no right to pre-trial probable cause hearing even though lis pendens encumbers property needed to hire counsel. (240) Defendant in this drug prosecution alleged he was prevented from retaining counsel of his choice because the government placed a forfeiture lis pendens on real property he needed to liquidate or borrow against to raise attorney’s fees. He conceded that he had no right to use forfeitable property to pay his attorney, but insisted that he did have a right to a pre-trial probable cause hearing to determine whether the government had adequate justification for seizing his assets. The Eleventh Circuit, alone among the circuits, has held that, “although pre-trial restraint of assets needed to retain counsel implicates the Due Process Clause, the trial itself satisfies this requirement.” See U.S. v. Bissell, 866 F.2d 1343, 1352-54 (11th Cir. 1989). The court intimated that Bissell should be re-examined, but held it unnecessary to do so on these facts. The court ruled that filing a lis pendens does not effectuate a seizure of real property, and therefore does not implicate any due process right to a hearing. U.S. v. Register, 182 F.3d 820 (11th Cir. 1999).
11th Circuit says posting arrest warrant and “No Trespassing” sign is seizure requiring Good hearing. (240) The government filed a civil forfeiture action against real property, obtained a warrant of arrest in rem from the district judge and executed it by posting notice of the warrant on the property. The government also placed a “No Trespassing” sign on the property (although the timing of this posting was disputed). Claimant argued that posting the warrant and the sign amounted to a seizure without the prior notice and hearing required by U.S. v. James Daniel Good Real Property, 510 U.S. 43, 48 (1993). The Eleventh Circuit conceded that posting an arrest warrant (as distinct from a seizure warrant) might not in itself always amount to a seizure under Good. However, the court concluded that posting this arrest warrant, which contained language referring to “seizure” of the property, together with the “No Trespassing” sign effected a seizure by interfering with claimant’s “right to occupy, use, enjoy, or receive rents from” the property. Accordingly, the court found a Good violation. Because the government proved its forfeiture case on the merits, the remedy was return of rent or other proceeds realized by the government between the initial seizure and the hearing on the merits. U.S. v. Land, Winston County, 163 F.3d 1295 (11th Cir. 1998).
11th Circuit, en banc, requires notice and hearing before executing seizure warrants on real property. (240) The government obtained ex parte arrest and seizure warrants for real property allegedly acquired and developed with drug money. U.S. Marshals did not evict the occupants, change the locks, post warning signs, or exercise any other form of physical control over the premises; they merely posted copies of the warrants at the premises and left. The en banc Eleventh Circuit nonetheless held that the Due Process Clause requires prior notice and an adversary hearing before the government executes a seizure warrant on real property. In its view, the Supreme Court’s decision in U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993), requiring prior notice and hearing, did not turn on the government’s discretionary decision to exercise the full extent of physical control to which a seizure warrant would legally entitle it in the absence of constitutional constraints. The court left open the possibility that the “post and walk” procedure would be constitutional for arrest rather than seizure warrants. Significantly, the court found that the proper remedy for a Good violation where property is ultimately found forfeitable is return of rents accrued between execution of the warrant and the finding of forfeitability. The court thus reversed the earlier panel decision (as well as its prior opinion in U.S. v. 2751 Peyton Woods Trail, S.W., 66 F.3d 1164 (11th Cir. 1995)) holding that the proper remedy is dismissal of the forfeiture complaint without prejudice. U.S. v. 408 Peyton Road, S.W., 162 F.3d 644 (11th Cir. 1998).
11th Circuit rules that remedy for illegal seizure is dismissal of forfeiture action. (240) Claimant argued that the government’s failure to afford him notice and a hearing before seizing his real property violated due process, and that the remedy was dismissal of the forfeiture complaint. The Eleventh Circuit agreed that the seizure was illegal, and that the proper remedy was dismissal of the forfeiture complaint. Claimant did not receive notice or a hearing before issuance of the warrants seizing his properties, as required by U.S. v. U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). The government did not allege or establish the existence of exigent circumstances that might have justified an ex parte seizure. The proper remedy was dismissal of the forfeiture complaint, rather than merely excluding the illegally seized evidence from trial and requiring the government to pay any rents accrued during the illegal seizure. Suppression of seized evidence provides no remedy at all when the purpose of the seizure is not to acquire evidence but to assert a possessory interest over the property. Any remedy short of dismissal would vitiate the purpose of Good. U.S. v. 2751 Peyton Woods Trail, S.W., 66 F.3d 1164 (11th Cir. 1995).
D.C. District Court says filing lis pendens without notice not due process violation, but using it as settlement leverage is. (240) The government filed an in rem civil forfeiture action against several pieces of real property belonging to a suspected drug trafficker and his wife. Arrest warrants for the property were obtained and copies posted at the property. The government also filed lis pendens in Maryland land records. The wife filed a claim to the property, and argued, inter alia, that posting the warrants and filing the lis pendens amounted to a deprivation of property rights without prior notice and hearing in violation of U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). The D.C. District Court held that neither posting the warrants nor filing the lis pendens violated the rule of Good. However, the court went on to say that the government did commit a due process violation when it used the lis pendens on the house where claimant lived as leverage to force a settlement regarding a second parcel. The court dismissed the forfeiture action as against both properties without prejudice. U.S. v. Property Identified as Lot Numbered 718, 20 F.Supp.2d 27 (D.C.D.C. 1998).
Alabama District Court refuses to issue arrest warrant in rem for real property without prior hearing. (240) The government filed a civil forfeiture complaint against real property in Alabama and asked the district court to issue arrest warrants in rem, but stay their execution until notice was given to the property owners and an adversarial hearing was held. The court refused to do so, relying on the Eleventh’s Circuit’s opinion in U.S. v. 408 Peyton Road, 112 F.3d 1106 (11th Cir. 1997) reh. en banc granted, 133 F.3d 1378 (11th Cir. Jan. 23, 1998), which held that the government’s “post and walk” policy (i.e., posting a copy of a seizure warrant and filing a lis pendens, but not taking physical control of premises until after a hearing) violated U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). In the present case, the government proposed only to post a copy of the warrant, and not to file a lis pendens. The government argued that the court lacked jurisdiction over the property until a warrant was issued and executed. The court held that it made no sense to issue an arrest warrant while simultaneously prohibiting the government from executing it. Instead, the court authorized the marshals to post notice of the forfeiture proceedings on the property. U.S. v. Two Parcels of Real Property Located at 101 North Liberty Street, 80 F.Supp.2d 1298 (M.D. Ala. 2000).
Florida District Court provisionally endorses form of arrest warrant in rem. (240) In this case, the district court attempted to resolve confusion over the proper form of arrest warrants in rem for real property resulting from the Eleventh Circuit’s opinion in U.S. v. 408 Peyton Road, 163 F.3d 644 (11th Cir. 1998). In light of 408 Peyton Road, the court was unsure that issuance and service of any ex parte arrest warrant for real property could comply with the dictates of due process. The district court asked that the government resubmit its proposed warrant to include language suggested in U.S. v. Real Property Located at 3284 Brewster, 949 F.Supp. 832 (M.D. Fla. 1996). The revised warrant would state that, [t]he real property is deemed released immediately after arrest,” and that the warrant does not interfere “with the owners’ right to maintain control over their property.” U.S. v. Real Property … Located at 31236 Anna Street, Lake Mack, Florida, 47 F.Supp.2d 1350 (M.D. Fla. 1999).
Nevada District Court says income from self-storage business must be returned after Good violation. (240) The government seized claimant’s self-storage business in Hawaii, as fruits or instrumentalities of crime. The seizure occurred without the prior notice and hearing required for seizures of real estate by U.S. v. James Daniel Good Real Property, 510 U.S. 43 (1993). In a prior order, the district court ruled that Good did not require the government to return the income generated by the self-storage business after the seizure because that income was personal property and not rent. In the present opinion, the court reconsidered and concluded that under Hawaii law a rental of storage space did not create a contract for a bailment, but a lease. Accordingly, the revenue from the storage business was rent which had to be returned to claimant by the government. The court went on to hold that restoration must occur immediately. Because under Good rental income derived before a full due process hearing on the merits is not forfeitable even if the real estate ultimately proves to be, the government could not hold the money until final resolution of the case. U.S. v. Real Property Located at Incline Village, 976 F.Supp. 1321 (D. Nev. 1997).