Source: https://law.justia.com/cases/federal/appellate-courts/F2/937/98/192819/
Timestamp: 2020-02-19 08:29:54
Document Index: 597729118

Matched Legal Cases: ['§ 881', '§ 1292', '§ 881', '§ 848', '§ 963', '§ 952', '§ 2', '§ 1292', '§ 881', '§ 881', '§ 881', '§ 853', '§ 881', '§ 6002', '§ 6002', '§ 848', '§ 881', '§ 881', '§ 1621', '§ 1621', '§ 6002']

United States of America v. a Parcel of Land, Buildings, Appurtenances and Improvements,known As 92 Buena Vista Avenue, Rumson, New Jerseyand Beth Ann Goodwin, Claimant,beth Ann Goodwin, Appellant, 937 F.2d 98 (3d Cir. 1991) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Third Circuit › 1991 › United States of America v. a Parcel of Land, Buildings, Appurtenances and Improvements,known As 92...
United States of America v. a Parcel of Land, Buildings, Appurtenances and Improvements,known As 92 Buena Vista Avenue, Rumson, New Jerseyand Beth Ann Goodwin, Claimant,beth Ann Goodwin, Appellant, 937 F.2d 98 (3d Cir. 1991)
US Court of Appeals for the Third Circuit - 937 F.2d 98 (3d Cir. 1991) Argued April 2, 1991. Decided June 17, 1991. Rehearing Denied Aug. 13, 1991
In this appeal arising out of a civil forfeiture action, at least nominally civil in nature, we are presented with the very interesting question of whether the donee of monies, which the government has established probable cause to believe are traceable to drug transactions and which were used by the donee to purchase the premises that the government seeks to forfeit, may assert an innocent owner defense pursuant to 21 U.S.C. § 881(a) (6).1 The district court found that the donee, Beth Ann Goodwin, could not assert such a defense because she admitted that the money with which she bought the premises was a gift and therefore she was not a bona fide purchaser for value. We conclude that the district court erred as a matter of law because Goodwin was entitled to assert an innocent owner defense even though she was not a bona fide purchaser for value. Additionally, we shall address three other questions that have been certified by the district court pursuant to 28 U.S.C. § 1292(b).
On April 3, 1989, the government filed a verified complaint pursuant to 21 U.S.C. § 881 et seq. seeking the seizure and forfeiture of the premises. The forfeiture proceeding was brought by the government as a consequence of the indictment of Joseph Anthony Brenna. The indictment alleged that from on or about January 1982, Brenna and others engaged in a continuing criminal enterprise in violation of 21 U.S.C. § 848, engaged in a conspiracy to import more than 1,000 kilograms of marijuana into the United States in violation of 21 U.S.C. § 963, and knowingly imported in excess of 1,000 kilograms of marijuana into the United States in violation of 21 U.S.C. § 952(a), and 18 U.S.C. § 2. On April 12, 1989, upon the ex parte application of the United States, the United States District Court for the District of New Jersey reviewed the verified complaint and determined that there was probable cause to believe that the premises were subject to forfeiture. The court thus issued a Summons and Warrant For Arrest and soon thereafter a United States Marshal seized the premises. Goodwin remains in possession of the premises pursuant to an Occupancy/Tenant Agreement with the United States Marshals Service.
On June 15, 1989, Goodwin filed an Answer, Claim and Counterclaim. On May 29, 1990, a hearing was held before the district court at which Goodwin moved to dismiss the complaint and seizure or, in the alternative, to grant summary judgment in her favor with respect to the United States' claim for forfeiture. The United States opposed the motion and crossmoved for a stay of the forfeiture proceedings. The district court denied Goodwin's motions and granted the United States' motion for a stay pending the criminal trial of Brenna and his co-defendants in the Southern District of Florida. The district court further ordered that if Brenna's trial were severed from the remaining defendants because of his fugitive status, Goodwin could move for relief from the stay after the trial of the remaining defendants. On July 13, 1990, the district court issued an order pursuant to 28 U.S.C. § 1292(b) certifying for appeal four questions:
Goodwin asserts that the government's seizure of her home pursuant to 21 U.S.C. § 881 et seq. without pre-seizure notice and hearing is in violation of the United States Constitution. In support of this argument, Goodwin cites United States v. Property at 4492 S. Livonia Road, Livonia, New York, 889 F.2d 1258 (2d Cir. 1989). In South Livonia, the Court of Appeals for the Second Circuit specifically considered whether 21 U.S.C. § 881(a) (7) was unconstitutionally applied in the context of the seizure of the claimant's home without notice and a hearing. Despite the fact that the court concluded that the claimant's interest in his home and the lack of exigent circumstance surrounding the seizure made the seizure unlawful, the court nevertheless determined that the forfeiture was not improper. Based on decisions from other courts of appeals, the Court of Appeals for the Second Circuit held that "the illegal seizure of property, standing alone, [does] not immunize that property from forfeiture, so long as impermissibly obtained evidence is not used in the forfeiture proceeding." South Livonia, 889 F.2d at 1265.
In keeping with the analysis used in South Livonia, we agree that the government's seizure of Goodwin's home pursuant to section 881 without notice and a hearing may have been unlawful. Nonetheless, the unlawfulness of the seizure does not require dismissal of the forfeiture proceedings provided that probable cause to seize the premises can be supported by untainted evidence. United States v. One 1978 Mercedes Benz, Four-Door Sedan, 711 F.2d 1297, 1302-03 (5th Cir. 1983). Indeed, the indictment of Brenna, which establishes probable cause to believe that he was involved in a drug importation scheme, and other inferential evidence obtained independently of the illegal seizure suffice to establish that the district court had "reasonable grounds to believe that the property probably was derived from drug transactions." United States v. Parcels of Land, 903 F.2d 36, 39 (1st Cir. 1990). Accordingly, the district court correctly declined to dismiss the forfeiture action, "because the government [did] establish [ ], by permissible evidence, that probable cause exist [ed] to subject the premises to forfeiture." U.S. v. 92 Buena Vista Ave., 738 F. Supp. 854, 857 (D.N.J. 1990).
Goodwin also argues that the district court erred in holding that Goodwin could not invoke an "innocent owner" defense pursuant to section 881(a) (6) because she was not a bona fide purchaser for value. Section 881(a) (6) provides for an innocent owner defense in the following language:
21 U.S.C. § 881(a) (6). Goodwin admits that the money provided to her by Brenna to purchase the premises was a gift, but she asserts that she did not know that such money was the proceeds of drug transactions.
The district court articulated three specific bases in support of its conclusion that an innocent owner defense may only be invoked by a bona fide purchaser for value: (1) the criminal forfeiture statute, 21 U.S.C. § 853(c), explicitly protects only transferees who are bona fide purchasers for value; (2) those who do not have legal title to property may not validly transfer it to others except when the transferee is a bona fide purchaser for value; and (3) in the case of fraudulent conveyances, bona fide purchasers for value may be protected, but recipients of gifts are not. The district court further noted that from a common sense standpoint it was unlikely that Congress intended that a drug dealer should be able to distribute, with impunity, the proceeds from his drug transactions, even to innocent parties.
Despite the appeal of this analysis, the plain language of the innocent owner provision speaks only in terms of an "owner" and in no way limits the term "owner" to a bona fide purchaser for value. Furthermore, in United States v. Parcel of Real Property Known as 6109 Grubb Road, 886 F.2d 618 (3d Cir. 1989), we determined, after reviewing the legislative history of section 881(a) (6), that "the term 'owner' should be broadly interpreted to include any person with a recognizable legal or equitable interest in the property seized." Id. at 625 n. 4 (quoting 1978 U.S.Code Cong. & Admin.News at 9522-23). Limiting the term "owner" to a bona fide purchaser for value and thereby excluding a recipient of a gift from being considered an "owner" would contravene the express legislative intent that we interpret "owner" broadly.
Moreover, as the district court pointed out, the criminal forfeiture statute, section 853, is explicitly limited to bona fide purchasers for value, while in section 881 Congress omitted such limiting language. We believe that such a difference was intended by Congress. See K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291, 108 S. Ct. 1811, 1817, 100 L. Ed. 2d 313 (1988) ("if the statute is clear and unambiguous, that is the end of the matter, for the court ... must give effect to the unambiguously expressed intent of Congress"). In section 881, Congress chose to utilize the broad term "owner." Therefore, rather than reading into section 881 a requirement that an owner be a bona fide purchaser for value, we conclude that Congress intended to omit the bona fide purchaser for value requirement in that section. Consequently, we hold that Goodwin need not be a bona fide purchaser for value to raise an innocent owner defense pursuant to section 881(a) (6).
The government forcefully argues that Goodwin never acquired an ownership interest in the premises because of the relation back doctrine embodied in 21 U.S.C. § 881(h), which provides that " [a]ll right, title, and interest in property described in subsection (a) of this section shall vest in the United States upon commission of the act giving rise to forfeiture under this section." Thus, the government asserts that Goodwin could never have been an "owner" because at the time of the drug transactions, all right, title, and interest in the proceeds from the drug transactions vested in the United States. See In the Case of One 1985 Nissan, 300 ZX, 889 F.2d 1317 (4th Cir. 1989).
Moreover, to interpret section 881(h) in the manner suggested by the government would essentially serve to emasculate the innocent owner defense provided for in section 881(a) (6). No one obtaining property after the occurrence of the drug transaction-including a bona fide purchase for value--would be eligible to offer an innocent owner defense on his behalf. Judge Murnaghan, in his concurrence in 1985 Nissan, gives an example which illustrates the overreaching effects that might result if the government's argument were accepted by us:
The extent of immunity granted to Goodwin was set forth in a May 4, 1988, letter signed by Assistant United States Attorney Lynne W. Lamprecht. In the letter, the government agreed that pursuant to 18 U.S.C. § 6002 "no testimony or other information resulting from Ms. Goodwin's interview on May 5, 1988 (or any information directly or indirectly derived from such testimony or other information) may be used against Ms. Goodwin in any criminal case except a prosecution for perjury, or for giving a false statement." (Emphasis added.)3 The district court concluded from this language that Goodwin was granted use immunity for her testimony and not transactional immunity. Therefore, despite the fact that the complaint was based, in part, on immunized testimony, the district court ruled that because the government established probable cause from other independent sources, it would not dismiss the complaint.
The immunity granted pursuant to 18 U.S.C. § 6002 is, indeed, "use" immunity. Tierney v. United States, 409 U.S. 1232, 93 S. Ct. 17, 34 L. Ed. 2d 37 (1972). In United States v. Pellon, 475 F.Supp 467, 479 (S.D.N.Y. 1979), the court distinguished "use" immunity from "transactional" immunity:
Id. (citing Kastigar v. United States, 406 U.S. 441, 449-53, 92 S. Ct. 1653, 1658-61, 32 L. Ed. 2d 212 (1972)).
The district court concluded that the United States "adequately demonstrated, from other sources independent of Ms. Goodwin's testimony, that probable cause exists to support forfeiture of the premises." 92 Buena Vista, 738 F. Supp. at 861. In support of its determination that there was an independent basis for a finding of probable cause, the district court set forth the following facts, among others, that were derived independently of Goodwin's testimony:
On or about April 13, 1990, a Grand Jury sitting in the Southern District of Florida returned an indictment against Joseph A. Brenna, among others, for violations of 21 U.S.C. §§ 848 and 853 and for forfeiture of the property in question.... The probable cause to indict Mr. Brenna for the drug offenses was derived independent of any information from the claimant, since the claimant disclaims any knowledge of Mr. Brenna's involvement in drug transactions.... In addition, Mr. Giacobbe obtained information from a Mr. Joseph Mazacco, an individual cooperating with the government on a plea agreement, that Brenna used drug money to purchase the premises....
92 Buena Vista, 738 F. Supp. at 857-58 (emphasis added).
In determining whether proceeds are traceable to drug transactions, " [t]here is no need to tie the [property] to proceeds of a particular identifiable illicit drug transaction." United States v. 1982 Yukon Delta Houseboat, 774 F.2d 1432, 1435 n. 4 (9th Cir. 1985) (emphasis in original). In determining whether probable cause exists for forfeiture, "all that is required is that a court be able to look at the 'aggregate' of the facts and find reasonable grounds to believe that the property probably was derived from drug transactions." United States v. Parcels of Land, 903 F.2d 36 (1st Cir. 1990). Based upon the information cited by the district court which was garnered independently of Goodwin's testimony, the district court correctly concluded that probable cause existed for the forfeiture of the property pursuant to 21 U.S.C. § 881(a) (6).
21 U.S.C. § 881(d). Furthermore, the legislative history provides that "Subsection (d) of this section provides that forfeiture proceedings shall be in accord with the provisions of existing U.S. customs law." House Report No. 91-1444, Comprehensive Drug Abuse Prevention and Control Act of 1970, reprinted in 1970 U.S.Code Cong. and Adm.News, pp. 4566, 4624.
The applicable statute of limitations, 19 U.S.C. § 1621 of the customs laws, requires that the United States commence its forfeiture action against Goodwin "within five years after the time when the alleged offense was discovered." 19 U.S.C. § 1621. Accordingly, because the government became aware of the transactions giving rise to this action in 1986 and because the government instituted this forfeiture action within five years (1989), the statute of limitations does not bar this action.
Goodwin also claims that the forfeiture action is barred by undue delay. The only caselaw which we have been able to uncover involves undue delay between the time of the seizure of the property and the post-seizure filing of the forfeiture action. Consequently, because this forfeiture proceeding was brought prior to the seizure, such caselaw is inapposite. Here, Goodwin has been permitted to be heard "at a meaningful time after the deprivation of the property...." 92 Buena Vista, 738 F. Supp. at 862. Moreover, Goodwin has not been wholly deprived of her property since she has been permitted to continue to reside at the premises in accordance with the terms of the occupancy agreement. Therefore, the district court correctly held that there was no undue delay that would warrant dismissal of this forfeiture proceeding.
Section 881(a) (6) sets forth an innocent owner defense to "civil" forfeiture proceedings instituted under Sec. 881. Section 853(c) also sets forth an innocent owner defense to criminal forfeitures under Sec. 853, but in different language. As explained below, that difference can be significant. See Part III, at 101, infra
Both sections 881(a) (6) and 881(a) (7) provide for the use of "innocent owner" defenses
For the purposes of our analysis, we shall assume, without deciding, that a civil forfeiture effected under section 881 constitutes a "criminal case" under the immunity statute, 18 U.S.C. § 6002. Obviously, if we were to decide that a section 881 forfeiture is not a criminal case, no more analysis would be required and upon that basis we would be able to affirm the district court's conclusion that the use of Goodwin's immunized testimony does not require that the forfeiture complaint be dismissed
We note that there is caselaw supporting the argument that such a forfeiture does constitute a criminal case. In Boyd v. United States, 116 U.S. 616, 634, 6 S. Ct. 524, 534, 29 L. Ed. 746 (1886), the Supreme Court stated:
Id.; see also One 1958 Plymouth Sedan v. Pennsylvania, 380 U.S. 693, 700, 85 S. Ct. 1246, 1250, 14 L. Ed. 2d 170 (1965) (citing Boyd for the proposition that a forfeiture proceeding is quasi-criminal in character with the same objectives of a criminal proceeding: to penalize one for committing a crime); and United States v. Riverbend Farms, Inc., 847 F.2d 553 (9th Cir. 1988) (quoting United States v. Seifuddin, 820 F.2d 1074, 1077 (9th Cir. 1987) for the proposition that forfeiture statutes are criminal "only for the purposes of the fourth amendment search and seizure clause and the fifth amendment self-incrimination clause").