Court Opinion

ID: 3185296
Source: CourtListenerOpinion
Date Created: 2016-03-14 21:04:39.761069+00
Date Added: 2024-06-11T14:36:02.604048
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 14-2323

                    UNITED STATES OF AMERICA,

                      Plaintiff, Appellee,

                               v.

          URBAN LOT ST G 103, GUAYAMA AND OTHER ASSETS,

                       Defendants in Rem,

        MYRNA RIVERA-ORTIZ and ENRIQUE RODRÍGUEZ-NARVÁEZ,

                     Claimants, Appellants.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

         [Hon. Daniel R. Domínguez, U.S. District Judge]

                             Before

                     Lynch, Selya and Lipez,
                         Circuit Judges.

     Enrique J. Mendoza Méndez and Mendoza Law Offices on brief
for appellants.
     Rosa Emilia Rodríguez-Vélez, United States Attorney, Nelson
Pérez-Sosa, Assistant United States Attorney, Chief, Appellate
Division, and Tiffany V. Monrose, Assistant United States
Attorney, on brief for appellee.

                         March 14, 2016
             SELYA, Circuit Judge.        The underlying case is one for

civil forfeiture arising in the aftermath of a 1993 criminal

prosecution mounted in the United States District Court for the

Southern District of New York.             There, a federal grand jury

indicted claimant-appellant Enrique Rodríguez-Narváez on drug-

trafficking and money laundering charges.1

             In due course, the appellant entered a guilty plea to a

single count charging money laundering violations.               The other

counts   were    dismissed,   and   the   district   court   sentenced   the

appellant.      As part of his plea agreement in the criminal case,

the appellant agreed to litigate all forfeiture issues related to

the criminal charges in the District of Puerto Rico (where a

forfeiture action already had been instituted).

             The government had filed its forfeiture action in the

United States District Court for the District of Puerto Rico on

March 26, 1993.       In that action, the government asserted that

several parcels of real estate and the appellant's interests in

certain businesses were forfeitable, but it did not mention any

interest of the appellant in a professional basketball team called

Los Brujos of Guayama (the Franchise).            After some skirmishing

(not relevant here), the parties reached a settlement.                   The

     1 Rodríguez-Narváez's spouse, Myrna Rivera-Ortiz, appears as
an additional claimant and appellant. For ease in exposition, we
treat Rodríguez-Narváez as if he were the lone claimant and
appellant.

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settlement agreement did not focus on, or even mention, the

Franchise.    The Puerto Rico district court approved the settlement

on September 30, 1996, and the government agreed "to release and

return to [the claimants] all their personal properties that were

seized during the present case."

             Years of procedural wrangling followed.               Eventually (in

June of 2005), the appellant filed the last in a series of motions

for   execution          of   judgment,     seeking     compensation       for    the

government's alleged seizure of the Franchise ancillary to the

criminal case.           The government objected, arguing (among other

things) that it had never seized the Franchise. The district court

conducted     an    evidentiary      hearing        (taking    testimony    on   two

different days) and denied the appellant's motion in an unpublished

order.    This timely appeal ensued.

             In this venue, the appellant claims that he owned an

interest    in     the    Franchise;      that   the   government    seized      that

interest; and that he is entitled to compensation because the

government failed to return the confiscated property to him.                     The

government does not challenge the first of these claims, but it

denies    that     it    ever   seized    the    appellant's    interest    in   the

Franchise and, accordingly, it also denies that any compensation

is due.

             The docket in the criminal case is illuminating.                      It

shows that, while the criminal case was pending, the government

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sought   to    preserve,    as    a   potentially       forfeitable    asset,    the

appellant's     interest    in    the      Franchise.     At   the    government's

request, the New York district court, on June 28, 1993, issued a

post-indictment restraining order prohibiting the appellant from

having   any    contact    with,      or    influence    over,   the    Franchise.

However,      the     restraining     order     specifically      permitted      the

Franchise to remain in operation.

              The    government     subsequently     determined      that   it   was

inadvisable to attempt to preserve the appellant's interest in the

Franchise for potential forfeiture.                 Thus, at the government's

instance, the court released both the Franchise and the appellant's

interest therein from the restraining order on August 27, 1997.

              We find nothing in the court records (or elsewhere, for

that matter) to suggest that the government seized the Franchise

when it obtained the restraining order from the New York district

court.   Though that order effectively prevented the appellant from

participating in the affairs of the Franchise, it did not divest

him of his proprietary interest.             Rather, the order — in pertinent

part — merely sought to ensure the availability of property (the

appellant's interest in the Franchise) pending disposition of the

criminal charges.        See United States v. Monsanto, 491 U.S. 600,

613 (1989).         A seizure is "some meaningful interference with an

individual's possessory interests in [the designated] property,"

United States v. Jacobsen, 466 U.S. 109, 113 (1984), and no seizure

                                            - 4 -
occurred    here.     To   the   contrary,       the   restraining     order   was

carefully drawn to separate the appellant from, but not deprive

him of, the Franchise.

             By like token, the subsequent forfeiture action does not

furnish a basis for the appellant's claim that the Franchise was

seized.    The complaint in that action did not refer, directly or

indirectly, to the Franchise; and the settlement agreement in the

forfeiture action did not include the Franchise.

             If more were needed — and we do not think that it is —

the district court wisely conducted an evidentiary hearing.                    The

court found that the Franchise belonged to the league, not to any

individual, and that the appellant was merely the holder of the

Franchise.     We review that finding for clear error.                See United

States v. Guzman, 282 F.3d 56, 58 (1st Cir. 2002).                   In doing so,

we remain mindful that findings of fact are not clearly erroneous

unless,    after    reviewing    them,   we   are      left   with   the   abiding

conviction that a mistake has been made.                 See United States v.

U.S. Gypsum Co., 333 U.S. 364, 395 (1948); Fed. Refin. Co., Inc.

v. Klock, 352 F.3d 16, 27 (1st Cir. 2003).               Measured against this

benchmark, the district court's finding is not clearly erroneous.

             In an effort to blunt the force of this logic, the

appellant suggests that he is entitled to lost Franchise profits

                                         - 5 -
for the period when the restraining order was in effect.2                       This

suggestion is groundless.

                 The district court's findings of fact defenestrate this

claim.       The court supportably found that, throughout the pendency

of the restraining order, the Franchise was in substantial debt.

There were, then, no profits to be lost.

                 The   appellant   tries    to    undermine   these      findings   by

noting that paragraph 4(c) of the restraining order authorized the

United States Marshals Service (USMS) to "[o]pen a holding account

into which all profits of the operation of the FRANCHISE shall be

deposited [and] held in escrow pending the disposition of the

criminal and forfeiture proceedings."               This initiative falls flat:

the district court supportably found that, regardless of the

authorization, "[n]o profits were ever deposited in any account

because the Government recognized that the basketball franchise

was in substantial debt."              In making this finding, the court

credited the testimony of a government official that the USMS never

took       any   substantial   action      with    respect    to   the    Franchise.

Accepting         this    testimony,       the    court   made     a     credibility

determination, and we will not normally disturb the factfinder's

       2
       The government argues that the claim for lost profits is
stillborn because it should have been brought in the forum where
the restraining order was issued (New York) rather than in Puerto
Rico.   Because the claim fails on the merits, we bypass this
procedural riposte. See, e.g., Royal Siam Corp. v. Chertoff, 484
F.3d 139, 144 (1st Cir. 2007).

                                            - 6 -
credibility choices.   See United States v. Laine, 270 F.3d 71, 75

(1st Cir. 2001).    We have no reason to do so here.

            We need go no further.    To paraphrase the able district

judge, "a party cannot be ordered to return property that the party

never possessed."

Affirmed.

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