Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-04552/USCOURTS-cand-3_06-cv-04552-4/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

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

 v.

$50,040 IN UNITED STATES CURRENCY,

Defendant. /

MICHAEL MOSS,

Claimant. /

No. C 06-04552 WHA

ORDER DENYING CLAIMANT’S

MOTION TO DISMISS

INTRODUCTION

In this civil forfeiture action, claimant Michael Moss moves to dismiss the complaint

under Federal Rule of Civil Procedure 12(b)(6). The parties disagree as to the standard of

review in a civil forfeiture case. This order finds that the complaint sufficiently states a claim

under both Rule G and Rule E(2)(a). Accordingly, claimant’s motion to dismiss the complaint

is DENIED.

STATEMENT

On March 29, 2006, members of the San Francisco International Airport Drug

Enforcement Task Force and the South San Francisco Police Department inspected a Federal

Express Facility. Special Agent Willie Byrd noticed a brown cardboard box with a handwritten

air bill, stating that the sender paid $43.95 in cash for standard overnight delivery. The parcel

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was assigned tracking number 856031677262. It was addressed to Ryan Lynch, 3145 Geary

Blvd. #328, San Francisco, CA. It bore the return address of Michael Moss, 271 Blue Sage

Circle, Steamboat, CO 80477. 

Detective Marty Mahon had his certified narcotic detection canine, “Maximus,”

examine the area containing numerous parcels. After conducting a search, Maximus made a

positive alert to parcel number 8560316772, indicating that the parcel had the odor of narcotics. 

The parcel was searched pursuant to a state search warrant. Inside the parcel was a “sealed mini

macro [sic] computer box” containing $50,040.00 in United States currency divided into 50

individually rubber-banded stacks in two heat-sealed pouches (Compl. ¶¶ 7–9). 

When task force officers interviewed Michael Moss, he stated that he sent Lynch the

$50,040 in cash as a down payment for realty. Moss stated that Lynch was his realtor and

partner in a venture to purchase a residence in San Diego — property he said he had personally

viewed. Moss explained that Lynch demanded cash only, so he sent a combination of cash he

had in his residence and cash borrowed from two personal credit cards, but he could not support

his statements with credit card receipts or documentation of the location of the property. Later

in the interview, however, Moss stated that the property was in the San Francisco Bay Area

(Compl. ¶ 11). 

The next day, agents went to the address on the parcel — a UPS Store. They learned

from the store’s manager that “Lynch had received a total of four Federal Express packages and

two USPS parcels” in that six-month period. Agents interviewed Lynch in the presence of her

attorney on April 4, 2006. Lynch denied knowledge of the parcel and of Michael Moss. She

further denied that she expected a parcel or that she knew anyone in Colorado that would send

her currency. After consulting with her attorney, Lynch signed a disclaimer of title and interest

in the parcel and currency. She then declined to answer any more questions (Compl. ¶¶ 12–13).

The government filed a complaint for civil forfeiture on July 26, 2006. Claimant now

moves to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure

to establish probable cause. 

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ANALYSIS

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the claims alleged

in the complaint. All material allegations of the complaint are taken as true and construed in the

light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 340

(9th Cir. 1996). A complaint should not be dismissed “unless it appears beyond doubt that the

plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” 

Conley v. Gibson, 355 U.S. 41, 45–46 (1957). However, “conclusory allegations of law and

unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a

claim.” Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996).

1. THE CIVIL FORFEITURE COMPLAINT SUFFICIENCY STANDARD IS IDENTICAL

UNDER RULES G AND E(2)(A).

The procedural requirements of a civil forfeiture action are governed by the Civil Asset

Forfeiture Reform Act (“CAFRA”) of 2000, Pub. L. No. 106-185, 114 Stat. 202 (codified

principally at 18 U.S.C. 983) and the Supplemental Rules for Admiralty or Maritime Claims

and Asset Forfeiture Actions. Prior to the adoption of Rule G, Rule E(2)(a), which governed

the sufficiency of complaints in maritime forfeiture actions, also applied to civil forfeitures

cases. 21 U.S.C. 881(d); United States v. $639,470.00, 919 F. Supp. 1405, 1416–17 (C.D. Cal.

1996). On December 1, 2006, Rule G was adopted to govern civil forfeiture actions in rem. It

states that in a forfeiture action in rem arising from a federal statute: 

[t]he complaint must (a) be verified; (b) state the grounds for subjectmatter jurisdiction; (c) describe the property with reasonable clarity; (d) if

the property is tangible, state its location when any seizure occurred and –

if different – its location when the action is filed; (e) identify the statute

under which the forfeiture action is brought; and (f) state sufficiently

detailed facts to support a reasonable belief that the government will be

able to meet its burden of proof at trial.

***

In an action governed by 18 U.S.C. § 983(a)(D) the complaint may not be

dismissed on the ground that the government did not have adequate

evidence at the time the complaint was filed to establish the forfeitablity of

the property. The sufficiency of the complaint is governed by Rule G(2).

FRCP Supp. AMC G(1)–(2), (8)(b)(ii). The advisory committee notes state that Rule G(2)(f)

carries forward the interpretation of Rule E(2)(a) standard as applied by case law to civil

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 Rule E(2)(a) stated and still states that “the complaint shall state the circumstances from which the

claim arises with such particularity that the defendant or claimant will be able, without moving for a more

definite statement, to commence an investigation of the facts and to frame a responsive pleading.” The advisory

committee notes state that Rule E was amended in 2006 “to reflect the adoption of Rule G to govern procedure

in civil forfeitures.” 

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forfeiture actions.1 The notes specifically articulate this standard as: “The complaint must state

sufficiently detailed facts to support a reasonable belief that the government will be able to meet

its burden of proof at trial.” The notes cite with approval United States v. Mondragon, 313 F.3d

862 (4th Cir. 2002). 

In Mondragon, the Fourth Circuit acknowledged that the passage of CAFRA affected its

interpretation of Rule E(2)(a). Since CAFRA changed the government’s trial burden for

showing probable cause, the Fourth Circuit declined to follow the wording of the pre-CAFRA

line of cases which articulated the Rule E(2)(a) standard in terms of probable cause. On review

of a motion to strike the government’s complaint for failure to meet the particularity

requirement of Rule E(2)(a), the court adopted the general standard that “a complaint under

Rule E(2)(a) must allege sufficient facts to support a reasonable belief that the property is

subject to forfeiture.” Id. at 865. This decision to omit the words “probable cause” did not

change the standard for sufficiency. Whether stated as a “reasonable belief that the property is

subject to forfeiture” or a “reasonable belief that the government will be able to meet its burden

of proof at trial,” the ultimate meaning is identical. A property is only subject to forfeiture if

the government meets its burden of proof at trial. 18 U.S.C. 983(c)(1). 

There is no Ninth Circuit case interpreting the post-CAFRA standard of review for a

civil forfeiture complaint. Both the Mondragon interpretation of Rule E(2)(a) and the newly

enacted Rule G, however, are consistent with district court interpretations in the Ninth Circuit. 

The Supplemental Rules require that the Government ‘describe with

reasonable particularity’ both the property subject to forfeiture and ‘the

circumstances from which the claim arises,’ such that the claimant is able

to investigate and challenge the forfeiture without requiring additional

information about the property or the alleged wrongdoing. Beyond those

requirements, at the pleading stage the ‘government’s complaint must

establish only a reasonable belief that the government can show probable

cause for forfeiture at trial.’ 

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United States v. Funds Rep’g Proceeds of Drug Trafficking of $75,868.62 Transferred to Acct

No. 7916944712 Located at Leumi Bank, Miami Fla., 52 F. Supp. 1160, 1163 (C.D. Cal. 1999)

(quoting $639,470.00, 919 F. Supp. at 1416–17) (internal citations omitted); see also United

States v. All Funds in Credit Suisse Private Banking Acct No. 0251-844548-6 in the Name of

Alexandria Inv., LLC., No. CV05-3910 (ABCMKCX) 2005 WL 520030, *2 (C.D. Cal. Sept. 20,

2005) (citing to and applying the standard to a claimants’ motion to dismiss a civil forfeiture

complaint). This interpretation is in practice similar to the standard articulated in the newly

enacted Rule G. 

Claimant asserts that “the government’s complaint must demonstrate probable cause to

believe the seized property was drug proceeds” (Br. 3). This assertion is based on claimant’s

interpretation of United States v. $191,910.00, 16 F.3d 1051 (9th Cir. 1994). Claimant

erroneously relies on $191,910.00 as setting the standard for post-CAFRA motions to dismiss

under Rule 12(b)(6). $191,910.00 only stated the pre-CAFRA standard for summary judgment;

it never stood for the proposition that the government had to demonstrate probable cause at the

pleading stage. $639,470.00, 919 F. Supp. at 1417 (noting that while under $191,910.00 the

government is required to have probable cause at the time it files a complaint, it is not required

to meet that burden at the pleading stage under Rule E(2)). This is true despite claimant’s

assertion that assessing the sufficiency of the complaint under Rule G(2) alone would violate

the Fourth Amendment. 

CAFRA incorporated the protections of the Fourth Amendment by requiring warrants

for seizures unless “there is probable cause to believe that the property is subject to forfeiture

and the seizure is made pursuant to a lawful arrest or search.” 18 U.S.C. 981(b)(2)(B). 

Challenges to the legality of the seizure — whether there is probable cause to believe the

property is subject to forfeiture at time of seizure — are brought pursuant to a motion to

suppress under Rule G(8)(a), not a motion to dismiss. United States v. $78,850.00 in U.S.

Currency, 444 F. Supp. 2d 630, 635–637 (D.S.C. 2006). Where the claimant lacks standing to

seek suppression, “a challenge to the sufficiency of evidence connecting the currency to a crime

might more properly be brought after discovery, on a motion for summary judgment.” United

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States v. $200,255.00 in U.S. Currency More or Less, No. 7:05-CV-27 (HL) 2006 WL 168774,

*9 n.9 (M.D. Ga. June 12, 2006) (denying motion to dismiss for lack of probable cause

connecting currency to sale or purchase of controlled substances and finding complaint

sufficient under Rule E(2)(a)). Even if claimant had moved to suppress, it would “not affect the

forfeiture of the property based upon independently derived evidence.” Rule G(8)(a). Thus, the

sufficiency of the complaint would still be governed by Rule G(2). 

2. THE COMPLAINT IS SUFFICIENT.

 The parties do not dispute that the complaint meets the preliminary requirements of

Rule G — it is verified and it states the grounds for subject-matter jurisdiction, in rem

jurisdiction and venue (Compl. ¶¶ 2–4). Rule G(2)(a)–(b). The complaint described the

property seized and the manner of packaging with reasonable particularity (Compl. ¶¶ 7). Rule

G(2)(c). It described the circumstances of seizure — the sweep of the facility, the positive alert

on the package by the narcotic detection canine, and the subsequent interviews of claimant

Moss and the intended recipient of the package (Compl. ¶¶ 7–13). Rule G(2)(d). The

complaint cited 21 U.S.C. 881(a)(6) as the statute under which the action was brought. Rule

G(2)(e). Thus the only issue in dispute is whether the complaint satisfies Rule G(2)(f) —

whether the complaint states sufficiently detailed facts to support a reasonable belief that the

government will be able to meet its burden of proof at trial. 

Seized currency is subject to forfeiture if it was furnished or intended to be

furnished in exchange for a controlled substance, is traceable to such an

exchange, or was used or intended to be used to facilitate any [drug

transaction]. 21 U.S.C § 881(a)(6); United States v. United States

Currency $ 30,060.00, 39 F.3d 1039, 1041 (9th Cir. 1994). In a civil

forfeiture proceeding, the burden of proof is on the government to

establish, by a preponderance of evidence, that the property is subject to

forfeiture. 18 U.S.C. § 983(c)(1). Moreover, if the government's theory is

that the property was used to commit or facilitate the commission of a

criminal offense, or was involved in the commission of a criminal offense,

the government ‘shall establish that there was a substantial connection

between the property and the offense.’ 18 U.S.C. § 983(c)(3).

United States v. $193,680.00 U.S. Currency, No. CV 01-9676 CBM (Mcx) 2004 U.S. Dist.

LEXIS 21745, *11–12 (C.D. Cal. Oct. 1, 2004). At the pleading stage, there need only be a

reasonable belief that the government can meet the above burden for the civil forfeiture

complaint to be sufficient. Rule G(2)(f). In other words, does the complaint — read in the light

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most favorable to the government — allege facts that will support a reasonable belief that the

seized currency was more likely than not connected to an illegal drug transaction. 21 U.S.C.

881(a)(6); 18 U.S.C 983(c); Mondragon, 313 F.3d at 866–65. This order finds that the

complaint sufficiently states such a claim. 

This order looks to the totality of the circumstances to evaluate the sufficiency of the

complaint. Mondragon, 313 F.3d at 866. In the instant case, the $50,040 consisted of 118

hundred-dollar bills, 108 fifty-dollar bills, 1641 twenty dollar bills and 2 ten-dollar bills. The

currency “was divided into 50 individually rubber-banded stacks” contained in “two separate

heat-sealed pouches,” further sealed in a computer box (Compl. ¶¶ 9). Although strong

evidence, a large sum of money, by itself, is insufficient to show a connection to drugs. United

States v. Currency, U.S. $42,500.00, 283 F.3d 977, 981–982 (9th Cir. 2002). But other factors

present here suggest a connection to drugs. Courts have found the manner of packaging used in

this case to be consistent with drug trafficking. Id. at 982 (wrapping money in cellophane was

commonly used to conceal drug odor and avoid detection by drug dogs); United States v.

$242,484.00 in U.S Currency, 389 F.3d 1149, 1161–1163 (11th Cir. 2004) (rubber-banded

money sealed in cellophane-like material and Christmas wrap was consistent with drug

couriers). The narcotic detection canine alerted to the package. $42,500.00, 283 F.3d at 982

(whether there is a sophisticated dog alert is an important factor). When questioned, the

claimant gave inconsistent statements. The addressee denied knowing the claimant and

disclaimed the package. United States v. $22, 474.00 in U.S. Currency, 246 F.3d 1212

1216–1217 (9th Cir. 2001) (inconsistent statements and discrepancies in stories support an

inference that the money was drug-related). The totality of these allegations support a

reasonable belief that the currency was connected to drugs. Mondragon, 313 F. 3d at 866 (the

sum, unusual packaging in sealed plastic bags and drug dog alert on money found sufficient). 

The complaint is detailed enough that Moss could have commenced a meaningful investigation

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 After the complaint was filed but before the briefing on the instant motion was completed, Congress

adopted Rule G. Neither party addressed the retroactivity of Rule G. Since the complaint is sufficient under

both Rule E(2)(a) and Rule G, the possible retroactivity of Rule G need not be resolved herein. 

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and drafted a responsive pleading. Finding that the complaint sufficiently states a claim under

both Rule G and Rule E(a)(2), this order denies claimant’s motion to dismiss.2

CONCLUSION

For the abovementioned reasons, claimant’s motion to dismiss the complaint is DENIED. 

Claimant is directed to file an answer to the complaint by 4:00 P.M. on APRIL 24, 2007.

IT IS SO ORDERED.

Dated: April 19, 2007. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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