1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

12-29-1995

United States of America v. McGlory

Precedential or Non-Precedential:

Docket 94-3528

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"United States of America v. McGlory" (1995). 1995 Decisions. Paper 325.

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1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

____________ 

No. 94-3528 

____________ 

UNITED STATES OF AMERICA 

v. 

$184,505.01 IN U.S. CURRENCY 

 Reginald D. McGlory, 

 Claimant-Appellant 

____________ 

No. 94-3674 

____________ 

UNITED STATES OF AMERICA 

v. 

$14,548.50 IN U.S. CURRENCY 

 Reginald D. McGlory, 

 Claimant-Appellant 

____________ 

No. 94-3675 

____________ 

UNITED STATES OF AMERICA 

v. 

ONE MARBLE INDIAN STATUE, 

ONE REPLICA REMINGTON 

RATTLESNAKE STATUE 

 Reginald D. McGlory, 

 Claimant-Appellant 

____________________ 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF PENNSYLVANIA 
2 

____________________ 

(D.C. Nos. 89-Civ-2323, 90-Civ-236, and 90-Civ-369) 

Argued September 13, 1995 

Before: SLOVITER, Chief Judge, ALITO, Circuit Judge, and RENDELL, 

District Judge0

(Opinion Filed: December 29, 1995) 

____________________ 

Michael A. Young (Argued) 

165 Christopher Street 

New York, New York 10014 

 Attorney for Claimant-Appellant 

Frederick W. Thieman, United States Attorney 

Bonnie R. Schlueter, Assistant United States Attorney 

Mary M. Houghton, Assistant United States Attorney (Argued) 

633 U.S. Post Office and Courthouse 

Pittsburgh, Pennsylvania 15219 

 Attorneys for Appellee 

____________________ 

OPINION OF THE COURT 

____________________ 

ALITO, Circuit Judge: 

 In these appeals, Reginald D. McGlory challenges the 

district court's refusal to set aside default judgments in three 

separate civil in rem forfeiture proceedings brought under 21 

U.S.C. § 881(a)(6).0 McGlory raises five separate issues -- lack 

 

0The Honorable Marjorie O. Rendell, District Judge for the 

Eastern District of Pennsylvania, sitting by designation. 

0The provision states in relevant part: 

The following shall be subject to forfeiture to the United 

States and no property right shall exist in them: 
3 

of notice, double jeopardy, wrong standard in refusing to set 

aside default judgments, insufficient reasons for refusing to set 

aside default judgment, and misstatement or fraud on the part of 

the government. Because we find that the government violated 

McGlory's due process rights by failing to provide him with 

adequate notice of two of the proceedings, we reverse the 

district court's judgments in those proceedingsi and remand those 

cases for further proceedings. However, we reject McGlory's 

double jeopardy argument and therefore affirm the district 

court's judgment in the remaining proceeding. We also reject 

McGlory's remaining arguments. 

I. 

 On September 8, 1989, as part of a criminal investigation of 

McGlory, federal Drug Enforcement Administration ("DEA") and 

Internal Revenue Service ("IRS") agents executed a search warrant 

at 4265-67 Bryn Mawr Road in Pittsburgh. Among other things, the 

agents seized the items that are the subject of the three 

 

 * * * 

(6) All moneys, negotiable instruments, securities, or other 

things of value furnished or intended to be furnished by any 

person in exchange for a controlled substance in violation 

of this subchapter, all proceeds traceable to such an 

exchange, and all moneys, negotiable instruments, and 

securities used or intended to be used to facilitate any 

violation of this subchapter, except that no property shall 

be forfeited under this paragraph, to the extent of the 

interest of an owner, by reason of any act or omission 

established by that owner to have been committed or omitted 

without the knowledge or consent of that owner. 

21 U.S.C. § 881(a)(6) (emphases added). 
4 

proceedings on appeal: $14,584.50 in cash ("$14K")0; three 

statues0; and an apparently separate collection of $184,505.01 in 

cash ("$184K").0 The agents also arrested McGlory. He was 

eventually convicted of conspiracy to distribute heroin and to 

possess heroin with the intent to distribute it, in violation of 

21 U.S.C. § 846; possession of heroin with intent to distribute, 

in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(C); possession of 

a firearm by a convicted felon, in violation of 18 U.S.C. 

§922(g)(1); using a firearm in a drug trafficking operation, in 

violation of 18 U.S.C. § 924(c)(1); and laundering drug proceeds, 

in violation of 18 U.S.C. § 1956(a)(1)(A)(i) and 18 U.S.C. § 2. 

See United States v. McGlory, 968 F.2d 309, 314-15 (3d Cir. 

1992), cert. denied, 113 S. Ct. 1388 (1993). 

 The DEA began separate administrative forfeiture proceedings 

against the $14K and the statues.0 McGlory, who was 

incarcerated, received notice of both proceedings in prison, 

Supplemental Appendix ("Supp. App.")0 at 60, 23, but filed no 

administrative claims in either proceeding. Id. Upon the filing 

of administrative claims by Sandra McGlory (McGlory's wife) and 

Ola Mae McGlory (his mother) to the $14K and the statues, 

 

0United States v. $14,548.50 in U.S. Currency (No. 94-3674). 

0United States v. One Marble Indian Statue, One Replica Remington 

Rattlesnake Statue (No. 94-3675). 

0United States v. $184,505.01 in U.S. Currency (No. 94-3528). 

0The DEA referred the forfeiture of the $184K to the United 

States Attorney for judicial forfeiture, because its value 

exceeded $100,000, the maximum allowable amount for the less 

cumbersome administrative forfeiture process. App. 77. 

0As used in this opinion, Appendix ("App.") and Supplemental 

Appendix ("Supp. App.") refer to the appendices submitted by 

McGlory and the government, respectively. 
5 

respectively, Supp. App. 52, 55, 60, 23, the DEA referred the 

forfeitures to the United States Attorney, who filed complaints 

for civil forfeiture on February 7, 1990 (for the $14K) and 

February 28, 1990 (for the statues). 

 The government served McGlory with the complaints via first 

class and certified mail at the Bryn Mawr Road address, where his 

mother signed both certified mail receipts. Supp. App. 43, 213-

16, 4. In her affidavit, McGlory's mother claimed not to 

remember receiving the notices but stated that she would have 

turned any such notices over to the attorney who was representing 

McGlory on the criminal charges, Thomas Ceraso, Esq. Appendix 

("App.") at 117. The government did not serve McGlory in prison, 

and made no attempt to do so. 

 McGlory did not file any claim or answer in either 

proceeding, App. 1-6, 27, 31, and the district court entered 

default judgments against him on May 29, 1990, and July 23, 1990, 

forfeiting the $14K and the statues, respectively. App. 21-22. 

McGlory filed motions to set aside the default judgments on April 

21, 1994. App. 34. 43. After referring the matter to a 

magistrate judge, who recommended that the default judgments not 

be reopened, the district court denied McGlory's motions. App. 

3, 9. 

 The government filed a complaint for civil forfeiture of the 

$184K on November 21, 1989. App. 7, 17. The government served 

the complaint on McGlory via first class and certified mail at 

the Bryn Mawr Road address, as well as on Mr. Ceraso. Supp. App. 

19. When McGlory again failed to file any claim or answer, the 
6 

government obtained a default judgment. Supp. App. 99, 111. On 

McGlory's behalf, Mr. Ceraso then filed a claim of ownership and 

a motion to set aside the entry of default, which the government 

did not oppose, and the court set aside the judgment. Supp. App. 

102-10, 112. McGlory again failed to file an answer within the 

time allotted by the court, and the court entered another default 

judgment against him on April 12, 1991. Supp. App. 129; App. 23. 

On July 15, 1994, McGlory filed a motion to set aside this second 

default judgment, which the district court denied. 

II. 

 McGlory first argues that his due process rights were 

violated in that the government failed to provide him with 

adequate notice of the civil forfeiture proceedings against the 

$14K and the statues. Relying primarily on the Supreme Court's 

decision in Robinson v. Hanrahan, 409 U.S. 38 (1972), McGlory 

argues that the Due Process Clause required that the government 

serve him with notice of the forfeiture proceedings in prison.0

 By virtue of 28 U.S.C. § 2451, civil in rem forfeiture 

proceedings are governed by Rule C of the Supplemental Rules for 

Certain Admiralty and Maritime Claims. As the government notes, 

Rule C(4) requires only publication, not personal service of 

 

0 McGlory also denies that he resided at the Bryn Mawr Road 

address prior to his arrest, claiming that the house at that 

address was his mother's home. McGlory Br. at 6, 9-11. The 

government points to extensive evidence that McGlory did in fact 

reside at 4265-67 Bryn Mawr Road. Gov't Br. at 7 n.1. Because 

we conclude that the government should have served (or at least 

attempted to serve) McGlory in prison, we need not resolve this 

dispute concerning McGlory's pre-arrest address. 
7 

process. However, for due process purposes, publication alone is 

not sufficient when the government can reasonably ascertain the 

names and addresses of interested parties. Mennonite Board of

Missions v. Adams, 462 U.S. 791 (1983). 

 McGlory argues, in our view persuasively, that Robinson and 

Adams together required that the government at least make an 

attempt to serve him with notice of the forfeiture proceedings in 

prison. In most important respects, Robinson appears 

indistinguishable from the present case. In Robinson, 

the State knew that appellant was not at the 

address to which the notice was mailed and, 

moreover, knew also that appellant could not get 

to that address since he was at that very time 

confined in . . . jail. Under these 

circumstances, it cannot be said that the State 

made any effort to provide notice which was 

"reasonably calculated" to apprise appellant of 

the pendency of the forfeiture proceedings. 

Robinson, 409 U.S. at 40 (quoting Mullane v. Central Hanover Bank 

& Trust Co., 339 U.S. 306, 314 (1950)); see also United States v. 

Woodall, 12 F.3d 791, 794 (8th Cir. 1993) (when government knows 

of party's actual whereabouts, due process requires sending of 

notice to that address, especially where party is incarcerated); 

accord United States v. Giraldo, 45 F.3d 509, 511 (1st Cir. 

1995). 

 The government's counterarguments are unavailing. The 

government cites Rule C(4) to show that it had no statutory duty 

to inform McGlory, but this argument is not dispositive for due 

process purposes. Equally unpersuasive is the actual notice of 

the administrative forfeiture proceedings that McGlory received 
8 

while he was in prison, since the judicial forfeiture proceedings 

were separate proceedings from the administrative actions. 

 The government also claims that its actions satisfied the 

Mullane standard, and attempts to distinguish Robinson by noting 

that the defendant in Robinson did not receive notice of the 

proceeding until after it had concluded, whereas McGlory had 

actual notice of the proceedings from two sources: the notice of 

the administrative proceedings and the notice of the civil 

proceedings received by his attorney from McGlory's mother. As 

noted above, we do not find the notice of the administrative 

proceedings that McGlory received while in prison to be 

significant for purposes of the subsequent judicial proceedings. 

Furthermore, the government's arguments concerning the notice 

received by McGlory's attorney are flawed.0

 The government, citing United States v. Indoor Cultivation 

Equipment, 55 F.3d 1311 (7th Cir. 1995), argues that the receipt 

of notice by McGlory's attorney constituted actual notice to 

McGlory. However, Indoor Cultivation Equipment and the case it 

cited, United States v. Di Mucci, 879 F.2d 1488, 1495 (7th Cir. 

1989), involved situations where the litigation had already begun 

and the party's attorney had received notice of an important fact 

or deadline but had failed to act on it. The important Supreme 

 

0The parties dispute whether there is sufficient evidence to 

support a finding that McGlory's attorney in the criminal case, 

Thomas Ceraso, Esq., received the notices of the civil forfeiture 

proceedings from McGlory's mother. There seems to be strong 

evidence that he did receive the notices, including Mrs. 

McGlory's affidavit, App. 123. For purposes of this analysis, we 

assume that Mr. Ceraso received actual notice of the proceedings. 
9 

Court cases in this area, Link v. Wabash R. Co., 370 U.S. 626 

(1962), and Smith v. Ayer, 101 U.S. 320 (1879), also involved 

such situations, as opposed to initial service of process on a 

defendant. 

 The situation presented here -- where the proceedings had 

not yet begun, McGlory was therefore not yet a party,0 and Mr. 

Ceraso was not yet his attorney in these proceedings -- is easily 

distinguishable from that in Indoor Cultivation and the other 

cases cited above. Plainly stated, for purposes of the civil 

forfeiture proceedings against the $14K and the statues, McGlory 

did not have an attorney at the time process was received by Mr. 

Ceraso; hence, service on Mr. Ceraso was not service on McGlory's 

attorney, and thus could not constitute actual notice to 

McGlory.0

III. 

 

0Indeed, with regard to McGlory's double jeopardy argument, see

Part IV infra, the government claims that McGlory was never a 

party to the first forfeiture proceeding. 

0Cases construing Rule 4 of the Federal Rules of Civil Procedure 

highlight the distinctiveness of service of process. Rule 4(d)(3) 

permits service upon an individual "by delivery of a copy of the 

summons and of the complaint to an agent authorized by 

appointment or by law to receive service of process." Fed. R. 

Civ. P. 4(d)(3). When the agent is the individual's attorney, 

numerous courts have held that the validity of service of process 

upon the attorney depends upon actual authority on the part of 

the attorney to receive process on behalf of the individual. See, 

e.g., Schultz v. Schultz, 436 F.2d 635, 639 (7th Cir. 1971) 

(service upon attorney was ineffective where attorney had not 

been appointed for that precise task); Schwarz v. Thomas, 222 

F.2d 305 (D.C. Cir. 1955) (attorney representing defendant in 

another litigation has no authority to accept service of process 

in a separate suit); Select Creations, Inc. v. Paliafito America, 

Inc., 830 F. Supp. 1223, 1234 (E.D. Wis. 1993) and cases cited. 
10 

 McGlory next argues that the forfeitures in Nos. 94-3675 

(statues) and 94-3528 ($184K) should be set aside as multiple 

punishments imposed on him for the same offense in violation of 

the Double Jeopardy Clause of the Fifth Amendment because they 

came after the forfeiture of the $14K in No. 94-3674 and (in the 

case of the $184K) after McGlory's criminal conviction.0

According to McGlory, this result is compelled by the Supreme 

Court's decisions in United States v. Halper, 490 U.S. 435 

(1989), Austin v. United States, 113 S. Ct. 2801 (1993), and 

Department of Revenue of Montana v. Kurth Ranch, 114 S. Ct. 1937 

(1994).0

 

0The following chronology is relevant to this discussion: 

(1) No. 94-3674 ($14K)

 Complaint filed: February 7, 1990 

 Jeopardy attached: Never (see Part III.B infra) 

 Default judgment entered: May 30, 1990 

 (2) No. 94-3675 (statues)

 Complaint filed: February 28, 1990 

 Jeopardy attached: Never (see Part III.B infra) 

 Default judgment entered: July 24, 1990 

 (3) Criminal conviction

 Superseding indictment filed: December 13, 1989 

 Jeopardy attached: April 25, 1990 

 Judgment of conviction and sentence: February 12, 1991 

 (4) No. 94-3528 ($184K)

 Complaint filed: November 21, 1989 

Jeopardy attached: No earlier than May 4, 1990, when 

McGlory was made a party (see footnote 14 infra). 

 Default judgment entered: April 12, 1991 

0McGlory did not raise his double jeopardy argument in the 

district court. Hence, the alleged constitutional violation is 

reviewable only for plain error. United States v. Olano, 113 S. 

Ct. 1770 (1993). 
11 

 McGlory's double jeopardy argument fails on several grounds. 

First, because he never filed a claim in the proceeding against 

the $14K or the proceeding against the statues, he was never "in 

jeopardy" in those proceedings. Second, none of the forfeitures 

constituted "punishment" within the meaning of the Double 

Jeopardy Clause. Finally, none of the proceedings were based on 

the "same offense." 

A. 

 The Double Jeopardy Clause of the Fifth Amendment provides 

that no person may "be subject for the same offense to be twice 

put in jeopardy of life or limb." U.S. Const. amend. V. This 

clause also applies to imprisonment and monetary penalties, Ex 

parte Lange, 85 U.S. (18 Wall.) 163 (1874), and it has been held 

to protect against "three distinct abuses: a second prosecution 

for the same offense after acquittal; a second prosecution for 

the same offense after conviction; and multiple punishments for 

the same offense." Halper, 490 U.S. at 440. 

 In three decisions issued in the last seven years, the 

Supreme Court has held that, in certain circumstances, 

constitutional limitations that had previously been thought to 

apply only to criminal sanctions also serve to limit the 

imposition of civil sanctions. In United States v. Halper, 490 

U.S. 435 (1989), the Court extended double jeopardy limitations 

to civil penalties that are not solely remedial in purpose, 

holding that "under the Double Jeopardy Clause a defendant who 

has already been punished in a criminal prosecution may not be 

subjected to an additional civil sanction to the extent that the 
12 

second sanction may not be fairly characterized as remedial, but 

only as a deterrent or retribution." Id. at 448-49. The 

defendant in Halper had previously been convicted for 65 counts 

of violating the criminal false claims statute, 18 U.S.C. § 287, 

by filing false Medicare claims totalling less than $600. He was 

then sued by the government under the civil False Claims Act, 31 

U.S.C. §§ 3729-3731, which prescribed a $2,000 civil penalty per 

violation. Based on the record of the prior criminal 

prosecution, the district court granted summary judgment for the 

government on the issue of liability, but the court held that the 

imposition of the full civil penalties prescribed by the statute 

would violate the prohibition against double jeopardy. On direct 

appeal, the Supreme Court agreed that the statutory penalty as 

applied to Halper violated double jeopardy. The Court held that 

the civil penalty constituted punishment because in this "rare 

case" the civil penalty bore "no rational relationship to the 

goal of compensating the Government for its loss, but rather 

appear[ed] to qualify as 'punishment' in the plain sense of the 

word." 490 U.S. at 449. The Court remanded the case to the 

district court to determine the size of the civil sanction that 

the government could receive without crossing the line between 

remedy and punishment. Id. at 450. 

 In Austin v. United States, 113 S. Ct. 2801 (1993), the 

Court considered two other forfeiture provisions of the 

Controlled Substances Act, 21 U.S.C. §§ 881(a)(4) and 881(a)(7), 

which provide for the forfeiture of, respectively, conveyances 

and real property used or intended for use in illegal drug-
13 

related activities. 21 U.S.C. §§ 881(a)(4), (a)(7). Drawing on 

"the historical understanding of forfeiture as punishment," 

Austin, 113 S.Ct. at 2810, on the language of §§ 881(a)(4) and 

(a)(7), and on the legislative history of § 881, the Court found 

that forfeiture under §§ 881(a)(4) and (a)(7) does not solely 

serve a remedial purpose and hence must be considered 

"punishment" under Halper. As such, the Court concluded, 

forfeitures under §§ 881(a)(4) and (a)(7) are subject to the 

limitations of the Eighth Amendment's Excessive Fines Clause. Id.

at 2812. 

 In so holding, the Austin Court rejected two arguments 

offered by the government in an attempt to show that §§ 881(a)(4) 

and (a)(7) are remedial and not punitive. First, the Court 

rejected the government's characterization of the conveyances and 

real property covered by the two sections as "instruments" of the 

drug trade, forfeiture of which could be considered remedial. See

United States v. One Assortment of 89 Firearms, 465 U.S. 354, 364 

(1984). Second, the Court rejected the government's attempt to 

liken such forfeitures to those involved in customs violations, 

which serve as "a reasonable form of liquidated damages," One Lot 

Emerald Cut Stones v. United States, 409 U.S. 232, 237 (1972), 

that compensate for the costs imposed by illegal drug activity on 

the government and on society as a whole. "[T]he dramatic 

variations in the value of conveyances and real property 

forfeitable under §§ 881(a)(4) and (a)(7)," the Court concluded, 

"undercut any similar argument with respect to those provisions." 

Austin v. U.S., 409 U.S. at 2812. 
14 

 Most recently, in Department of Revenue of Montana v. Kurth 

Ranch, 114 S. Ct. 1937 (1994), the Court held that the imposition 

of a tax under Montana's Dangerous Drug Tax Act after the 

taxpayer had already been punished in a separate criminal 

proceeding represented a second "punishment" for the same offense 

in violation of the Double Jeopardy Clause. While noting the 

holding of Halper that the Double Jeopardy Clause prevents a 

defendant already punished in a criminal proceeding from having a 

nonremedial civil sanction imposed against him in a separate 

proceeding, the Court found the Halper method of determining 

whether a civil sanction is punitive to be inapplicable to tax 

statutes. Id. at 1944-45. Instead, focusing on a number of 

specific characteristics of the tax -- its high rate, its 

deterrent purpose, the fact that it is conditioned on the 

commission of a crime, the limitation of its scope to taxpayers 

who have already been arrested for the very conduct that gives 

rise to the tax obligation, and the fact that it is levied on 

goods that the taxpayer no longer owns or possesses -- the Court 

concluded that the tax is fairly characterized as punishment. Id.

at 1946-48. 

 Resolution of McGlory's double jeopardy claim regarding the 

civil forfeitures requires answers to three distinct questions: 

Was McGlory "in jeopardy" in the first forfeiture proceeding? Did 

the forfeitures under § 881(a)(6) constitute "punishment"? And 

finally, did the offenses underlying the first forfeiture and 
15 

McGlory's criminal conviction represent the "same offense" as 

those underlying either of the two later forfeitures?0

B. 

 As noted in Part I supra, McGlory did not file any claim of 

ownership or answer to the complaint of forfeiture in either of 

the first two civil forfeiture proceedings. He did not 

participate in either proceeding until default judgments had 

already been entered against him. His first appearance in either 

proceedings was the filing of a motion to set aside the default 

judgment, in each case some four years after the judgment had 

been entered. 

 A forfeiture proceeding in which a party does not 

participate does not place that party in jeopardy, and therefore 

that party cannot use that forfeiture as the basis of a double 

jeopardy challenge to a subsequent proceeding. As the Seventh 

Circuit stated in United States v. Torres, 28 F.3d 1463, (7th 

Cir.) (holding that a forfeiture under 21 U.S.C. § 881(a)(6) in 

 

0Another issue presented by any double jeopardy claim is whether 

the proceedings in which punishment has allegedly been imposed 

were separate proceedings or, alternatively, constituted a 

single, coordinated proceeding; if the latter is true, the double 

jeopardy argument fails. See, e.g., Kurth Ranch, 114 S. Ct. at 

1945 ("Montana could no doubt collect its tax . . . if it had 

assessed the tax in the same proceeding that resulted in [the 

taxpayer's] conviction."); Missouri v. Hunter, 459 U.S. 359, 368-

69 (1983) ("Where . . . a legislature specifically authorizes 

cumulative punishment under two statutes, regardless of whether 

those two statutes proscribe the 'same' conduct . . . the 

prosecutor may seek and the trial court or jury may impose 

cumulative punishment under such statutes in a single trial."). 

We assume without deciding that the various forfeiture 

proceedings and McGlory's criminal trial were all separate 

proceedings. 
16 

which the claimant did not file a claim did not place the 

claimant in jeopardy for Fifth Amendment purposes), cert. denied, 

115 S. Ct. 669 (1994): "You can't have double jeopardy without a 

former jeopardy." Id. at 1465 (citing Serfass v. United States, 

420 U.S. 377, 389 (1975)); see also United States v. Penny, 60 

F.3d 1257 (7th Cir. 1995), petition for cert. filed, 64 U.S.L.W. 

____ (U.S. Oct. 24, 1995) (No. 95-6698). 

 In United States v. Arreola-Ramos, 60 F.3d 188 (5th Cir. 

1995), the Fifth Circuit followed the reasoning of Torres in 

rejecting the double jeopardy claim of a defendant who had not 

participated in an earlier administrative forfeiture proceeding. 

"As Arreola did not appear and contest the forfeiture, he was 

never in jeopardy," the court reasoned. "Without former 

jeopardy, double jeopardy cannot arise." Id. at 192. Because of 

the factual similarity between Arreola-Ramos and the present 

case, the Fifth Circuit's description and dismissal of the 

defendant's legal theory bear quoting: 

[W]e perceive that Arreola's argument runs 

something like this: (1) the government arrested 

me and seized my money; (2) knowing I was in jail, 

the government instituted forfeiture proceedings 

against my money, but sent notice only to my civil 

residence; and (3) this constitutes inadequate 

notice and violates my due process rights, as I 

was unaware of and unable to contest the 

forfeiture. Arreola then jumbles all three parts 

together and, in a transparent bit of legal 

alchemy, attempts to transmute the "lead" of a 

civil forfeiture proceeding--in which he was not 

even a party--into the "gold" of former jeopardy. 

Essentially, Arreola . . . now asks us . . . to 

overlook his absence from the forfeiture 

proceeding and to hold--not merely "in spite of" 

his absence but indeed "because of" his absence--

that former jeopardy attached in the forfeiture 
17 

proceeding. Despite its ingenuity, this is 

nothing more than a garden variety flawed 

syllogism. 

Arreola-Ramos, 60 F.3d at 190. 

 In United States v. Baird, 63 F.3d 1213 (3d Cir. 1995), 

petition for cert. filed, 64 U.S.L.W. 3318 (U.S. Oct. 17, 1995) 

(No. 95-630), we also adopted the Torres rationale in rejecting 

the double jeopardy argument of a defendant who had not filed a 

claim in an earlier administrative forfeiture proceeding. In 

that case, defendant Baird sought dismissal of a superseding 

criminal indictment, arguing that it was barred by the Double 

Jeopardy Clause in light of the earlier forfeiture. We found 

Baird's argument wanting, stating: "Like the double jeopardy 

claimant in Torres, as a non-party to the administrative 

forfeiture process, Baird was not, and could not have been, 

placed at risk by that process." Id. at 1219. While Halper

"extended the no-double-punishments rule to civil penalties . . . 

[it] did not remove from the double jeopardy claimant's shoulders 

the burden of establishing a former jeopardy." Id.

 The logic of Baird applies as well to judicial forfeiture 

proceedings such as that brought against the $14K and the 

statues. Thus, we hold that McGlory was not "in jeopardy" in 

either of the first two forfeiture proceedings.0

 

0McGlory's only argument here would have to be that he did in 

fact participate in the first forfeiture proceeding by filing his 

motion to set aside the default judgment. However, we have 

stated that "jeopardy does not, and cannot, attach until one is 

made a party to a proceeding before a trier of fact having 

jurisdiction to try the question of guilt or innocence, and that, 

until such time, the constitutional double jeopardy prohibition 

can have no application." Baird, 63 F.3d at 1218 (emphasis in 
18 

C. 

 In order to establish that his double jeopardy rights were 

violated, McGlory must also show that the forfeitures themselves 

constituted "punishment" under Halper, Austin, and Kurth Ranch. 

Two courts of appeals have addressed this issue with respect to 

§881(a)(6), reaching opposite conclusions. Adopting the Fifth 

Circuit's reasoning and rejecting the Ninth Circuit's, we hold 

that the forfeitures here did not constitute "punishment." 

 In United States v. Tilley, 18 F.3d 295 (5th Cir.), cert. 

denied, 115 S. Ct. 574 (1994), the Fifth Circuit held that 

forfeiture of illegal drug proceeds under § 881(a)(6) is not 

"punishment." Applying the test of Halper -- whether the amount 

forfeited was so great that it bore "no rational relation to the 

costs incurred by government and society from the defendant's 

criminal conduct," id. at 298-99, and citing national statistics 

on revenues produced and costs imposed by illegal drug 

activities, the court held that the amounts confiscated in that 

case were not grossly disproportionate to governmental and 

 

original). Under this definition, McGlory's double jeopardy 

claim fails, since until and unless the default judgment was set 

aside, McGlory was not "a party to a proceeding before a trier of 

fact having jurisdiction to try the question of guilt or 

innocence." Alternative definitions offered by other courts of 

appeals are also of no help to McGlory in this regard. See

Torres, 28 F.3d at 1465 (jeopardy attaches when evidence is first 

presented to trier of fact); United States v. Ursery, 59 F.3d 

568, 572 (6th Cir. 1995) (in nontrial proceeding ended by a 

consent judgment, jeopardy attaches when judge accepts 

stipulation of forfeiture and enters judgment of forfeiture), 

cert. granted, 116 S.Ct. 762 (1196). United States v. Kearns, 61 

F.3d 1422, 1428 (9th Cir. 1995) (jeopardy attaches no earlier 

than date on which defendant files answer to forfeiture 

complaint). 
19 

societal costs. Id. at 299. The court distinguished Austin, 

reasoning that the concerns about forfeitures of conveyances and 

real estate under §§ 881(a)(4) and (a)(7), i.e., that they could 

be wildly disproportionate to the costs imposed by the 

defendant's illegal activities, were not applicable to 

forfeitures of proceeds under § 881(a)(6). "[T]he forfeiture of 

drug proceeds will always be directly proportional to the amount 

of drugs sold. The more drugs sold, the more proceeds that will 

be forfeited. As we have held, these proceeds are roughly 

proportional to the harm inflicted upon government and society by 

the drug sale." Id. at 300. 

 Alternatively, the court held, even without the "rational 

relation" test of Halper, forfeiture of illegal drug proceeds is 

not "punishment" because of their very nature as illegally 

derived property. "When . . . the property taken by the 

government was not derived from lawful activities, the forfeiting 

party loses nothing to which the law ever entitled him. . . . The 

possessor of proceeds from illegal drug sales never invested 

honest labor or other lawfully derived property to obtain the 

subsequently forfeited proceeds. Consequently, he has no 

reasonable expectation that the law will protect, condone, or 

even allow, his continued possession of such proceeds because 

they have their very genesis in illegal activity." Tilley, 18 

F.3d at 300. 

 We find the Fifth Circuit's reasoning to be sound. We 

therefore hold that the forfeiture under 21 U.S.C. § 811(a)(6) of 

proceeds from illegal drug transactions, or proceeds traceable to 
20 

such transactions, does not constitute "punishment" within the 

meaning of the Double Jeopardy Clause. 

 In so holding, we reject the contrary reasoning and 

conclusion of the Ninth Circuit regarding § 881(a)(6) in United 

States v. $405,089.23 U.S. Currency, 33 F.3d 1210 (9th Cir. 

1994), amended on denial of rehearing, 56 F.3d 41 (9th Cir. 

1995), cert. granted, 116 S.Ct. 762(1996). Eschewing the caseby-case approach urged by the government (and adopted by the 

Fifth Circuit in Tilley), the Ninth Circuit looked to "the entire 

scope of the statute which the government seeks to employ, rather 

than to the characteristics of the specific property the 

government seeks to forfeit." Id. at 1220; see also id. (citing 

Austin and Kurth Ranch as compelling a "categorical approach" 

under which a court "must look to the requirements of the 

forfeiture statute as a whole"). It noted that the scope of 

§881(a)(6) was not limited to proceeds, but included all moneys 

"'furnished or intended to be furnished'" in exchange for drugs, 

and all moneys "'used or intended to be used'" to facilitate 

violations of the drug statute. Id. at 1221 (emphases in 

opinion). The panel's reasoning was sharply criticized in a 

seven-judge opinion dissenting from the court's denial of 

rehearing and of rehearing en banc: 

The panel's opinion collapses Halper [a double 

jeopardy case] into Austin [an excessive fines 

case], converting Halper's rule of reason for the 

"rare" case into a per se rule for the routine 

case. It also merges the inquiry for excessive 

fines cases--whether the amount forfeited is 

partly punishment--into double jeopardy cases, 

where the issue is whether the amount forfeited is 

entirely punishment. And, perhaps most 
21 

critically, the opinion treats proceeds, which are 

forfeitable under § 881(a)(6), like a car or a 

house used to facilitate a drug offense. This has 

to be wrong. 89 Firearms--which Austin

distinguishes but leaves intact--says otherwise; 

and so does the Fifth Circuit . . . . 

$405,089.23 U.S. Currency, 56 F.3d at 42-43 (Rymer, J., 

dissenting). 

D. 

 Moreover, both of McGlory's double jeopardy claims must also 

fail for an additional reason: the challenged forfeitures were 

not predicated on the "same offense" as that which formed the 

grounds for the earlier forfeiture or his criminal conviction.0

 The basic test for determining whether two offenses are the 

"same offense" for double jeopardy purposes is the "same 

elements" test set forth in Blockburger v. United States, 284 

U.S. 299, 304 (1932): "The applicable rule is that where the same 

act or transaction constitutes a violation of two distinct 

statutory provisions, the test to be applied to determine whether 

 

0Since Halper was decided in 1989, no court of appeals has dealt 

squarely with the "same offense" issue in connection with 

§881(a)(6). Several courts of appeals have addressed the issue 

tangentially, or with respect to a different provision of § 881. 

See United States v. Ursery, 59 F.3d 568 (6th Cir. 1995) 

(analyzing § 881(a)(7)), cert. granted, 116 S.Ct. 762 (1996); 

United States v. $405,089.23 U.S. Currency, 33 F.3d 1211 (9th 

Cir. 1994), (distinguishing case at bar from Missouri v Hunter, 

459 U.S. 359(1983)); amended on denial of rehearing, 56 F.3d 41 

(9th Cir. 1995), cert. granted, 116 S.Ct. 762 (1996) United 

States v. One 1978 Piper Cherokee Aircraft, Tail No. N 5538V, 

Including Its Tools and Appurtenances, 37 F.3d 489 (9th Cir. 

1994) (remanding for consideration of "same offense" issue under 

§ 881(a)(4)). But see United States v. Sherrett, 877 F. Supp. 

519, 527 (D. Or. 1995) (holding that indictment and forfeiture 

under § 881(a)(6) were based on same offense where indictment 

included conspiracy count and forfeiture complaint included 

"allegations of conspiracy"). 
22 

there are two offenses or only one, is whether each provision 

requires proof of a fact which the other does not."0 The 

Blockburger "same elements" test was confirmed in United States 

v. Dixon, 113 S. Ct. 2849 (1993), which rejected the alternative 

"same conduct" test in overruling Grady v. Corbin, 495 U.S. 508 

(1990). 

 Here, all three forfeiture complaints sought forfeiture 

"pursuant to 21 U.S.C. § 881." App. 11, 14, 17. The government 

supported its complaint against the 14K and the 184K with 

allegations that they were "proceeds from sales or exchanges of 

controlled substances, in violation of Title 21, United States 

Code." App. 12, 18. This language implicitly invoked 

§881(a)(6). Regarding the statues, the government alleged that 

they were "acquired with proceeds traceable to unlawful exchanges 

of controlled substances in violation of 21 U.S.C. § 881(a)(6)." 

 

0The Supreme Court clarified the applicability of the Blockburger

test in Missouri v. Hunter, 459 U.S. 359 (1983), where the Court 

characterized the test as a rule of statutory construction that 

bars cumulative punishments for the same offense "'in the absence 

of a clear indication of contrary legislative intent.'" 

Blockburger, 459 U.S. at 366 (quoting Whalen v. United States, 

445 U.S. 684, 692 (1980)) (emphasis in Blockburger). Thus, 

[w]here . . . a legislature specifically authorizes 

cumulative punishment under two statutes, regardless of 

whether those two statutes proscribe the "same" conduct 

under Blockburger, a court's task of statutory construction 

is at an end and the prosecutor may seek and the trial court 

or jury may impose cumulative punishment under such statutes 

in a single trial. 

Id. at 368-69. The Hunter limitation on the scope of Blockburger

would apply in the present appeal only if the civil and criminal 

proceedings were considered a single, coordinated proceeding 

rather than separate proceedings. See Part III.B supra. 
23 

App. 15.0 Our analysis thus must begin with the language of 

§881(a)(6): 

The following shall be subject to forfeiture to 

the United States and no property right shall 

exist in them: 

 * * * 

(6) All moneys, negotiable instruments, 

securities, or other things of value furnished or 

intended to be furnished by any person in exchange 

for a controlled substance in violation of this 

subchapter, all proceeds traceable to such an 

exchange, and all moneys, negotiable instruments, 

and securities used or intended to be used to 

facilitate any violation of this subchapter, 

except that no property shall be forfeited under 

this paragraph, to the extent of the interest of 

an owner, by reason of any act or omission 

established by that owner to have been committed 

or omitted without the knowledge or consent of 

that owner. 

21 U.S.C. § 881(a)(6). Thus, proceeds from, or proceeds 

traceable to, exchanges of controlled substances in violation of 

"this subchapter" are subject to forfeiture. "This subchapter" 

is subchapter I of Title 21, covering 21 U.S.C. §§ 801-904. In 

addition, section 965 makes the forfeiture provision applicable 

to violations of subchapter II, 21 U.S.C. §§ 951-971. 21 U.S.C. 

§ 965; see also United States v. Sherrett, 877 F. Supp. 519, 525-

 

0This level of specificity in the forfeiture complaints 

eliminates the need to undertake a detailed examination of 

indictments, affidavits, etc. of the sort conducted by the court 

in United States v. Ailemen, 893 F. Supp. 888 (N.D. Cal. 1995). 

There the court was faced with vague seizure notices that simply 

noted that the defendant's money was seized "for forfeiture under 

Title 21, United States Code (U.S.C.), Section 881, because it 

was used [in] or acquired as a result of a drug related offense," 

id. at 905 (emphasis in original), and had to determine whether 

the forfeitures were based on the same offenses as those charged 

in the criminal indictments, all of which were drug-related. 
24 

26 (D. Or. 1995). Therefore, forfeiture under section 881(a)(6) 

can punish a property owner only for violations of 21 U.S.C. 

§§801-971. 

 A Blockburger/Dixon analysis of the three forfeitures is 

straightforward: each forfeiture requires proof of an element 

that the others do not require, i.e., that the particular piece 

of property seized constituted illegal proceeds or was acquired 

with illegal proceeds. McGlory's assertions notwithstanding, the 

three forfeitures among themselves do not satisfy the "same 

elements" test. 

 We must also apply the Blockburger/Dixon test to the 

offenses underlying the third forfeiture (the $184K) and those 

underlying McGlory's criminal punishment, since this last 

forfeiture followed the criminal conviction. Of the criminal 

charges for which McGlory was indicted and convicted, only two 

fall within the range of violations covered by section 881(a)(6): 

conspiracy to possess with intent to distribute, and to 

distribute, heroin, in violation of 21 U.S.C. § 846; and 

possession of heroin with intent to distribute, in violation of 

21 U.S.C. §§ 841(a)(1), (b)(1)(C). See United States v. McGlory, 

968 F.2d 309, 314-15 (3d Cir. 1992), cert. denied, 113 S. Ct. 

1388 (1993). As noted above, the forfeitures were based on the 

allegations that the seized property was "proceeds from sales or 

exchanges of controlled substances" or "acquired with proceeds 

traceable to unlawful exchanges of controlled substances." 

 Under the Blockburger/Dixon test, the violations underlying 

the forfeitures and those for which McGlory was convicted also do 
25 

not constitute the "same offenses." Conviction on the criminal 

charges required proof that McGlory participated in a conspiracy 

or that he possessed a controlled substance (namely, heroin); 

forfeiture under § 881(a)(6) did not require proof of either of 

these elements. Similarly, forfeiture required proof of a sale 

or exchange, and proof that the specific property was proceeds 

of, or traceable to, a sale or exchange; neither of the criminal 

charges required proof of either of these elements.0

IV. 

 For the reasons stated above, we reverse the orders of the 

district court and remand for further proceedings not 

 

0Halper and Kurth Ranch provide a useful contrast to the present 

case. The criminal and civil charges against Halper were both 

based on his submission of the 65 false Medicare claims. The 

criminal false claims statute, 18 U.S.C. § 287, prohibited 

"mak[ing] or present[ing] . . . any claim upon or against the 

United States, or any department or agency thereof, knowing such 

claim to be false, fictitious or fraudulent." The civil False 

Claims Act, 31 U.S.C. § 3729, prohibited "knowingly mak[ing], 

us[ing], or caus[ing] to be made or used, a false record or 

statement to get a false or fraudulent claim paid or approved." 

See Halper, 490 U.S. at 437-38. 

 The statute at issue in Kurth Ranch imposed a tax on the 

possession and storage of dangerous drugs. See Kurth Ranch, 114 

S. Ct. at 1941. Thus, it was "conditioned on the commission of a 

crime." Id. at 1947. Moreover, the Court explained: "In this 

case, the tax assessment not only hinges on the commission of a 

crime, it is also exacted only after the taxpayer has been 

arrested for the precise conduct that gives rise to the tax 

obligation in the first place." Id. Thus, while neither Halper

nor Kurth Ranch explicitly addressed the "same offense" issue, it 

seems clear that in both cases application of the 

Blockburger/Dixon test would have shown that both punishments 

were based on the same offense. 
26 

inconsistent with this opinion in Nos. 94-3674 and 94-3675, and 

affirm the order of the district court in No. 94-3528.0

 

0Judge Sloviter concurs with all of this opinion except for 

section III.D. Neither party has briefed the "same offense" 

issue, and the district court, which did not discuss the double 

jeopardy issue at all, obviously never addressed this particular 

issue. Under these circumstances I would leave that issue for 

another day.