2004 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

10-26-2004

USA v. Contents of Two

Precedential or Non-Precedential: Non-Precedential

Docket No. 03-2460

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"USA v. Contents of Two" (2004). 2004 Decisions. Paper 198.

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No: 03-2460

 

UNITED STATES OF AMERICA

 v.

CONTENTS OF TWO SHIPPING CONTAINERS SEIZED AT ELIZABETH,

NEW JERSEY ON OR ABOUT DECEMBER 20, 1990, INCLUDING ONE 1900

NISSAN 300ZX (VIN JN1RZ26A3LX010643) AND VARIOUS ITEMS OF

FURNITURE AND PERSONAL EFFECTS

 DANIEL ORIAKHI,

 Appellant

 

Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 01-cv-05823 )

District Judge: Honorable William H. Walls

 

Argued March 24, 2004

Before: ROTH, AMBRO and CHERTOFF, Circuit Judges

(Opinion filed: October 26, 2004)

Joseph M. Bernstein, Esquire (Argued)

800 North King Street, Suite 302

Wilmington, DE 19801

Counsel for Appellant
2

Peter G. O’Malley, Esquire (Argued)

Office of United States Attorney

970 Broad Street, Room 700

Newark, NJ 07102

Counsel for Appellee

 

O P I N I ON

 

ROTH, Circuit Judge

Daniel Oriakhi appeals the judgment of the United States District Court for the District

of New Jersey, granting summary judgment in favor of the United States on this civil

forfeiture action of the contents of two shipping containers, seized in Elizabeth, New Jersey.

Oriakhi limits his argument on appeal to the proposition that the government’s civil

forfeiture action was barred by the statute of limitations found at 18 U.S.C.§ 983(e)(2)(B)(ii).

 We reject this argument and will affirm the judgment of the District Court.

II. Background and Procedural History

The background of this case is provided in an opinion from the Fourth Circuit Court

of Appeals in a related criminal action, United States v. Oriakhi, 57 F.3d 1290, 1294, 1297

(4th Cir. 1995). Briefly, the contents of the two containers involved in this case were

originally seized in December 1990 by the United States Customs Service. Id. at 1294. The

owner of the contents of the containers was later discovered to be Daniel Oriakhi. See id.
1

If a timely claim is filed, the administrative forfeiture process stops and the

Attorney General is required to institute judicial forfeiture proceedings. 19

U.S.C.§1603(b). However, if no timely claim is filed, the agency must, by default,

declare the property forfeited. 19 U.S.C. (1609)(a). Subject to exceptions not relevant

here, no forfeiture action may be commenced more than five years after the underlying

alleged offense was discovered, or more than two years after the involvement of the

property in the alleged offense was discovered, whichever is later. 19 U.S.C. §1621.

3

Oriakhi was indicted and convicted in the United States District Court for the District of

Maryland for conspiracy to import heroin into the United States. Id. at 1294-95.

Customs officials effected forfeiture of the contents of the two shipping containers

pursuant to 21 U.S.C. § 881(a)(6), which provides for forfeiture of, among other things, all

property traceable to an illegal drug transaction. See Alli-Balogun v. United States, 281 F.3d

362, 364-65 (2d Cir. 2002). The officials were required to provide publication and written

notice of their intent to forfeit the property to any party appearing to have an interest in the

property. 19 U.S.C. § 1607(a)

1

. In 1991, the government attempted to send three notices to

Oriakhi. Oriakhi claims he never received these notices and the government does not contest

this claim. Oriakhi failed to make a timely claim on the property, and the contents of the two

containers were administratively forfeited in May and August of 1991. See 19 U.S.C.

§§1603(b) & 1609 (a). [App. II 26, 32]

In 1997, Oriakhi went to the United States District Court for the District of New Jersey

to seek compensation for the contents of the two containers. In August 1999, the court

concluded that the government’s three attempted notices in 1991 were not “reasonably

calculated” to alert Oriakhi to the impending forfeiture. The court set aside the administrative
4

forfeiture, but, rather than order the government to compensate Oriakhi for the value of the

property, the court directed the government to initiate judicial forfeiture proceedings.

Oriakhi appealed and we affirmed the District Court in August 2001 in an unpublished

per curiam decision. We reasoned that the District Court did not abuse its discretion by

directing the government to initiate judicial forfeiture proceedings rather than ordering

compensation for the improperly forfeited property.

The government initiated judicial forfeiture proceedings in December 2001 and moved

for summary judgment in January 2002. Oriakhi argued that the property in the containers

was not subject to forfeiture and that the government’s new judicial forfeiture action was

barred by the 5-year statute of limitations at U.S.C.§ 1621. The District Court held that

Oriakhi was collaterally estopped from making the first argument and that the statute of

limitations should be equitably tolled. Oriakhi appealed.

III. Jurisdiction and Standard of Review.

The District Court had federal question jurisdiction pursuant to 28 U.S.C. § 1331. We

have appellate jurisdiction under 28 U.S.C. § 1291. We exercise plenary review over an

order, granting summary judgment, applying the same test that the district court should have

applied. Assaf v. Fields, 178 F.3d 170, 171 (3d Cir. 1999); Chipollini v. Spencer Gifts, Inc.,

814 F.2d 893, 896 (3d Cir. 1987) (en banc). If we determine that “there is no genuine issue

as to any material fact” and that the movant is entitled to judgment at a matter of law, we will

affirm the district court’s grant of summary judgment. Fed. R. Civ. P. 56(c). 
2We normally refuse to consider arguments on appeal that were not raised in the

District Court, absent exceptional circumstances. E.g., Hormel v. Helvering, 312 U.S.

53, 557 (1941); Franki Foundation Co. v. Alger-Rau & Assoc’s, Inc., 513 F.2d 586, (3d

Cir. 1975). This rule is “one of discretion rather than jurisdiction.” Selected Risks Ins.

Co. v. Bruno, 718 F.2d 67, 69 (3d Cir. 1997) (internal quotation omitted).

We think the ends of justice would be promoted by reaching Oriakhi’s new

argument. In our earlier decision in this case we suggested that, due to the complexity of

the issues, including any statute defense, Oriakhi should request appointment of counsel

in District Court. Oriakhi moved for appointment of counsel in the District Court

immediately following our decision and renewed his motion two months later. The

District Court never ruled on these motions, perhaps because Oriakhi filed them under

the original docket number associated with his action seeking compensation for the

administratively forfeited property, rather than under the new docket number opened

when the government initiated judicial forfeiture proceedings in December 2001. 

However, the same judge presided over both cases and was apprised by our earlier

decision of the possibility that Oriakhi might request appointment of counsel. Oriahki

might not have been entitled to appointment of counsel, see Taborn v. Grace, 6 F.3d 147,

153 (3d Cir. 1993) (decision to deny counsel in civil cases reviewed for abuse of

discretion), but the District Court should have ruled on his requests.

Pro se status by no means creates an automatic exception to the waiver rule, see

United States v. Garth, 188 F. 3d 99, 105-06 (3d Circ. 1999), but we have relied on this

factor to relax the waiver rule in the past, see Tabor, 6 F.3d at 153 n.2, and the unusual

circumstances described above make the argument for relaxing the rule especially

compelling here. We further note that the waiver rule may be relaxed where, as here, the

new argument presents pure questions of law that do not require and would not benefit

from factual development in the district court. See Trailways Lines, Inc. v. Trailways,

Inc., Joint Council of Amalgamated Transit Union, AFL-CIO, CLC 785 F.2d 101, 104

(3d Cir. 1986); see also In re American Biomaterials Corp., 954 F. 3d 919, 927-28 (3d

Cir. 1992) (waiver rule applied with “added force where the timely raising of the issue

would have permitted the parties to develop a factual record”).

5

IV. Discussion

Oriakhi argued before the District Court that the limitations period found at 19 U.S.C.

§ 1621 barred the government’s judicial forfeiture action. He abandons this argument on

appeal and now contends that a different limitations provision, found in 18 U.S.C. § 983(e)(2

(B)(ii), bars the government’s action.2 Section 983 was added to Title 18 by the Civil Asset

Forfeiture Reform Act of 2000 (CAFRA). This appeal presents two questions. Does

CAFRA apply to this case? If so, does the limitations period at § 983(e)(B)(ii) apply? The
6

answers are yes and no, respectively.

A. CAFRA Applies.

First, CAFRA applies here, CAFRA applies to “any forfeiture proceeding commenced

on or after” August 23, 2000, 120 days after CAFRA was signed into law. Pub. L. No. 106-

185, §21, 114 Stat. at 225 (codified at 8 U.S.C. §1324 (note)); United States v. One “Piper”

Aztec “F” De Luxe Model 250 PA 23 Aircraft Bearing Serial No. 27-7654057, 321 F. 3d 355,

257-358 (3d Cir. 2003). The government commenced its judicial forfeiture action in

December 2001, after CAFRA’s effective date.

Oriakhi correctly contends that the 1991 administrative forfeiture proceeding does not

affect the determination of CAFRA’s applicability. Administrative forfeitures set aside for

inadequate notice are void. United States v. One Toshiba Color Television, 213 F. 3d 147,

156 (3d Cir. 2000). A void judgment “is one which, from its inception, was a complete nullity

and without legal effect.” Raymark Industries, Inc. v. Lai, 973 F. 2d 1125, 1132 (3d Cir.

1992). Relying on the date of inception of the administrative proceeding to determine

CAFRA’s applicability would improperly give some “legal effect” to a void proceeding.

Further, legislative history indicates that “for purposes of the effective date provision, the date

on which a forfeiture proceeding is commenced is the date on which the first administrative

notice of forfeiture relating to the seized property is sent.” 146 Cong. Rec. H2040, H2051

(daily ed. April 11, 2000) (statement of Rep. Hyde). In this case, no constitutionally adequate

notice was ever sent, and therefore the administrative proceeding never legally “commenced”
3

Section 983 clearly distinguishes between forfeiture proceedings — which, by

definition, may only be initiated by the government — and motions, like Oriakhi’s

motion, to set aside declarations of forfeiture. See 18 U.S.C. § 983 (e)(1) (providing that

any “person entitled to written notice in any nonjudicial civil forfeiture proceeding under

a civil forfeiture statute who does not receive such notice may file a motion to set aside a

declaration of forfeiture”) (emphases added).

7

at all.

 The United States does not dispute this point but argues instead that the relevant

proceeding for determining CAFRA’s applicability is Oriakhi’s 1997 action to set aside the

administrative forfeiture. This argument runs counter to the plain language and legislative

history of the effective date provision. The effective date provision states that CAFRA

applies to “any forfeiture proceeding commenced on or after” August 23, 2000, 120 days after

CAFRA was signed in law. 8 U.S.C. §1324 (note) (emphasis added). Only the government

may initiate forfeiture proceedings. If anything, Oriakhi’s motion to recover property in 1997

was an anti-forfeiture proceeding.3 Also, as noted above, legislative history provides that

“for purposes of the effective date provision, the date on which a forfeiture proceeding is

commenced is the date on which the first administrative notice of forfeiture relating to the

seized property is sent.” 146 Cong. Rec. H2040, H2051 (daily ed. April 11, 2000) (statement

of Rep. Hyde) (emphases added). This statement indicates that the statutory term “forfeiture

proceeding” refers to the government’s action to forfeit property, not any subsequent action

by a claimant to set aside an administrative forfeiture.
4 The full text of 18 U.S.C. § 983(e) is as follows:

e) Motion to set aside forfeiture.--

(1) Any person entitled to written notice in any nonjudicial civil forfeiture

proceeding under a civil forfeiture statute who does not receive such notice

may file a motion to set aside a declaration of forfeiture with respect to that

person’s interest in the property, which motion shall be granted if–

(A) the Government knew, or reasonably should have known, of the moving

party’s interest and failed to take reasonable steps to provide such party

with notice; and

(B) the moving party did not know or have reason to know of the seizure

within sufficient time to file a timely claim.

(2)(A) Notwithstanding the expiration of any applicable statue of limitations, if

the court grants a motion under paragraph (1), the court shall set aside the

declaration of forfeiture as to the interest of the moving party without

prejudice to the right of the Government to commence a subsequent

forfeiture proceeding as to the interest of the moving party.

(B) Any proceeding described in subparagraph (A) shall be commenced–

(i) if nonjudicial, within 60 days of the entry of the order granting the motion;

or 

(ii) if judicial, within 6 months of the entry of the order granting the motion.

(3) A motion under paragraph (1) may be filed not later than 5 years after the

date of final publication of notice of seizure of the property.

(4) If, at the time a motion made under paragraph (1) is granted, the forfeited

property as been disposed of by the Government in accordance with law,

the Government may institute proceedings against a substitute sum of

8

B. The Limitations Period at Subsection 983(e)(2)(B)(ii) Does Not Apply.

Oriakhi wins the battle concerning CAFRA’s applicability, but ultimately loses, the

war because the limitations period at § 983(3)(2)(B)(ii) does not apply to this case. This

section provides that if the district court grants a motion brought under § 983(e)(1) to set aside

an administrative declaration of forfeiture based on inadequate notice, the government must

commence a subsequent judicial forfeiture proceeding within six months of the entry of the

order granting the § 983(e)(1) motion. See 18. U.S.C. § 983(e)(2)(B)(ii).4 Oriakhi argues that
money equal to the value of the moving party’s interest in the property at

the time the property was disposed of.

(5) A motion filed under this subsection shall be the exclusive remedy for

seeking to set aside a declaration of forfeiture under a civil forfeiture

statute.

9

the government missed the six-month deadline by more than a year because the order setting

aside the forfeiture was entered in August 1999 and the government waited until December

2001 to commence judicial forfeiture proceedings.

However, the government correctly argues that subsection 983(e)(2) does not apply

here because subsection 983(e)(1) was never invoked. The language of the statute plainly

indicates that the limitations periods provided in § 983(e)(2)(B) apply only to a “subsequent

forfeiture proceeding” described in § 983(e)(2)(A), and that such a proceeding is only

authorized if a motion brought under § 983(e)(1) is granted by the court. Thus, the six-month

limitations period at § 983(e)(2)(B)(ii) does not apply if a § 983(e)(1) motion is never made.

Clearly, no § 983(e)(1) motion was made in this case. Rather, Oriakhi filed his motion under

Fed. R. Crim. Pro. 41(e) in 1997, three years before CAFRA was enacted. Thus, even though

CAFRA applies to this case for the reasons discussed above, the six-month limitations period

at § 983(e)(2)(B)(ii) does not.

Oriakhi implies that because he obtained the relief authorized by § 983(e)(1), albeit

before that section existed, the limitations period at § 983(e)(2)(B)(ii) ought to apply. Oriakhi

offers neither argument nor support for this position. The Supreme Court has explained that
10

the plain meaning of a statute is conclusive “except in the rare cases [in which] the literal

application of a statute will produce a result demonstrably at odds with the intentions of its

drafter.” United States v. Ron Pair Enters., 489 U.S. 235, 242 (1989) (internal quotations

omitted). There is no reason to think that Congress intended the limitations periods by §

983(e)(2)(B) to apply to a case where § 983(e)(1) does not - and could not - apply.

IV. Conclusion

For the reasons stated above, we will affirm the judgment of the District Court.