Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-16070/USCOURTS-ca9-14-16070-0/pdf.json

Nature of Suit Code: 625
Nature of Suit: Drug Related Seizure of Property
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JP MORGAN CHASE BANK

ACCOUNT NUMBER ENDING

8215 IN THE NAME OF LADISLAO

V. SAMANIEGO, VL:

$446,377.36; JP MORGAN

CHASE BANK ACCOUNT

NUMBER ENDING 7058 IN THE

NAME OF MANUEL CASTRO, VL:

$361, 070.25,

Defendants,

LADISLAO V. SAMANIEGO;

MANUEL CASTRO,

Claimants-Appellants.

No. 14-16070

D.C. No.

2:12-cv-00155-MHB

OPINION

Appeal from the United States District Court

for the District of Arizona

Michelle H. Burns, Magistrate Judge, Presiding

Argued and Submitted May 4, 2016

Pasadena, California

Filed September 1, 2016

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2 UNITED STATES V. SAMANIEGO

Before: RAYMOND C. FISHER, MILAN D. SMITH, JR.,

and JACQUELINE H. NGUYEN, Circuit Judges.

Opinion by Judge Milan D. Smith, Jr.

SUMMARY*

Civil Forfeiture

The panel reversed the district court’s summary judgment

in favor of the government in claimants’ challenge to the

government’s seizure of two J.P. Morgan Chase bank

accounts in a civil asset-forfeiture action, and remanded for

further proceedings.

Claimants Ladislao Samaniego and Manuel Castro

opened the two bank accounts which the government seized,

based on the government’s belief that the accounts were used

in money laundering connected to the illegal drug trade. The

district court held that claimants had not demonstrated a

property interest in the seized funds sufficient to confer

standing.

The panel held that claimants had standing to proceed

past summary judgment and challenge the government’s

forfeiture action, but did not address the merits of their claims

or preclude the district court from re-examining Article III

standing at a later date, in light of additional evidence. 

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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UNITED STATES V. SAMANIEGO 3

The panel held that claimants set forth sufficient evidence

for a reasonable factfinder to conclude that they had Article

IIIstanding to challenge the forfeiture. The panel held that in

light of claimants’ self-contradictoryclaims and shifting legal

theories, the district court did not err by holding that

claimants failed to provide indicia of their own ownership of

the funds sufficient to defeat summary judgment, but

claimants demonstrated a possessory interest in the funds

sufficient to defeat summary judgment. Specifically, the

panel held that, viewing the evidence in the light most

favorable to claimants, claimants’ explanation of their

respective possessory interests in the seized funds, coupled

with supporting evidence in the form of declarations,

deposition testimony, bank records, and other evidence,

raised a material dispute of fact for trial. 

The panel also held that claimants provided sufficient

evidence of possessoryinterests to confer prudential standing.

COUNSEL

Taylor Clarke Young (argued) and Robert A. Mandel,

Mandel Young PLC, Phoenix, Arizona, for ClaimantsAppellants.

Monica N. Edelstein (argued), Assistant United States

Attorney; Mark S. Kokanovich, Deputy Appellate Chief;

John S. Leonardo, United States Attorney; United States

Attorney’s Office, Phoenix, Arizona; for Plaintiff-Appellee.

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4 UNITED STATES V. SAMANIEGO

OPINION

M. SMITH, Circuit Judge:

Ladislao Samaniego and Manuel Castro (collectively,

Claimants) challenge the government’s seizure of two J.P.

Morgan Chase bank accounts in a civil asset-forfeiture action.

One account, totaling $446,377.36, was held in the name of

Samaniego; the other, totaling $361,070.25, in the name of

Castro. In a verified complaint seeking forfeiture, the

government contends that Claimants unlawfully used the

accounts to launder money connected with illicit drug

proceeds.

Claimants answered and filed verified claims in response

to the complaint, alleging that they held ownership and

possessory interests in the seized funds sufficient to confer

standing. The parties filed cross-motions for summary

judgment.1 The district court entered judgment in favor of the

government, holding that Claimants failed to produce

adequate evidence of their Article III and prudential standing

to contest the forfeiture. We reverse.

STANDARD OF REVIEW AND JURISDICTION

We have jurisdiction pursuant to 28 U.S.C. § 1291. We

review summary judgment determinations de novo. Wright v.

1 The government captioned its motion as a “motion to strike”

Claimants’ answer and verified claims for lack of standing. However, it

presented the motion as the equivalent of a motion for summary judgment.

See Fed. R. Civ. P. G(8)(c)(ii)(B). On appeal, we review the district

court’s decision as a grant of “summary judgment” and refer to it as such

in our opinion.

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UNITED STATES V. SAMANIEGO 5

Incline Vill. Gen. Improvement Dist., 665 F.3d 1128, 1133

(9th Cir. 2011). Summary judgment is appropriate when,

viewing the evidence in the light most favorable to the

nonmoving party, “there is no genuine dispute as to any

material fact.” Fed. R. Civ. P. 56(a); see also Celotex Corp.

v. Catrett, 477 U.S. 317, 322 (1986). A genuine dispute of

material fact exists if “there is sufficient evidence favoring

the nonmoving party for a jury to return a verdict for that

party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

249–50 (1986).

Because this appeal concerns a civil forfeiture matter,

summary judgment procedures are construed “in light of the

statutory law of forfeitures, and particularly the procedural

requirements set forth therein.” United States v. Currency,

U.S. $42,500.00, 283 F.3d 977, 979 (9th Cir. 2002).

Forfeiture proceedings are governed by statute and by the

Supplemental Rules for Admiralty or Maritime Claims and

Asset Forfeiture Actions of the Federal Rules of Civil

Procedure. See 18 U.S.C. § 983(a)(4)(A). The relevant rules

provide that the government may move to strike a claim or

answer for lack of standing. Fed. R. Civ. P. G(8)(c)(i)(B).

Such a motion “may be presented 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.” Id. G(8)(c)(ii)(B).

FACTS AND PRIOR PROCEEDINGS

Ladislao Samaniego is the general manager and minority

shareholder of a Mexican currency-exchange business called

Centro Cambiario Sonorense, formerly Casa de Servicios de

California (CSC). Samaniego and his longtime acquaintance

Manuel Castro, both residents of Mexico, opened the two

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6 UNITED STATES V. SAMANIEGO

bank accounts that are the subject of this action as a result of

CSC’s business relationship with a company called Fruteria

Welton.

Fruteria Welton is a Mexican grocery company with

stores along the U.S.-Mexican border. In the course of its

daily operations, Fruteria Welton acquires large amounts of

Mexican and U.S. currency. Fruteria Welton, along with a

related companyDistribuidora Welton (collectively, Welton),

is owned in part by Jorge Salas Alvarez. Welton enlisted the

services of CSC to count, record, and deposit the currency

that it acquired.

Samaniego considers Salas Alvarez his compadre, a term

used to denote a close friend who holds the near-familial

status of a godfather.2 Through an agreement with Salas

Alvarez that has lasted seventeen years, CSC (and by

extension, Samaniego) was permitted to use the currency it

collected for its own purposes, as long as Welton did not

require immediate use of the funds. CSC and Samaniego were

also entitled to retain any profits arising from their temporary

use of the funds. This longstanding arrangement was oral in

nature.3In this way, Samaniego alleges, he and CSC accrued

2

See United States v. Salcido, No. CR09-01878, 2010 WL 2044468, at

*3 n.4 (D. Ariz. Mar. 12, 2010) (“In Mexican culture the padrino of a

child and the child’s father refer to one another as compadre, a sign of

respect for each other as benefactors and protectors of the child.” (citing

Appleton’s New Cuyas English-Spanish and Spanish-English Dictionary

(1972))).

3 Claimants substantiated the existence and nature of this business

relationship through sworn declarations from Samaniego and Salas

Alvarez.

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UNITED STATES V. SAMANIEGO 7

a debt of roughly one million dollars to Welton, which

required eventual repayment.

After Mexico enacted tighter restrictions on the maximum

amounts of U.S. currency that could be deposited in Mexican

banks, Samaniego endeavored to help Salas Alvarez transport

Welton’s excess U.S. currency across the border for deposit

in U.S. banks. Samaniego claims he did it as a personal favor

for Salas Alvarez, and without compensation, in order to

“avoid having [his] compadre’s daughter being robbed along

the way.” To better perform this function, Samaniego enlisted

the help of his longtime acquaintance Manuel Castro. Castro

was not formally engaged by Welton or CSC, but, from time

to time, Samaniego would payCastro one hundred dollars for

his help in making deposits into the two seized accounts.

On May 31, 2011, Samaniego and Castro visited a Chase

branch in Arizona to open a personal bank account held in

Castro’s name. On June 7, 2011, Samaniego also opened a

personal Chase bank account under his own name in which

both he and Castro deposited excess funds from Welton.

Samaniego announced that the purpose of the bank accounts

was to “accumulate all the money that [he] owe[d] to Jorge

Salas in order to pay him.” Castro echoed that the money in

the accounts belonged to Welton, and was being set aside to

repay a debt to Welton. Collectively, these two bank accounts

are the subject of the current forfeiture action.

On August 22, 2011, the government seized the two bank

accounts opened by Claimants, based on the belief that the

accounts were used in money laundering connected to the

illegal drug trade. The government then filed a verified

complaint for forfeiture of the two accounts. Claimants

responded by filing an answer and verified claims. Following

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8 UNITED STATES V. SAMANIEGO

a round of discovery and briefing, the government moved for

summary judgment.4 The district court granted the

government’s motion, holding that Claimants had not

demonstrated a property interest in the seized funds sufficient

to confer standing. Claimants filed a motion for

reconsideration. which the district court denied.5 This timely

appeal followed.

ANALYSIS

I. Claimants’ Article III Standing

To satisfy constitutional standing requirements under

Article III, a claimant contesting the government’s civil

forfeiture action must show “sufficient interest in the property

to create a case or controversy.” United States v. Real Prop.

Located at 475 Martin Lane, 545 F.3d 1134, 1140 (9th Cir.

2008) (quotation marks omitted); see Lujan v. Defenders of

Wildlife, 504 U.S. 555, 560–61 (1992). This showing need

only constitute “a colorable interest” in the seized funds,

generally through the demonstration of an ownership or

possessory interest in the property. United States v.

$133,420.00 in U.S. Currency, 672 F.3d 629, 637 (9th Cir.

2012) (quotation marks omitted). “[A]n owner or possessor

of property that has been seized necessarily suffers an injury

that can be redressed at least in part by the return of the

4 As noted earlier, supra note 1, the government styled its motion for

summary judgment as a “motion to strike” Claimants’ answer and verified

claims for lack of standing. See Fed. R. Civ. P. (G)(8)(C)(ii)(B).

5 Because we reverse the judgment, we do not dwell on Claimants’

challenge to the denial of their motion for reconsideration.

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UNITED STATES V. SAMANIEGO 9

seized property.” Id. at 638 (quoting United States v.

$515,060.42, 152 F.3d 491, 497 (6th Cir. 1998)).

The precise “manner and degree of evidence required” to

demonstrate standing will vary according to the stage of

litigation. Id. (quoting Lujan, 504 U.S. at 561). A claimant at

the summary judgment phase must offer supporting evidence.

Id. This evidence may take the form of affidavits alleging

specific facts, coupled with the claimant’s possession of the

property when it was seized. Id. at 639. Although a claimant

need not prove standing by a preponderance of the evidence

to survive summary judgment, a court must determine that “a

fair-minded jury could return a verdict for [the claimant] on

the evidence presented.” Liberty Lobby, 477 U.S. at 252. That

is, the evidence set forth must be sufficient for a reasonable

factfinder to conclude that the claimant has standing to

challenge the forfeiture. See Fed. R. Civ. P. G(8)(c)(ii)(B).

A. Ownership Interest

A claimant’s “unequivocal” assertion of ownership in the

seized property, along with physical possession of the

property at the time of seizure, can overcome the summary

judgment hurdle. $133,420 in U.S. Currency, 672 F.3d at 639.

However, Claimants’ ownership claims have been repeatedly

controverted through their own deposition testimony and

other record evidence. The district court did not err when it

found Claimants’ assertions of ownership to be no more than

back-pedaling, “late-in-the-day declarations” insufficient to

create a genuine dispute as to the ownership of the funds.

At various times, Claimants have asserted conflicting

interests in the seized funds. For example, Claimants stated

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10 UNITED STATES V. SAMANIEGO

in their verified claims that the funds “belong[ed] to them.”6

During his deposition, however, Samaniego declared that “the

money that was seized doesn’t belong to us. It belongs to

Fruteria and Distribuidora Welton, and we need to pay it

back.” Castro’s deposition testimonyconfirmed that the funds

“belonged” to Welton. When asked why they did not open the

accounts in Welton’s name, Samaniego responded that “it

was our full intention to change the names on both accounts

. . . [b]ecause the money belonged to them.”

The record reveals other instances when Claimants

disavowed legal ownership. In their answers to the forfeiture

complaint, Claimants expressly “admit[ted] that Samaniego

and Castro transported U.S. dollars belonging to Fruteria

Welton or Distribuidora Welton into the United States.”

Moreover, in the Currency or Monetary Instrument Reports

that Samaniego filed with U.S. officials at the border, he

represented that he was transporting the currency on behalf of

Welton or, at times, CSC.

In a subsequent declaration, Samaniego reasserted his

ownership interest in the funds. He claimed that “[b]ecause

. . . the Seized Funds were sourced from Welton and would

. . . eventually be repaid to Welton, [he] at times referred to

them as Welton funds. . . . [S]uch a characterization does not

mean—and has never meant—that [he and] CSC lacked an

ownership and possessory interest in the funds.” To

6 Verification, in this context, means that Claimants have submitted

sworn pleadings in support of their claims, and specified the property

claimed and the nature of their interest in the property. See Fed. R. Civ. P.

G(5)(a)(i). This procedural requirement serves to protect against the

proliferation of false claims in asset-forfeiture proceedings. See Stefan D.

Casella, Asset Forfeiture Law in the United States § 7-13(c), at 313 (2d ed.

2013).

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UNITED STATES V. SAMANIEGO 11

complicate matters, Samaniego, in his declarations, adopted

the shorthand of “CSC” to refer collectively to both himself

and CSC.

A claimant must “make clear whether he is asserting a

possessoryinterest, an ownership interest, or something else.”

Id. at 640 (quotation marks omitted) (holding that a

claimant’s bare allegation of “ownership and/or a possessory

interest” was lacking specificity and insufficient to survive

summary judgment); cf. Kennedy v. Allied Mut. Ins. Co.,

952 F.2d 262, 266–67 (9th Cir. 1991) (discounting a “sham”

affidavit when the district court found that it “flatly

contradicts earlier testimony in an attempt to ‘create’ an issue

of fact and avoid summary judgment”). In light of Claimants’

self-contradictory claims and jumble of shifting legal

theories—alternatively alleging ownership on the part of

Welton or CSC or Claimants—the district court did not err by

holding that Claimants failed to provide indicia of their own

ownership of the funds sufficient to defeat summary

judgment.

B. Possessory Interest

However, Claimants may still demonstrate a possessory

interest in the funds that is short of ownership. A possessory

interest involves “[t]he fact of having or holding property in

one’s power; the exercise of dominion over property.”

Possession, Black’s Law Dictionary (10th ed. 2014). Unlike

an ownership interest, a possessory interest arises even if the

claimant is merely “holding the item for a friend” who has

temporarily transferred control of the item to the claimant for

safekeeping. United States v. $191,910.00 in U.S. Currency,

16 F.3d 1051, 1058 (9th Cir. 1994), superseded by statute on

other grounds as stated in United States v. $80,180.00 in U.S.

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12 UNITED STATES V. SAMANIEGO

Currency, 303 F.3d 1182, 1184 (9th Cir. 2002). If the item

were seized, the claimant would suffer injury to that

possessory interest. Id.

In forfeiture proceedings, we have acknowledged that the

risk of false claims “requir[es] courts to demand more than

conclusory or hearsay allegations of some ‘interest’ in the

forfeited property.” United States v. $100,348.00 in U.S.

Currency, 354 F.3d 1110, 1118–19 (9th Cir. 2004) (quotation

marks and alteration omitted). Neither naked possession nor

bare title, standing alone, will do. Rather, a claimant must

offer some additional explanation concerning his “lawful

possessory interest in the money seized.”7

$133,420.00 in

U.S. Currency, 672 F.3d at 639 (quoting United States v.

$321,470.00, 874 F.2d 298, 303 (5th Cir. 1989)). Therefore,

at the summary judgment phase, claimants alleging a

possessory interest must set forth supporting evidence along

with some explanation of how they came into possession of

the seized property. Id.

7 By “lawful possessory interest,” we do not mean that a claimant must

prove that his possession is lawful, which is an inquiry better left for the

merits stage of an asset-forfeiture action. See United States v. Hooper,

229 F.3d 818, 820 n.4 (9th Cir. 2000); United States v. Funds in the

Amount of $239,400, 795 F.3d 639, 647 (7th Cir. 2015). Instead, a

claimant must articulate an interest in the property that is recognized by

law. This comports with the principle that, for standing inquiries, the

guiding question is whether the claimant would be injured through the

seizure of the property, even assuming arguendo that the property was

wrongfully seized. See Funds in the Amount of $239,400, 795 F.3d at 645;

United States v. Cambio Exacto, S.A., 166 F.3d 522, 527 (2d Cir. 1999);

United States v. One-Sixth Share of James J. Bulger in All Present &

Future Proceeds of Mass Millions Lottery Ticket No. M246233, 326 F.3d

36, 41 (1st Cir. 2003) (“Courts should not . . . conflate the constitutional

standing inquiry with the merits determination that comes later.”).

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UNITED STATES V. SAMANIEGO 13

Viewing the evidence in the light most favorable to

Claimants, we hold that Claimants’ explanation of their

respective possessory interests in the seized funds, coupled

with supporting evidence in the form of declarations,

deposition testimony, bank records, and other evidence, raises

a material dispute of fact for trial.

1. Samaniego’s Possessory Interest

The district court failed to draw all reasonable inferences

in favor of Samaniego when it concluded that only CSC, and

not Samaniego, held a property interest in the funds. In this

case, it is fair to infer from the evidence that CSC and

Samaniego retained a joint interest in the funds. Under this

reading, Samaniego has presented sufficient evidence of a

possessory interest in the bank account bearing his name to

defeat summary judgment.

Here, the relevant evidence primarily took the form of

declarations from Samaniego and Salas Alvarez, a part owner

and manager of Welton. Samaniego declared that the seized

funds were the proceeds of Welton business activities.

Samaniego explained that, for nearly two decades, he and

CSC had collected Welton proceeds and arranged for their

deposit and safekeeping. Salas Alvarez corroborated this

explanation of how the seized funds came into Samaniego’s

possession. Salas Alvarez averred that “[w]hen the armored

car companies deliver these proceeds to CSC [and

Samaniego], [they] take[] title to, possession, and complete

control of the proceeds.”

Under these circumstances, a reasonable jury could find

that Samaniego has presented adequate evidence, and

explanation, of his possessory interest in the funds to confer

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14 UNITED STATES V. SAMANIEGO

Article III standing. Moreover, Samaniego presented further

evidence of a “concrete and particularized” injury,see Lujan,

504 U.S. at 560, by repeatedly declaring that he was liable for

the balance on the accounts. As Salas Alvarez acknowledged,

CSC and Samaniego remained “obligated to repay to Welton

the amount of these proceeds at a later date.”

2. Castro’s Possessory Interest

Similarly, we conclude that Castro has set forth sufficient

evidence of a possessory interest in the bank account bearing

his name to survive summary judgment. Like Samaniego,

Castro was the sole individual with signatory authority over

the account in his own name. Although he agreed to manage

the funds at Samaniego’s direction, only Castro was able to

access the funds in the account. In addition, Castro was able

to identify the source and nature of the funds, explaining they

were the proceeds of Welton businesses. Castro presented

evidence that the funds came into his possession through an

arrangement with Samaniego, whereby Castro assumed

safekeeping and control of the funds on Samaniego’s behalf.

Castro has therefore offered adequate evidence and

explanation to distinguish his possessory interest from that of

a simple “unknowing custodian,” $191,910.00 in U.S.

Currency, 16 F.3d at 1058 (quotation marks omitted).

Accordingly, we conclude he has standing to challenge the

forfeiture of the bank account in his name.

II. Prudential Standing

In addition to Article IIIstanding, a claimant must satisfy

the requirements of prudential standing. See United States v.

Lazarenko, 476 F.3d 642, 649–50 (9th Cir. 2006). Prudential

standing consists of “the general prohibition on a litigant’s

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UNITED STATES V. SAMANIEGO 15

raising another person’s legal rights, the rule barring

adjudication of generalized grievances more appropriately

addressed in representative branches, and the requirement that

a plaintiff’s complaint fall within the zone of interests

protected by the law invoked.” Id. (quotation marks omitted).

The prudential-standing addendum to the Article IIIstanding

inquiry has fallen into disfavor in recent years. See Lexmark

Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377,

1386 (2014). To the extent it continues to apply, we conclude

that the essential requirements are satisfied here.

First, Claimants do not exclusively “rais[e] another

person’s legal rights.” Lazarenko, at 476 F.3d at 649. They

are not only the titleholders of the accounts in question, but

have articulated colorable possessory interests in the seized

accounts in their own right. For similar reasons, neither do

Claimants raise “generalized grievances more appropriately

addressed in representative branches.” Id. at 650. Rather, the

locus of their injury is the seizure of the accounts. Therefore,

the seizure constitutes an injury that is redressable through

the return of the property.

Finally, Claimants’ challenges “fall[] within the class of

plaintiffs whom Congress has authorized to” assert a claim in

a civil forfeiture action. Lexmark, 134 S. Ct. at 1387. It is

precisely those claimants whose property interests are

impaired by government seizure that Congress meant to

protect through the civil asset-forfeiture laws. See 18 U.S.C.

§ 983(a)(2)(A),(C). As a result, Claimants have provided

sufficient evidence of a possessory interest to confer

prudential standing.

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16 UNITED STATES V. SAMANIEGO

CONCLUSION

We hold that Samaniego and Castro have standing to

proceed past summary judgment and challenge the

government’s forfeiture action. However, we do not address

the merits of their claims or preclude the district court from

re-examining Article III standing at a later date, in light of

additional evidence. Accordingly, we REVERSE the

judgment of the district court, and REMAND for further

proceedings.

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