Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_04-cv-06572/USCOURTS-caed-1_04-cv-06572-1/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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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, et )

al., )

)

Plaintiff, )

v. )

)

APPROXIMATELY $37,000.00 IN )

U.S. CURRENCY, )

)

Defendant. )

)

 )

1:04-CV-06572-AWI-SMS

FINDINGS AND RECOMMENDATION

RE: PLAINTIFF’S MOTION FOR

DEFAULT JUDGMENT (DOC. 16)

Plaintiff is proceeding with a civil action in this Court.

The matter has been referred to the Magistrate Judge pursuant to

28 U.S.C. § 636(b) and Local Rules 72-302(c)(19) and 72-303.

Pending before the Court is Plaintiff’s motion for default

judgment, which is set for hearing on October 14, 2005.

I. Background

On October 14, 2005, the matter came on regularly for

hearing at 9:37 a.m. in the Courtroom of the Honorable Sandra M.

Snyder, United States Magistrate Judge. Kristi C. Kapetan,

Assistant United States Attorney, appeared on behalf of

Plaintiff. There was no appearance on behalf of Defendant.

A verified complaint for forfeiture in rem was filed on

November 18, 2004, which alleged that the Defendant currency was

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subject to forfeiture because it was furnished or intended to be

furnished in exchange for a controlled substance, was proceeds

traceable to such an exchange, and/or was used or intended to be

used to facilitate one or more violations of 21 U.S.C. § 841 et

seq. It was further alleged that Defendant currency was subject

to forfeiture to the United States pursuant to 21 U.S.C. §

881(a)(6), based on further allegations that on or about April

29, 2004, the currency was located at 2854 South Thompson in

Sanger, California, during a search of the residence of Pam

Nunthatee (Pam), wife of Mahesak Nunthatee, and of Mahesak

Nunthatee (Mahesak), the lessee and cultivator of a field on

which over 1,800 marijuana plants had been discovered growing

nine days previously. Most of the money was found in a safe to

which co-resident Pam indicated that only Mahesak had access;

thirteen bags of marijuana were found on the property, as well as

a loaded handgun, a shotgun, a spotting scope, night vision

goggles, binoculars, and radio headsets. Although Pam claimed

that $10,000 of cash belonging to her was in the safe in a black

bag, the bag in the safe was empty. A narcotics canine positively

alerted to the money. Storage facilities located at another site

and leased to Mahesak were searched and revealed forty pounds of

marijuana as well as items consistent with agricultural

cultivation. On or about April 29, 2004, Mahesak was arrested for

cultivation of marijuana, and he pleaded guilty on or about June

2, 2004, to a violation of Cal. Health & Saf. Code § 11358,

cultivation of marijuana.

Plaintiff asserts that the Court issued a warrant of arrest

in rem for the currency on November 18, 2004. However, Plaintiff

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has not specifically identified the warrant as part of the record

of the Court as required by Local Rule 43-142. The Court notes

that the warrant appears in the Court’s record between documents

2 and 3 of the Court’s docket; it is not docketed as such. 

On November 18, 2004, the Court ordered publication pursuant

to Rule C(4) of the Supplemental Rules of Certain Admiralty and

Maritime Claims, directing that notice of the action and arrest

be given in the Fresno Business Journal, a legal newspaper of

general circulation, including the Court, title and number of the

action; date of the arrest/seizure; identity and/or description

of the property arrested/seized; the name, address, and telephone

number of the attorney for Plaintiff; a statement that claims of

persons entitled to possession or claiming an interest pursuant

to Supplemental Rule C(6) of the Federal Rules of Admiralty must

be filed with the Clerk and served on the Plaintiff’s attorney

within thirty days after the date of publication; a statement

that answers must be filed and served within twenty days after

the filing of the claim, and that in the absence thereof, default

might be entered and condemnation ordered; a statement that

applications for intervention under Fed. R. Civ. P. 24 by persons

claiming maritime liens or other interests should be filed within

the thirty days allowed for claims for possession; and the name,

address, and telephone number of the United States Marshal and/or

Department of Treasury. 

On January 13, 2005, a declaration of publication was filed

that established notice of the arrest of November 24, 2004, and

publication of all other information as required by the Court’s

order and by Local Rule A-530.

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Declarations filed with the Court further establish

additional notice in the form of personal service of the

complaint, warrant and summons for arrest, application and order

for publication, and court notices upon Pam Nunthatee, wife of

Mahasek, on December 14, 2004 (Decl. of Tammy Teglia, and proof

of service attached, Doc. 9); upon Lamai Nunthatee on March 11,

2005 (Decl. of Autumn Magee, and proof of service attached, Doc.

12); and upon Mahesak by way of service upon Pam Nunthatee, wife

of Mahesak, a person of suitable age and discretion then residing

in Mahesak’s usual place of abode, on March 11, 2005 (Decl. of

Autumn Magee, and proof of service attached, Doc. 14).

Supplemental declarations of Teglia and Magee filed on October

14, 2005, establish that Mahesak had actual notice of the

forfeiture proceeding within the time period for filing a claim. 

The declarations submitted in connection with the

applications for default against Pam, Lamai, and Mahesak,

referred to above, establish that no claim or answer has been

filed on behalf of any of those individuals. A review of the

Court’s docket shows that no claim or answer has been filed.

Defaults were entered against Pam on February 22, 2005; against

Lamai on May 6, 2005; and against Mahesak on June 10, 2005.

On August 18, 2005, Plaintiff filed an ex parte motion for

default judgment with a memorandum of points and authorities; a

proof of service establishes that it was served by mail on

Mahesak at the address last indicated in the record to have been

his usual place of residence (Docs. 17, 14). Supplemental points

and authorities were filed on September 12, 2005, with a proof of

service by mail on Mahesak. 

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II. Default Judgment

A court has the discretion to enter a default judgment

against one who is not an infant, incompetent, or member of the

armed services where the claim is for an amount that is not

certain on the face of the claim and where 1) the defendant has

been served with the claim; 2) the defendant’s default has been

entered for failure to appear; 3) if the defendant has appeared

in the action, the defendant has been served with written notice

of the application for judgment at least three days before the

hearing on the application; and 4) the court has undertaken any

necessary and proper investigation or hearing in order to enter

judgment or carry it into effect. Fed. R. Civ. P. 55(b); Alan

Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th

Cir. 1988). Factors that may be considered by courts in

exercising discretion as to the entry of a default judgment and

as to setting aside a default include the nature and extent of

the delay, Draper v. Coombs, 792 F.2d 915, 924-925 (9th Cir.

1986); the possibility of prejudice to the plaintiff, Eitel v.

McCool, 782 F.2d 1470, 1471-72 (9th Cir.1986); the merits of

plaintiff's substantive claim, id.; the sufficiency of the

allegations in the complaint to support judgment, Alan Neuman

Productions, Inc., 862 F.2d at 1392; the amount in controversy,

Eitel v. McCool, 782 F.2d at 1471-1472; the possibility of a

dispute concerning material facts, id.; whether the default was

due to excusable neglect, id.; and the strong policy underlying

the Federal Rules of Civil Procedure that favors decisions on the

merits, id.

With respect to default judgments in proceedings that are in

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rem actions for forfeiture, both the general Federal Rules of

Civil Procedure and the Supplemental Rules for Certain Admiralty

and Maritime Claims (Supp. R.) apply, but the latter rules

prevail if there is an inconsistency. Supp. R. A(1). Supp. R.

C(1)(a) permits an action in rem to be brought whenever a statute

of the United States provides for a proceeding analogous to a

maritime action in rem. Title 21 U.S.C. § 881(d) provides that

the provisions of law relating to the seizure, summary and

judicial forfeiture, and condemnation of property for violation

of the customs laws apply to forfeitures and seizures alleged to

have been incurred under that subchapter. 

Title 21 U.S.C. § 881(a)(6) provides that all money,

negotiable instruments, securities, or other things of value

furnished or intended to be furnished by any person in exchange

for a controlled substance or listed chemical in violation of the

subchapter, all proceeds traceable to such an exchange, and all

moneys or any property used or intended to be used to facilitate

any violation of the subchapter are subject to forfeiture to the

United States, and no property right shall exist in them. 

Tile 21 U.S.C. § 881(b) provides that any such property may

be seized by the Attorney General in the manner set forth in 18

U.S.C. § 981(b).

III. Analysis

A. Notice

Civil forfeiture actions involving personal property are

subject to the notice requirements of the Supplemental Rules for

Certain Maritime and Admiralty Cases (Supp. R.), which in turn

require the government to give notice of forfeiture proceedings

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by publication. Supp. Rule C(4). Further, Local Rule A-530

governs the publication of notice of action and arrest, requiring

the information ordered by the Court herein in its order dated

November 18, 2004.

Further, the due process clause of the Fifth Amendment,

which confers a right to notice and an opportunity to be heard,

requires that with respect to known owners of the property whose

whereabouts are known, the government must employ such notice as

is reasonably calculated under all of the circumstances to

apprise the person of the pendency of the forfeiture. United

States v. Real Property, 135 F.3d 1312, 1315 (9th Cir. 1998);

Dusenbery v. United States, 534 U.S. 161, 168 (2002) (holding

that sending certified mail to the custodial institution where

the party was being held as well as to the residence where the

arrest occurred, and the address in the town where his mother

lived, satisfied due process even though it did not result in

actual notice to the person).

Further, Local Rule A-540(a) requires that a party seeking a

default judgment in an action in rem shall show to the

satisfaction of the Court that due notice of the action and

arrest of the property has been given by publication pursuant to

Local Rule A-530, and by personal service on the person having

custody of the property or on the person having custody prior to

its possession by a law enforcement agency or officer, and by

personal service or by 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

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satisfactory showing of diligent efforts to give such notice

without success.

The Court finds that the required personal service has been

effected on Pam, Lamai, and Mahesak Nunthatee.

B. Default

A person who might claim an interest in or right against

property that is the subject of a forfeiture action such as that

before the Court must file a verified claim identifying the

interest or right within thirty days after the earlier of 1) the

date of service of the government’s complaint, or 2) the

completion of publication. Supp. R. C(6). A person who files a

statement of interest or right must serve and file an answer

within twenty days after filing the statement. Id.

Here, the declarations and the docket reveal that no claims,

statements, or answers have been filed despite the completion of

publication by December 6, 2004, and the service of the complaint

at the latest on March 11, 2005. Thus, there has been a default,

as reflected by the Clerk’s entry of default against Pam, Lamai,

and Mahesak. A failure to file a timely claim under Supp. R. C(6)

precludes one from establishing statutory standing as a party to

the forfeiture action. See United States v. Real Property, 135

F.3d 1312, 1317 (9th Cir. 1998).

C. Sufficiency of the Complaint

The relevant portions of Supp. R. Adm. C(2) indicates that,

in an action in rem, the complaint must:

(a) be verified; 

(b) describe with reasonable particularity the property that

is the subject of the action;

. . . 

(d) in a forfeiture proceeding for violation of a federal

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statute, state: (i) the place of seizure and whether it was

on land or on navigable waters; (ii) whether the property is

within the district, and if the property is not within the

district the statutory basis for the court’s exercise of

jurisdiction over the property; and (iii) all allegations

required by the statute under which the action is brought.

Further, 18 U.S.C. § 984(a)(1) provides that it shall not be

necessary for the government to identify the specific property

involved in the offense that is the basis for the forfeiture in

any forfeiture action in rem in which the subject property is

cash, monetary instruments in bearer form, funds deposited in an

account in a financial institution, or precious metals. 

Here, the complaint was verified, the property was described

as United States currency of specified amounts, and the place of

seizure and its location in the district was specified. (Cmplt.

at 1-4.)

As to the allegations required by the statute under which

the action is brought, 21 U.S.C. § 881(a)(6) renders subject to

forfeiture currency furnished or intended to be furnished in

exchange for a controlled substance, and all proceeds traceable

to such an exchange and/or used or intended to be used to

facilitate a violation of the subchapter, which includes

manufacture, distribution, or possession with intent to

manufacture or distribute marijuana, a Schedule I controlled

substance, 21 U.S.C. §§ 812(c), 841(a). The complaint alleges

that law enforcement officers located over 1,800 marijuana plants

growing in a field tended by Mahesak, officers believed 4,000

marijuana plants had previously been harvested, many pounds of

marijuana were found in locations controlled by Mahesak, and cash

and guns were found as well. The currency was subject to a

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positive alert by a drug canine, cultivation paraphernalia were

also found with forty more pounds of marijuana in storage

containers controlled by Mahesak, and Mahesak was arrested for

possession, cultivation, and possession for sale as well as being

armed. Mahesak pled guilty to cultivation of marijuana in state

court.

Under the Civil Asset Forfeiture Reform Act (CAFRA), which

applies to this case, the government must prove by a

preponderance of evidence that the property is subject to

forfeiture. 18 U.S.C. § 983(c)(1). Further, the government must

establish that there was a substantial connection between the

property and the offense. § 983(c)(3). 

Here, from the factual allegations of the complaint

regarding the marijuana plants, cultivation paraphernalia and

associated weapons, large amounts of cash, and canine alert to

the cash, it may reasonably be inferred that Mahesak cultivated

large quantities of a controlled substance, had harvested and

intended to continue to harvest large quantities of the

substance, and had already engaged in substantial sales

transactions of the substances. The government showed by a

preponderance of the evidence that the property, which was cash,

constituted either proceeds of the sale of a controlled substance

or was used or intended to be used to facilitate a violation of

the subchapter; further, given the circumstances of its quantity,

location, and discovery, the government established by a

preponderance that the property seized was closely connected to

the commission of an offense involving the controlled substance.

See United States v. Currency, U.S., $42,500.00, 283 F.3d 977,

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984 n.1 (9th Cir. 2002); U.S. v. $10,700.00 in U.S. Currency, 258

F.3d 215, 223 n. 6 (3d Cir. 2001). The substantive allegations of

the complaint were sufficient to establish by a preponderance of

the evidence that the property was subject to forfeiture. 

D. Judgment

Local Rule A-540(d) provides that upon a showing that no one

has appeared to claim the property and give security, and that

due notice of the action and arrest of the property has been

given, a party may move for judgment at any time after the time

for answer has expired; if no one has appeared, the party may

have an ex parte hearing before the Court and judgment without

further notice.

Here, no one has claimed an interest in the property or

otherwise responded to the complaint despite adequate notice. It

does not appear that there is any risk of mistake or excusable

neglect on the part of anyone with a potential interest in the

property or of a dispute as to a material fact essential to the

government’s case. No just cause for delay appears. It is

apparent from the declarations submitted to the Court that none

of the potential claimants is an infant, incompetent, or member

of the armed services. There does not appear to be any reason why

the general policy in favor of a decision on the merits would

warrant refusing to enter the requested default judgment. 

Accordingly, the Court finds that Plaintiff has shown its

entitlement to a default judgment of forfeiture.

With respect to the form of the judgment, Plaintiff has

established that it is entitled to a judgment against the

property, Waterloo Distilling Corp. v. U.S., 282 U.S. 577, 581

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(1931), affecting the interests of all persons in the property,

Hanson v. Denkla, 357 U.S. 235, 246 n.12 (1958).

 RECOMMENDATION

Accordingly, it IS RECOMMENDED that

1. Plaintiff’s motion for default judgment BE GRANTED; and

2. Plaintiff IS ENTITLED to, and the Clerk SHOULD ENTER, a

judgment that 

a) The interest/s of Pam Nunthatee, Lamai Nunthatee,

and Mahesak Nunthatee in the Defendant property are condemned and

forfeited to the United States of America; and

b) The right, title, and interest of potential

claimants Pam Nunthatee, Lamai Nunthatee, and Mahesak Nunthatee 

in the Defendant property are forfeited to the United States of

America pursuant to 21 U.S.C. § 881(a)(6), and are vested in the

United States; and

c) All persons claiming any right, title, or interest

in or to the Defendant property have defaulted and no longer have

any right, title, or interest in the Defendant property

whatsoever; and

3. The Clerk ENTER final judgment of forfeiture for

Plaintiff United States. 

This report and recommendation is submitted to the United

States District Court Judge assigned to the case, pursuant to the

provisions of 28 U.S.C. § 636 (b)(1)(B) and Rule 72-304 of the

Local Rules of Practice for the United States District Court,

Eastern District of California. Within thirty (30) days after

being served with a copy, any party may file written objections

with the court and serve a copy on all parties. Such a document

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should be captioned “Objections to Magistrate Judge’s Findings

and Recommendations.” Replies to the objections shall be served

and filed within ten (10) court days (plus three days if served

by mail) after service of the objections. The Court will then

review the Magistrate Judge’s ruling 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 Court’s order. Martinez v. Ylst, 951 F.2d

1153 (9th Cir. 1991).

IT IS SO ORDERED.

Dated: October 17, 2005 /s/ Sandra M. Snyder 

icido3 UNITED STATES MAGISTRATE JUDGE

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