T h e pan el u nani m o usl y c on cl u des t h i s c as e i s s u i t abl e f or de ci s i on *

w itho u t o ra l ar g u m e n t. See Fed

. R

. A p p

. P

. 34 (a)( 2 ).

F OR P UB LIC AT ION



### U N I TED STA TES C O U R T O F A PPEA LS F O R T H E N IN T H C IR C U IT

U NI TED S T A T ES O F A M ERI CA ,

Plaintif f-Appellee ,

v. $11,500.00 I N U

NI TED S TA TES C U RREN CY , in rem; $2,971.00 IN U NI TED S T A T ES C U RREN CY , in re m, De fe nd an ts , and

C H A RLES G U ERRERO ,

Claimant-Appellant

. No. 11-35923

D.C. No. 3:10-cv-00097- MO

OPI NI ON

Appea l from the United States District Court for the D istrict of Ore g on Michae l W. M osman, District J udg e, Presiding Malcolm F. Ma

rsh, District J udg e, Presiding

Submit ted Octobe r 9, 2012 * Portland, Oreg on
Filed Ma rch 20, 2013U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 2

T hi s s ummary cons t i t ut es no part o f the o pi ni on of

t he cour t

. I t ha s ** b een p repa red b y co urt s t af f f o r t he co nveni ence o f

t he read er. Be fore : Ba

rry G. Silverman, Richar d R. Cli fton, and N. Rand y Smith, Cir c uit

Judg e s. Opinion by

J udg e Clifton; P a rt i a l C o n c ur

r e n c e an d P art i a l D i s s e n tb y Judg e N. R. Sm ith

SUMMAR

Y **

Civil For feiture The pa nel af firmed in par

t and vacated in pa

rt the district
c ourt ’s or de r i n a

c ivi l f or fe iture a c tio n und e r 2 1 U .S. C. § 881. The g overnme nt soug ht to forfe it two bundles of curr ency in the amou

nts of $1 1, 50 0 a

nd $2 ,9 71 . T he dis tr ic t c ourt he ld wi th r e sp e c t to the $1 1, 50 0 th at th e c la ima nt fa ile d to c omp ly wi th S u p p l e m e n t a l A dm i r a l ty an d M ar i t i m e C l a i m s Rul e G( 5) (a )( iii ) ( re qu ir inga

c la im f or m f ile d b y a bai le e mus t identify the bailor); a

nd with respec t to bot h am o unts, the district court ente red summary judgme nt in favor of

the g overnme nt beca

u s e t h ey wer e either

the proc eeds of

drug traff ickingor used to facilitate drugtraff icking . The pa

nel held that the district court’s dismissal of the cla im to $11,500 – based on the claimant’s failure to identify the bailor – wa s an abuse of discre tion, primarily beca use the omission did not prejudice the g overnme nt, did not appear to b e calculated, and d i d n ot delay

or extend the forf

eiture pr ocee dings. TheU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 3 panel f urth e r h e ld th at t h e r e w a s a

g e nu in e is s u e o f

mate rial fac t whether the $11,500 was de rived leg itimately , and there fore the district court e rre d in enteri n g summary judgm e nt o n th is a lte rn ativ e ba sis . F ina lly , th e pa ne l he ld that the g overnme nt’s failure to provide timely notice of the forf eiture to the claimant as to both amounts, pursuant to 18 U. S.C § 98 3( a )( 1) (A )( i) , d id n ot r e qu ir e the g ov e rnmen t to
re tur n the pro pe rt

y wh e re the g ov e rnme nt s ub se qu e ntl y commence d a forf

eiture proce eding

. The pa nel af firmed the judgme nt forfe iting the $2,971, a n d vacated and r emande d the portion forfe iting the $11,500. Judg e N. R. Sm ithc on c ur

re d in pa rt , and dis se nte d in p art

. J udg e N.R. S mith agr eed that the g overnme nt need not re turn the s eized funds for failure to g ive t imely notice where it had alr e a d y c o mm e n c e d a f

o r f e it u r e p r o c e e d in g ; a nd Sup ple me nta l Ru le G( 5) (a )( iii ) re qu ir e d th e c la ima nt t o identify the bailor. J udg e N. Smith dissented beca use: he wa s no t c onvin c e d th at th e dis tr ic t c ourt a bu se d it s d isc re tio n in striking the c laim for fa ilure to comply with Supplemental Rule G(5); and in a

ny event, he would aff

irm t h e s u mmary jud g me nt e nte re d in

fa vo r o f t he g ov e rnme nt.

CO UN SEL

F ra nk de la Pue nte , A tto rn e y , Sa le m, Oregon, f or Cla imantAp pe lla nt.
S. Amanda Mar shall, United States At t o rney , Kelly A. Z usman, Appellate Chief, an d Robert D. Ne sler, Assistant United States Attorney , for Plaintiff-A ppellee.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 4

OP IN ION

CL I FTO N, Circuit J udg e:
Civil forf eiture a ctions broug ht by

the g overnme nt re q

uire compliance with c erta in r

ules by both the g overnme nt and by
any cla im ant. In th is c a se , th e g ov e rnme nt a nd the on ly claimant ea ch violated one of the rules. This appe al re quires
us to c on sid e r t

he a pp ro pr iate c on se qu e nc e s. The g overnme nt sought to for feit two bundl es of c urre ncy in the am o u n ts of $11,500 and $2,971. Only one contr ary claim was filed reg arding both sets of cur renc y . The district
c ourt c on c lud e d that the c la ima nt f a ile d to c omp ly

wi th Sup ple men ta l A dmi ra lty and Mari tim e Cla ims Rul e G(5)( a)( iii), which requir es t hat “[a] claim filed by a per son asse rti n ganinte r e s t a s a b a il e e mu s t i d e n ti f

y th e b a il or.” Supp. Rul e G( 5)(a )(iii). The claim form filed he re a sserted a differ ent prope rty

interest, desc ribed b y

the claimant a s “possessory ,” and it did not identify a bailor. The claimant’s alleg ed intere st in the $11,500 later ca me to b e i d en tified as a bailee ’s interest. Ba sed on the fa ilure to identify the bailor, the district court struc k t h e cl aim to the $11,500. We ag ree with the district court that the re quirement a pplied to the
c la ima nt, e ve n th ou g h h e ini tia lly a sse rt e d a dif fe re nt i nte re st. We also conclude , howeve r, that striking his claim based on that transg ression wa s not mandatory but was instead subjec t to t h e s ound exercise of

discretion by

the cour t. Under the circ umstances of

this case, the dismissal of t h e cl ai m to the $1 1, 50 0 f or that fa ilure wa s an ab us e of dis c re tio n, pr ima

ri ly be c a us e the omi ssi on

did not prej ud ic e the g ov e rnme nt, did not appea r to be c alculate d, and did not d elay or extend the fo rf e iture pr oc e e din g s.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 5
Th e dis tr ic t c ourt c on c lud e d th at th e g ov e rnme nt f a ile d to provide notice to the claimant within 60 day s after the date of the seizure of bot h sets of cur renc y , as re quired unde r 18 U.S.C. § 983(a )(1) (A)( i) for a nonjudicial civil forfe iture. Ne ith e r d id t

he g ov e rnme nt re tur

n the mon e y

to t he c la ima nt. Instead, the g overnme nt commence d civil forfe iture proce eding s. I t could proper ly do so, even though it had not g iven t imely

notice, and w e conc lude that the g overnme nt was not re quired i n these c ircumstance s to return the p r o p e rty. We thus affirm the judg ment in favor of the g overnme nt
r e g ar d in gth e p o rti o no f

c ur r e n c y amo un ti n gto $ 2 , 9 7 1

. We
vacate the judg ment in f av o r of the gove rnment as to the $1 1, 50 0 p or

tio n a nd re mand fo r f ur the r p ro c e e din g s.
I. Bac kgr ound
The c urre ncy

at issue was se ized when claimant Char les Gu e rr e ro (“ Gu e rr e ro ” ) w e nt t o a ja il i n Portl and , O re g on , to post bail for his wife, Rosalie Guer rer o (“Rosalie” ), who ha d be e n a rr e ste d th e night b e fo re fo r p os se ssi on wi th i nte nt t o distribute heroin. Gue rre ro d i d n ot enter the jail himself but
a c c omp anie d Vi rg il Woo d and g ave him $1 1, 50 0 to po st b a il. At the jail, law enf

orce ment ag ents asked Wood how he had obtained the c urre ncy . Wood event ually identified Gue rre ro as the sourc e. F indi n g Guerrer o outside the jail, law
e nf or c e me nt o ff

ic e rs se arc he d h im a

nd fo un d $ 2,97 1 in his pocket, a lon gwith severa l pills . Guer rer o was a

rre sted and tol d th e of

fi c e rs that th e $1 1, 50 0 a

nd $2 ,9 71 we re his

. The c ircumstance s surroundingthe seizure of the
curr ency led the g overnme nt to believe that the money was connec ted t o drug traff

icking

. The officer s discovere d sever alU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 6

g rams of he r o in

in a b la c k b a gin th e tr un k o f Wo o d ’ s c ar, and Gue rre ro later

pl ed gu i l ty

to possession of heroin. A trained dogsniffed the curr ency for the odor of narc otics, and th e g o v e r n m e n tc o n t e n d s th atth e d o ga l e rt e d p o s i t i v e l y.
T h e Un i t edS t at es i n i t i at edci v i l fo rf ei ture p ro ce ed i n gs ag ainst the $11,500 and $2,971 under 21 U .S.C. § 881, on t he basis that the cur

renc y was e ither proc eeds of

drugtraff icking
or us e d to fa c ili tate dr

ug tr a ff ic kin g

. Gu e rr e ro fi le d the sol e c la im t o th e c ur

re nc y . In th e c laim he fi le d w iththe c ourt , th r o u g hc o un s e l , h e d e s c r i b e d h i s i n t e r e s t a s “ p o s s e s s o r

y

. ” In a “se ized asset claim f

o rm ” attached to the c ourt filing, he pr ov ide d a

han dwr itten

re sp on se to a

n in qu ir y a s to his i n t er es t : “M y

i n t er es ti s p o s s es s o ry , i

. e. , th e m o n ey b el o n gs to me.”

In his subsequent deposition Guerr ero a cknowledg ed that he had sold drug s and that he had not ha d stable employ ment for year s. He maintaine d, howeve r, that the seized cur renc y came from leg itimate sources. H e testified that the $2,971 was money

he had sa ved fr om the sale of some furniture and too ls. Withre sp e c t to the $1 1, 50 0, Gu e rr e ro te sti fi e d th at hi s wife ha d rec eived the mone y sever al y ear s ea rl ier fr om an i n s ura n ce s et t l em en t an d h ad gi v en i t t o h i mfo r s af ek ee p i n g.
The district cour

t gr anted summary

judgme n t t o the g overnme nt w ith r espec t to the $11,500, holding t h at Guer rer o failed to comply with Supplemental Admiralty and Mari tim e Cla ims Rul e G( 5) (a )( iii ), because he fa ile d to identify R o s al ie as his bailor on the c laim form. The c ourt further held, in the alter

native, that ther e was no g enuine issue of fa ct as to whe ther t he $11,500 wa s the proce eds of or fa cil itated drug traff

icking

. The $2,971 was forf eited afte r aU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 7 jur y fo un d th at it

c on sti tut e d p ro c e e ds of

ill e g a l dr uga c tiv ity and fa cilitated drugtraff

icking . Guer

rer o timely

appea led.

II. Bai lorIde nt ific at ion Re quir e m e nt
Wh e nth e g o v e r

n me n t i n it iate s c iv il f o r f e it ure pr oc e e din g s a g a ins t spe c if ie d p ro pe rt

y , a pe rs on may c on te st the forf eiture by filing a cla im in dis trict court in ac corda nce wi th t he Sup ple me nta l Ru le s f or Admi ra lty

and Mari tim e Claims. 18 U.S.C . § 983(a) (4)( A). The claim must “identify the claimant a

nd state the c laimant’s intere st in the property .” Supp. Rule G(5)( a)( i)(B ). Among the other require ments, and t he one at issue here , is that “[a] claim filed by a per son asser ting a n i n t erest as a ba ilee must identify the bailor.” Supp. Rul e G( 5)(a )(iii). Supplemental Rule G(8) (c) specific ally

provides that the g overnme nt may move to strike
a claim for failure to c omply with spe cified portions of t he Supplemental Rules, including Supplem en t al Rule G(5) , or b ec au s e t h e c l ai m an tl ac k s s t an d i n g.
Th e dis tr ic t c ourt gr ante d th e g ov e rnme nt’ s mo tio n to strike Guer

rer o’s claim to the $11,50 0 for f ailing to identify Rosalie as the ba ilor of th e currenc y on his claim form. The court’s order noted that Guer rer o “neve r pled the e x istence of
a b ail ment, and did not identify Rosalie Guer

rer o as the ba ilo r. ” Th e or de r a ls o n ote d th at G ue rr e ro did no t e xpla in until his deposition that the money had bee n g iven to him by his wi fe , and

fu rt he r t hat G ue rr e ro ne ve r s ou g ht t o ame nd his claim form to identify

her a s the bailor.

We reviewa distri ct cour t’s interpre tation of the Supple m en t al Ad m i ra l ty

an d M ar i t i m e C l ai m s R

u l es d e novo. See U nited States v. 2,164 W

atches , 3 66 F .3 d 7 67 , 7 70 (9 th Cir . 2 00 4) . D ism iss a l of a fo rf e iture c la im f

or fa ilure toU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 8

c omp ly wi th p ro c e dura l r e qu ir e me nts is r e vie we d f or a bu se o f d is c r e ti on. S

ee United States v. Re al Property Located at 22 Santa Barbara Drive , 264 F.3d 860, 868 (9th Cir. 2001). A district court a

buses its discretion if it does n ot apply the
corr ect leg al standar d, Bat em a n v. U.S. Postal Serv ice , 231 F.3d 1220, 1223 (9th Cir. 2000) , or if it fails to consider the fa ctors re levant to t he exerc ise of its discretion. See Bautista v. Los Angeles Cnty. , 216 F.3d 837, 841–42 ( 9th Cir. 20 00 ). We c on c lud e that th e dis tr ic t c ourt wa s c or re c t in holding that Rule G( 5)(a )(iii) ap plied to Guerr ero, but that striking his cla im was an a buse of discr etion.

As de sc ri be d ab ov e , Gue rr e ro ’s c la im f or m st ate d th at hi s int e re st i n t he curr e nc y

wa s “ po sse sso ry .” I t w a s n ot u nti l afte r the g overnme nt moved to stri k e Gu errero’ s claim for lack of standing that Guer rer o argued in re sponse that he ha d
an o wn e rs hip int e re st i n th e c ur renc y by vir tue of his
m ar r i a g e t o R o s a l i e an d

f ur th e r d e s c r i b e d h i s “ p o s s e s s o r y” in ter est a s th at of

a “ ba ile e fo r R os a lie .” Th at w a s th e fi rs t t i m e that Guer

rer o or anyone else descr ibed Guer rer o’s relationship t o the cur

renc y as that of a

bailee. T he cour

t declined to str i ke Gue rre ro’s c laim based on a lack of standing , holding that there was a g enuine dispute of material fac t a s to whether Guer

rer o was a bailee of the curr ency . But the c ourt we nt o n to strike Gu e rr e ro ’s c la im f or fa ilure to identify Rosalie as the ba ilor.

Guer rer o contends that the rule only require s the ide nti fi c atio n o f t

he ba ilo r whe n th e c la ima nt e xplic itl y a sse rt s a ba ile e int e re st o n h is c la im form. Gu e rr e ro ’s c la im form did not descr ibe his interest as that of a bailee . The g overnme nt argues that the ba ilor identification re quirement did apply here

.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 9
The r u le in qu e s ti o n , Su

p p le me n ta l R

u le G ( 5 ) ( a ) ( ii i), states under

a subhea ding e ntitled “Filinga Claim” that “[a]
c la im f ile d b y a pe rs on a sse rt ingan inte re st a s a

ba ile e mus t ide nti fy the ba ilo r, and

if fi le d o n t he b a ilo r’ s b e ha lf mus t state the a uth or ity to do so. ” Th at la

ngua g e do e s n ot e xplic itl y s p e ll o u t w h e th e r “ a s s e rti n g an inte r e s t a s a b a il e e” r efe rs on ly to t he tim e th e c la im f

or m is fi le d o r i nc lud e s a su bs e qu e nt a sse rt ion

of a ba ile e ’s int e re st.

We are persua ded that the r eq uirement to identify the bailor applies to the a ssertion of a ba ilee’s inte re s t at any time, even if it is articulated after the claim form is filed. The purpose of

the re quirement is to pr ovide the g overnme nt and the c o urt n o ti c e o f

th e s p e c if

ic b a s is o f

th e c la im

an d the
s ource of the prope rty

. See U n i t e d S ta t es v

. R e a l

P r o pe rty , 13 5 F .3 d 13 12 , 13 17 (9 th Cir

. 19 98 ) (n oti ng that the purp os e behind forf

eiture ple adingrequire men t s is “to inform the
c ourt that th e re is a

c la ima nt t o th e pr op e rty who wan ts i t back and intends to defe nd it”); United States v. $321,470.00, U.S. Currency , 8 74 F .2 d 2 98 , 3 04 (5 th C ir . 1 98 9) (i n de fe nd ingba ilo r i de nti fi c atio n a s a sta nd ingre qu ir e me nt, noting that “a courier car

rying c ash fr om an unknown owne r to an unknown re cipient . . . the idea l mule for drug tr a ff ic ke rs , mu st b e pr e pa

re d to de mon str ate that he ha s a lawful po ssessory

interest”) . This purpose would be ill-ser ved if a c laimant could avoid the ba ilor identification re quirement simply by descr ibing his intere st on the claim for m in another
wa y and wa iti ngun til late r t o ide nti fy it as a ba ile e ’s int e re st. There fore , we c onclude that the ba iloridentification require ment in Rule G(5)(a )(i ii) applies to a cla imant who
asser ts an interest as a bailee of conte sted proper ty , even if he had not desc ribed himself as a bailee on hi s claim form. The rule thus applied to Gue rre ro.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 10

Gu e rr e ro ’s c la im s ho uld no t ha ve be e n d ism iss e d a s a re su lt, ho we ve r. Th e dis tr ic t c ourt he re did so be c a us e it understood that “stric t compliance” with the forf eiture f iling rule wa s nece ssary , cit ing our court’s de cision in United Sta te s v . R e al Pro

pe rty , 1 3 5 F.3d 1312 ( 9th Cir. 1998). But the claimant’ s failure i n t hat ca se wa s not like Guerr ero’ s misstep here. I

n Re al Pro

pe rty , the claimant r ece ived notice of for feiture proce eding s but failed to file a timely claim of any kind, only

challeng ing the forf

eiture pr ocee dings one y ear afte r re ceiv i n g n otice and six mont hs after the g o v e r n me n t r e c e iv e d

a f in a l j u d g me n t o f

f o r f e itur e. Id. at 1313

– 1 4 . In holding that f ailure to file a

claim within the applicable time limi t s prec luded the cla imant from later
c ha lle ng ingthe fo rf

e iture , w e noted that

a llo wi nghim

to challeng e a f

orfe it u re j u dg ment afte r so much time had elapse d would “exact a sig nificant toll on judicial resourc es.” Id. at 1317. That doe s not mean that any defic iency

in a
c la im f or m r e qu ir e s d ism iss a l of

a c la im.

To the contra

ry , we have held that courts have “discr etion to overlook the fa ilure to confor m to th e re quirements of [forfeiture claim rules].” United States v. Real Prope rty at 2659Ro un dh ill

Dr
., Alam o, Cal

. , 1 94 F .3 d 1 02 0, 10 24 (9 th Cir. 1999)

. Among the fa ctors re levant to the exerc ise of that discretion ar e whe ther the deficienc y prejudice d the g overnme nt, se e Un ite d S tates v . 1 98 2 Yuk

on De lta Houseboat , 774 F.2d 1432, 1436 (9th Cir. 1985), and whe ther it was a strateg ic attempt to g ain some adva ntag e. See U

nited Sta te s v . R e al Pro

p. Loc ate d a t 22 Sa nt a Ba rb ara D r. , 26 4 F .3 d 86 0, 87 0 (9 th Cir

. 20 01 ) (r e fu sin g to excus e noncompliance with Rule C(6) wher e the r eason f or claimant’s f

ailure to timely

file a c laim was strate g ic). Af ter revie wingthese fa ctors, we conclude that it was an a buse of dis c re tio n to str ike Gu e rr e ro ’s c la im.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 11

T he di s s ent i ng opi ni on s ug ges t s , at 23– 25 , t hat t he governm en t was 1 p rejudi ced by G uerrer o ’ s f ai lure t o i d ent i f

y hi s b ai l ee i nt erest , but t he gover nment di d not i t s el f s o ar gu e. Rat her , i t s t oo d , as di d t he di s t r i ct
cour t , on t he propo s i t i on t hat “ s t r i ct comp l i anc e” wi t h Rul e G (5 ) was
r equ i r ed. As di s cuss ed abov e, w e con cl u de t h at t h e cou r t h ad di s cr et i on t o ove rl o o k G uerrer o ’ s o m i ss i o n. The fa ilure of Guer

rer o’s claim form to ide ntify a bailee ’s interest and to list Ros alie as the bailor did not prejudice the g overnme nt or delay

the proc eeding s. The g overnme nt knew of Rosalie’s identity

an d t o o kher de position, as well as Guer rer o’s. Ther e is no basis to conclude that the g overnme nt
was una ble to conduct a p roper

investigation. Rega

rdless of how Guer

rer o char acte rized his posses s ory interest, the g overnme nt w as awa

re of the fac ts unde rlyi n g Gu err ero’ s p o s s e s s i o no f

th e c ur r e n c y. 1

Nor wa s th e re any

ind ic atio n th at G ue rr e ro ’s fa ilure to ide nti fy the ba ilo r w a s a

str ate g ic atte mpt

to g a in s ome advanta g e. There was no advanta g e gaine d. And it would not have be e n c le ar to Gu e rr e ro that f a ili ngto i de nti fy

his int e re st
w it h p r e c is e a c c ur a c y in th e c la im h e f il e d w o u ld h av e bee n fata l. Cf. United States v. $260,242.00 i n U.S. Currency , 91 9 F .2 d 6 86 , 6 88 (1 1th

Cir . 1 99 0) (n ot h old ingc la ima nt t o kn ow le dg e of

the re qu ir e me nt that he name his ba ilo r b e c a us e the El e ve nth

Cir c uit ha d n ot p re vio us ly

ru le d o n th e sp e c if

ic issue).

In a dd iti on , th e c la im w a s d ism iss e d wi tho ut g ivi nghim an ade quate oppor

tunity to a mend. In the dismissal order, the district court ac curately

noted th at Guer

rer o did not seek leave to amend his claim. But the district court could have offe red that opportunity

and did not do so. See Supp. Rule G Advisory Commi ttee Notes ( “[T] he cour t should strike aU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 12

T h e g o v e rn m e n t ha s n o t ar g u e d o n a p p e a l t h a t G u e rr e ro lac k e d A rtic le 2 II I s t and i ng. G uerrer o ’ s te stimo ny de scr i b ed a ba i l ee i nt erest i n t he
cu r r e n c y , a s w e d i s c u s s e d a b o v e , a n d s u c h a n i n t e r e s t w a s s u f f i c i e n t f or A rtic le I I I s ta n d ing

. See Uni t ed St at es v. $19 1, 91 0 i n U

. S. Cu r r ency , 1 6 F .3 d 1 0 5 1 , 1 0 5 7 (9 th C ir. 1 9 9 4 ) (“ In o rd e r t o c o n te st a fo rfe iture , a cl a i ma n t n e e d o n l y h a v e s om e t y pe of pr op e r t y i n t e r e s t i n t h e f orf ei t ed i t em s. ”), s up er s eded on ot her ground s by s t at ut e as s t at ed i n U ni t ed St at es
v. $80, 180. 00 , 30 3 F.3d 11 8 2 , 11 8 4 (9t h C i r. 20 0 2 ). c la im o r a

ns we r onl y if satis fi e d th at an o pp or tun ity sh ou ld
no t be a ff

or de d to c ure th e de fe c ts und e r R ule 15 .” ). With reg ard to plea dings, our

g ener al pra ctice is to “f ree ly g ive le ave [to ame nd ] wh e n ju sti ce so re qu ir e s. ” F e d. R. C iv. P. 15 (a )( 2) ; see also Eminence Capital, LL C v. Aspeon, Inc

. , 316 F.3d 1048, 1051 ( 9th Cir. 2003) (stating that the policy of freel y g ra

nti ngle ave to a

me nd is “ to b e a

pp lie d w ith extreme liberality”). That approach should apply here . Thoug h Guer rer o never moved to amend his c laim, the absenc e of a formal motion for leave to amend does n o t prec lude the district cour t from g rantingit. Edwards v. Oc cidental Chem. Corp. , 892 F.2d 1442, 1445 n.2 (9th Cir. 1990). It is not surprising Gue rre ro did no t r e qu e st l e ave to a

me nd his c la im. Th e g ov e rnme nt d id
no t mo ve to s tr ike Gu e rr e ro ’s c la im b a se d o n th e fa ilure to identify a bailor. Rather, the gove rnment pre mised its mot ion to s tr ike on

the g ro un d th at G ue rr e ro ’s ass erte d o wn e rs hip
an d p o s s e s s o r

y i n t e r e s t s w e r e i n s u f

f i c i e n tf o r A rt i c l e III
s t an d i n g. Even afte r Guer rer o descr ibed himself as a b ai lee 2 in his brief opposingthe motion, the gove rnm en t d id not argue to t he dis trict court that the claim should be struck for violating the ba ilor ident ification re quirement. Instead, the g overnme nt argued that, bec ause Guerr ero hadnot asserte d a bailee i n tere st or identified a ba ilor on his claim form, the
co urts h o u l d

n o tco n s tru e G u erre ro ’s cl ai mas as s ert i n g aU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 13
bailee interest. Under these circumstance s, we c onclude that str iki ngthe c la im b e c a

us e Gu e rr e ro fa ile d to ide nti fy Ros a lie as bailor in the c laim he filed wa s an abuse of discre tion.

III. Source of the $11,500 The district court also g rante d summary judgme nt for the g overnme nt on the alterna t ive g round that there was no g enuine dispute that the $11,500 was proce eds of or fa ci l i t at eddru g tra ff

i ck i n g. Gu erre ro ch al l en ges th atru l i n g.
In revie wingthe summary judgme nt, we mustview the evide n c e in th e li g h t mo s t f av o r a b le to G u e r

r e r o and deter mine whether

there is any

g enuine issue as t o whether th e c urr en cy

wa s d er i v edfr o mo r f

ac i l i t at eddru g tra ff

i ck i n g. United States v. $133,420.00 in U.S. Currency , 672 F.3d 629, 637 (9th Cir. 2012). In a civil fo rf eit ure a ction, the g overnme nt bear s the burden of provingby a pre pondera

nce of the e vidence that the prope rty is subject to forfe iture. 18 U. S.C. § 9 83 (c )( 1) . Summa ry jud g me nt i s a

pp ro pr iate if there is no ge nuine issue as to any materia l f act. Fe d. R. Civ. P. 56(a). The g over nment did not prove a link betwe en the
curr ency and a spe cific a ct of drugtraff icking , but it was not
re qu ir e d to do so , n otw ith sta nd in g Guer

re ro ’s argume nts to the c on tr ary . T he g ov ernme nt m ay me e t it s b ur de n w ith sufficie ntly

strongcirc umstanti al evidenc e linking the
curr ency to drugtraff

ickingin ge nera l. See United States v. Currency, U.S. $42,500.00 , 283 F.3d 977, 984 (9th Cir. 2002) (a ff ir min gg ov e rnme nt’ s motio n f or summa ry jud g me nt i n light of substantial c ircumstantial evidenc e that cur renc y was c onne c te d to dr

ug tr a ff ic kin g , a nd wh e re c la ima

nt r e fu se d toU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 14

G uer r er o a l s o c hal l eng es t he r ef us al of t he di s t r i ct cour t t o co nsid er 3 t wo pieces o f

evi d ence t end i n g to sup p o rt cl ai m ant ’ s p o si t i o n t hat t he
cu rren cy wa s l eg i t i m ately d erive d f ro m R o sali e’s i nsur an ce p ro ce ed s. B eca us e we va cat e t he s ummary j udgment on s ubs t ant i ve gr ounds , we need not d i scus s t he evi d ent i ary rul i ngs at l engt h, but t he excl usi o n of t he evi d ence wa s no t an ab u se o f d iscret i o n. Fi rs t , t he co urt s t ruck a d ecl arat i o n by R o sal i e b ecause she l at er i nvo ked t he Fif t h A m end m ent and r ef us ed t o ans wer ques t i ons about t he s our ce of t he cu rren cy at he r d e p o sitio n . W h e n a w itne ss te stifie s a n d the n inv o k e s the F ift h A m e n d m e n t t o a v o id a d v e rs a ria l t e sting o f t h e tr u th o f t h a t t e stim o n y, a d i st ri ct co urt m ay st ri ke that t est i m o ny t o avo i d dis t o rt i o n of t he t rut h. Uni t ed St at es v. $1 33
, 42 0. 00 i n U

. S. Cu r r ency , 6 7 2 F .3 d 6 2 9 , 6 4 0

– 4 2 (9 th C i r

. 201 2). Second, G uer r er o t r i ed t o of f er hi s o wn t es t i mo ny as t o what R osa l i e t ol d hi m abo ut t he cur r enc y ’ s s our ce. T hat was hear s ay an d was appropri at el y exc l uded. G uer r er o a r gu es t hat i t s houl d hav e been admi t t ed und er t he res i d ual hears ay excep t i o n, Fed eral R ul e o f E vi d ence 8 0 7

. B ut a st at em ent qua l i f

y i ng und er t he res i d ual excep t i o n m ust have “ eq ui val ent
c i r c u m s t a n t i a l g u a r a n t e e s o f t r u s t w o r t h i n e s s

. ” F e d

. R

. Ev i d

. 8 0 7 ( a ) ( 1 )

. No
s uch gu ar ant ees wer e pr es ent he r e. disclose the sourc e of the curr ency or pro v i d e any

other evidenc e that the sourc e wa s leg itimate).

In g rantingsummary

judgme nt, the district court emphasized “the a

bsence of some ad

mi ssi bleevi d en ce supporting the contention that the source of the $11,500 wa s the insuranc e settl em ent paid to Rosalie Guer rer o two y ear s prior to t he seizure.” (Emphasis in orig inal.) This statement immediately

prec eded the dis t rict cour t’s conclusion that other e vidence o ff

ere d by Guer rer o in support of the insurance settlement as the sourc e of f unds (R o s ali e’s decl ar at i o nan d

Gu erre ro ’s d ep o s i t i o nt es timony reg arding the
source o f th e mo n e y g iv e n to h im b y Ro s a li e ) w a s not admissible evidence and could not be c onsidered. 3

Guer rer o did offer

admissible evidence that s u p p o r te d that proposition, however . In particula r, he p re sented aU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 15
decla ration from the attorney

who re prese nted Rosalie in her insurance claim. The de clar ation stated that Rosalie re ceive d insurance proce eds in the amount of $12,743.75 t wo y ear s befor e the se izure, and an a dditional $11,096.05 o n an undisclosed date, a s compensation for injuries sustained in a
car acc ident. The declaration attache d and authenticated two do c ume nts su

pp or tin gthat conte nti on . The dis tr ic t c ourt did not rule that the lawy er’ s evidenc e wa s inadmissibl e. Indeed, the cour t’s order even r efe rre d to th e fac t of the insuranc e pay ments to Rosa l i e, with citation t o the attorne y ’s decla ration, as pa

rt of the ba ckg round of the c ase.
Th e di str ic t c ourt

no ne the le ss c on c lud e d th at “ Ros a lie Gu e rr e ro ’s re c e ipt

of an in sura nc e se ttl e me nt mo retha n tw o y e ar s prior to the seizure in question d o es notg ive rise to a g enuine dispute of material fa ct as t o whether the seized
c ur r e n c y r e p r e s e n t e d

a p o rt i o no f

th ats e t t l e m e n to r

p r o fi ts the re fr om. ” I t is c le a

r t hat th e re wa s p le nty

of e vidence to support an ultimate f

actua l f inding that the money

came from dr ug sa le s. Vi e wi ng the e vid e nc e in the light mos t f avo ra ble to Guerr ero a s we must, howeve r, we do n o t agre e that the evidenc e wa s so conclusive a s to eliminate a g enuine issue a s to the source of the $11,500.

The leng th of time be tween the insurance settlement and the seizure of the curr ency , more than two yea rs , did not prec lude a f

inding that the curre ncy was leg itimate. Guerr ero testified that Rosalie was unem ploy ed at the time she g ave Guer rer o the money , but there w as no e v i d en ce a bout her
e mpl oy me nt status the re st o f t

he tim e . It is no t unre a so na ble to think that som eone r ece iving a lump sum of money

might
s e ti ta s i d e f

o r a r a i n y d ay.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 16
The e vidence of a positi ve dog sni ff a lert to the cur renc y did not conclusively

prove that the currenc y came from drug
sa le s. Gi ve n th at th e Gue rreros de a lt d ru g s, a jur y c ou ld
re a so na bly inf e r t hat any mon e y the y ha d, e ve n if

le g iti mate ly de ri ve d, c ou ld h ave be e n expo se d to dru g s, su c h a s th e he ro in found in Wood’s vehicle at the scene of the forf eitu re

. And, ther e was some ambiguity in the rec ord as to whe ther the drugdogproper ly

aler ted. In a document detailingthe dog ’s training , the ca

nine offic er state d that his dog ha s been tra ined to scratc h or bite at the source of narc otics. In his notes on the $11,500, howeve r, he did not mention the dogscr at ch i ngor biting but wrote “sniffe d intently —aler ted.” That might mea

n t h at the dogsniffed intently and then a lerted, or

it might mean, a s Guer re ro argued, that the dogfailed to scr atch but that th e of

fi c e r n on e the le ss i nte rp re te d it s sn if f a s a n a le rt

. Whil e the jury

could dra

w infer ence s in f

av o r of the g overnme nt from Rosalie’s re fusal to testify , her r efusa l was not nece ssarily

inconsistent with a leg itimate source f o r the
curr ency . Given her own problems with the l aw, her attorne y may have advised her to pla y it sa fe and not a

nswer any questions that might re quire he r to ac knowledg e illeg al activity . At her de position, R osalie’s att orney expressed
conce rn that i f she a

nswere d even a

seeming ly

innocuous question, the g overnme nt would acc use her of “pickingand choosingwhen to answ er.”

Gu e rr e ro did no t have a lot of a dmi ssi ble e vid e nc e on

his side, and a

jury might we ll be persua ded by the g overnme nt’s evidenc e. On the $2,971 bundle of cur renc y , the forf

eiture
case went to trial, and t h e jury found in favor

of the g ov e r n m e n t

. B u t G u e r

r e r o mu s t e r e d e n o u g h e v i d e n c e to pe r mi t a r e a s o n a

b le ju r y to c o n c lu d e th at th e $ 1 1 , 5 00 was derive d leg itimately , and t h at was enoug h to establish theU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 17

T he gover nment ar gu es t hat i t comp l i ed wi t h t he appl i cabl e n ot i ce 4

r equ i r eme n t s , and urges t h e cou r t t o a f f i r m on t h i s a l t er n at i v e g r ou n d. B eca us e we conc l ude t hat t he gover nm en t n ee d not r et ur n t he cur r enc y
e v e n if it faile d to p ro v id e tim e ly no tice , w e d e c line to re a c h the issu e . W e t heref o re as sume, witho ut de ci d i ng, t hat noti ce was not t i m el y i n t he
rem ai nd er of

t he o p i ni o n. exis tence of a g enuine issue of m ater ial fac t. The alter native basis iden tified by

the district court c annot sustain the g rant
o f s u mm ar

y ju d g me n t in f

av o r o f th e g o v e r

n me n t a s to the forf eitability of the $11,500.

IV. Time liness of

Notice

Th e dis tr ict c ourt

he ld t hat th e g ov e rnme nt f

a ile d to pr ov ide Gu e rr e ro wi th time ly no tic e of the fo rf e iture of bo th the $11,500 and the $2,971. The g overnme nt held on to the money despite the fa ilure to g ive notice, a nd i t later
commence d this civil forfeiture proce eding

. Guer rer o argued that 18 U.S.C. § 983( a) (1 )(F) re quired that the mone y be returne d to him. The dist rict cour t disag ree d and held that the statute did not require the re turn of the cur renc y to Guerr ero. We ag ree with the district court’s interpr etation. 4

When the fe d er al g overnme nt seizes property under a civil forfe iture statute, it must send n o t i ce to potential claimants “in a

manner to achieve proper notice as soon a s prac ticable, and in no case more than 60 da y s after the date of the seizure.” 18 U .S.C. § 983(a)( 1 )(A) (i). I f the g overnme nt do e s n ot s e nd

pr op e r n oti ce in the tim e a llo tte d, the statut e provides that the g overnme nt “ shall return the proper ty to [ the person f rom whom the pro p e rty

was seized] without prejudice to the rig ht of the Gove rnment to commenc e a f orfe iture proce edingat a lat er tim e.” 18 U .S.C. § 983(a)(1) (F ). WhenU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 18
the g ov e rnme nt c omm e nc e s a c ivi l f or fe iture pr oc e e din g , it
ma y s e iz e th e p r o p e rty

. See 21 U. S.C. § 8 81 (b ); 18 U. S.C. § 981(b)( 2).

This frame work a

rguably sug g ests that if the g overnme nt fa i l s t o g i v e t i m e l y

n o t i c e , i ts h o u l d

r e tur nth e p ro pe rt y though it could then commenc e for feiture proce eding s and re

seize the proper

ty . But is the g overnme nt require d to return the prope rty

even i f i t has in the meantime c ommenced fo rf e iture pr oc e e din g s?

Some courts have held that it is – t h at when the g overnme nt has failed to pr ovide timely notice, it must return the seized proper

ty to the claimant even though it had a lrea dy
commence d forf

eiture pr ocee dings. See D e Saro v. U nited States , 1 73 F e d. Ap px. 7 60 , 765 –6 6 (11 th Cir . 2 00 6) ; United States v. Assorted Je welry with a n Approximate Valueof $219,860.00 , 386 F. Supp. 2d 9, 13 (D.P.R. 2005). B ut others have he ld that the g overnme nt need not r et u rn t he seized proper ty

. See, e .g. , Return of

Seized Property v. United States , 625 F. Supp. 2d 949, 954–55 (C.D. Cal. 2009) (r easoningthat the re le a se of

se ize d p ro pe rt

y wo uld b e “ a c a de mic ” be c a us e the g ov e rnme nt’ s in iti atio n o f forf e iture pr oc e e din g s w ou ld allow it to imm ediately

re- seize the proper

ty), m a n d a mus denied, In re J

ordan , 606 F.3d 1135, 1137 ( 9 t h Cir. 2010) (holding that such an inter pretat i o n was not clear e rror); United States v. $114,031.00 in U.S. Currency , No. 0 6- 21820-CI V, 2007 W L2904154, at *3 (S.D. F la. Oct. 4, 2007) (noting that the plain languag e of section 983(a )(1) (F ) allows the g overnme nt to bring a forf eiture pr ocee ding after returningseized proper

ty , but does not require the re turn of proper ty befor e bring ing a

later pr ocee ding)

.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 19

In our view, the better and more prac tical interpre tation of the statut or

y fr ame wo rk

is that a fai lur e to p ro vid e tim e ly
no tic e do e s n ot r e qu ir e the g ov e rnme nt to r e tur n th e pr op e rt

y i f i th as s u

b s equ en t l y c o m m en ce d

a f o rf ei ture p ro ce ed i n g. Th e g ov e rnme nt c an s til l f ile a fo rf e iture a c tio n, and

on c e it has done so, it is emp o we red to seize the pr operty . By the tim e t h e is sue wa s raised be fore the district court, the forf eiture pr ocee ding w as under way

. Requiringthe re turn of the pr op e rt

y and the n p e rm itt ingthe gove rnme nt t o immediately re- seize it would impose a mea ningle ss exercise.

V. Conclusion

Th e po rt ion

of the jud g me nt f

or fe iti ngthe $2 ,9 71 is aff irmed , and the por

tion forfe iting the $11,500 is vac ated. The c ase is re manded f or fu rt her pr ocee dings a s to the $11,500.

AF F IRM E D i n par t; VA CA TED and REM AN DE D i n part.

N. R. SM I TH , Ci rc uit

Judg e , co nc ur

ri ngin p art , d iss e nti ngin pa rt :
I ag ree that the gover

nment need not return seized funds for f ailure to g i v e t i m ely

notice whe re it has a lrea dy
co mmenced a

forf eiture pr ocee ding. I

also ag ree that Supplemental Rule G(5)( a)( iii) r equire d Guer rer o to “identify the bailor,” beca

use h e as serted a

n interest as a

bailee in the proce eding s b el o w. This is true eve n though he did not de sc ri be him se lf

a s a ba ile e on his ini tia l c la im f

or m.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 20

Howeve r, I

write sepa

rate ly in dissent, b ec au s e (1) Iam no t c onvin c e d th at th e dis tr ict co ur t a bu se d it s d isc re tio n in str iki ngGu e rr e ro ’s c la im f or fa ilure to c om ply

wi th Supplemental Rule G(5); and (2) in a ny event, I would aff

irm the d i strict court’s grant of summar y judgme nt for the g ov e rnme nt.

I. The dist r ic t c our t d id n ot abuse it s dis c r e ti on i n s tr i k i n g Gu er re ro ’s cl a i m.

“ Civ il in rem forf

eitures are g overne d by the Sup ple me nta l Ru le s f

or Ce rt a in A dmi ra lty

and Mari tim e Claims of the Fe dera l Ru l es of Civil Procedure .” United States v. $100,348.00 in U.S. Currency , 354 F.3d 1110, 1117 (9th Cir. 2004). Sup p l em en tal Rule G(5)( a)( iii) (the rule at issue here ) provides: “A c laim filed by a per son assertingan interest as a bailee m ust identify the bailor, and if filed on the bailor’s be h alf must state the a uthority to do so.” Sup ple me nta l Ru le G( 8) (c ) a uth or ize s th e g ov e rn

me nt t o mov e to s tr ike any

c la im that “ fa il[s] to com ply wi th R ule G(5) or (6) .

. . .” Notwiths tandingSupplemental Rule G(5)’ s mandatory

languag e, the major ity

corr ec t ly deter mined that th e d i s tr i c tc o urth a s d i s c r e t i o nt o e x c u s e f a i l ur e t o c o mp l y. Th e Ad vis or y Committe e No te s to Sup ple me nta l Rul e G s tate that “ [a]s wi th o the r ple a din g s, the c ourt sh ou ld s tr ike a

c la im
or ans we r o n l y

if satisfied that an oppor tunity should not be
a ff or de d to c ur e the de fe c ts und e r [F e de ra l Ru le of Civ il Procedur e 15].”

A district court a

buses its discretion only

when it applies the wrongleg al standar d, or if it bases its con cl u s ion on a fact u al findi ngthat is “illogica l, implausibl e, or w ithout support in inf

ere nces that may be drawn from the f acts in the
rec ord.” United States v. Hink son , 58 5 F .3 d 12 47 , 1 26 3 ( 9thU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 21

I r ej e c t a n y i mp l i c a t i on t h a t t h e di s t r i c t c ou r t de ma n de d “ s t r i ct 1

c o m p l i ance” w i t h Sup p l em ent al R ul e G (5) and , t hereb y , ab used i ts d i scre t i o n b y f

ail i ng t o co ns id er w he t he r i t co uld p ro p erly ex cu se G uerrer o ’ s no n co m p l i ance. T he d i st ri ct co urt anal y zed t he f act o rs
r el eva nt under Rul e 15, t houg h i t di d not l abel t hem as s uch

. T he di s t r i ct
co urt ob ser ved t hat G uerrer o never r equest ed l ea v e t o a men d h i s c l ai m or
o f f ere d an y e xp l an ati o n f

o r h i s fail ure to c o m p l y. T he d i st rict co urt als o not ed t hat G uer r er o f

ai l ed t o eve n r ai s e t he bai l or/ bai l ee i s s ue un t i l af t er t he clo se of d i sco ve ry an d aft er t he go ve rnm en t ’ s d i sp o si t i ve m o t i o ns. T hu s , al t houg h t he di s t r i ct cour t di d not us e Rul e 15 t er ms l i ke “ prej udi ce”
an d “d elay,” i t i s clear t ha t i t an alyzed t he se facto rs. Cir. 2009). Her e, the majority misapplies this st andar d. The majority overlooks amp l e support for the district court’s decision to strike Gue rre ro’s c laim and ins tead c oncludes that the district court should have su a s po ntea llo we d Gue rr e ro to amend his cla im under F ed er al Rule of Civil P roce dure 15. M a j. O p

. at 1 1

– 1 2

. G iv e n th e amp le s u p p o rt f o r th e district court’s de cision, the majority ’s conc lusion fin d s n o support in R ule 15 . Wh ile Rul e 15 make s c le ar t hat c ourt s sh ou ld

“ fr e e ly g ive le ave ” to ame nd , the ma jor ity a llo ws that phra se to swallow the district court’ s discretion. 1 Nothing i n o u r cases re quires the district cour t to sua sponte order leave to a

mend afte r the close of

discovery

and the par ties’ dispositive motions. Indeed, our court a nd others have up he ld a

dis tr ic t c ourt ’s dis c re tio n to de ny le ave to amend at that sta g e of litigation. See, e .g. , Loc k he e d M ar tin Corp. v. Network Solutions, Inc. , 194 F.3d 980, 986 (9th Cir. 1999) (“ A nee d to reope n discovery and th er ef

ore de lay the proce eding s supports a district court’s f inding of prejudice from a de lay ed motion to amend the complaint.”); Solomon v. N. Am. Life &Cas. Ins. Co. , 151 F.3d 1132, 1139 ( 9th Cir. 1998) (a ffirmingdenial of le ave to a mend wher e motion was filed on the “eve of the discovery d ea d l i ne”) ; Campbell v.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 22

Em or yClin ic , 166 F.3d 1157, 1162 ( 11th Cir. 1999) (“Pre judice and undue delay

are inhere nt in an amendment
asser ted af ter the c lose of dis co v er y and af ter dispositive
m o t i o n s h av e b e e nf

i l e d , b r i e f e d , an d d e c i d e d

. ” )

. S i m i l ar l y, the a dd iti on

of a ne w l e g a l th e or

y we ig hs a g a ins t le ave to amend under Rule 15. Se e J ac k so n v . B an k

of H aw. , 902 F.2d 1 3 8 5 , 1 3 8 8 (9 th C i r. 1 9 9 0 ) (“ ‘P ut t i n g th e d ef en d an t s th ro u gh th e t i m e an d

e x p e n s e o f

c o n t i nu e d

l i t i g at i o no na

n e wth e o r

y, with the possibili ty

of additional discover y , would be
m an i fe s t l y

un fa i r a n d

un d u l y p re j u d i ci al

. ’” (qu o t i n g P r iddy v. Ede lman , 883 F.2d 438, 447 (6th Cir. 1989) ). In this case, beca use Gue rre ro asse rt ed the ba ilor/bailee c laim only afte r the close of

discovery

and the g overnme nt’s dispositi ve mot ion , th e dis tr ic t c ourt pr op e rl y de te rm ine d th at th e se fac tors weig h ag ainst leave to amend.

Th e ma jor ity a lso fa ils to s c rutin ize Guer re ro ’s de lay

in seekingame ndme nt ( i.e ., his fa ilure to e ve r r e qu e st amendment f

rom the district court) . A p ar ty ’s undue de lay
and fa ilure to e xpla in t

he re a so n f

or the de lay wei g h a g a ins t leave to amend under

Rule 15. Se e Swa nson v . U .S . F or est S erv. , 8 7 F .3 d 3 39 , 3 45 (9 th C ir . 1 99 6) ; Te x a c o , Inc. v

. P o n s o ldt , 939 F.3d 794, 799 ( 9th Cir. 1991). Here , the
ma jor ity c or re c tly po int s o ut t

hat ou r c a se s d o n ot preclude
ame ndme nt, e ve n th ou g h Gue rr e ro ne ve r r e qu e st ed it . M a j. Op

. at 12. Yet, the major ity fails to cite any

case that even
su g g e sts that a

dis tr ic t c ourt

might a bu se its dis c re tio n if

it fails t o order

leave to amend su a s

po nte

. Given that a number of Rule 15 fa ctors we ighe d ag ainst leave to amend, the dis tr ic t c ourt ’s dis mis sa l of Gue rr e ro ’s c la im d id n ot r ise to the level of

an abuse of discre tion. The majority ’s ana ly sis focuses e x clusively on two fac tors: prejudice and the likelihood of g ame s manship.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 23
Whil e these fac tors may

g uide our revie w under

Rule 15, the majority fails to look at these fac tors throug h the def ere ntial lens that our pre cede nt require s. This defe renc e to the district
c ourt re qu ires th at w e a ff

ir m if the se fa c tor s c ou ld p la

us ibl y w e igh a g a in s t le av e to ame nd. S ee Hinkson , 585 F.3d at 12 63 . T he re c or d ma

kes c le ar t

ha t th e dis tr ic t c ourt

c ou ld pla us ibl y fi nd a g a ins t G ue rr e ro on

the se fa c tor s. The majority

conclude s that the go vernme nt suffer ed no prejudice fro m Guer

rer o’s fa ilure to identify his bailee interest, bec ause the g overn m ent knew that the funds belong ed to Rosali e Gue rre ro. Maj. Op. at 11. Yet, the majority acknow ledg es that re vealingthe identity of the proper ty ’s owner

is not t h e o n ly

purpose of

Supplemental Rule G(5 ). R ather , the purpose of the “identify

the bailor” require ment “is to provide t h e g overnme nt and the cour t notice of the specific basis of the claim and the source of the p r o p e rty. ” M a

j

. O p

. at9 ( e mp h a s i s a d d e d )

. S i m i l ar l y, Guer rer o argues that we should hold his cl ai m only to a notice plea ding standard under Rule 8 of the F eder al Rules of Civil Procedur e. I ag ree with Guer rer o and the major ity

that notice of the basis of a c laim is an essen t ial purpose of Supplemental Rule G(5)

. Acc ording ly , the issue is not whether the claim fa iled to give the g overnment notice of Rosalie Gu er rer o’s identity , but whether it failed to g ive the g ov e rnme nt n oti c e of

the sp e c if

ic ba sis of Gu e rr e ro ’s c la im.

Gue rr e ro ’s c la im a lle g e d a va g ue “ po sse sso ry

int e re st” and owne rship of the $11,500. The c laim failed to alleg e a ba ilo r/ ba ile e int e re st a s a

sp e c if ic bas is for

re lie f. Thus ,U

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. $ 11,500.00 I N U. S. C U RREN CY 24

G u er r er o a r gues t hat a bai l or / bai l ee r el at i on s h i p i s s i mpl y a t y pe of 2 “po ss ess o ry i nt erest

. ” I agre e , a n d t he vague ass ert i o n of a “ p o ss ess o ry i nt erest ” m i ght have b een eno ugh t o a le rt the gove rnme nt t hat G uerrer o
w o u ld c la im a b a ilo r in te re st b u t f o r th e “id e n tif

y the b a ilo r” re q u ire m e n t. G uerrer o ’ s f

ai l ure t o i d ent i fy R o sa li e G uerrer o as t he b ai l o r ent i t l ed t he g o v e rn m e n t t o re ly o n G u e rr e ro ’s no n -as se rtio n o f a b a ilo r/b a ilee inte re st. Guer rer o failed to g ive the g overnme nt even Rule 8–leve l
no tic e of his int e nt t o late r a sse rt

a ba ilo r i nte re st. 2

Ba sed on Gue rre ro’s c laim as pleade d, the g overnme nt
move d to s tr ik e th e c la im

— p o inti n g to G u e r

r e r o ’ s la c k of
owner ship and lack of

possession (bec ause he had g iven the funds to Wood). The majority points out t hat the g overnme nt did no t mo ve to st ri ke G ue rr e ro ’s c la im o n th e ba sis of his failure to id en t i fy

the bailor. How ever , as the g overnme nt
asser ts, it had no notice of this basis for the cl ai m . Guer rer o raised the bailor/bailee issue only in respons e to t he g overnme nt’s motion to strike. Prior to that time, Guerr ero ha d o nly argue d th at he h a d a

n o wn e rs hip /po sse sso ry

int e re st in the funds. Ther efor e, the g ov er n m ent was sur prised by Gu e rr e ro ’s su dd e n a sse rt ion of a ba ile e interes t. Wer e it otherwise, the g overnme nt would have ne eded to a rgue ag ainst Guerr ero’ s assertion of a bailee inter est in its prior b ri ef i n g.
The re cord s upports the conc lusion that the tim ing of Guer rer o’s asser

tion of a bailor/bailee interest pre judiced the g ov e rnme nt. As dis c us se d a bo ve , Guerrero did

no t a sse rt

a bailor/bailee interest until a fter the close of discover y . Prior to that time, the gove rnment’s for feiture ca s e was g ear ed toward Guerr ero’ s claim that he owned the funds. While the
ma jor ity no te s th at th e g ov e rnme nt a sk e d Gu e rr e ro a bo ut h is “saf ekeep ing” of the funds in his deposition, Maj. Op. at 6,U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 25 that question would not have a lerted the go v er nment that Guer rer o would later r ely

on a bailor/bailee theory

. Instead, the g overnme nt surely

expected, af

ter Gue rre ro’s de position, that it ha d wo n its c a se

. Af te r a ll, Gu e rr e ro ha d pr e mis e d h is claim on his ownership of the funds and the n admitted that he did not ow n t h em

. The g overnme nt would not have known that it needed to d i s prove Guerr ero’ s unpleade d bailee int e re st. On appe al, it remains uncle ar t o what extent Guerr ero e ve n a sse rt s a

ba ile e int e res t in

the $1 1, 50 0. In h is R e ply B ri e f, Gu e rr e ro argue d th at th e dis tr ic t court e rr e d, be c a us e Gu e rr e ro ’s a sse rt ion

of an u na do rn e d “ po sse sso ry

int e re st” was suff icien t to comply

with Supplemental Rule G. Guer rer o claims he did not nee d to identify Rosalie Guer

rer o as the ba ilor beca

use “[t] here was n o bailee- bailor
re latio ns hip be tw e e n [G ue rr e ro ] an d Ro sa lie .” Thus , b oth in the dis tr ic t c ourt

be low and on a pp e al, Gue rre ro se e ms t o move fluidly

betwee n theories, c laiming a nd disclaiming them as conve nient. This is the ex act sort o f moving targ et that Ru le G( 5) a ims to a

vo id. Th e majo ri ty ’s ho ldi ngon ly
serve s to compound the g overnme nt’s prejudice

. Withre sp e c t to the g ame sma ns hip fa c tor , th e ma

jor ity
c on c lud e s th at th e re is n o in dic atio n th at th e de c isi on to w a it to r aise the bailee issue was strateg ic. Maj

. Op

. at 11. Howeve r, this statement overlooks the fac t that Guer rer o had to h ave known the fa cts underly ing his a lleg ed bailor/ba ilee interest longbefor e he r aised the i s s ue. The n, he ra ised the issue afte r discover

y ended a nd in response to a

dis p o s i t i ve g overnme nt motion. Whil e Istop short of acc using Guerr ero or his attorney

of outrig h t g amesmanship, these actions at le a st i nf e r s uc h d e sign. Suc h in fe re nc e in t he re c or d s ho uld fo rc e us to a ff

ir m th e dis tr ic t c ourt

.U

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 26

II. The dist r ic t c ourt d id note r r when i t g r ant e d t he governm ent’s m otion f

or sum m ary judgm ent.
The district cour

t alt er n atively

g rante d the g overnme nt
summa ry jud g me nt. Th e dis tr ic t court is c or re c t th at th e re is no g enuine issue of

mat er i al fac t as to whether the $11,500 constitutes drugproce eds. The ma jority relies o n o n e piec e of evide nce to support its conclusion to the contra ry : an a f f i d av i to f R o s a l i e G u e r

r e r o ’ s p e r s o n a l i n

j ur y at t o r n e y. Howeve r, bec ause the attorney has no persona l knowledg e of what Rosalie Gue rre ro did with the insuranc e proc eeds she
rec eived, the a ffidavit esta blishes only

that Rosalie Guer

rer o rec eived a

cer tain amount of money

at a c ertai n t ime. See F e d. R. C iv. P. 5 6( c )( 4) ; see also B l o ck v. City of L.A. , 253 F

. 3 d 4 1 0 , 4 1 9 ( 9 th Ci r

. 2 0 0 1 ) ( r e je c ti n g r e li an c e on an aff idavit to defeat summary

judgme nt wher e the a ffidavit wa s “base d on inadmissible hearsa y ,” not per sonal knowledg e).

I t is well settled that a non-movingparty must present

“ mor e tha

n a ‘m e re

. . . s c int ill a

of evi den ce’ t o d e fe at a motion for

summary judgme nt.” In t’ l Ch urc h o f F ou rsq ua re Go sp e l v . Ci ty

of S an Le an dr o , 673 F.3d 1059, 1068 ( 9th Cir. 2 0 1 1 ) (a l t er at i o n i n o ri gi n al ) ( q u o t i n g An de rso n v . Li be rty Lobby , 477 U.S. 242, 252 (1986)). The scintilla of evidenc e upon which the maj ority and Gue rre ro re ly

—the fa ct that Rosalie Guer rer o rec eived insura nce pr ocee ds—does not pr e c lud e summa

ry jud g me nt. With out a

c omp e te nt w itn e ss to t e sti fy at tr ia l th at Ro sa li e Gue rr e ro save d th e fu nd s, Guer rer o’s attorne y

would not even be able to argue that the $1 1, 50 0 tr a c e s b a c k to the ins ur anc e pr oc e e ds

. No wi tne ss w ou ld b e a

ble to t est if

y in s up po rt

of thi s argument. As the majority acknow ledg es, Rosalie Gue rre ro wo uld b e un a b l e t o t e s t i f

y attr i a l , b e c a

u s e s h e p r e v i o us lyU

NI TED S T A T ES V

. $ 11,500.00 I N U. S. C U RREN CY 27
invoked the F ifth Amendment. See Nationwide Life Ins. Co. v. Richards , 54 1 F .3 d 9 03 , 9 10 (9 th C ir . 2 00 8) (“ Tr ia l c ourt s gen er al l y wi l l n o tp er m i ta p arty t o i n v o k e t h e p ri v i l ege ag ainst sel f- i n cr i m i n at i o nwi thre s p ec tt o d ep o s i tion questions and then late r testify about t he same subject matter at trial.”). As no te d a

bo ve , Ro sa lie Gu e rr e ro ’s atto rn e y wi ll n ot b e a

ble to testify at t rial t hat t he $11,500 was insurance proce eds, due to her lac k of per sonal knowledg e. Similarly , Guer rer o himself will be unable to te stify of the funds’ o ri g in. Guer rer o does not claim to have persona l knowledg e of the
source of t h e fu n d s

. To the extent he seeks to testify , based on information Rosalie Guer rer o told him, i t is hearsa y . As the ma jor ity no te s, the d istri c t c ourt did no t a bu se its discretion in refusing to consider these hearsay statements on
summa ry jud g me nt. Contrary to the majority ’s view, the district court’s
c on c lus ion did

no t r e qu ir e it t o w e ig h th e e vid e nc e be fo re it. Rathe r, the g ov e rnme nt i s e nti tle d to summar y jud g me nt, beca use Rosalie Gue rre ro’s attorney ’s af fi d av it, without more, doe s not raise a

g enuine issue of m at er i al fac t and would not a llow a jury to rea sonably find in Guerr ero’ s favor

. See United States v. $133,420.00 in U.S. Currency , 672 F.3d 62 9, 63 8 (9 th Cir . 2 01 2) (“ ‘T he me re e xiste nc e of a sc int ill a of evide nce in support of the plai n t i ff’s pos ition will be ins uf fi c ie nt; the re mus t be e vid e nc e on wh ic h th e jur

y c ou ld
re as o n ab l y

fi n d fo r t h e p l ai n t i ff

. ’” (qu o t i n g Anderson , 477 U.S. at 252)).