Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_09-cv-08096/USCOURTS-azd-3_09-cv-08096-0/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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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America, 

Plaintiff, 

vs.

$133,420.00 in U.S. Currency, 

Defendant. 

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No. CV-09-8096-PCT-NVW

ORDER

Before the Court are Claimant Damon Louis’ Motion to Suppress (doc. # 22), the

Government’s Motion to Strike Claim and Answer of Damon J. Louis (doc. # 27), the

Government’s Motion to Stay Louis’ Motion to Suppress (doc. # 29), Louis’ Motion for

Summary Judgment (doc. # 42), Louis’ Motion to Stay Discovery (doc. # 45), and Louis’

Motion to File Supplemental Memorandum (doc. # 53).

I. Facts

The following facts are either undisputed or are framed in the light most favorable

to Claimant Louis. On January 6, 2009, Officer Mace Craft of the Arizona Department of

Public Safety stopped a white 2009 Buick driven by Claimant Damon Louis on the

westbound Interstate 40 in Arizona. When prompted, Louis produced a California

driver’s license and a rental agreement indicating he had rented the vehicle from Avis Car

Rental in San Francisco, California, on January 2, 2009. The vehicle was due to be

returned on January 9, 2009. 

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Officer Craft asked Louis where he was traveling from and why he didn’t fly, to

which Louis responded that he had visited Albuquerque for a friend’s wedding and had

driven with a friend who stayed there. When Officer Craft inquired about the wedding,

Louis explained that the wedding was in fact a month ago and that he had returned to

Albuquerque for the ceremony. Officer Craft eventually completed a traffic warning and

provided Louis with a copy. He then asked whether there was anything illegal in the

vehicle, to which Louis responded no. When asked, Louis also twice denied having any

large amounts of U.S. currency in the vehicle. 

Another officer who had arrived on the scene subsequently conducted a pat-down

of Louis’ person, which revealed two cell phones. Although the parties dispute whether

Louis consented to a search of his vehicle or to a canine drug detection sniff, Officer

Craft at some point directed his canine to sniff the exterior of the vehicle. After

observing the canine’s reactions, Officer Craft informed Louis that he had probable cause

to search the vehicle and again asked if there was anything illegal inside. Louis said no. 

A search of the trunk revealed three cardboard boxes, one of which contained a grocery

bag with three zip-lock bags of U.S. currency inside. Officer Craft placed Louis in

handcuffs and escorted him to the Arizona Department of Public Safety. 

Upon arrival, two detectives advised Louis of his Miranda rights and conducted an

interview. Louis explained that after he rented the 2009 Buick, he drove from San

Francisco, California, to Denver, Colorado, and was on his way back to San Francisco

when Officer Craft stopped him. He also admitted that he was in fact aware of the

currency in the trunk of the vehicle because he had put it there. However, he refused to

answer any questions about how he acquired the currency, where it was going, or who it

belonged to. At the conclusion of the interview, Louis was invited to sign a DPS

“Disclaimer of Ownership of Currency or Property” form, but declined to do so without

the presence of an attorney. He was subsequently released and advised that he was free to

leave. His vehicle was returned, but law enforcement retained the two cell phones and

the currency.

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On March 9, 2009, Louis filed a claim for the defendant currency with the Drug

Enforcement Administration. The Government initiated this in rem civil forfeiture

proceeding on June 5, 2009, alleging that the currency is subject to forfeiture pursuant to

both 18 U.S.C. § 981(a)(1)(C) and 21 U.S.C. § 881(a)(6) as proceeds traceable to

controlled substance offenses. In August 2009, Louis filed a claim and answer contesting

the forfeiture after the Court granted a stipulated extension of time in which to do so. The

claim alleges that Louis has “an ownership and/or a possessory interest in, and the right to

exercise dominion and control over, all or part of the defendant property.” (Doc. # 14.) 

On October 5, 2009, the Government propounded special interrogatories pursuant

to Rule G(6) of the Supplemental Rules for Certain Admiralty or Maritime Claims and

Asset Forfeiture Actions, which allows the Government to serve interrogatories limited to

“the claimant’s identity and relationship to the defendant property without the court’s

leave at any time after the claim is filed and before discovery is closed.” Interrogatory 2

requested the following information:

State the extent and describe with particularity the nature of your interest in the

defendant currency, and identify how you acquired that interest. Your answer

should include, but not be limited to, the following:

(a) The date(s), time, place and manner in which the defendant currency

was obtained, including the names, address and telephone numbers of the

person(s) from whom the currency was obtained.

(b) The circumstances of each transaction by which you acquired or

obtained any interest in the defendant currency.

(c) The reason(s) the defendant currency was obtained, and witnesses,

including the names, addresses, and telephone numbers of such witnesses, to

any of the transactions by which the defendant currency was obtained. . . . 

Louis objected to the request on various grounds, including his Fifth Amendment right

against self-incrimination and his Fourth Amendment rights against unreasonable

searches and seizures, but ultimately provided the following limited response: “Without

waiving said objections, my interest in the defendant property is as the owner and

possessor of said property, with a right to exercise dominion and control over said

property.” His responses to other similar interrogatories provided sometimes less, but

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certainly no more, explanation of the nature of his property interest in the defendant

currency. 

On January 14, 2010, Louis filed a motion to suppress evidence (doc. # 22), to

which the Government responded with its motion to strike Louis’ claim and answer for

lack of standing (doc. # 27) and its motion to stay consideration of the motion to suppress

pending resolution of the motion to strike (doc. # 29). Louis followed his motion to

suppress with a February 24, 2010 motion for summary judgment (doc. # 42) arguing that

the Government lacked probable cause to initiate this forfeiture proceeding. All of the

aforementioned motions are currently pending.

II. Analysis

A. Motion to Stay

In its motion to stay, the Government contends that the issue of standing must be

resolved before Louis’ motion to suppress is considered. Louis, on the other hand, argues

that because the motion to suppress seeks, in part, suppression of statements he made to

law enforcement officers regarding his relationship to the defendant currency, and

because those statements inform the standing inquiry, the Court should resolve the motion

to suppress before addressing standing. The motion to stay therefore boils down to a

threshold dispute over the order in which the Court may address the issues presented by

the various motions.

Civil in rem forfeiture proceedings are governed by the Supplemental Rules for

Certain Admiralty or Maritime Claims and Asset Forfeiture Actions. United States v. $

100,348.00 in U.S. Currency, 354 F.3d 1110, 1117 (9th Cir. 2004). Rule G of the

Supplemental Rules, effective in 2006, permits any person claiming an interest in the

property at issue to contest the forfeiture by filing a claim in the court where the action is

pending. Supp. R. Certain Adm. & Mar. Cl. G(5)(a)(i). The government, in turn, may

move to strike the claim on various grounds, including the claimant’s lack of standing. 

Id. at G(8)(c)(i)(B). The motion to strike “must be decided before any motion by the

claimant to dismiss the action.” Id. at G(8)(c)(ii)(A). The Advisory Committee Note to

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Rule G(8)(c)(ii) further indicates that a claimant who lacks standing “is not entitled to

challenge the forfeiture on the merits.” 

The parties spend an inordinate amount of time addressing whether the motion to

suppress is “dispositive” of the action, but that inquiry finds no basis in the language of

Rule G or its Advisory Committee Notes. Because the motion is not one seeking

dismissal of the action, the relevant inquiry is whether Louis’ motion to suppress is a

challenge to the forfeiture on the merits, and the answer is yes. The likelihood of the

Government’s success in this forfeiture action turns substantially on the admissibility of

its evidence, and particularly the $133,420.00 in U.S. currency seized from Louis’ rental

vehicle. Louis’ motion to suppress challenges the admissibility of his statements to law

enforcement officials as the final fruits of the various allegedly unconstitutional searches

and seizures that occurred during his January 6, 2009 encounter. Those same searches

and seizures form the basis of Louis’ argument that other evidence, including the

currency itself, should be suppressed. Therefore, even if his statements are relevant to the

standing inquiry, a determination of their admissibility necessarily requires the Court to

evaluate the admissibility of most if not all of the Government’s evidence. It cannot

reasonably be argued that such a determination does not go to the merits of the action. 

To be sure, other courts have required claimants to establish Article III standing as

a prerequisite to bringing a motion to suppress in a forfeiture proceeding. See United

States v. $ 1,185,135.00 in U.S. Currency, 320 Fed. Appx. 893, 894 (11th Cir. 2008)

(noting that a claimant must establish standing to challenge the forfeiture proceeding in

order to raise a suppression claim); United States v. $ 321,470.00, U.S. Currency, 874

F.2d 298, 300 (5th Cir. 1989) (affirming the district court’s finding that the claimant’s

lack of Article III standing mooted his motion to suppress); United States v. $ 543,190.00

in U.S. Currency, 535 F. Supp. 2d 1238, 1248 (M.D. Ala. 2008) (addressing standing to

contest the forfeiture before addressing the lawfulness of the seizure). Therefore, the

admissibility of Louis’ statements cannot be evaluated until standing has been resolved. 

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1

In its Reply, the Government argues for the first time that Louis also lacks prudential

standing. The Court finds it unnecessary to address that issue. Therefore, Louis’ recent

motion to file a supplemental memorandum addressing prudential standing will be denied

as moot.

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B. Standing

As mentioned, Rule G of the Supplemental Rules permits any person claiming an

interest in property at issue in a forfeiture proceeding to contest the forfeiture by filing a

claim in the court where the action is pending. Supp. R. Certain Adm. & Mar. Cl.

G(5)(a)(i). However, the claimant bears the burden of establishing standing, the threshold

function of which is “to ensure that the government is put to its proof only where

someone with a legitimate interest contests the forfeiture.” United States v. $ 557,933.89,

More or Less, in U.S. Funds, 287 F.3d 66, 79 (2d Cir. 2002). Standing is a question of

law. Gordon v. Virtumundo, Inc., 575 F.3d 1040, 1047 (9th Cir. 2009). 

The Government argues that Louis lacks both Article III and statutory standing.1

The argument as to statutory standing is without merit because it incorrectly assumes that

Louis must be “an innocent owner” for purposes of 18 U.S.C. § 983(d)(1) in order to have

statutory standing. Whether a claimant can prove that he or she is an “innocent owner” is

irrelevant to the threshold standing inquiry; rather, it is a defense that can be raised to

defeat forfeiture. See id. (entitled “innocent owner defense”). A determination of

statutory standing ensures the claimant has complied with the procedural requirements of

18 U.S.C. § 983(a)(4)(a) and the Supplemental Rules for Certain Admiralty and Maritime

Claims. See id. § 983(a)(4)(A); United States v. $ 114,031.00 in U.S. Currency, 284 Fed.

Appx. 754, 756 (11th Cir. 2008); United States v. $ 487,825.00 in United States

Currency, 484 F.3d 662, 664 (3d Cir. 2007). Louis’ procedural compliance has not been

challenged. Therefore, only Article III standing need be addressed. 

To have Article III standing, a claimant must demonstrate that he or she has “a

sufficient interest in the property to create a case or controversy.” United States v. Real

Property Located at 475 Martin Lane, 545 F.3d 1134, 1140 (9th Cir. 2008). Although the

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Ninth Circuit has not expressly addressed the applicable standard of proof, a review of

existing law suggests the standard varies with the stage of the proceeding. See United

States v. $ 57,790.00 in U.S. Currency, 263 F. Supp. 2d 1239, 1241-42 (S.D. Cal. 2003)

(harmonizing seemingly conflicting Ninth Circuit authority governing the applicable

standard of proof by distinguishing between stages of the proceeding). 

At the motion to dismiss stage, a mere allegation of ownership or some

explanation of a lawful possessory interest is sufficient. United States v. Real Property

Located at 475 Martin Lane, 545 F.3d 1134, 1140 (9th Cir. 2008); see also United States v.

$ 191,910.00 in U.S. Currency, 16 F.3d 1051, 1058 (9th Cir. 1994) (reviewing a district

court’s denial of a motion to dismiss for lack of standing). However, mere unexplained

possession is insufficient, even at this early stage. Id.; see also $ 543,190.00 in U.S.

Currency, 535 F. Supp. 2d at 1249. 

At the summary judgment and trial stages, however, more is required. Rule

G(8)(c)(ii)(B), effective in 2006, states that a motion to strike for lack of standing “may

be presented as a motion for judgment on the pleadings or as a motion to determine after a

hearing or by summary judgment whether the claimant can carry the burden of

establishing standing by a preponderance of the evidence.” (emphasis added). The 2006

Advisory Committee Note for Rule G(8)(c)(ii) explains:

Paragraph (c)(ii) further identifies three procedures for addressing claim

standing. If a claim fails on its face to show facts that support claim standing,

the claim can be dismissed by judgment on the pleadings. If the claim shows

facts that would support claim standing, those facts can be tested by a motion

for summary judgment. If material facts are disputed, precluding a grant of

summary judgment, the court may hold an evidentiary hearing. The

evidentiary hearing is held by the court without a jury. The claimant has the

burden to establish claim standing at a hearing; procedure on a government

summary judgment motion reflects this allocation of the burden.

Supreme Court and Ninth Circuit case law also supports a heightened standard of

proof of standing at the summary judgment and trial stages. See Lujan v. Defenders of

Wildlife, 504 U.S. 555, 561 (1992) (because standing must be supported “with the manner

and degree of evidence required at the successive stages of the litigation,” a plaintiff

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cannot rest on mere allegations at the summary judgment stage); United States v. Real

Property Located at Section 18, 976 F.2d 515, 520 (9th Cir. 1991) (requiring claimant to

establish standing by a preponderance of the evidence at trial). 

Therefore, to defeat summary judgment, the claimant must come forward with

some evidence demonstrating a genuine issue of material fact as to standing, and at trial

or an evidentiary hearing, standing must be proved by a preponderance of the evidence. 

See $ 57,790.00 in U.S. Currency, 263 F. Supp. 2d at 1242. While a claimant is always

free to invoke the Fifth Amendment privilege against self-incrimination, the privilege is

not “a substitute for evidence that would assist in meeting a burden of production.” 

United States v. Rylander, 460 U.S. 752, 758 (1983). “In other words, ‘[a] party who

asserts the privilege against self-incrimination must bear the consequence of lack of

evidence.’” United States v. $ 148,840 in U.S. Currency, 521 F.3d 1268, 1274-75 (10th Cir.

2008) (citing United States v. Taylor, 975 F.2d 412, 404 (7th Cir. 1992)).

Here the Government has presented its motion to strike as a motion for summary

judgment accompanied by a separate statement of facts (doc. # 28) and several exhibits,

including Louis’ responses to the Government’s Rule G(6) special interrogatories. To

defeat the motion, Louis must produce some evidence demonstrating a genuine issue of

material fact as to whether he owns or otherwise has a lawful possessory interest in the

defendant currency. This he has failed to do because his response, which is premised

entirely on the mistaken assumption that the action is in its initial stages, merely asserts

that he is required to do no more than allege an ownership or lawful possessory interest in

the currency. The only proffered “evidence” of his ownership or other property interest

are his conclusory responses to the Government’s special interrogatories and the fact that

the currency was in his possession at the time it was seized. Neither is sufficient. 

Louis’ responses to the interrogatories merely assert bald, unexplained ownership

and possessory interests in the currency. There is no explanation of how or why he

acquired the funds. While he is entitled to invoke Fifth Amendment protection against

self-incrimination, he does so at the peril of failing to produce sufficient evidence of

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standing to contest this civil proceeding. Louis has produced no evidence corroborating

his claims other than the fact that the currency was in his possession at the time it was

seized. Mere unexplained possession does not establish a possessory interest even at the

pleading stage, and it is insufficient to create a genuine issue of material fact as to

ownership. 

 Though summary judgment is warranted in light of Louis’ inadequate response,

the Court is mindful of the somewhat confusing state of Ninth Circuit authority on the

standard of proof applicable to standing in forfeiture proceedings. Therefore, the Court

will deny the motion to strike and instead conduct a Rule G(8)(c)(ii)(B) evidentiary

hearing on Friday, April 30, 2010, at 10am to determine whether Louis can establish

standing by a preponderance of the evidence. By Friday, April 23, 2010, the parties are

requested to submit a brief no longer than 12 pages addressing the following:

(1) Which statements made by Louis during the January 6, 2009 encounter does

each party intend to introduce at the hearing, if any?

(2) Of those statements, which are incriminating, if any?

(3) Assuming arguendo that the statements are the fruits of unlawful searches

and seizures and therefore subject to suppression, may they nevertheless be

introduced for purposes of determining standing?

(4) Assuming arguendo that the statements are the fruits of unlawful searches

and seizures and therefore subject to suppression, may they nevertheless be

used for substantive impeachment purposes?

IT IS THEREFORE ORDERED that the Government’s Motion to Stay Louis’

Motion to Suppress (doc. # 29) is granted. 

IT IS FURTHER ORDERED that the Government’s Motion to Strike Louis’

Claim and Answer (doc. # 27) is denied as to summary judgment, without prejudice to the

April 30, 2010 evidentiary hearing on Claimant’s standing..

IT IS FURTHER ORDERED that Louis’ Motion to File Supplemental

Memorandum (doc. # 53) is denied as moot.

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IT IS FURTHER ORDERED setting an evidentiary hearing on the issue of

standing for Friday, April 30, 2010, at 10am. The parties shall submit the additional

briefing requested in the order by Friday, April 23, 2010.

IT IS FURTHER ORDERED that Claimant Damon Louis submit to the Court a

new uncorrupted copy of the non-electronically filed Exhibit B, submitted in support of

his Response to the Government’s Motion to Stay and his Response to the Government’s

Motion to Strike. (Doc. # 47.) 

DATED this 9th day of April, 2010.

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