Court Opinion

ID: 9001972
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:14:38.048541+00
Date Added: 2024-06-11T17:11:13.040439
License: Public Domain

VAN GRAAFEILAND, Circuit Judge,
concurring in part and dissenting in part:
Although I agree with my colleagues that the government’s seizure of appellants’ property should not be vacated, I cannot agree with the reasoning that preceded their ultimate decision. .Accordingly, I write separately.
At the outset, I do not believe that there is an appealable interlocutory order in this case. Although the appeal is addressed to the district court’s order of December 16, 1991, the due process issue that this court is asked to resolve arises out of the warrant order signed by Judge Nickerson on November 15, 1991. If the November 15 order cannot be challenged on due process grounds, neither can the December 16 order. There can be no separate due, process challenge to the December 16 order. See Seguros Banvenez S.A. v. S/S Oliver Drescher, 715 F.2d 54, 56 (2d Cir.1983) (motion to vacate attachment generally nonappealable).
Indeed, instead of the December 16 order supporting defendants’ due process argument, it weakens it. In arguing the uricon-stitutionality of the November 15 seizure, the defendants emphasize the absence of a post-seizure hearing. Their application which led to the December 16 order was an appropriate vehicle for securing the post-seizure hearing to which defendants say they were entitled. As discussed in the majority opinion, page 900, appellants submitted no new evidence to the district court in their December application and did not request an evidentiary hearing. It was available to them if they wanted it. Like any other interlocutory order in a civil action, the December 16 order was not engraved in stone. It could be dissolved or amended at any time. Moreover, even if the November 15 order was constitutionally deficient, the deficiency did not invalidate the seizure; its only effect was to create a ban on the use of evidence obtained from the seizure. It cannot be said to have “serious, perhaps irreparable” consequences that “can be ‘effectually challenged’ only by immediate appeal,” and thus to warrant its treatment as if it were a preliminary injunction. See Carson v. American Brands, Inc., 450 U.S. 79, 84, 101 S.Ct. 993, 997, 67 L.Ed.2d 59 (1981); H & S Plumbing Supplies, Inc. v. Banc-America Commercial Corp., 830 F.2d 4, 7 (2d Cir.1987); see also Drys Shipping Corp. v. Freights, Sub-Freights, Charter Hire, 558 F.2d 1050, 1051 (2d Cir.1977). I therefore would treat the December 16 order as a nonappealable interlocutory order.
Assuming, however, that the December 16 order is appealable, I would hold on the merits that it did not violate the defendants’ right to due process. Section 981(b)(2) of United States Code Title 18 provides in pertinent part that, property seized under paragraph (1) of section 981(b) shall be “upon process issued pursuant to ■ the Supplemental Rules for certain Admiralty and Maritime Claims.” This is not a novel requirement. District courts were given Admiralty and Maritime jurisdiction in 1789, see Act of September 24, 1789, ch. 20, § 9, 1 Stat. 73, 76, and the first set of maritime rules was promulgated in 1844. See Schiffahartsgesellschaft Leonhardt & Co. v. A. Bottacchi S.A. De Navegación, 773 F.2d 1528, 1533 (11th Cir.1985). The first confiscatory act of the Civil War, Act of August 6, 1861, 12 Stat, at L. 319, as interpreted by the Supreme Court, provided that condemnation of the property at issue therein was to be conducted in general conformity with the practice in admiralty. See Four Hundred and Forty-Three Cans of Frozen Egg Prods, v. United States, 226 U.S. 172, 181, 33 S.Ct. 50, 52, 57 L.Ed. 174 (1912); Union Ins. Co. v. United States, 73 U.S. (6 Wall.) 759, 763-64, 18 L.Ed. 879 (1868). Because of the basic similarity in the concepts underlying the two in rem proceedings, this provision made sense, and the practice of utilizing admiralty procedures in in rem proceedings continues to the present day. Thus, conformity provisions similar to those in the civil forfeiture statute at issue herein, which deals with unlawful monetary transactions, may be found in the Federal Food, Drug, and Cos*907metic Act, see 21 U.S.C. § -334(b), the Federal Hazardous Substances Act, see 15 U.S.C. § 1265(b), and the Controlled Substances Act, see 21 U.S.C. § 881(b).
Seizures without prior judicial approval have been held to meet constitutional standards under each of these acts. See Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594, 598-600, 70 S.Ct. 870, 872-873, 94 L.Ed. 1088 (1950) (Federal Food, Drug, and Cosmetic Act); United States v. An Article of Device “Theramatic”, 715 F.2d 1339, 1342-43 (9th Cir.1983) (same), cert. denied, 465 U.S. 1025, 104 S.Ct. 1281, 79 L.Ed.2d 685 (1984); United States v. Articles of Hazardous Substance, 588 F.2d 39, 43 (4th Cir.1978) (Federal Hazardous Substances Act); United States v. Banco Cafetero Panama, 797 F.2d 1154, 1162 (2d Cir.1986) (Controlled Substances Act).
Prior to the amendment in 1985 of Rule C(3) of the Supplemental Rules for Certain Admiralty and Maritime Claims, there was no requirement that a warrant of seizure be approved by a judge before it was issued. Rule C(3) changed this by providing for court review of an application for an in rem seizure before the clerk issued a warrant. While this proposed change was under consideration by the Rules Advisory Committee, the Department of Justice expressed concern that if the requirement for judicial approval was applied to federal forfeiture statutes, it would seriously damage efforts to increase the use of civil forfeitures, particularly in the area of drug enforcement. See Diana G. Culp, Charting a New Course: Proposed Amendments to the Supplemental Rules for Admiralty Arrest and Attachment, 103 F.R.D. 319, 347 (1985). Influenced by the merit of this contention, the Committee recommended that the requirement of pre-seizure judicial approval not apply to actions by the United States for forfeitures based on federal statutory violations. The Committee published the following explanatory statement for this exception:
The foregoing requirements for prior court review or proof of exigent circumstances do not apply to actions by the United States for forfeitures for federal statutory violations. In such actions a prompt hearing is not constitutionally required, United States v. Eight Thousand Eight Hundred and Fifty Dollars, 461 U.S. 555 [103 S.Ct. 2005, 76 L.Ed.2d 143] (1983); Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663 [94 S.Ct. 2080, 40 L.Ed.2d 452] (1974), and could prejudice the government in its prosecution of the claimants as defendants in parallel criminal proceedings since the forfeiture hearing could be misused by the defendants to obtain by way of civil discovery information to which they would not otherwise be entitled and subject the government and the courts to the unnecessary burden and expense of two hearings rather than one.
103 F.R.D. 351, 356.
Calero-Toledo, supra, 416 U.S. 663, 94 S.Ct. 2080, involved the seizure of a yacht without prior notice or hearing pursuant to the Controlled Substances Act of Puerto Rico, P.R.Laws Ann. tit. 24, § 2101 et seq. (Supp.1973). Id. at 665, 94 S.Ct. at 2082-83. Rejecting the due process challenge, the Court said:
Appellants challenge the District Court’s holding that the appellee was denied due process of law by the omission from § 2512(b), as it incorporates § 1722, of provisions for preseizure notice and hearing. They argue that seizure for purposes of forfeiture is one of those “ ‘extraordinary situations’ that justify postponing notice and opportunity for a hearing.” Fuentes v. Shevin, 407 U.S., at 90, 92 S.Ct., at 1999; see Sniadach v. Family Finance Corp., 395 U.S. 337, 339, 89 S.Ct. 1820, 1821, 23 L.Ed.2d 349 (1969); Boddie v. Connecticut, 401 U.S. 371, 378-379, 91 S.Ct. 780, 786-787, 28 L.Ed.2d 113 (1971). We agree.
Id. at 676-77, 94 S.Ct. at 2088-89.
United States v. Eight Thousand Eight Hundred and Fifty Dollars, supra, 461 U.S. 555, 103 S.Ct. 2005, involved an alleged delay in filing a forfeiture proceeding pursuant to section 231 of the Bank Secrecy Act of 1970, now codified at 31 U.S.C. § 5316. See id. at 556-57, 103 S.Ct. at 2007-08. Although the appellant in that *908case conceded that the Government could constitutionally seize her property without a prior hearing, id. at 562, 103 S.Ct. at 2010-11, Justice O’Connor, writing for the Court, deemed it important to emphasize the correctness of this concession:
The general rule, of course, is that absent an “extraordinary situation” a party cannot invoke the power of the state to seize a person’s property without a prior judicial determination that the seizure is justified, (citations omitted) But we have previously held that such an extraordinary situation exists when the government seizes items subject to forfeiture. In Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974), the Court upheld a Puerto Rico statute modeled after a federal forfeiture statute, 21 U.S.C. § 881(a), which allowed Puerto Ri-can authorities to seize, without prior notice or hearing, a yacht suspected of importing marihuana. Pearson Yacht clearly indicates that due process does not require federal customs officials to conduct a hearing before seizing items subject to forfeiture. Such a requirement would make customs processing entirely unworkable. The government interests found decisive in Pearson Yacht are equally present in this situation: the seizure serves important governmental purposes; a preseizure notice might frustrate the statutory purpose; and the seizure was made by government officials rather than self-motivated private parties.
Id. at 562 n. 12, 103 S.Ct. at 2011 n. 12.
After these two opinions were written, Congress broadened the scope of federal forfeiture provisions so as to make real property as well as personal property subject to forfeiture thereunder. See 18 U.S.C. § 981(a)(1) and 21 U.S.C. § 881(a)(7). Congress also implicitly signified its approval of pre-hearing seizures by authorizing seizure to be made on the basis of a warrant issued in the same manner as is provided for a search warrant under the Federal Rules of Criminal Procedure. See §§ 981(b)(2)(B) and 881(b). Fed.R.Crim.P. 41 permits a search warrant to be issued by a judicial officer without a hearing. This accords with the traditional requirement of due process, which is that a neutral judicial officer determine whether there is probable cause to conduct the search. See Steagald v. United States, 451 U.S. 204, 212, 101 S.Ct. 1642, 1647-48, 68 L.Ed.2d 38 (1981); Shadwick v. City of Tampa, 407 U.S. 345, 350, 92 S.Ct. 2119, 2122-23, 32 L.Ed.2d 783 (1972); Johnson v. United States, 333 U.S. 10, 13-14, 68 S.Ct. 367, 368-69, 92 L.Ed. 436 (1948).
The Government secured Judge Nicker-son’s approval for the warrant to issue in the instant case. I disagree with my colleagues’ holding that this was not constitutionally sufficient. In United States v. The Premises and Real Property at 4492 South Livonia Road, 889 F.2d 1258 (2d Cir.1989), the case upon which my colleagues principally rely, the panel held that section 881(a)(7) was unconstitutional as applied to the seizure of a home, id. at 1263, but not as applied to the forfeiture of the same home. Although this reasoning, which I personally find somewhat lacking in logic, establishes circuit law, that law is narrow in scope and has little precedential effect in the instant case. Section 881(a)(7) plays no role here; we are dealing with section 981(a)(1). I am not prepared to hold that section 981(a)(1) is unconstitutional as applied to the seizure of defendants’ interests herein.
Courts customarily look to specific factors to justify pre-hearing seizures under governmental forfeiture statutes, among which are the following:
1. The protection of the public from personal or financial harm. See Calero-Toledo, supra, 416 U.S. at 679, 94 S.Ct. at 2089-90; An Article of Device “Theramatic, ” supra, 715 F.2d at 1342. As Justice Marshall, writing for the Court in Hodel v. Virginia Surface Mining & Reclamation Ass’n, Inc., 452 U.S. 264, 300, 101 S.Ct. 2352, 2372-73, 69 L.Ed.2d 1 (1981), said, “deprivation of property to protect the public health and safety is ‘[o]ne of the oldest examples’ of permissible summary action.” (citations omitted)
*9092. The raising of revenue to assist the government in its law enforcement efforts. Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 629, 109 S.Ct. 2646, 2654, 105 L.Ed.2d 528 (1989); United States v. Two Thousand Five Hundred Dollars, 689 F.2d 10, 13 (2d Cir.1982); see Phillips v. Comm’r, 283 U.S. 589, 595-97, 51 S.Ct. 608, 611-12, 75 L.Ed. 1289 (1931).
3. The prevention of further illicit use of the forfeited property and the enforcement of criminal sanctions. Calero-Tole-do, supra, 416 U.S. at 679, 94 S.Ct. at 2089-90; see Two Thousand Five Hundred Dollars, supra, 689 F.2d at 13.
4. The prevention of the destruction or removal of incriminating property by alerted defendants. Calero-Toledo, supra, 416 U.S. at 679, 94 S.Ct. at 2089-90.
If some or all of these factors play a significant role in the government’s decision to proceed with a pre-hearing forfeiture seizure, the seizure does not violate a defendant’s right to due process. Our holding in The Premises and Real Property at 4492 South Livonia Road, supra, 889 F.2d 1258, is not authority to the contrary. In denying a petition for rehearing in that case, we said:
And nothing that we have said precludes the government from using the seizure provision where exigent circumstances, demonstrated ex parte to the satisfaction of a judicial officer, justify a seizure without prior notice and hearing.
897 F.2d 659, 661 (2d Cir.1990).
In United States v. 141st Street Corp., by Hersh, 911 F.2d 870 (2d Cir.1990), cert. denied, — U.S.-, 111 S.Ct. 1017, 112 L.Ed.2d 1099 (1991), which involved the seizure of an apartment building without a pre-seizure hearing, we said:
To find that “exigent” or “extraordinary” circumstances are present, we must conclude that (1) seizure was necessary to secure an important governmental or public interest, (2) very prompt action was necessary, and (3) a government official initiated the seizure by applying the standards of a narrowly drawn statute.
Id. at 875.
Referring to these criteria, the court below said:
The Court of Appeals for the Second Circuit in United States v. 141 St. Corp. by Hersh, 911 F.2d 870, 874-76 (2d Cir. 1990), cert. denied, [— U.S.-], 111 S.Ct. 1017 [112 L.Ed.2d 1099] (1991), set forth the criteria this court should use in determining whether a seizure warrant should be issued ex parte. Applying those criteria, this court concludes that the warrant was validly issued ex parte. The court below continued as follows:
The United States had a clear interest in stopping the trafficking in stolen motor vehicles and motor vehicle parts with vehicle identification numbers removed or altered. The United States also had an interest in stopping the fraudulent conveyance of those vehicles to fictitious persons.
The United States had a reasonable concern that the property would continue to be used as an instrumentality of crime. In fact the supplemental declaration of Detective Keteltas shows that the property was continuing to be used in the criminal manner set forth in the complaint.
The foregoing findings were not clearly erroneous. Moreover, although this was not discussed by the district court, we may take judicial notice that the statute at issue is a revenue producing act. It has been reported that in 1989 alone some $600 million in personal assets and real property were forfeited to the Government. See Lawrence A. Kasten, Extending Constitutional Protection to Civil Forfeitures That Exceed Rough Remedial Compensation, 60 Geo.Wash.L.Rev. 194, 194 n. 2 (1991).
Assuming that the district court’s order directing issuance of the seizure warrant is presently challengeable, I would reject the challenge. See United States v. One Parcel of Property Located at 15 Black Ledge Drive, 897 F.2d 97, 98 (2d Cir.1990); United States v. A Single Family Residence *910and Real Property Located at 900 Rio Vista Blvd., 803 F.2d 625, 628 (11th Cir. 1986).
I agree wholeheartedly with the expression of concern contained in the majority’s “Conclusion”. However, I take no position with regard to the majority’s suggestions that follow this expression, which I consider to be nonbinding dicta.