# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 6- 36 46

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Uni te d S ta te s o f Am eri ca

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.

$5 79 ,47 5.0 0 i n U.S. Cu rren cy

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t

LNG Expr es s, In c.

ll ll ll ll ll ll ll ll ll ll l Cl ai man t - Ap pe ll an t

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Eas te rn Dis tri ct of Ark an sa s - Li tt le Ro ck

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Su bm it te d: Sep te m

be r 21 , 20 17 Fil ed : J an ua ry

10 , 20 18

__ __ __ __ __ __
Befo re COLLOTON, BENTO N, and KELLY , Cir cu it Ju dg es

.

__ __ __ __ __ __ KELLY, Cir cu it Ju dg e.LNG Exp res s, In c. (LNG) ap pe al s th e di st ric t co ur t’s or de r st rik in g it s ve rif ie d 1

cl ai m in th is ci vi l fo rfei tu re p ro ceed in g. We con cl ud e th at LNG’ s v eri fie d cl ai m is

m at eri al ly in di st in gu is ha bl e fro m th e cl ai m a pa ne l of ou r co ur t fo un d in ad eq ua te in
Uni te d St at es v. $1 54 ,85 3.0 0 in U.S. Cu rren cy , 74 4 F.3 d 55 9 (8 t h C i r

. 2 0 1 4)

. W e th eref or e aff irm.

In Sep te m

be r 20 14
, an Ark an sa s St at e Po li ce offi cer in it ia te d a tra ffi c st op of

a tra ct or tra il er in Fau lk ne r Co un ty, Ark an sa s. Afte r th e dr iv er co ns en te d to a se arch
of th e tru ck

, th e of

fic er fo un d an d se iz ed two bo xe s co nt ai ni ng a to ta l of $5 79 ,47 5.0 0
in U.S. c ur ren cy

. The tru ck ’s d riv ers bo th di sc la im ed an y kn owl ed ge of o r in te res t
in th e cu rren cy

.

Bel ie vi ng th e cu rren cy to be “ dr ug m on ey ,” th e go ve rn m en t fil ed a ve rif ie d

co m pl ai nt in th e di st ric t co ur t, se ek in g fo rfei t u r e o f th e cu rren cy un de r 21 U.S.C. § 8 81 (a)( 6) . LNG fil ed a ti m el y ve rif ie d c la im , ave rri ng in rel ev an t p art :

1. [LNG] ha s a cl ai m to , in te res t in

, an d rig ht to th e pr op ert y se iz ed he rei n, sp eci fic al ly th e de fen da nt -in -rem , $5 79 ,47 5.0 0 in Uni te d St at es Cu rren cy , and de m an ds it s re st it ut io n a nd ret ur n.

2

. Th e i nt eres t of [LNG] in th e de fen da nt -in -rem by vi rtu e of whi c h [LNG] de m an ds it s res ti tu ti on , it s ret ur n, an d th e rig ht to d e f e nd th e act io n is al l of th e rig ht

, ti tl e, an d in te res t in sa id de fen da nt -in -rem as th e

own er t he reo f.

The go ve rn m en t m ov ed to st rik e LNG’ s ve rif ie d cl ai m , pr es en ti ng it s m ot io n

as a m ot io n fo r jud gm en t on th e pl ead in gs

. The go ve rn m en t arg ue d th at it was 2

The Hon or ab le Su sa n W eb be r W rig ht

, Uni te d St at es Dis tri ct Ju dg e f o r th e 1
East ern Dis tri ct of Ark an sa s.

The go ve rn m en t al te rn at iv el y pr es en te d it s mo t io n to st rik e as a m ot io n fo r 2

su m m ary jud gm en t

. I t i s c le ar fro m th e reco rd

, ho wev er, th at th e di st ric t co ur t

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-en ti tl ed to jud gm en t on th e pl ead in gs be cau se LNG’ s ve rif ie d cl ai m fai le d to m eet th e th res ho ld pl ead in g req ui rem en t se t fo rth in Ru le G(5 ) of th e Su pp le m en ta l Ru le s fo r Adm ira lt y or Mar it im e Cl ai m s an d Ass et Fo rfei tu re Acti on s. Acco rd in g to th e
go ve rn m en t, th e v eri fie d c la im di d n ot id en ti fy

LNG’ s i nt eres t i n t he cu rren cy wit h

su ffi ci en t sp ecifi ci ty

. The di st ric t co ur t gr an te d th e go ve rn m en t’s m ot io n ov er LNG’ s
op po si ti on , an d st ru ck LNG’ s ve rif ie d c l a im

, fin di ng it in su ffi ci en t to m eet
Su pp le m en ta l Ru le G(5 )’s th res ho ld pl ead in g r eq ui rem en t. In th e ab se nc e of an y
ot he r cl ai m s, th e di st ric t co ur t th erea fte r en te red a de cree of fo rfei tu re, ve st in g ti tl e

to th e cu rren cy

in th e g ov ern m en t.

Afte r th e go ve rn m en t i n i t i a t es a ci vi l fo rfei tu re pr oc eed in g, a “ pe rs on who

a s s e r ts an in te res t in th e de fen da nt pr op ert y m ay co nt es t th e fo rfei tu re by fil in g a cl ai m in th e co ur t whe re th e act io n is pe nd in g.” Fed

. R. Ci v. P. Su pp

. R. G(5 )(a) (i)

.

“ The cl ai m m

us t: (A) id en ti fy th e sp eci fic pr op ert y cl ai m ed ; (B) id en ti fy th e cl ai m an t

an d st at e th e cl ai m an t’s in te res t in th e pr op ert y ; (C) be si gn ed by th e cl ai m an t un de r
pe na lt y of pe rjury; an d (D) be se rv ed on th e go ve rn m en t at to rn ey

. . . .” Id

. “ At an y ti m e be fo re tri al

, th e go ve rn m en t m ay m ov e to st rik e a cl ai m

. . . fo r fai li ng to co m pl y wit h R ul e G(5 ) . . . .” Fed. R. Ci v. P. Su pp . R. G(8) (c)( i).

W e rev ie w th e di st ric t co ur t’s st rik in g of a cl ai m in a ci vi l fo rfei tu re pr oc eed in g f o r an ab us e of di sc ret io n. $1 54 ,85 3.0 0, 74 4 F.3 d at 56 2. “ An ab us e of di sc ret io n

oc cu rs whe n th e di st ric t co ur t res ts it s c o nc lu si on s on cl earl y erro ne ou s fact ua l
fin di ng s or erro ne ou s le ga l co nc lu si on s.” Id

. (q u o ti ng Lan kf or d v. Sh erm an , 45 1
F.3 d 49 6, 50 3– 04 (8 th Ci r. 20 0 6) ). W he n ru li ng on a m ot io n fo r jud gm en t on th e pl ead in gs , th e di st ric t co ur t m us t acce pt th e cl ai m an t’s fact ua l al le ga ti on s as tru e an d

co ns tru e al l reas on ab le in fere nc es in th e cl ai m an t’s fav or

. Sat erd al en v. Sp en cer, 72 5
F.3 d 83 8, 84 1 (8 th Ci r. 20 13 ). The di st ric t co ur t ge ne ral ly m ay no t co ns id er m at eri al s

ou ts id e th e pl ead in gs , bu t it m ay co ns id er so m e pu bl ic reco rd s, m at eri al s th at do no t

res ol ve d t he m ot io n a s o ne for jud gm en t o n t he pl ead in gs

.
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-co nt rad ic t th e co mp l a i nt , or m at eri al s th at are “ ne ces sa ril y em br aced by th e pl ead in gs .” Id

. (q uo ti ng Nob le Sy s. Co rp

. v. Alo ric a Cen t., LLC, 54 3 F.3 d 97 8, 98 2 (8 th Cir . 20 08 )).

The go ve rn m en t arg ue s t h a t o u r pr ev io us pa ne l op in io n in Uni te d St at es v. $1 54
, 8 5 3

. 0 0 i n U.S. Cu rren cy is di sp os it iv e in th is ap pe al

. In $1 54 ,85 3.0 0, th e cl ai m an t in it ia ll y fil ed a ve rif ie d cl ai m “ cl ai m [in g] th e se iz ed U.S. Cu rren cy in th e

am ou nt of $1 54 ,85 3, m or e or l e ss ,” an d at te st in g th at he “ ha [d ] an own ers hi p an d

po ss es so ry

in te res t i n t he se iz ed U.S. cu rren cy .” 74 4 F.3d at 56 1. The go ve rn m en t

m ov ed to st rik e th e cl ai m an t’s in it ia l ve rif ie d cl ai m fo r fai lu re to su ffi ci en tl y st at e hi s in te res t in th e cu rren cy as req ui red by Su pp le m en ta l Ru le G(5 ). Id

. The di st ric t co ur t

gr an te d th e go ve rn m en t’s fir st m ot io n to st rik e, bu t gr an te d th e cl ai m an t le av e to fil e

an am en de d ve rif

ie d c la im . Id. at 56 2. In hi s amend ed ve rif ie d c la im , th e cl ai m an t

av erre d, in rel ev an t pa rt, th at he “ ha [d ] an own ers hi p a nd po ss es so ry in te res t in th e

se iz ed U.S. Cu rren cy

. $4 ,50 0 m or e or le ss of th e U.S. C u r r e n c y was fo un d on Cl ai m an t’s pe rs on an d earn ed by Cl ai m an t th ro ug h hi s em pl oym en t.” Id

. The di st ric t

co ur t al so st ru ck th e am en de d v eri fie d c la im . Id.

In $1 54 ,85 3.0 0, we co nc lu de d th at th e di st ric t co ur t ha d n o t a b u se d it s di sc ret io n by st rik in g t he cl ai m an t’s fir st ve rif ie d cl ai m , rei te rat in g th is co ur t’s

req ui rem en t t ha t “ [t]he cl ai m an t’s in te res t i n t he pro pe rty m us t b e st at ed wit h s om e le ve l of sp eci fic it y .” Id

. (ci ti ng Uni te d St at es v. Thre e Parc el s of Rea l Pro p., 43 F.3 d
38 8, 39 1– 93 (8 th Ci r. 19 94 ) an d Uni te d St at es v. $1 04 ,67 4.0 0, 17 F.3 d 26 7, 26 8– 69 (8 th Ci r. 19 94 )). Mo re pa rti cu la rly, we de sc rib ed th e cl ai m an t’s as se rti on of “ an

own ers hi p an d po ss es so ry in te res t in th e se iz ed U.S. cu rren cy ” as “ on ly a ge ne ral

as se rti on of hi s in te res t” in th e fu nd s, whi ch pr ov id ed “ no l e v el of sp eci fic it y ” an d

“ di d n o t s u f

f i c ie nt ly id en ti fy hi s in te res t.” Id

. at 56 3. W e th en he ld th at th e cl ai m an t’s am en de d ve rif

ie d co m pl ai nt ha d su ffici en tly st at ed a “ co lo rab le own ers hi p in te res t” in $4 ,50 0 of th e s e i z e d f u n d s, in li gh t of it s ad di ti on al at te st at io n th at th e cl ai m an t ha d earn ed th at po rti on of th e fu nd s “ th ro ug h hi s em pl oym en t.” Id

. at 56 4.

-4

-Thi s was be cau se th e cl ai m an t “ wou ld cert ai nl y ha ve an own ers hi p in te res t in earn ed

in co m e.” Id

. In li gh t of th e ad di ti on al av erm en t th at $4 ,50 0 rep res en te d em pl oym en t
in co m e, we he ld th at th e di st ric t c ou rt ha d ab us ed it s di sc ret io n by st rik in g th e cl ai m an t’s am en de d ve rif ie d cl ai m to th e ex te nt he so ug ht to co nt es t th e fo rfei tu re of
th at po rti on of t he sei zed fun ds . Id.

LNG at te m

pt s to di st in gu is h th e cl ai m to own ers hi p in it s ve rif ie d cl ai m fro m th e own ers hi p clai m we fo un d i na de qu at e in $1 54 ,85 3.0 0. Mo re spe ci fic al ly, LNG

co nt en ds th at it s ve ri f

i e d c l ai m sa ti sf

ie s th e req ui rem en ts of Ru le G(5 ) be cau se it
in cl ud es a cl ai m by LNG to “ al l th e rig ht

, ti tl e, an d in te res t in ” th e se iz ed cu rren cy “ as th e own er th ereo f.” In LNG’ s vi ew, th is st at em en t rem ed ie s th e de fic ie nc y ou r co ur t
id en ti fie d in th e ve rif

ie d cl ai m i n $ 15 4,8 53 .00
, whi ch al le ge d on ly “ an own ers hi p in t e r e s t ” in th e se iz ed cu rren cy

. LNG arg ue s th at , in $1 54 ,85 3.0 0, we fo un d th e cl ai m an t’s own ers hi p cl ai m in su ffi ci en t be cau se it di d no t cl ai m a fu ll an d co m pl et e

own ers hi p in te res t in th e cu rren cy to th e ex cl us io n o f a l l ot he rs

. W e di sa gr ee. A

care fu l read in g of ou r de c is io n in $1 54 ,85 3.0 0 de m on st rat es th at we fo un d th e

own ers hi p cl ai m fau lt y no t be cau se of th e sc op e of th e cl ai m ed in te res t. In st ead

, we de te rm in ed th at th e cl ai m ed in te res t was no t de sc rib ed wit h su ffi ci e n t s p e c ifi ci ty.
Not ab ly, th e on ly di ffer en ce be twee n th e own ers hi p in te res t al le ge d in th e cl ai m an t’s
in it ia l v eri fie d c la im

(th e st rik in g o f whi ch we affi rm ed ) an d th e on e cl ai m ed in th e

am en de d ve rif

ie d cl ai m (th e st rik in g of whi ch we rev ers ed as to th e cl ai m an t’s al le ge d
in te res t in $4 ,50 0) was th e cl ai m an t’s ad di ti on al av erm en t th at he ha d earn ed $4 ,50 0
of th e se iz ed cu rren cy fro m hi s em pl oym en t. In sh or t, we di d no t fin d th e cl ai m an t’s
in it ia l ve rif

ie d cl ai m in su ffi ci en t be cau se it di d no t al le ge ex cl us iv e own ers hi p of th e

cu rren cy ; we de em ed it in ad eq ua te be cau se it di d no t id en ti fy th e own ers hi p in te res t
wit h s pe ci fic it y

.

LN G c o r r e c tl y no te s th at so m e of ou r si st er ci rcu it s ha ve de cl in ed to im po s e th e sa m e req ui rem en t of sp eci fic it y th at we req ui re of ve rif ie d fo rfei tu re cl ai m s un de r Su pp le m en ta l Ru le G(5 ). In Uni te d St at es v. $1 96 ,96 9 U.S. C ur ren cy , t he Sev en th

-5

-Ci rcu it he ld th at a “ ba ld as se rti on ” of own ers hi p wou ld st ric tl y co m pl y wit h
Su pp le m en ta l Ru le G(5 )’s req ui rem en t th at th e cl ai m an t st at e wha t in te res t he ha s in
th e pr op ert y

. 71 9 F.3 d 64 4, 64 6– 47 (7 th Ci r. 20 13 ). The Sev en th Ci rcu it ex pl ai ne d
th at no “ ad di ti on al req ui rem en ts can be ex tra ct ed fro m th e [ru le ’s] te rs e an d crystal li ne la ng ua ge ,” an d ex pr es sl y reject ed th at , to co m pl y wit h Su pp le m en ta l Ru le G(5 ), a cl ai m an t m

us t st at e “ ho w he ob ta in ed po ss es si on of th e cu rren cy ,” in cl ud in g, in te r al ia

, a de sc rip ti on of th e tra ns act io n ge ne rat in g th e cu rren cy

. Id

. at 64 6; se e al so Uni te d St at es v. Fu nd s in th e Am ou nt of $2 39 ,40 0, 79 5 F.3 d 63 9, 64 4 (7 th Ci r. 20 15 ) (“ [S] at isfy in g pr oc ed ur al req ui rem en ts —n ot es ta bl is hi ng ‘leg it im at e’ own ers hi p— is
al l th at Ru le G as ks of cl ai m an ts as id e fro m sh ow i n g c on st it ut io na l st an di ng .”).
Si m il arl y , th e Si xt h Ci rcu it rece nt ly he ld th at “ [a]t th e pl ead in g st ag e, a ve rif ie d cl ai m of own ers hi p is su ffi ci en t to sa ti sf y Arti cl e III an d th e pr oc ed ur al req ui rem en ts of

Ru le G.” Uni te d Stat es v. $3 1,0 00 .00 in U.S. Cu rren cy , 87 2 F.3d 34 2, 34 8– 54 (6 th
Ci r. 20 17 ); cf. Uni te d St at es v. $1 33 ,42 0.0 0 in U.S. Cu rren cy , 67 2 F.3 d 62 9, 63 8 (9 th
Ci r. 20 12 ) (“ At th e m ot io n to di sm is s st ag e, a cl ai m an t’s un eq ui vo cal as se rti on of an

own ers hi p in te res t in th e pr op ert y is su ffi ci en t b y it se lf to es ta bl is h [Art ic le III]

st an di ng .”). Bu t cf. Uni te d St at es v. $3 8,5 70 U.S. Cu rren cy , 95 0 F.2 d 11 08
, 11 12 –1 3 (5 th Ci r. 19 92 ) (a “ ba re as se rti on ” of an own ers hi p in te r e s t i n se iz ed pr op ert y , wit ho ut m or e, is in ad eq ua te to sh ow Arti cl e III st an di ng ). Bu t “ [i]t is a card in al ru le
in ou r ci rcu it th at on e pa ne l is bo un d by th e de ci si on of a pr io r pa ne l.” Mad er v. Uni te d St at es , 65 4 F.3 d 79 4, 80 0 (8 th Ci r. 20 11 ) (en ba nc ) (q uo ti ng Owsl ey v. Lue bb ers , 28 1 F.3 d 68 7, 69 0 (8 th Ci r. 20 02 )). Howev er pe rs ua si ve th es e cas es m ay be , we are b ou nd by thi s co ur t’s p an el op in io n i n $ 15 4,8 53 .00

.

LNG’ s cl ai m t o an own ers hi p in te res t in th e se iz ed cu rren cy is m at eri al ly
in di st in gu is ha bl e fro m th e cl ai m th is co ur t de em ed in ad eq ua te in $1 54 ,85 3.0 0, an d

we are th eref

or e bo un d by Eig ht h Ci rcu it pr eced en t, whi ch on ly th e en ba nc co ur t can

ov erru le . The jud gm en t o f th e d is tri ct co ur t i s af fir m ed

.

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