Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_04-cv-06733/USCOURTS-caed-1_04-cv-06733-0/pdf.json

Nature of Suit Code: 625
Nature of Suit: Drug Related Seizure of Property
Cause of Action: 21:881 Forfeiture Property-Drugs

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The subject Lexus’ vehicle identification number is JT8BH68X6X0018002, and its license number is 1

5CKC924.

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, CASE NO. CV F 04-6733 AWI LJO

Plaintiff, FINDINGS AND RECOMMENDATIONS ON

PLAINTIFF’S APPLICATION FOR DEFAULT

vs. JUDGMENT

(Doc. 21.)

1999 LEXUS GS 400, VIN

JT8BH68X6X0018002, LICENSE

NUMBER 5CKC924,

Defendants.

 /

INTRODUCTION

In this civil forfeiture action, plaintiff United States of America (“Government”) seeks:

1. Default judgment against the interests of three individuals and a used car business in a

1999 Lexus GS 400 automobile (“Lexus”); and 1

2. Entry of a final forfeiture judgment to vest in the Government all right, title and interest

in the Lexus.

This Court considered the Government’s default and final forfeiture judgment motion on the record and

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No timely opposition papers were filed. Pursuant to this Court’s Local Rule 78-230(c), no opposing party 2

is entitled to oral argument in the absence of timely filed opposition papers.

The below factual recitation is based on the Government’s papers and record before this Court. 3

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without oral argument or the now vacated August 25, 2006 hearing, pursuant to this Court’s Local Rule

78-230(c) and (h). For the reasons discussed below, this Court RECOMMENDS to: 2

1. GRANT the Government default judgment and to ENTER final forfeiture judgment to

vest in the Government all right, title and interest in the Lexus; and

2. ORDER the Government, within 10 days of service of an order adopting these findings

and recommendations, to submit a proposed default and final forfeiture judgment

consistent with these findings and recommendations. 

BACKGROUND3

Lexus Seizure

In October 2001, Monica Morales (“Ms. Morales”) purchased the Lexus from Martinez Used

Cars. According to Ms. Morales, her brother Frank Gabriel Romero (“Mr. Romero”) arranged purchase

details, and she signed no paperwork. After approximately six months, Ms. Morales could not afford

the Lexus payments and gave the Lexus to Mr. Romero. An April 29, 2004 California Certificate of

Title indicates that Ms. Morales released her interest in the Lexus to “James Romero,” the Lexus’

current listed registered owner.

Mr. Romero was a target of a methamphetamine distribution investigation and made three onepound sales of methamphetamine to a cooperating witness. On July 21, 2004, federal law enforcement

officers executed a search warrant at Mr. Romero’s Turlock, California apartment and seized the Lexus,

methamphetamine, a loaded gun, and other objects associated with methamphetamine distribution. Mr.

Romero was arrested for conspiracy to distribute methamphetamine.

The Federal Bureau of Investigation (“FBI”) initiated an administrative forfeiture action against

the Lexus and noticed all potential claimants. James Roque (“Mr. Roque”) filed a September 10, 2004

claim in the FBI forfeiture proceedings to claim that the Lexus “belongs to me although the title was

erroneously named as James Romero, instead of James Roque.” Neither Mr. Romero nor Ms. Morales

filed a claim in the FBI forfeiture proceedings.

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In October 2004, law enforcement officers interviewed Mr. Romero in his attorney’s presence.

Mr. Romero stated that he started to deal methamphetamine in 2001 and used drug proceeds to purchase

his vehicles.

The Government’s Claims

On December 20, 2004, the Government filed its complaint for forfeiture in rem (“complaint”)

in this action to claim that the Lexus is subject to forfeiture to the Government under 21 U.S.C. §

881(a)(6) because it constitutes monies or other things of value furnished or intended to be furnished

in exchange for a controlled substance or proceeds traceable to such an exchange, and/or were used or

intended to be used to facilitate violation of 21 U.S.C. §§841, et seq. Also on December 20, 2005, this

Court issued a warrant and summons for arrest in rem (“arrest warrant”) for the Lexus. The warrant was

executed on January 6, 2005.

Notice Of Forfeiture Action

This Court issued its December 20, 2004 order for publication (“publication order”) for the

Government to provide public notice of this action and arrest of the Lexus by publication in the Modesto

Bee. Such notice appeared in the Modesto Bee on April 21 and 28, 2005 and May 5, 2005, and the

Government filed proof of such publication on May 20, 2005.

On December 29, 2004, the Government by certified mail served Mr. Romero and Mr. Roque’s

attorneys copies of the complaint, arrest warrant, publication order and court notices. On March 22,

2005, the Government personally served Ms. Morales with copies of the complaint, arrest warrant,

publication order and court notices. On March 24, 2005, the Government personally served Mr. Romero

with copies of the complaint, arrest warrant, publication order and court notices. On May 6, 2005, a

deputy U.S. Marshal personally served on Mr. Roque’s daughter at his home copies of the complaint,

arrest warrant, publication order and court notices. The Government characterizes Mr. Roque’s daughter

as “a person of suitable age and discretion.”

The Government by certified mail had served Martinez Used Cars copies of the complaint, arrest

warrant, publication order and court notices on December 21, 2004.

On March 22 and 25, 2005 and May 6, 2005, a deputy U.S. Marshal attempted to serve “James

Romero” with copies of the complaint, arrest warrant, publication order and court notices at the Turlock

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address listed on the Lexus’ title documents. The deputy U.S. Marshal left a note on the residence’s

door after unsuccessful service attempts. When the deputy U.S. Marshal served Mr. Roque’s daughter

on May 6, 2005, the deputy U.S. Marshal determined from the daughter that no “James Romero” exists

in the family.

Stipulation For Final Forfeiture Judgment And Default Entries

Mr. Romero and the Government entered into a December 13, 2005 stipulation for final

forfeiture judgment by which Mr. Romero agreed to forfeit his right, title and interest in the Lexus and

that:

1. He is the Lexus’ sole owner;

2. The Lexus’ title was placed in James Romero’s name to disguise Mr. Romero’s true

ownership interest;

3. There is no James Romero in his family; 

4. The Lexus was in Mr. Romero’s possession when seized on July 21, 2004; and

5. There was reasonable cause for seizure/arrest of the Lexus.

In a December 2004 interview with an FBI agent, Ms. Morales noted that she did not know

James Romero, the Lexus’ listed registered owner, and there was no James Romero in her immediate

or extended family. Ms. Morales noted that she had no knowledge that Mr. Roque, her cousin, owned

the Lexus and had never seen Mr. Roque drive the Lexus.

After the Government’s requests, this Court’s clerk entered in this action June 8, 2005 defaults

against Mr. Romero, Ms. Morales, Mr. Roque, and Martinez Used Cars. 

DISCUSSION

Complaint’s Sufficiency

The Government contends that its complaint’s allegations and issuance of the arrest warrant

based on probable cause “provide ample basis” for the Lexus’ forfeiture. A complaint’s sufficiency is

a factor to consider whether to grant default judgment. Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th

Cir. 1986). The Government notes that its complaint’s allegations arise from the underlying parallel

criminal prosecution of Mr. Romero. Thus, according to the Government, the Lexus is subject to

forfeiture under 21 U.S.C. 881(a)(6) (“all proceeds traceable” to monies exchanged for a controlled

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substance are subject to forfeiture).

The Government attributes Mr. Romero to admit that he purchased the Lexus with monies from

methamphetamine sales. Mr. Romero entered into a written stipulation to forfeit his right, title and

interest in the Lexus and to acknowledge, among other things, that he is the Lexus’ sole owner and

possessed the Lexus when it was seized, and that there was reasonable cause for seizure/arrest of the

Lexus. As noted by the Government, Mr. Romero pled guilty to conspiracy to manufacture and

distribute methamphetamine. In the absence of assertion of other interests in the Lexus, this Court is

not in a position to question the sufficiency of the Government’s claims in this action.

Notice Requirements

The Government contends that it provided required notice for the Lexus’ forfeiture. The Fifth

Amendment’s Due Process Clause prohibits the Government to deprive property without “due process

of law.” Individuals whose property interests are at stake are entitled to “notice and an opportunity to

be heard.” United States v. James Daniel Good Real Property, 510 U.S. 43, 48, 114 S.Ct. 492 (1993).

Judicial property forfeitures are governed by the Supplemental Rules for Certain Admiralty and

Maritime Claims (“Supplemental Rules”). Supplemental Rule C(4) requires the Government to give

notice of forfeiture proceedings by publication alone. This Court’s Local Admiralty and In Rem Rules

echo Supplemental Rule C(4)’s notice of forfeiture action by court-ordered publication in a newspaper

of general circulation in the district where the action is filed. See Local Rule A-530 (incorporating Local

Rule 83-171 by which court is to designate appropriate newspaper and manner of publication). The

Government accomplished such notice with the publication order and publishing notice of this action

and the arrest of the Lexus in the Modesto Bee in spring 2005.

However, when the Government knows of an owner of defendant property, the owner has a

constitutional right of due process to require “the Government to make a greater effort to give him notice

than otherwise would be mandated by Supplemental Rule C(4).” United States v. Real Property, 135

F.3d 1312, 1315 (9 Cir. 1998). For such persons, the Government must attempt to provide actual notice th

by means “‘reasonably calculated under all circumstances’ to apprise [the person] of the pendency of

the . . . forfeiture[.]” Dusenberry v. United States, 534 U.S. 161, 168, 122 S.Ct. 694 (2002). The

Government must provide such notice “as one desirous of actually informing the absentee might

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reasonably adopt to accomplish it.” Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 315,

70 S.Ct. 652 (1950). “Reasonable notice, however, requires only that the government attempt to provide

actual notice; it does not require that the government demonstrate that it was successful in providing

actual notice.” Mesa Valderrama v. United States, 417 F.3d 1189, 1197 (11 Cir. 2005). th

This Court’s Local Rule A-540 addresses notice to persons known to have an interest in property

subject to forfeiture. The rule requires that a party seeking default judgment in an action in rem to show

to the Court’s satisfaction that due notice and arrest of the property has been given by: (1) publication;

(2) if the property is in the hands of a law enforcement officer, by personal service on the person having

custody prior to its possession by law enforcement agency or officer; and (3) by personal service or

certified mail, return receipt requested, to every other person who has not appeared in the action and is

known to have an interest in the property; provided that failure to give actual notice to such other person

may be excused upon a satisfactory showing of diligent efforts to give such notice without success.

Local Rule A-540(a).

Putting aside the Supplemental Rules and Local Rule A-540(a), the Government provides

sufficient notice if such notice complies with F.R.Civ.P. 4 requirements. See F.R.Civ.P. 4(n)(1) (when

a federal statute authorizes forfeiture, “[n]otice to claimants of the property shall then be sent in the

manner provided by statute or by service of a summons under this rule.”)

Here, the Government personally served Mr.Romero and Ms. Morales with the complaint, arrest

warrant, publication order and court notices. The Government accomplished substituted service of the

documents on Mr. Roque. See F.R.Civ.P. 4(e)(2). The Government took further measures to provide

notice by certified mail to attorneys for Mr. Romero and Mr. Roque and to Martinez Used Cars. The

record demonstrates and Mr. Romero admitted that “James Romero” does not exist. Of key importance,

Mr. Romero stipulated that he is the Lexus’ sole owner and possessed it when seized and that reasonable

cause exists to seize/arrest the Lexus. No notice issues arise as to the Lexus’ forfeiture.

Failure To Answer

The Government contends that this Court’s clerk properly entered defaults against Mr. Romero,

Ms. Morales, Mr. Roque and Martinez Used Cars. Supplemental Rule C(6)(a) addresses responsive

pleadings in civil forfeiture actions such as this and requires a person who asserts an interest in or right

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against the subject property to file a verified statement to identify the interest or right within 30 days

after the earlier of: (1) service of the Government’s complaint; or (2) completion of publication notice.

Failure to comply with Supplemental Rule C(6) requirements precludes a person to establish standing

as a party to a forfeiture action. Real Property, 135 F.3d at 1317. 

As outlined above, the Government by certified mail served Martinez Used Cars with the

complaint on December 21, 2004. The Government personally served its complaint on Ms. Morales on

March 22, 2005 and on Mr. Morales on March 24, 2005. Publication notice was completed on May 5,

2005, and the Government filed proof of such publication notice on May 20, 2005. The Government

accomplished substituted service of its complaint on Mr. Roque on May 6, 2005. More than 30 days

have passed since completion of publication notice and since service of the complaint on Mr. Romero,

Ms. Morales, Mr. Roque and Martinez Used Cars. This Court’s clerk properly entered defaults upon

failure of the potential claimants to respond to the Government’s complaint and notices.

Default Judgment

The Government seeks judgment against the interests of Mr. Romero, Ms. Morales, Mr. Roque

and Martinez Used Cars and final forfeiture judgment to vest in the Government all right, title and

interest in the Lexus. The Supplemental Rules do not provide a procedure to seek default judgment.

Supplemental Rule A provides: “The general Rules of Civil Procedure for the United States District

Courts are also applicable to the foregoing proceedings except to the extent that they are inconsistent

with these Supplemental Rules.”

Default entry is a prerequisite to default judgment. F.R.Civ.P. 55(a) governs entry of default:

“When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise

defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall

enter the party’s default.” Generally, the default entered by the clerk establishes a defendant’s liability:

Rule 55 gives the court considerable leeway as to what it may require as a

prerequisite to the entry of a default judgment. “The general rule of law is that upon

default the factual allegations of the complaint, except those relating to the amount of

damages will be taken as true.” (citations omitted). Geddes v. United Financial Group,

559 F.2d 557, 560 (9 Cir. 1977). th

Televideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917-918 (9 Cir. 1987). th

As noted above, the Government properly obtained default entries against the interests of Mr.

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Romero, Ms. Morales, Mr. Roque and Martinez Used Cars. There is no impediment to default judgment

sought by the Government as to them. The Government has entered into a stipulation for final forfeiture

judgment with Mr. Romero. Nonetheless, the Government seeks judgment against the interests of the

entire world, that is, a final forfeiture judgment to vest in the Government all right, title and interest in

the Lexus. “A judgment in rem affects the interests of all persons in designated property. . . . [T]he

plaintiff is seeking to secure a pre-existing claim in the subject property and to extinguish or establish

the nonexistence of similar interests of particular persons.” Hanson v. Denckla, 357 U.S. 235, 246, n.

12, 78 S.Ct. 1228 (1958).

In light of the defaults and stipulation for final judgment noted above, a final forfeiture judgment

is in order for the Government.

RECOMMENDATIONS AND ORDER

For the reasons discussed above, this Court RECOMMENDS to:

1. GRANT plaintiff United States of America default judgment against the interests of

Frank Gabriel Romero, Monica Morales, James Roque and Martinez Used Cars in the

1999 Lexus GS 400, vehicle identification number JT8BH68X6X0018002, license

number 5CKC924;

2. ENTER final forfeiture judgment to vest in plaintiff United States of America all right,

title and interest in the 1999 Lexus GS 400, vehicle identification number

JT8BH68X6X0018002, license number 5CKC924; and

3. ORDER plaintiff United States of America, within 10 days of service of an order

adopting the findings and recommendations, to submit a proposed default and final

forfeiture judgment consistent with the findings and recommendations and order

adopting them. 

These findings and recommendations are submitted to the district judge assigned to this action,

pursuant to 28 U.S.C. § 636(b)(1)(B) and this Court’s Local Rule 72-304. No later than August 31,

2006, any party may file written objections to these findings and recommendations with the Court and

serve a copy on all parties and the magistrate judge and otherwise in compliance with this Court’s Local

Rule 72-304(b). Such a document should be captioned “Objections to Magistrate Judge’s Findings and

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Recommendations.” Responses to objections shall be filed and served no later than September 11, 2006

and otherwise in compliance with this Court’s Local Rule 72-304(d). A copy of the responses shall be

served on the magistrate judge. The district judge will review the magistrate judge’s findings and

recommendations, pursuant to 28 U.S.C. § 636(b)(1)(c). The parties are advised that failure to file

objections within the specified time may waive the right to appeal the district judge’s order. Martinez

v. Ylst, 951 F.2d 1153 (9th Cir. 1991). 

IT IS SO ORDERED.

Dated: August 17, 2006 /s/ Lawrence J. O'Neill 

66h44d UNITED STATES MAGISTRATE JUDGE

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