Opinion ID: 685598
Heading Depth: 2
Heading Rank: 3

Heading: Is Lack of Consent An Independent Defense Under Sec.

Text: 56 881(a)(4)?
57 Should the district court conclude on remand that Goodman was willfully blind, the question will arise whether such a conclusion will defeat his claim of innocent owner status. As has been mentioned, the district court believed that it did, and rejected Goodman's argument that, under 6109 Grubb Road, he should still be entitled to innocent owner protection if he could show that he did not consent to the use of the Rolls Royce to facilitate a drug transaction. See 817 F.Supp. at 580. As we have also noted above, 6109 Grubb Road held that, in the context of a Sec. 881(a)(7) forfeiture, an owner who had knowledge of the taint will still be considered an innocent owner upon a showing that he or she did not consent to the use which caused the taint. The district court refused to apply 6109 Grubb Road, stating that the case did not govern Sec. 881(a)(4)(C) forfeitures. 58 In 6109 Grubb Road, the claimant admitted knowing that her property had been used for drug dealing. She argued, however, that notwithstanding such knowledge, she should still be entitled to innocent owner status because she could show that she did not consent to its use therefor. Relying principally on the canon of construction that words separated by an or must be given independent meaning, the panel agreed, concluding that the lack of either knowledge or consent established innocent owner status. 886 F.2d at 626. 59 We believe that the 6109 Grubb Road analysis is applicable to Sec. 881(a)(4)(C) for two reasons. First, for all practical purposes, although the willful blindness language appears only in Sec. 881(a)(4), the tests for innocent ownership under all three provisions are virtually identical, and hence the construction should be consistent. See supra at 809-10. Since the choice between reading the conditions for innocent owner status in the disjunctive or conjunctive will have a dramatic effect on the nature of the defenses, the construction should remain consistent across all three subsections in order to keep the defenses virtually identical, see supra at 809. 60 Second, and more importantly, the central logic of the 6109 Grubb Road decision mandates the same result in the context of Sec. 881(a)(4). As has been mentioned, the 6109 Grubb Road panel ultimately based its decision on the language and structure of the statute, in particular, the use of the traditionally disjunctive word or. 886 F.2d at 626 (The use of or in the statute (knowledge or consent) means that each word must be given its independent and ordinary meaning.... Reading 'knowledge or consent' as the canons of construction require, we conclude that [the claimant] can show innocent ownership by proving by a preponderance of the evidence that the illegal use of the property occurred either without her knowledge or without her consent.). Although Sec. 881(a)(4)(C) adds the willful blindness notion, the language and structure of the provision is otherwise identical to that of Sec. 881(a)(7), including the use of the traditional disjunctive or. The government asks us to overlook the obvious similarities between Secs. 881(a)(4)(C) and (7) for purposes of applying 6109 Grubb Road, contending that to transpose 6109 Grubb Road to Sec. 881(a)(4)(C) would lead to the absurd result that every owner could establish the innocent owner defense. 61 The government's argument goes as follows. First, the government recognizes that if 6109 Grubb Road is extended to Sec. 881(a)(4)(C), an owner can prevail on the innocent owner defense by showing either a lack of willful blindness or a lack of knowledge. Second, the government assumes that willful blindness and knowledge are mutually exclusive. In other words, the government maintains that if the court finds that the owner knew that the conveyance was used to facilitate drug transactions, it must logically conclude that the owner was not willfully blind thereto; concomitantly, the government contends that if the court finds that the owner was willfully blind to the conveyance having been used to facilitate drug transactions, it must necessarily conclude that the owner lacked knowledge thereof. Accordingly, the government maintains, an owner can always show that he or she either lacked knowledge or was not willfully blind, causing the 6109 Grubb Road construction to create the absurd situation in which an owner could successfully make out the innocent owner defense simply by failing to satisfy one of the conditions for innocent owner status. Under this analysis, it argues, 6109 Grubb Road cannot apply. 62 But in the world of logic, a syllogism is valid only if its premises are sound, and it appears to us that one of the government's premises is false. As our discussion of willful blindness in the previous section demonstrates, willful blindness and knowledge are not mutually exclusive states of mind. Willful blindness, as it is used in Sec. 881(a)(4)(C), and as it has been used traditionally, is an alternative way of proving knowledge. In terms, knowledge comprises both actual knowledge--a subjective belief that something is true--and willful blindness--a subjective belief that it is highly probably that something is true. In other words, willful blindness is a subset of knowledge. For this reason, proof of willful blindness has been sufficient to prove knowledge in the context of Secs. 881(a)(6) and (7). Since such proof establishes knowledge in the context of those sections, it also suffices to establish knowledge in the context of Sec. 881(a)(4)(C), for we see no reason to construe the term knowledge in Sec. 881(a)(4)(C) differently from Secs. 881(a)(6) and (7). It follows, then, that an owner's failure to prove a lack of willful blindness simultaneously amounts to a failure to prove lack of knowledge for purposes of the statute. As a result, the illogical result the government fears if we apply 6109 Grubb Road to Sec. 881(a)(4)(C) is illusory. 63 The fact that Sec. 881(a)(7) has been interpreted to deprive a claimant of innocent owner status where the owner was willfully blind is important for another reason. If the government were correct that willful blindness and actual knowledge are mutually exclusive mental states, then the illogical result would also exist in the context of Sec. 881(a)(7). In other words, the government's assumption that willful blindness and knowledge are mutually exclusive is at odds with the well settled case law holding that willful blindness is sufficient to deprive a claimant of the innocent owner defense of Sec. 881(a)(7). In short, the government's argument is really a veiled criticism of 6109 Grubb Road, not just of its application to Sec. 881(a)(4)(C), and does not provide a basis for distinguishing Sec. 881(a)(7) from Sec. 881(a)(4)(C). 64 We can find no reason why the rationale of 6109 Grubb Road should not apply with equal force to forfeitures under Sec. 881(a)(4)(C). The legislative history clearly tells us that the defenses under Sec. 881(a)(7) and Sec. 881(a)(4)(C) are the same; the structure of the language in Sec. 881(a)(4)(C) is identical to that in Sec. 881(a)(7), so the same canons of construction that were controlling 6109 Grubb Road lead to an identical result here. Section 881(a)(4)(C) does not embody any policy distinct from Sec. 881(a)(7) which would otherwise prevent the application of 6109 Grubb Road to the construction of its language. We therefore conclude that the innocent owner defense of Sec. 881(a)(4)(C) is available to any owner who can prove any one of either a lack of knowledge, lack of consent, or lack of willful blindness. Accordingly Goodman should be entitled to innocent owner status if he did not consent to the use of the Rolls Royce in facilitating drug trafficking.
65 A straightforward application of 6109 Grubb Road to the facts of this case suggests that on remand, Goodman could show that he did not consent to the improper use of the Rolls Royce by proving that he did not own the car at the time that it was used to facilitate drug transactions, that he was not in a position to prevent such a use of the car, and that he did not know that the car was being used for such a purpose at the time it was so used or, if he knew, that he took all reasonable steps to prevent such use. If Goodman did not know that the Rolls Royce was going to be used in the DiSalvo or Ianarella meetings, he simply could not have consented to such a use. As a result, even if Goodman actually knew about or was willfully blind to the car's past improper use at the time he obtained ownership of it, he could not have consented to such improper use, and hence would be an innocent owner. Because we do not see how a person can consent to a particular use of property if he or she did not know that the property would be so used at or before the time of the use, the 6109 Grubb Road approach means that a subsequent owner who did not know about the act creating the taint on the property at or before it was committed would always be an innocent owner under the statute--even if he or she knew about the act creating the taint at the time he or she received the property. 66 The result we reach by applying 6109 Grubb Road raises the question whether that case was properly decided as an original matter. We, of course, cannot avoid the holding of that opinion, see Third Circuit Internal Operating Procedures 9.1, but the result 6109 Grubb Road created here seems at first blush sufficiently counterintuitive that the case needs more explaining. As we describe below, although the rationale given in 6109 Grubb Road is not free from doubt, the result is quite sensible as a matter of policy. Indeed, as we also detail below, the puzzling result cannot be laid at the feet of the 6109 Grubb Road panel. Rather, in our view, the cause is the nearly impenetrable language of the statute and an intervening Supreme Court decision, 92 Buena Vista, the importance of which the 6109 Grubb Road panel would not have anticipated. 67 We begin by noting that the rationale provided in 6109 Grubb Road is vulnerable. 18 The argument that the existence of the word or between the words knowledge and consent requires a disjunctive reading of the conditions that an owner needs to establish to show innocent owner status, arguably overlooked the importance of context in determining whether the conditions should be treated as disjunctive or conjunctive. Whether requirements in a statute are to be treated as disjunctive or conjunctive does not always turn on whether the word or is used; rather it turns on context. For example, if a statute provides that no cars or motorcycles are allowed in the park, a person trying to keep a vehicle out of the park need only show that the vehicle is either a car or a motorcycle. From that perspective the statute is disjunctive. On the other hand, a person trying to bring a vehicle into the park must show both that it is not a car and that it is not a motorcycle. From that perspective, the statute is conjunctive. Depending on the relevant context, a disjunctive test can always be reformulated as a conjunctive one. 19 68 To be fair to the 6109 Grubb Road panel, part of the problem in both 6109 Grubb Road and in this case stems from the language of the statute itself. Filled with negatives, its language is nearly impenetrable. The difficulty with the 6109 Grubb Road linguistic interpretation is demonstrated by removing two of the negatives (which should not change the meaning of the statute) and the burden of proof language (which merely indicates who has to satisfy the requirements of the statute without indicating what the party with the burden must show): 69 [ ] property shall be forfeited under [Sec. 881(a)(7) ] to the extent of an interest of an owner, by reason of any act or omission ... committed or omitted with[ ] the knowledge or consent of the owner. 70 Parsed with the negatives and the burden of proof language excised, the statute provides that an act or omission committed under either of the two conditions will preclude an innocent owner defense. If an act is committed with knowledge, the vehicle is forfeited, and if it is committed with consent, it is forfeited. Thus, a conjunctive, rather than disjunctive, reading seems plausible. 71 Of course, one might resort to the legislative history to construe the language, but unfortunately the legislative history is unhelpful on this issue. 20 The textual analysis does not, however, leave 6109 Grubb Road insupportable. Quite to the contrary, at least three different reasons justify the 6109 Grubb Road approach. First, the 6109 Grubb Road construction avoids making the consent requirement surplusage. Construing the statute to require the claimant to negate both knowledge and consent renders the consent language redundant. In other words, if a claimant established a lack of knowledge, this would necessarily negate any consent to the illegal activity, because in order to consent to drug activity, one must know about it. United States v. 141st St. Corp., 911 F.2d 870, 878 (2d Cir.1990), cert. denied, 498 U.S. 1109, 111 S.Ct. 1017, 112 L.Ed.2d 1099 (1991) (quoted in 1 SMITH, at p 4.02[d]. Under a conjunctive reading, [t]he term consent would be totally unnecessary since the factfinder would never reach the issue of consent once it concluded that the claimant either had knowledge or lacked knowledge. 1 SMITH, at p 4.02[d]. 21 72 Second, and more importantly, the 6109 Grubb Road construction ameliorates some of the harsh effects of the forfeiture statute. It allows an owner to keep the property when he or she has done everything reasonably possible to prevent its use in drug activity. See, e.g., United States v. All Right Title & Interest in Property Known as 710 Main St., 744 F.Supp. 510, 524-25 (S.D.N.Y.1990) (holding that a landlord who closed off portions of a building used in drug trafficking, posted signs discouraging drug trafficking, restricted hours of operation of one of the businesses, and made anonymous phone calls to the police to report drug activity at his property was an innocent owner); United States v. Certain Real Property & Premises Known as 171-02 Liberty Ave., 710 F.Supp. 46, 50-53 (E.D.N.Y.1989) (holding on a motion for summary judgment that a landlord who had purchased property in a drug infested neighborhood with the intention of fixing it up, and who, after admitting knowledge of drug related activities in his building, cooperated with police to try to clean it up, pressed criminal trespass charges against some drug dealers, and allowed police to tear down fences and steel doors that the dealers had erected to obstruct surveillance, had shown enough for a jury to find that he was an innocent owner). 22 73 Third, the 6109 Grubb Road construction avoids a potential constitutional problem with the statute. (This third justification is independent of but related to the second one.) When a landlord cognizant of drug transactions occurring at his or her property tries to do everything he or she reasonably can to prevent use of the property in that way, and the drug dealing continues, forfeiture of the property may be unduly oppressive. See Calero-Toledo, 416 U.S. at 689-90, 94 S.Ct. at 2094-95. 74 Not surprisingly, 6109 Grubb Road is now on one side of a circuit split on the question whether the claimant can achieve innocent owner status by showing the lack of one of the conditions. While the Second and Eleventh Circuits have followed 6109 Grubb Road, see United States v. 141st St. Corp., 911 F.2d 870, 877-80 (2d Cir.1990), cert. denied, 498 U.S. 1109, 111 S.Ct. 1017, 112 L.Ed.2d 1099 (1991); United States v. One Single Family Residence Located at 15603 85th Ave. N., 933 F.2d 976, 982 (11th Cir.1991) (stating that an owner with actual knowledge that the property was used or is being used for drug trafficking can keep the property if he can show that everything reasonably possible was done to prevent the taint), 23 the Ninth Circuit has adopted the opposite position, see United States v. One Parcel of Land at Lot 111-B, 902 F.2d 1443, 1445 (9th Cir.1990) ([I]f the claimant either knew or consented to the illegal activities, the 'innocent owner' defense is unavailable.); see also 890 Noyac Road, 739 F.Supp. at 113-15 (providing a good explanation of the problem with 6109 Grubb Road); cf. 1989 Jeep Wagoneer, 976 F.2d at 1174 (8th Cir.) (noting the circuit split without taking a position on the question). 24 75 The upshot of this extended analysis of 6109 Grubb Road is that, while reasonable people can disagree about its correctness, 6109 Grubb Road is defensible. Its construction of the statute sensibly works to the benefit of people who own property before the illegal act is committed. However, as we have discussed, 6109 Grubb Road ensures that a post-illegal-act transferee who did not know of the illegal act at the time it occurred will always be able to make out the innocent owner defense, regardless of whether he or she knew about the taint at the time of the transfer. 76 The 6109 Grubb Road opinion makes no mention of this problem. But that is understandable because, at the time 6109 Grubb Road was decided, its construction would have had no effect at all on the rights of post-illegal-act transferees. At that time it was generally assumed that because of the relation back provision of the forfeiture statute, 21 U.S.C. Sec. 881(h), which vested title in the United States at the moment of the illegal act, a post-illegal-act transferee could never have better title than the United States and could never benefit from the innocent owner defense. 25 In 1993, however, the Supreme Court decided United States v. Parcel of Land, Bldgs., Appurtenances & Improvements at 92 Buena Vista Avenue, Rumson, N.J., --- U.S. ----, 113 S.Ct. 1126, 122 L.Ed.2d 469 (1993), holding that the relation back provision does not defeat the rights of a post-illegal-act transferee who otherwise satisfies the requirements for the innocent owner defense under Sec. 881(a)(6). Thus, 92 Buena Vista Avenue has the effect of making the knowledge or consent language of the statute as interpreted by 6109 Grubb Road applicable to post-illegal-act transferees and, in turn, creates the problem of insulating certain owners who one reasonably might not consider to be deserving.
77 One possible solution to this problem would be to divide potentially innocent owners into two categories, pre-illegal-act owners and post-illegal-act transferees, and apply the 6109 Grubb Road disjunctive test to the first category but the conjunctive test to the second one. 26 That approach is, in fact, what one federal district court in Florida has taken. See United States v. One Parcel of Real Estate Located at 6640 S.W. 48th St., 831 F.Supp. 1578 (S.D.Fla.1993). In 6640 S.W. 48th Street, the court was confronted with essentially the same problem in this case (except that it was applying Sec. 881(a)(7)). The court recognized that 92 Buena Vista Avenue created a problem in applying the innocent owner provision to post-illegal-act transferees in jurisdictions (including its own) following the 6109 Grubb Road approach, since it realized that under such an approach, the claimant would be declared an innocent owner because [he] could not possibly have consented to ... the illegal activities. Id. at 1585. To avoid that result, the court declined to follow the 6109 Grubb Road approach in such a context, and concluded that the consent language should be ignored altogether when considering a post-illegal-act transferee: Consent is simply irrelevant when examining the innocent owner claims of post-illegal act transferees. Id. 78 By performing what might be termed an act of judicial legislation, the court closed a loophole in the statute and prevented post-illegal-act transferees with knowledge at the time of the transfer of the property's taint from escaping the forfeiture statute. But the statute simply draws no such distinction between pre-illegal-act owners and post-illegal-act transferees. We cannot justify reading the very same language in a statute disjunctively with respect to one class of owners and conjunctively with respect to another, in the absence of any instruction from Congress to do so. The dissent contends that a failure to draw such a distinction would constitute judicial abdication, citing cases which require us to construe a statute to avoid absurd results, if alternative interpretations are available and consistent with the legislative purpose. United States v. Schneider, 14 F.3d 876, 879-80 (3d Cir.1994) (citing Griffin v. Oceanic Contractors, 458 U.S. 564, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982)). The obligation as expressed in these cases does not involve or support, however, reading statutory language variably in the absence of a justification in either the language of the statute or the legislative history. In this case, there is no such instruction in either the statute or the legislative history. 79 Given that the language of the statute as interpreted by 6109 Grubb Road favors Goodman in this context, we are faced with, at the very least, an ambiguity in the statutory language. Because Sec. 881(a)(4) is punitive and quasi-criminal in nature, see Austin v. United States, --- U.S. ----, ---- - ----, 113 S.Ct. 2801, 2810-11, 125 L.Ed.2d 488 (1993) (holding that Secs. 881(a)(4) and 881(a)(7) are punitive in nature), we must apply the rule of lenity, which requires us to resolve the ambiguity in favor of the claimant, see United States v. Thompson/Center Arms Co., --- U.S. ----, ---- & n. 10, 112 S.Ct. 2102, 2110 & n. 10, 119 L.Ed.2d 308 (1992) (applying the rule of lenity in construing a punitive tax statute in a civil setting). 27 Thus, on remand, if Goodman can show that he did not know that the Rolls Royce was being used or going to be used in the DiSalvo or Ianarella meetings at the time they took place, then he will be able to show that he did not consent to the use and, under 6109 Grubb Road, will be entitled to the innocent owner defense. 80 We might be tempted to draw a similar distinction to that drawn by the court in 6640 S.W. 48th Street despite the absence of any guidance from Congress if the result we have reached here were unreasonable. But it is not unreasonable to think that post-illegal-act transferees of property interests would not be subject to forfeiture, at least with respect to Secs. 881(a)(4) and (7) forfeitures. The principal goal of Secs. 881(a)(4) and (7), which are aimed at forfeitures of property used to facilitate drug trafficking, is to give owners of property an incentive to prevent use of that property in the drug trade. People who are not owners at the time the act is committed are simply in no position to prevent the improper use. Penalizing such owners would do little to accomplish the ends of those forfeiture statutes. 28 81 Moreover, at a much more fundamental level, the Supreme Court's decision in 92 Buena Vista Avenue creates substantial doubt that post-illegal-act transferees without knowledge of the illegal act until after it happened are within the scope of the forfeiture statutes. In 92 Buena Vista Avenue, the Court discussed, in dicta, the question whether such owners were within the scope of Sec. 881(a)(6). Although the plurality suggested that equitable principles (and not the statutory language) might prevent a post-illegal-act transferee with knowledge of the illegal act at the time of the transfer from having the benefit of the innocent owner defense, it ultimately avoided the issue by stating that respondent has assumed the burden of convincing the trier of fact that she had no knowledge of the alleged source of [the property]. --- U.S. at ----, 113 S.Ct. at 1137. In a concurring opinion, however, Justice Scalia stated that it would not be absurd to think that the forfeiture statutes did not reach post-illegal-act transferees who knew about the act creating the taint at the time of transfer, but not at the time it occurred:I do not find inconceivable the possibility that post-illegal-act transferees with post-illegal-act knowledge of the earlier illegality are provided a defense against forfeiture. The Government would still be entitled to the property held by the drug dealer and by close friends and relatives who are unable to meet their burden of proof as to ignorance of the illegal act when it occurred. 82 92 Buena Vista Avenue, --- U.S. at ----, 113 S.Ct. at 1142 (Scalia, J., concurring). If Justice Scalia is right, allowing post-illegal-act transferees with post-illegal-act knowledge to be outside the scope of the forfeiture statute is defensible, and thus a straightforward application of 6109 Grubb Road to post-illegal-act transferees would not create an absurd result. 29 83 In his dissent in 92 Buena Vista Avenue, Justice Kennedy complained that the plurality's opinion leaves the forfeiture scheme that is the centerpiece of the Nation's drug enforcement laws in quite a mess. In the context of the present case, Justice Kennedy was only partially right. It is not so much the plurality's opinion in 92 Buena Vista Avenue that leaves the civil forfeiture laws in chaos, nor for that matter is it this court's interpretation of the statute in 6109 Grubb Road. In our estimation, the problem originated in Congress when it failed to draft a statute that takes into account the substantial differences between those owners who own the property during the improper use and some of those who acquire it afterwards. Although a schizophrenic reading of the text might solve the problem, the better solution, we believe, is to apply 6109 Grubb Road. Congress should redraft the statute, if it desires a different result. The judgment of the district court will be vacated and the case remanded for further proceedings consistent with this opinion.