Opinion ID: 78295
Heading Depth: 2
Heading Rank: 1

Heading: Timeliness of Gray's Petition

Text: An initial point of contention is whether the thirty-day rule for filing a third-party petition is mandatory. Gray maintains that it is not because § 853(n)(2) states that a third party may petition the court within the specified thirty-day time period and Rule 32.2(c)(1)(A) provides that a district court may dismiss a petition for any lawful reason. 21 U.S.C. § 853(n)(2); Fed. R.Crim.P. 32.2(c)(1)(A). According to Gray, the use of the word may instead of must renders the thirty-day rule optional. The government acknowledges that a third party cannot be forced to file a claim within the thirty-day period but maintains that the failure to do so will extinguish that third party's rights. Both the forfeiture statute and Rule 32.2 support the government's position. Under the statute, if no third-party petitions are filed, the United States obtains clear title to the property following the expiration of the period provided in paragraph (2) for the filing of such petitions. 21 U.S.C. § 853(n)(7). Likewise, Rule 32.2(c)(2) provides that a third party who fails to file a timely petition may not object when the preliminary order of forfeiture becomes the final order of forfeiture. See Fed.R.Crim.P. 32(c)(2); see also Fed.R.Crim.P. 32.2 advisory committee notes (2000 Adoption) (stating that Rule 32.2(c)(2) preserves the established tenet of current law that if a third party has notice of the forfeiture but fails to file a timely claim, his or her interests are extinguished, and may not be recognized when the court enters the final order of forfeiture). Taken together, these provisions mean that if a third party desires to assert an interest in forfeitable property, she may do so by filing a sworn petition within thirty days of the publication of the impending forfeiture or of the third party actually receiving notice of the impending forfeiture, whichever is earlier. United States v. Soreide, 461 F.3d 1351, 1355 (11th Cir.2006) (per curiam). If a third party chooses not to file a petition within the prescribed thirty days, however, she forfeits her interests in the property. [3] See id. (concluding that a third party could not assert a claim of a superior interest in the forfeited property because it was belatedly raised); United States v. Grossman, 501 F.3d 846, 848-49 (7th Cir.2007) (affirming dismissal for untimeliness of a third-party petition filed five months after the party received notice of the preliminary forfeiture order), cert. denied, ___ U.S. ___, 128 S.Ct. 1098, 169 L.Ed.2d 812 (2008). This brings us to the central dispute in this casewhether the thirty-day period prescribed in § 853(n)(2) can be triggered by notice of a preliminary order of forfeiture entered before sentencing or only by notice of a forfeiture entered in conjunction with a criminal judgment at the time of sentencing. The district court focused on the latter, which meant that Gray's thirty-day period started running when criminal judgment was entered against Marion on 19 September 2007. [4] We begin with the criminal forfeiture statute itself, 21 U.S.C. § 853. The sections pertaining to third-party notification and the thirty-day filing period refer only to an order of forfeiture or property which has been ordered forfeited. See 21 U.S.C. § 853(n)(1), (2). Section 853(n) does not distinguish between a preliminary order of forfeiture and a final order of forfeiture entered at sentencing. See id. The statute alone does not plainly answer the question of whether the government's obligation to publish notice of a forfeiture order (and, in turn, third parties' thirty-day window to disclaim their interest) is triggered by the preliminary order of forfeiture or the final order of forfeiture entered at sentencing. Yet, the plain language of Rule 32.2 suggests that the preliminary order of forfeiture process, including notice proceedings to third parties, may begin before sentencing and entry of a final criminal judgment. Rule 32.2(b) expressly provides that the forfeiture process should begin [a]s soon as practicable after a verdict or finding of guilty, or after a plea of guilty or nolo contendere is accepted with the district court determining what property is subject to forfeiture and promptly entering a preliminary order of forfeiture. Fed.R.Crim.P. 32.2(b)(1), (2). Rule 32.2(b) further provides that the entry of a preliminary order of forfeiture authorizes the Attorney General (or a designee) to ... commence proceedings that comply with any statutes governing third-party rights. Id. 32.2(b)(3). Rule 32.2(b) necessarily contemplates that this process may begin before sentencing because it specifies that [a]t sentencingor at any time before sentencing if the defendant consentsthe order of forfeiture becomes final as to the defendant. Id. The Advisory Committee Notes to the 1996 amendments to Rule 32 and the 2000 amendments adopting Rule 32.2 confirm that these rules were intended to allow the preliminary order of forfeiture process, including notice to third parties, to begin before sentencing. See United States v. Elmes, 532 F.3d 1138, 1144 n. 7 (11th Cir.2008) (Although not binding, the interpretations in the Advisory Committee Notes are nearly universally accorded great weight in interpreting federal rules. (quotation marks and citation omitted)). In 1996, Rule 32 was amended to allow a district court to enter a preliminary order of forfeiture, which then authorized the government to begin ancillary proceedings. See Fed.R.Crim.P. 32(d)(2) (1997). Prior to this amendment, Rule 32 had been interpreted to mean that a forfeiture order could not be entered until sentencing. See Fed.R.Crim.P. 32 advisory committee notes (1996 Amendments). Lengthy delays between a verdict and sentencing had resulted in delayed forfeiture proceedings, however. See id. This in turn had caused serious problems, one being that third parties had to wait until the forfeiture order had been entered at sentencing before they could petition the court to begin ancillary proceedings. See id.; see also United States v. Yeje-Cabrera, 430 F.3d 1, 15 (1st Cir.2005) (stating that the advisory committee notes to Rule 32.2(b) are concerned almost entirely with improving the procedure by which the relative ownership interests of the defendant and of third parties are determined.). In addition, delays in forfeiture proceedings cost the government valuable time in locating assets which may become unavailable or unusable and force the government to seek restraining orders because it cannot actually seize the property until a forfeiture order is entered. See Fed.R.Crim.P. 32 advisory committee notes (1996 Amendments). The 1996 amendments to Rule 32 addressed these concerns by specifically recognizing the authority of the court to enter a preliminary forfeiture order before sentencing. Id. But these amendments did not mandate the timing of entry of a preliminary order of forfeiture. Instead, [e]ntry of an order of forfeiture before sentencing rests within the discretion of the court, which may take into account anticipated delays in sentencing, the nature of the property, and the interests of the defendant, the government, and third persons. Id. Likewise, the Advisory Committee Notes to the 2000 adoption of Rule 32.2, which incorporated Rule 32(d)(2), reiterate the government's authority under subdivision (b)(3) to begin an ancillary proceeding once the court enters a preliminary order of forfeiture. Fed. R.Crim.P. 32.2 advisory committee notes (2000 Adoption). Thus, a primary purpose of the amendments to Rule 32 and the subsequent adoption of Rule 32.2 was to enable third parties to assert their interests in an ancillary proceeding prior to the entry of criminal judgment and sentencing. Despite these extensive revisions of the Federal Rules of Criminal Procedure, § 853(n) still says an order of forfeiture or property which has been ordered forfeited and has not been updated to distinguish between a preliminary order of forfeiture and a final order of forfeiture. We may not disregard Rule 32.2, however. The Federal Rules of Criminal Procedure have the force and effect of law. Just as a statute, the requirements promulgated in these Rules must be obeyed. United States v. Gilbert, 244 F.3d 888, 915 n. 66 (11th Cir.2001) (quotation marks and citation omitted). We see no conflict between § 853 and Rule 32.2 and believe the two can easily be harmonized. The language of § 853 referring to an order of forfeiture or property which has been ordered forfeited is broad enough to encompass both a preliminary order of forfeiture and a final order of forfeiture. And when Rule 32.2 is read in tandem with § 853, the references to an order of forfeiture or property which has been ordered forfeited in § 853(n)(1) and (2) logically include a preliminary order of forfeiture. [5] That is, once a preliminary order of forfeiture is entered, whether before or at the time criminal judgment is entered, the government is authorized to commence proceedings governing third-party rights and must publish notice of that order and its intent to dispose of the property. See 21 U.S.C. § 853(n)(1); Fed.R.Crim.P. 32.2(b)(3). A third party then has thirty days from the receipt of notice of the preliminary forfeiture order or the final publication of notice of the latter, whichever is earlier, within which to petition the court for an ancillary hearing. See id. § 853(n)(2). Again, this thirty-day period will begin to run from the triggering date, even if it is before criminal judgment is entered. The failure to file a petition within this thirty-day time period extinguishes a third-party's interests. See id. § 853(n)(7); Fed.R.Crim.P. 32.2(c)(2). We believe this interpretation is faithful to the plain language of Rule 32.2 and § 853, the purpose behind the amendment of Rule 32 and the adoption of Rule 32.2, and, importantly, congressional intent, as reflected by its decision not to veto or modify the provisions in Rule 32.2 (and formerly Rule 32) creating the preliminary order of forfeiture procedures. [6] See Gonzalez v. Sec'y for Dep't of Corr., 366 F.3d 1253, 1270 (11th Cir.2004) ( en banc ) (discussing interplay of Federal Rule of Civil Procedure 60(b) and the Antiterrorism and Effective Death Penalty Act and explaining, Congress allowed Rule 60(b) to be created through the Rules Enabling Act process, see generally, 28 U.S.C. §§ 2071-2077, by not exercising its legislative authority to veto or modify that rule, see § 2074. Congress can supercede Rule 60(b) or any other rule promulgated through the rules process by actively asserting its legislative authority to enact provisions that govern procedure.). [7] Now that we have explained how § 853 and Rule 32.2 are naturally read together to allow for the third-party petition process to begin before criminal judgment has been entered when the district court has entered a preliminary order of forfeiture, we still must explain why two of our precedents in this area do not dictate a different result. First, in United States v. Pease, 331 F.3d 809, 813 (11th Cir.2003), we stated that the government only acquires a convicted defendant's interest in forfeited property when the district court orders the interest forfeited as part of its criminal judgment (a point not in dispute here). Here, the district court relied on Pease in reasoning that an ancillary hearing could not occur until after the government had obtained its interest from Marion on 19 September 2007 and thus that her claim was timely filed within thirty days of the date the government acquired Marion's interest. See Pease, 331 F.3d at 810 (Once the defendant's interest in the subject property is forfeited by the entry of a final judgment, any person (other than the convicted defendant) claiming an interest in the property may commence an ancillary proceeding in the district court by petitioning the court pursuant to 21 U.S.C. § 853(n)(2) to enter an order declaring that his or her interest is superior to the defendant's interest (which the final judgment forfeited to the United States).). We agree with the government that Pease does not control the outcome here because it involved different issues than those presently before us. At issue in Pease was: (1) whether a criminal forfeiture must be made part of the criminal judgment adjudicating the defendant's guilt and imposing a sentence, and (2) if so, does the district court's failure to include a forfeiture order in its judgment constitute a clerical mistake within the meaning of Federal Rule of Criminal Procedure 36. Id. at 812. After addressing the first question and concluding that the issuance of a preliminary order of forfeiture does not relieve the district court of the obligation to include an order of forfeiture in its judgment, the Pease court turned to a discussion of when third-party petitions may be filed. See id. at 813-14. The Pease court, however, was not presented with a question of whether the third-party petitions filed in that case were timely filed or the broader question of whether the government is authorized under Rule 32.2(b)(3) to issue notice and begin ancillary proceedings when a preliminary order of forfeiture is entered before entry of a final criminal judgment. Accordingly, any comments on that issue are dicta and non-binding precedent. See Swann v. S. Health Partners, Inc., 388 F.3d 834, 837 (11th Cir.2004); Great Lakes Dredge & Dock Co. v. Tanker Robert Watt Miller, 957 F.2d 1575, 1578 (11th Cir.1992). Second, our discussion in Gilbert of when third-party petitions may be filed also does not require a different conclusion here. Gilbert addressed, in part, whether a district court's order of forfeiture that was entered after the jury's forfeiture verdict, but before the district court entered a criminal judgment and imposed a sentence, was the order of forfeiture required to begin ancillary proceedings under 18 U.S.C. § 1963( l ). [8] Gilbert, 244 F.3d at 926. The Gilbert court concluded that it was not because section 1963( l ) ancillary proceedings are held so that innocent third-party owners can get their interests back from the government and thus ancillary proceedingswhich are activated under [§] 1963( l ) by an order of forfeiture could not take place without the government's seizure of the property, which is authorized under [§] 1963(e) and [Federal Rule of Criminal Procedure] 32(b)(2) by a judgment of forfeiture. Id. Because it is clear from the forfeiture scheme that the judgment, rather than the order, must come first and the judgment may not be entered until sentencing, the Gilbert court deduced the `order of forfeiture' required by section 1963( l ) also may not be entered until sentencing. Id. The forfeiture order at issue in Gilbert, however, was entered in 1990. This was before the 1996 amendments to Rule 32(d) and the 2000 adoption of Rule 32.2, discussed supra. These amendments authorized a district court to determine the property subject to forfeiture and enter a preliminary order of forfeiture [a]s soon as practicable after a verdict or finding of guilty, or after a plea of guilty or nolo contendere is accepted. Fed.R.Crim.P. 32.2(b)(1), (2). Rule 32.2 further provides that [t]he entry of a preliminary order of forfeiture authorizes the Attorney General... to commence proceedings that comply with any statutes governing third-party rights. Id. 32.2(c). Because Gilbert addressed a forfeiture order that was entered before the Federal Rules of Criminal Procedure authorized preliminary orders of forfeiture, Gilbert 's discussion of the timing of the commencement of third-party proceedings is also not on point. Returning to this case, based on § 853, read in tandem with Rule 32.2, we conclude that Gray's petition was not timely filed. It is undisputed that Gray received proper written notice of the preliminary order of forfeiture on 18 June 2007 and that the last date of published notice of the preliminary forfeiture order was 3 July 2007. Pursuant to 21 U.S.C. § 853(n)(2), the earlier date of 18 June 2007 started the thirty-day clock. It is also undisputed that Gray filed her petition on 4 October 2007, well over three months after receiving her notice. Accordingly, Gray's petition was untimely. See 21 U.S.C. § 853(n)(2). The district court therefore erred in denying the government's motion to dismiss on grounds that Gray filed her petition within thirty days that criminal judgment was entered against Marion.