Opinion ID: 698685
Heading Depth: 2
Heading Rank: 3

Heading: Lack of Predeprivation Hearing

Text: 27 Finally, the claimants submit that there should have been an adversary hearing before their property was seized. They rely on the Supreme Court's pronouncement in United States v. James Daniel Good Real Property, --- U.S. ----, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993). They admit that they raised the issue in the district court only in their reply brief in support of the motion to reconsider, but note that the Supreme Court did not decide the Good case until after they had filed the motion for reconsideration. Therefore, the reply was their first opportunity to invite the attention of the district court to this important development in the law of forfeiture. We agree with the claimants that, because they raised the matter at the first opportunity, it cannot be considered waived. We also agree, in concert with the other appellate courts that have applied Good retroactively, that the holding in Good is applicable to this case as it is to all cases not final on the date of the Supreme Court's decision. 17 We have no quarrel with those decisions. 28 The district court did not dispute the applicability of Good to this case. Rather, it declined to consider its application at such a late stage in the proceedings. In declining to address the merits of the claimants' damages argument, the district court stated: 29 As final judgment has been entered in this case and we are not going to disturb that judgment, we will not entertain Penny's argument that she is entitled to damages because she did not receive a pre-seizure hearing as found necessary by the Supreme Court in U.S. v. James Daniel Good Real Property, --- U.S. ----, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993). She may file suit seeking damages if she desires to pursue this course and is satisfied that James Daniel Good applies retroactively. 30 Memorandum Opinion of January 25, 1994, R.208 at 8-9. A motion for a new trial or to alter or amend the judgment is committed to the sound discretion of the district court. 18 Consequently, we approach our assessment of the district court's ruling with great deference. Nevertheless, several considerations, in addition to a general concern for judicial economy, compel us to conclude that the district court's approach to the late arrival of Good on this litigation scene cannot be affirmed. First, as we have noted earlier, we agree that the holdings of the other circuits that Good applies retroactively are correct. Therefore, although the district court left the matter open, we are satisfied that Good applies to this case. Second, our independent examination of the record reveals that the district court misapprehended the gist of the claimants' argument. Although their position is not stated in the clearest of terms, we believe that, fairly read, the claimants' contention was broader than that perceived by the district court. We read the reply to the motion for reconsideration and the briefs filed in this court to argue that Good requires the nullification of the forfeiture order because of the failure of the district court to provide an adversary hearing. As an alternate position, the claimants argue that Good at least requires that they be paid compensation for the seizure of their realty by an ex parte order. 31 We are persuaded that a preferable approach is the one taken by our colleagues in the Sixth Circuit in United States v. Real Property Known and Numbered as 429 South Main Street, 52 F.3d 1416 (6th Cir.1995). In that case, through the pen of Judge Boggs, the Sixth Circuit, in reviewing a summary judgment granting a forfeiture such as the one before us, required that the district court revisit the correctness of its judgment because of the intervening decision in Good. Despite the fact that the claimants did not raise the applicability of Good in the district court, the Sixth Circuit determined that the possibility of a miscarriage of justice required that the district court address Good in reaching its judgment on the forfeiture issue. We believe that the approach outlined by Judge Boggs in 429 S. Main Street is sound as a matter of logic and as a matter of judicial economy. We therefore believe that the district court ought to resolve, at this juncture, the impact of Good on this forfeiture action. 32 To permit the district court to accomplish this task with dispatch, we offer, in the interest of judicial efficiency, the following guidance. As we have noted above, the claimants suggest, albeit with some obliqueness, that Good requires an adversary hearing not only with respect to the realty that was listed in the complaint, but also to the remainder of the property with respect to which the government sought forfeiture. Good involved the forfeiture of realty: 33 In sum, based upon the importance of the private interests at risk and the absence of countervailing Government needs, we hold that the seizure of real property under Sec. 881(a)(7) is not one of those extraordinary instances that justify the postponement of notice and hearing. Unless exigent circumstances are present, the Due Process Clause requires the Government to afford notice and a meaningful opportunity to be heard before seizing real property subject to civil forfeiture. 34 Good, --- U.S. at ----, 114 S.Ct. at 505. Nevertheless, the Court's notation that it tolerate[d] some exceptions to the general rule requiring predeprivation notice and hearing in extraordinary situations in which important governmental interests were at stake, id. at ----, 114 S.Ct. at 501, might suggest that the holding in Good will later spread its dominion to property other than realty. 19 Several of our colleagues in other circuits have intimated that the issue is an open one. 20 In this case, however, extending Good to property other than the realty at stake seems, at best, a difficult task for the claimants. The other property--bank accounts and automobiles--possesses attributes of liquidity and mobility that would make the possibility of conversion substantial. 21 Therefore, it would appear that the considerations that justified the seizure of the yacht in Calero-Toledo, 416 U.S. at 679, 94 S.Ct. at 2089-90, 22 would also permit initial seizure on an ex parte basis here. Because this matter has never been addressed by the district court, a proper respect for its prerogatives requires that we permit it to address the issue if the defendants should choose to pursue the issue. However, we emphasize that, in evaluating any such submission by the defendants, the district court must give considerable weight to the possibility of the property's disappearing if the government is not allowed to proceed on an ex parte basis. 35 There can be no question that the holding in Good applies to realty. However, the Supreme Court was careful to note that, even with respect to this property, there may be times when exigent circumstances will excuse the necessity of a hearing. The existence of such circumstance is a fact-specific issue that ought to be raised and litigated in the district court. On remand, the government is free to rely on this exception. We note that the Supreme Court has made clear in Good that this exception may be established only if the government can demonstrate that less restrictive alternatives such as a lis pendens are not realistic measures for the protection of the government's interest in preventing the sale, destruction or continued illegal use of the real property. Good, --- U.S. at ----, 114 S.Ct. at 505. 36 We also believe that it is appropriate to provide, for the assistance of the district court, guidance with respect to the available remedies for a failure to provide notice and hearing before seizure. As Judge Kozinski noted in United States v. Real Property Located at 20832 Big Rock Drive, 51 F.3d 1402 (9th Cir.1995), the cases reflect some difference in approach on this issue. The Eighth Circuit is of the view that Good requires dismissal of the forfeiture action with leave to file a new action if the statute of limitations has not run. See One Parcel of Real Property, Located at 9638 Chicago Heights, 27 F.3d 327, 330 (8th Cir.1994). The Second, Third, and Ninth Circuits take the view that the illegal seizure does not, standing alone, require that the property be immune from forfeiture. See 20832 Big Rock Dr., 51 F.3d at 1406; United States v. Premises Known as RR # 1, 14 F.3d 864, 869 n. 5 (3d Cir.1994); United States v. Premises and Real Property at 4492 South Livonia Rd., 889 F.2d 1258, 1265-66 (2d Cir.1989). Under this view, the government is responsible, however, for the profits of which the claimant was deprived during the period of illegal seizure. We believe that this latter approach provides an effective, but measured, remedy for the violation of the claimant's rights. It is the responsibility of the courts to construct a remedy for a constitutional violation that is tailored to the injury caused by the violation. Milliken v. Bradley, 418 U.S. 717, 744, 94 S.Ct. 3112, 3127, 41 L.Ed.2d 1069 (1974) ([T]he scope of the remedy is determined by the nature and extent of the constitutional violation.). We believe that the approach of the majority of the circuits reflects that guiding principle.