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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

v.

APPROXIMATELY $50,000 in U.S. 

CURRENCY,

Defendant.

Case No. 4:17-cv-00478-HSG (DMR)

REPORT AND RECOMMENDATION 

RE MOTION FOR DEFAULT 

JUDGMENT

Re: Dkt. No. 17

Plaintiff United States brought this in rem civil forfeiture action and now moves for default 

judgment against Defendant Approximately $50,000 in United States Currency (the “Currency”). 

[Docket No. 17 (Mot.).] No one has filed an opposition. The Honorable Haywood S. Gilliam 

referred this matter to the undersigned for the preparation of a Report and Recommendation. For 

the reasons below, the court recommends that the government’s motion be GRANTED.

I. BACKGROUND

A. Factual Allegations 

On August 31, 2016, the United States Postal Inspection Service (“USPIS”) investigated a

United States mail parcel at the San Francisco International Service Center that exhibited 

“multiple suspicious characteristics of parcels containing illegal narcotics, contraband, or money 

or monetary instruments that are proceeds of illegal activity.” [Docket No. 1 (Compl.) ¶¶ 7, 8.]

These indicators included the use of Express Mail, which is a service that the government 

contends is frequently used by drug traffickers; the presence of a handwritten label; and the fact 

that the package displayed the zip code of a mailing location different from the zip code listed for 

the return address. Id. at ¶¶ 9-11. The USPIS inspectors presented the parcel to a trained and 
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certified San Francisco Police Department narcotics detection canine who exhibited a change in 

behavior that was “consistent with the canine’s detection of the odor of a controlled substance the 

canine is certified to detect.” Id. at ¶ 12.

The parcel was addressed to “Lizz Guzman” at a post office box address in Petaluma, 

California. Upon investigation, the USPIS inspectors found that a “Liz Guzman” had applied for 

the post office box. Id. at ¶ 14. The return address on the parcel was listed as “R. Robinson” in 

Baton Rouge, Louisiana. Id. at ¶ 11. The USPIS inspectors called the number listed for Robinson 

on the Express Mail label and found that it was invalid. Id. at ¶ 13. The inspectors called the 

phone number listed on the package for the recipient and spoke to a woman who identified herself 

as Guzman, the owner of the post office box. When the inspectors asked her what the parcel 

contained, she replied “stuff for design,” and responded “yes” when asked if it was “fashion 

design stuff.” Id. at ¶ 15. The inspectors asked Guzman for permission to open the parcel to 

verify the contents, and she provided her consent. Id. at ¶ 15, 17. On August 31, 2016, the USPIS 

inspectors received a telephone call from a male subject identifying himself as Roy Robinson. Id.

at ¶ 16. Robinson informed the inspectors that he mailed the parcel to Guzman and that it 

contained $50,000 in cash. When asked why he mailed the cash to Guzman, Robinson stated that 

the cash was “for a transaction to buy property,” and that the purchase price of the property was 

$150,000. Id. The inspector attempted to question Robinson further about the property, but he 

hung up. Id. Upon opening the parcel, the inspectors found vacuum-sealed plastic bags 

containing $50,000 in U.S. currency. Id. at ¶¶ 17, 18. The cash consisted entirely of small 

denominations, namely, 2,500 $20 bills, and the parcel contained no notes, receipts, or 

instructions. Id. at ¶¶ 18, 19. The government alleges that both characteristics are inconsistent 

with legitimate business transactions, and are instead common indicators of narcotics trafficking. 

Id.

Robinson and William Guzman, the spouse of Liz Guzman, have each been arrested within 

the last eight years for marijuana-related criminal offenses. Id. at ¶ 20. The USPIS ultimately 

seized the parcel and the Currency. Id. at ¶ 7. 
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B. Procedural History

On January 30, 2017, the government filed a verified complaint to obtain the forfeiture of 

the Currency pursuant to 21 U.S.C. § 881(a)(6) as moneys furnished or intended to be furnished

by any person in exchange for a controlled substance or listed chemical in violation of 21 U.S.C.

§§ 841 and 846.1 Compl. ¶¶ 24-26. On February 1, 2017, the Clerk issued an arrest warrant in 

rem. [Docket No. 5 (Arrest Warrant).] 

On February 1, 2017, the government sent notice of the forfeiture action via certified mail 

to Liz Guzman. [Docket No. 6 (Certificate of Service).] The notice included the Complaint for 

Civil Forfeiture, notice of the forfeiture action including information about filing deadlines, and 

other related documents. The government sent notice of the action to three different addresses for 

Guzman, including the address originally listed on the parcel. Certificate of Service. Guzman 

signed a U.S. Postal Service certified mail receipt certifying that she received the mail providing 

notice of the action on February 4, 2017. [Docket No. 23 (Lopez Decl., Aug. 2, 2017) ¶¶ 5, 6, Ex. 

A.] On February 1, 2017, the government also mailed notice of the forfeiture action to Roy 

Robinson at the address listed on the parcel. Certificate of Service. Robinson did not sign the 

receipt to acknowledge he received service. Therefore, the government personally served 

Robinson with the documents on March 3, 2017. [Docket No. 12 (Robinson Certificate of 

Service)]. 

Starting on February 2, 2017, the government posted notice of the forfeiture on an official 

government internet site (www.forfeiture.gov) for at least 30 consecutive days. [Docket No. 13

(Proof of Publication of Notice).]

Having received no claim to the Currency or answer to the verified complaint, the 

government moved for entry of default. [Docket No. 15]. The clerk entered default on April 19, 

2017. [Docket No. 16 (Default)]. On May 16, 2017, the government filed the present motion, 

 

1

21 U.S.C. § 841 provides in relevant part that it is unlawful for any person “knowingly or 

intentionally . . . to manufacture, distribute, or dispense, or possess with intent to manufacture, 

distribute, or dispense, a controlled substance . . . .” 21 U.S.C. § 841(a)(1). 21 U.S.C. § 846 

states, “[a]ny person who attempts or conspires to commit any offense defined in this subchapter 

shall be subject to the same penalties as those prescribed for the offense, the commission of which 

was the object of the attempt or conspiracy.”
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which Judge Gilliam referred to the undersigned for preparation of a Report and Recommendation. 

[Docket No. 18.] On July 27, 2017, the court ordered the government to submit supplemental 

evidence in support of the motion for default judgment, which the government timely filed on

August 2, 2017. [Docket Nos. 22, 23.] 

II. CIVIL FORFEITURE

The government brings this action under 21 U.S.C. § 881, which provides for the forfeiture 

of “[a]ll moneys . . . furnished or intended to be furnished by any person in exchange for a 

controlled substance or listed chemical in violation of this subchapter . . . .” 21 U.S.C. § 

881(a)(6). “Forfeiture is a harsh and oppressive procedure which is not favored by the courts.” 

United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051, 1069 (9th Cir. 1994) (quotation 

omitted). The Ninth Circuit has stated that it is “particularly wary of civil forfeiture statutes, for 

they impose ‘quasi-criminal’ penalties without affording property owners all of the procedural 

protections afforded criminal defendants.” Id. at 1068. “[F]orfeitures should be enforced only 

when within both letter and spirit of the law,” United States v. Marolf, 173 F.3d 1213, 1217 (9th 

Cir. 1999) (quotation omitted), and “forfeiture statutes are strictly construed against the 

government.” $191,910.00 in U.S. Currency, 16 F.3d at 1068 (citation omitted). Accordingly, 

“strict adherence to procedural rules is paramount in civil forfeiture proceedings.” United States v. 

Twenty-Four Thousand Dollars ($24,000) in U.S. Currency, No. 01:09-CV-2319-LRH-RJJ, 2010 

WL 2695637, at *1 (D. Nev. July 2, 2010) (citing Marolf, 173 F.3d at 1217 (denying forfeiture 

where government failed to provide due notice to property owner)).

Property subject to civil forfeiture may be forfeited under the Federal Rules of Civil 

Procedure Supplemental Rules for Admiralty and Maritime Claims and Asset Forfeiture Actions 

(“Fed R. Civ. P. Supp.”) and this District’s Admiralty & Maritime Local Rules. United States v. 

Real Property, 135 F.3d 1312, 1315 (9th Cir. 1998); Admir. L.R. 1-2. Under Admiralty & 

Maritime Local Rule 6-1(a), “[a] party seeking a default judgment in an action in rem must show 

that due notice of the action and arrest of the property has been given . . . [t]hrough execution of 

process in accordance with [Fed. R. Civ. P. Supp.] G(3); and [i]n accordance with [Fed. R. Civ. P.

Supp.] G(4).” Admir. L.R. 6-1(a)(1).
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The court must examine whether the government has strictly complied with the procedural 

rules governing civil forfeiture proceedings with respect to the Currency.

A. Fed. R. Civ. P. Supp. G(2): Adequacy of the Complaint

Rule G(2) sets forth the following requirements for a complaint in “a forfeiture action in 

rem arising from a federal statute,” as follows: 

[t]he complaint must:

(a) be verified;

(b) state the grounds for subject-matter jurisdiction, in rem 

jurisdiction over the defendant property, and venue; 

(c) describe the property with reasonable particularity; 

(d) if the property is tangible, state its location when any 

seizure occurred and--if different--its location when the 

action is filed; 

(e) identify the statute under which the forfeiture action is 

brought; and 

(f) state sufficiently detailed facts to support a reasonable 

belief that the government will be able to meet its burden of 

proof at trial. 

Fed. R. Civ. P. Supp. G(2). Here, the government’s complaint was verified by Postal Inspector

Eva Chan. It states the grounds for subject matter jurisdiction, in rem jurisdiction, and venue 

under 28 U.S.C. §§ 1345, 1355(a), 1355(b), and 1395. Compl. at 7 (Verification); id. at ¶¶ 1-2, 4. 

The complaint describes the amount of currency and its denominations, and states that the seizure 

occurred at the San Francisco International Service Center. The complaint identifies that the 

forfeiture action is being brought under 21 U.S.C. § 881(a), and provides sufficient facts as 

described above regarding the suspicious characteristics of the package to support a reasonable 

belief that the government can meet its burden of proof at trial. Id. at ¶¶ 1, 7-8, 9-21. Therefore, 

the government has satisfied the requirements of Rule G(2).

B. Fed. R. Civ. P. Supp. G(3): Judicial Authorization and Process

Rule G(3) governs judicial authorization and process. It provides that “[i]f the defendant is 

not real property, the clerk must issue a warrant to arrest the property if it is in the government’s 

possession, custody, or control.” Fed. R. Civ. P. Supp. G(3)(b)(i). In the present case, the clerk 
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issued a valid arrest warrant on February 1, 2017. Arrest Warrant. 

Rule G(3) also states that “[t]he warrant and any supplemental process must be delivered to 

a person or organization authorized to execute it,” including “someone under contract with the 

United States.” Fed. R. Civ. P. Supp. G(3)(c)(i). Here, the certificate of service states that a 

paralegal within the Asset Forfeiture Unit of the United States Attorney for the Northern District 

of California served the relevant documents in this case by first class mail and certified mail upon 

potential claimants Robinson and Guzman. Certificate of Service; see also Lopez Decl. Ex. A. 

Accordingly, the government complied with Rule G(3).

C. Fed. R. Civ. P. Supp. G(4): Notice

Rule G(4) requires the government to provide both general notice to the public and direct 

notice of the forfeiture action to any known person who reasonably appears to be a potential 

claimant. Fed. R. Civ. P. Supp. G(4)(a), (b). 

a. Notice by Publication

Rule G(4)(a)(ii) provides that “a published notice must: “(A) describe the property with 

reasonable particularity; (B) state the times under Rule G(5) to file a claim and to answer; and (C) 

name the government attorney to be served with the claim and answer.” Here, the notice 

published by the government describes the amount of currency and the location of its seizure, 

states that claims and answers under Rule G(5) must be brought within 60 days, and names Gregg 

W. Lowder as the government attorney to be served with the claim and answer. Proof of 

Publication of Notice. Therefore, in the present case, the government has satisfied the 

requirements of Rule G(4)(a)(ii). 

Rule G(4)(a)(iii) sets forth the requirements for the frequency of publication of notice. 

Published notice must appear either once a week for three consecutive weeks or need only appear 

once, if notice of nonjudicial forfeiture was published on an official internet government forfeiture 

site for at least 30 consecutive days before the action was filed. Fed. R. Civ. P. Supp. 

G(4)(a)(iii)(A), (B). As to the means of publication, Rule G(4)(a)(iv) provides the notice may be 

published by” posting a notice on an official internet government forfeiture site for at least 30 

consecutive days.” Here, the government’s verified complaint was published on an official 
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internet government forfeiture site (www.forfeiture.gov) after the action was filed for at least 30 

consecutive days, from February 2, 2017 to March 3, 2017, and remained on the site without being 

taken down. Therefore, the government’s published notice complied with the requirements of 

Rule G(4)(a)(iii)(A) and G(4)(a)(iv)(C), as the 30-day posting satisfied the requirement of 

appearing once a week for three consecutive weeks and remained on the site for at least 30 

consecutive days.

b. Notice to Known Potential Claimants

Rule G(4)(b) sets forth the requirements for notice to known potential claimants. It states

that “[t]he government must send notice of the action and a copy of the complaint to any person

who reasonably appears to be a potential claimant on the facts known to the government before the 

end of the time for filing a claim under Rule G(5)(a)(ii)(B).” Fed. R. Civ. P. Supp. G(4)(b)(i). 

The notice must state “(A) the date when the notice is sent; (B) a deadline for filing a claim, at 

least 35 days after the notice is sent; (C) that an answer or a motion under Rule 12 must be filed no 

later than 21 days after filing the claim; and (D) the name of the government attorney to be served 

with the claim and answer.” Fed. R. Civ. P. Supp. G(4)(b)(ii). 

Here, the government sent the notice of the action and a copy of the complaint to Roy 

Robinson and Liz Guzman on February 1, 2017. Certificate of Service; Lopez Decl. Ex. A. 

Further, since Robinson did not sign the receipt to acknowledge service, the government 

personally served Robinson with notice of the action and a copy of the complaint on March 3, 

2017. Robinson Certificate of Service.

As to the sufficiency of the notice sent by the government, the notice indicates that it was 

sent on January 31, 2017, provides a 35-day deadline for filing a claim, provides the 21-day 

deadline for submitting an answer or a motion under Rule 12, and lists Gregg W. Lowder as the 

government attorney to be served with the claim and answer. [Docket No. 3 (Notice of Forfeiture 

Action).] 

Finally, Rule G(4)(b)(iii)(A) provides that “[t]he notice must be sent by means reasonably 

calculated to reach the potential claimant.” Here, the government sent the notice to the addresses 

where Robinson and Guzman reside, as confirmed by the USPIS inspectors. Certificate of 
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Service; Compl. at ¶¶ 13-15. The government also sent the notice to any potential addresses

associated with Guzman, including the original address listed on the parcel. Certificate of Service. 

As Guzman confirmed receipt of the documents on February 4, 2017, and Robinson was 

personally served on March 3, 2017, the government was able to confirm that both parties actually 

received notice. Lopez Decl. Ex. A; Robinson Certificate of Service. The government has thus 

satisfied the requirements of Rule G(4)(b).

In sum, the government has adhered to the procedural rules governing civil forfeiture 

actions. The court will now address whether default judgment is warranted.

III. DEFAULT JUDGMENT

Federal Rule of Civil Procedure 55(b)(2) permits a court to enter a final judgment in a case 

following a defendant’s default. Shanghai Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 

995, 999 (N.D. Cal. 2001). Whether to enter a judgment lies within the court’s discretion. 

Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. 

Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986)) (“A defendant’s default does not automatically 

entitle the plaintiff to a court-ordered judgment.”)

Before assessing the merits of a motion for default judgment, a court must confirm that it 

has subject matter jurisdiction over the case and personal jurisdiction over the parties, as well as 

ensure adequacy of service on the defendant. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). If 

the court finds these elements satisfied, it turns to the following factors (the “Eitel factors”) to 

determine whether it should grant a default judgment:

(1) the possibility of prejudice to the plaintiff, (2) the merits of 

plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) 

the sum of money at stake in the action[,] (5) the possibility of a 

dispute concerning material facts[,] (6) whether the default was due 

to excusable neglect, and (7) the strong policy underlying the 

Federal Rules of Civil Procedure favoring decisions on the merits. 

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). In this analysis, “the well-pleaded 

allegations of the complaint relating to a defendant’s liability are taken as true.” Pepsico, Inc., 238 

F. Supp. 2d at 1175 (citing Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 

1987)). Nevertheless, default does not compensate for essential facts not within the pleadings and 
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those legally insufficient to prove a claim. Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 

(9th Cir. 1992). 

First, the court addresses subject matter jurisdiction and personal jurisdiction. The court 

will then examine the Eitel factors to determine whether default judgment is appropriate.

A. Subject Matter Jurisdiction and In rem Jurisdiction

The court has jurisdiction over this matter under 28 U.S.C. § 1355(a), which provides that 

district courts “have original jurisdiction . . . of any action or proceeding for the recovery or 

enforcement of any . . . forfeiture . . . incurred under any Act of Congress . . . .” See also 28 

U.S.C. § 1345 (vesting district courts with original jurisdiction “of all civil actions, suits or 

proceedings commenced by the United States”). Venue in this district is proper under 28 U.S.C. 

§§ 1355(b)(1)(A) and 1395(b), as the Currency was seized and is found in the Northern District of 

California. See 28 U.S.C. § 1355(b)(1)(A) (forfeiture action may be brought in “the district court 

for the district in which any of the acts or omissions giving rise to the forfeiture occurred”); 28 

U.S.C. § 1395(b) (“[a] civil proceeding for the forfeiture of property may be prosecuted in any 

district where such property is found.”). 

This court must also determine whether it has jurisdiction over the Currency. See In re 

Tuli, 172 F.3d at 712. In rem jurisdiction treats an item of property as a person against whom suits 

can be filed and judgments can be entered. United States v. $29,959.00 U.S. Currency, 931 F.2d 

549, 551 (9th Cir. 1991). The Ninth Circuit relies on a plain reading of 28 U.S.C. § 1355(b) as the 

appropriate jurisdictional test for in rem proceedings. United States v. Approximately $1.67 

Million (US) in Cash, Stock & Other Valuable Assets, 513 F.3d 991, 996 (9th Cir. 2008). That 

statute provides that “[a] forfeiture action or proceeding may be brought in the district court for the 

district in which any of the acts or omissions giving rise to the forfeiture occurred.” 28 U.S.C. § 

1355(b)(1)(A). Therefore, in rem jurisdiction exists if the Currency was seized within this district. 

Since the seizure did occur in the Northern District of California, this district court has in rem

jurisdiction over the Currency. Compl. at ¶ 8. 

B. Eitel Factors

The first Eitel factor examines whether the plaintiff will suffer prejudice if a default 
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judgment is not entered. Eitel, 782 F.2d at 1471. Courts have found prejudice where the plaintiff 

will be without a means for recourse if the defendant fails to appear or defend against the suit. 

PepsiCo, Inc., 238 F. Supp. 2d at 1177. In the present case, no party has attempted to oppose the 

verified complaint or otherwise make a claim on the Currency. Therefore, the first factor weighs 

in favor of default judgment, as the government has no other opportunity to establish its right to 

the Currency pursuant to the verified complaint. 

The second and third Eitel factors address the merits of a plaintiff’s substantive claim and 

the sufficiency of the complaint. Eitel, 782 F.2d at 1472. In analyzing these factors, the court 

accepts as true all well-pleaded allegations regarding liability. See Fair Hous. of Marin v. Combs, 

285 F.3d 899, 906 (9th Cir. 2002). As noted, 21 U.S.C. § 881 provides for the forfeiture of money 

“furnished or intended to be furnished by any person in exchange for a controlled substance or 

listed chemical in violation of this subchapter.” 21 U.S.C. § 881(a)(6). Here, the government’s 

allegations, assumed to be true, show that the Currency is subject to forfeiture under 21 U.S.C. § 

881(a)(6), as the government asserts that the funds were related to drug trafficking. See generally 

Compl. Evidence supporting this conclusion includes the fact that the narcotics detection canine, 

which was trained to alert upon detecting the odor of controlled substances, gave such an alert 

when presented with the parcel in question. The Ninth Circuit has held that the alert provided by a 

narcotics detection canine is “an important factor in determining probable cause” and provides 

evidence of a link between seized money and controlled substances. United States v. Currency, 

U.S. $42,500.00, 283 F.3d 977, 982-83 (9th Cir. 2002). Additional facts in the verified complaint 

further support the conclusion that the funds were related to drug trafficking. These facts include

the manner in which the Currency was packed, the low denomination of the bills and lack of 

instructions in the parcel, the conflicting explanations offered by the sender and recipient of the 

parcel, and the manner of mailing. Therefore, there is a strong likelihood that the government 

would be successful on the merits. The second and third Eitel factors thus weigh in favor of 

granting default judgment.

As to the fourth factor, default judgment is discouraged when the money at stake in the 

litigation is substantial or unreasonable in relation to the defaulting party’s conduct. Bd. of Trs. v. 
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Core Concrete Const., Inc. ̧11-2532 LB, 2012 WL 380304, at *4 (N.D. Cal. Jan. 17, 2012). In the 

present case, the Currency represents the entire amount of money actually seized, all of it believed 

to be related to drug trafficking. No person has come forward to challenge the forfeiture.

Therefore, the fourth Eitel factor points in favor of granting default judgment. 

The fifth Eitel factor considers whether it is likely that the material facts of the case will be 

disputed by the parties. Eitel, 782 F.2d at 1471-72. The likelihood of dispute in this case is 

minimal, since the potential claimants received notice of this forfeiture action, but have not made 

any claims to the Currency or otherwise responded to the verified complaint. 

The sixth Eitel factor considers whether the default by the defendant may have been as a 

result of excusable neglect. Eitel, 782 F.2d at 1472. In the present case, the potential claimants 

received the complaint and related documents, but have failed to respond to this action. There is 

no indication that the default was due to the potential claimants’ excusable neglect. 

The seventh Eitel factor dictates that the court must take into account the strong policy 

favoring a decision on the merits. Eitel, 782 F.2d at 1472. This is the sole factor that points 

against default judgment in the present case. However, it alone is not dispositive. PepsiCo, Inc., 

238 F. Supp. 2d at 1177. There is no claimant in the present case to contest a decision on the 

merits. Therefore, it is not possible to obtain a decision on the merits and this factor does not 

outweigh the other six factors.

In sum, the court concludes that the Eitel factors favor default judgment in the present 

case. 

IV. CONCLUSION

In light of the foregoing, the undersigned recommends that the government’s motion for 

default judgment against Defendant $50,000 in United States Currency be GRANTED.

It is further recommended that judgment be entered for the United States. The Currency shall be 

forfeited to the United States and all right, title, and interest in the Currency shall be vested in the 

United States of America. Immediately upon receipt of this report and recommendation, the 

government shall serve a copy of this report on all known interested parties at their last known 

addresses, and shall file a proof of service. 
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Any interested party may file objections to this report and recommendation with the

Honorable Haywood S. Gilliam within 14 days of being served with a copy. See 28 U.S.C. § 

636(b)(1); Fed. R. Civ. P. 72(a); N.D. Civil L.R. 72-2.

IT IS SO ORDERED.

Dated: August 7, 2017

______________________________________

Donna M. Ryu

United States Magistrate Judge