## F I L E D United States Court of Appeals Tenth Circuit 

### DEC 28 2000 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v. $30,006.25 (THIRTY THOUSAND SIX DOLLARS AND 25/100) IN UNITED STATES CURRENCY; $1,951.00 (ONE THOUSAND NINE HUNDRED FIFTY-ONE) DOLLARS IN UNITED STATES CURRENCY; CHEVROLET CORVETTE 1979 VIN #1Z8789S449896, ONE AND THE PROCEEDS THEREOF; CHEVROLET CORVETTE 1977 VIN #1Z37L7S421309, ONE AND THE PROCEEDS THEREOF; FORD ECONOLINE E-150 VAN VIN #1FDEE14F4EHA92259 ONE AND THE PROCEEDS THEREOF,

Defendants,

_______________________________ JOE EARL RODGERS,

Claimant-Appellant. No. 00-5046* After examining the briefs and appellate record, th is panel has determined

unanimously that oral argument would not materiallyassist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). T he case is therefore ordered submitted without oral argument.

-2- APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NORTHERN DISTRICT OF OKLAHOMA (D.C. No. 97-CV-743-E)

Submitted on the briefs: * Stephen C. Lewis, United States Attorney for the No rthern District of Oklahoma, and Catherine J. Depew, Assistant United States Att orney, Tulsa, Oklahoma, for Plaintiff-Appellee. Joe Earl Rodgers, pro se.

Before TACHA , EBEL and BRISCOE , Circuit Judges.

EBEL , Circuit Judge.

Following the government’s two unsuccessful attempt s to forfeit currency and other property seized from claimant-appellant J oe Earl Rodgers, the district court ordered the government to return the propertyto Rodgers. The only issue presented on this appeal is whether the government must pay prejudgment interest on the amount of money due Rodgers. We agree with the district court that the “no-interest rule” prohibits the government from paying interest in this situation-3-

because there is no applicable waiver of sovereign immunity. We therefore affirm.
I. In February 1991, Oklahoma law enforcement officers arrested Rodgers under state drug laws and seized currency and prope rty from his residences. At some point, he was charged by federal indictment wi th conspiracy to distribute cocaine, and federal authorities adopted for federa l forfeiture many of the items seized by local authorities. These items included (1) $30,006.25 in U.S. currency; (2) $1,951.00 in U.S. currency; (3) a 1977 Chevrole t Corvette; (4) a 1979 Chevrolet Corvette; and (5) a 1984 Ford Econoline v an. The government (specifically, the Drug Enforcement Administration) forfeited the seized items on the ground they were used in or acquired as a resul t of a drug-related offense.
See 21 U.S.C. §§ 881(a)(4), (a)(6). Rodgers challenge d the forfeitures, and on appeal, this court vacated them on the basis that t he government failed to provide Rodgers with adequate notice of the pendency of the forfeiture proceedings. United States v. Rodgers , 108 F.3d 1247, 1251-55 (10th Cir. 1997). On May 30, 1997, the government began new administr ative forfeiture proceedings against the same items and, since it ha d sold the vehicles in 1991, the proceeds of the vehicles. When Rodgers asserted a claim to the property, the government instituted this civil forfeiture action. See 19 U.S.C. § 1608. Rodgers1 We note that the district court cited Title 28 rath er than Title 19 of the

U.S. Code for the applicable statute of limitations . The forfeiture procedures relating to the customs laws apply to forfeitures o ccasioned by violation of the drug laws. 21 U.S.C. § 881(d).

2 Under Ninth Circuit law, the type of account the mo ney was deposited in affects the amount of interest for which the government is liable. See United (continued...) -4- moved to dismiss the government’s complaint, and th e district court granted the motion, concluding that the forfeiture action was b arred by the statute of limitations. See 19 U.S.C. § 1621 (requiring that forfeiture procee dings be “commenced within five years after the time when th e alleged offense was discovered”). 1 The government filed a notice of appeal, but dism issed its appeal following issuance of our decision in Clymore v. United States , 164 F.3d 569 (10th Cir. 1999). After the government dismissed its appeal, Rodgers moved to compel the return of the property. The government did not obj ect to the motion per se, but because it had already sold the three vehicles, it requested the district court to value them at the amounts it had received at auctio n. In response, Rodgers filed a “motion to disclose,” in which he contended he was entitled to interest on the currency seized and on the cash the government rece ived for the vehicles, citing United States v. $277,000 U.S. Currency , 69 F.3d 1491 (9th Cir. 1995), and he wanted the government to “disclose” the type of int erest-bearing account in which the money was deposited. 2 In reply, the government acknowledged there is a split2 (...continued)

States v. $133,735.30 , 139 F.3d 729, 731-32 (9th Cir. 1998). -5- in the circuits on whether the government must pay prejudgment interest when ordered to return money, but argued that the better -reasoned view held that sovereign immunity barred the payment of prejudgment interest, citing United States v. $7,990.00 in U.S. Currency , 170 F.3d 843 (8th Cir.), cert. dismissed , 120 S. Ct. 577 (1999), and Ikelionwu v. United States , 150 F.3d 233 (2d Cir. 1998). In resolving the issue, the district court noted th at the only disputed matter was whether Rodgers was entitled to interest on the amounts owed him by the government, and it agreed with the Eighth and Secon d Circuits that sovereign immunity barred Rodgers’ claim for interest. The c ourt granted the government’s motion to approve the value of the vehicles sold atthe amount the government received at auction, and it ordered the government to return the currency seized and the proceeds of the vehicles to Rodgers, without interest. Rodgers filed a timely notice of appeal, and argues only that the d istrict court erred in not requiring the government to pay interest on the amo unts due him. He does not challenge the district court’s determination regard ing the value of the vehicles.-6- II

. As noted above, the circuits are split on whether the government can be ordered to pay interest when it must return seized property to a claimant following an unsuccessful forfeiture action. The Eighth and Second Circuits hold that sovereign immunity bars an award of interest since the government has not waived its immunity from suit in this respect. $7,990.00 , 170 F.3d at 845-46; Ikelionwu , 150 F.3d at 239. While acknowledging there is no relevant waiver of sovereign immunity, the Ninth and Sixth Circuits vi ew the matter not as an award of interest, but as the government’s duty to disgor ge property, earned while the seized res was in the government’s hands, that was not forfeited. $277,000 , 69 F.3d at 1498; United States v. $515,060.42 in U.S. Currency , 152 F.3d 491, 504 (6th Cir. 1998). We cannot agree with the Ninth an d Sixth Circuits that recharacterizing an interest award as a disgorgement of profits circumvents the effect of sovereign immunity. The United States, as sovereign, is immune from sui t except as it consents to be sued, and “[a] waiver of sovereign immunity c annot be implied but must be unequivocally expressed.” United States v. Mitchell , 445 U.S. 535, 538 (1980) (quotation omitted). This basic rule of sovereign immunity has led to what is known as the no-interest rule: “In the absence of express congressional consent to the award of interest separate from a general wa iver of immunity to suit, the3 In moving in the district court to compel the return of the money, Rodgers

cited Fed. R. Crim. P. 41(e). A motion for return of seized property pursuant to Rule 41(e), which is governed by equitable principl es, is not the appropriate procedure in this situation because the judicial fo rfeiture proceedings initiated by the government and § 2465 provide Rodgers with an adequate legal remedy. See United States v. Akers , 215 F.3d 1089, 1106 (10th Cir.), cert. denied , 2000 WL 1578322 (U.S. Nov. 27, 2000) (No. 00-6612); Frazee v. IRS , 947 F.2d 448, 449-50 (10th Cir. 1991). -7- United States is immune from an interest award.” Library of Congress v. Shaw , 478 U.S. 310, 314 (1986). “For well over a century , this Court, executive agencies, and Congress itself consistently have rec ognized that federal statutes cannot be read to permit interest to run on a recov ery against the United States unless Congress affirmatively mandates that result.” Id. at 316; see also Edwards v. Lujan , 40 F.3d 1152, 1153-54 (10th Cir. 1994); Sandia Oil Co. v. Beckton , 889 F.2d 258, 261 (10th Cir. 1989). As the Eighth Circuit has explained, “[w]hen the go vernment has unsuccessfully sought to forfeit previously seized property under 21 U.S.C. § 881(a)(6), no statute expressly authorizes the payment of prejudgment interest to the successful claimant.” $7,990.00 , 170 F.3d at 844-45. Although the district court did not cite a statutory basis for ordering the government to return the currency and proceeds to Rodgers following its deci sion, the applicable statute is 28 U.S.C. § 2465. 3 Cf. Republic Nat’l Bank of Miami v. United States , 506 U.S.-8-

80, 95-96 (1992) (holding that § 2465 provides for return of proceeds of seized property that was subsequently sold). Section 2465 provides as follows:

Upon the entry of judgment for the claimant in any proceeding to condemn or forfeit property seized under any Actof Congress, such property shall be returned forthwith to the cl aimant or his agent; but if it appears that there was reasonable cause f or the seizure, the court shall cause a proper certificate thereof to b e entered and the claimant shall not, in such case, be entitled to co sts, nor shall the person who made the seizure, nor the prosecutor, be liable to suit or judgment on account of such suit of prosecution. Id. The provision for the payment of costs does not authorize the payment of interest. Shaw , 478 U.S. at 321; $7,990.00 , 170 F.3d at 845. Despite the lack of a statutory basis for the awardof interest on returned property, the Ninth and Sixth Circuits have not fou nd sovereign immunity to bar the recovery of prejudgment interest.

While sovereign immunity customarily precludes the Government’s liability for interest prior to a judgment [citing Shaw ], to the extent that the Government has actually or c onstructively earned interest on seized funds, it must disgorge those earnings along with the property itself when the time arrives for a return of the seized res to its owner. . . . [W]e do not view the award of interest in this case as the typical award of pre-judgment inte rest which cannot be recovered absent an express waiver of sovereign immunity; rather, we view this award of interest as an aspect of the seized res to which the Government is not entitled as it did not succee d in its forfeiture action. $515,060.42 , 152 F.3d at 504; accord $277,000 , 69 F.3d at 1492. We cannot agree that the Ninth and Sixth Circuits h ave found a legitimate exception to the no-interest rule. Regardless of w hat they call it, they are4 We also note that the district court in the Ninth Circuit case $277,000 had

ordered that the government could deposit the seize d currency in an interestbearing account pending the currency’s disposition, and that “all parties thought that this was exactly what would happen.” 69 F.3d at 1494. The First Circuit also ordered the government to pay interest on seiz ed funds when the district court had ordered the funds placed in an interest-b earing account and the defendant had reasonably interpreted his plea agree ment to require the government to apply interest earned on the funds to his civil tax assessment. United States v. Kingsley , 851 F.2d 16, 18, 21 (1st Cir. 1988). Here, there is no indication the district court ever ordered the seiz ed currency or proceeds to be deposited in an interest-bearing account, and we ne ed not consider whether such an order would affect the government’s obligation t o pay interest. (continued...) -9- allowing an award of interest against the United St ates without a waiver of sovereign immunity, but “the force of the no-intere st rule cannot be avoided simply by devising a new name for an old institution.” Shaw , 478 U.S. at 321. To the extent their holdings stem from the fact that the government may be unjustly enriched if it is not forced to “disgorge” its profits from the seized property and that a contrary holding is unfair, the y do not cite, nor are we aware, of any general waiver of sovereign immunity for unj ust enrichment claims. Moreover, fairness or policy reasons cannot by them selves waive sovereign immunity. Shaw , 478 U.S. at 321 (“Courts lack the power to award interest against the United States on the basis of what theythink is or is not sound policy.”) (quotation omitted); see also United States v. Bein , 214 F.3d 408, 413 (3d Cir. 2000) (“[A]pplication of sovereign immunity, by its very nature, will leave a person wronged by Government conduct without recourse.”). 44 (...continued)

-10- III. We thus hold that sovereign immunity prohibits the award of interest on the currency and proceeds returned to Rodgers. Though of little help to Rodgers at this point, we note that Congress, through the Civi l Asset Forfeiture Reform Act of 2000, has now waived sovereign immunity with res pect to interest on returned currency, negotiable instruments and proceeds. Pub . L. No. 106-185, § 4(a), 114 Stat. 202, 211-13 (2000) (codified at 28 U.S.C. § 2 465(b)(1)(C)). This provision does not apply to this case because, with one excep tion not relevant here, it was not effective with respect to forfeiture proceeding s commenced prior to August 23, 2000. Id. § 21, 114 Stat. at 225. The judgment of the district court is AFFIRMED.