Court Opinion

ID: 2969251
Source: CourtListenerOpinion
Date Created: 2015-09-22 15:45:21.799154+00
Date Added: 2024-06-11T11:43:21.090332
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RECOMMENDED FOR FULL-TEXT PUBLICATION
                Pursuant to Sixth Circuit Rule 206
        ELECTRONIC CITATION: 2000 FED App. 0017P (6th Cir.)
                    File Name: 00a0017p.06

UNITED STATES COURT OF APPEALS
                  FOR THE SIXTH CIRCUIT
                    _________________

 UNITED STATES OF AMERICA, ;
           Plaintiff-Appellee/ 
             Cross-Appellant, 
                                
                                
                                              Nos. 98-4014/

                                
                                              4036
          v.                     >
                                
                                
        Defendant-Appellant/ 
 LARRY DEAN DUSENBERY,

              Cross-Appellee. 
                                
                               1

          Appeal from the United States District Court
         for the Northern District of Ohio at Cleveland.
         No. 91-00291—Kathleen McDonald O’Malley,
                         District Judge.
                  Argued: September 14, 1999
              Decided and Filed: January 13, 2000
Before: SUHRHEINRICH, COLE, and GIBSON*, Circuit
                   Judges.

    *
     The Honorable Judge John R. Gibson, Circuit Judge of the United
States Court of Appeals for the Eight Circuit, sitting by designation.

                                  1
2       United States v. Dusenbery               Nos. 98-4014/4036

                       _________________
                             COUNSEL
ARGUED: Paul Mancino, Jr., MANCINO, MANCINO &
MANCINO, Cleveland, Ohio, for Appellant. James L.
Morford, OFFICE OF THE U.S. ATTORNEY, Cleveland,
Ohio, for Appellee. ON BRIEF: Paul Mancino, Jr.,
MANCINO, MANCINO & MANCINO, Cleveland, Ohio, for
Appellant. James L. Morford, OFFICE OF THE U.S.
ATTORNEY, Cleveland, Ohio, for Appellee. Larry Dean
Dusenbery, Terre Haute, Indiana, pro se.
  SUHRHEINRICH, J., delivered the opinion of the court, in
which GIBSON, J., joined. COLE, J. (p. 13), delivered a
separate dissenting opinion.
                       _________________
                           OPINION
                       _________________
  SUHRHEINRICH, Circuit Judge. Defendant-Appellant
Larry Dean Dusenbery appeals the district court’s judgment
denying his motion under Fed. R. Crim. P. 41(e) for the return
of forfeited property. Plaintiff-Appellee United States cross-
appeals the district court’s ruling that its administrative
forfeiture notices were constitutionally insufficient. For the
following reasons, we AFFIRM.
                           I. Background
  In 1986, Dusenbery was convicted and incarcerated for
possession and distribution of cocaine. See United1 States v.
Dusenbery, No. 86-CR-102 (N.D. Ohio 1986). While

    1
      In connection with this conviction, the Government obtained civil
forfeiture of several items of Dusenbery’s property, including $21,940.00
in U.S. currency and a 1984 Chevrolet Monte Carlo. Dusenbery later
moved unsuccessfully for the return of this property, claiming that the
forfeited property was his and that the government’s forfeiture
Nos. 98-4014/4036                United States v. Dusenbery            3

incarcerated, Dusenbery continued to oversee and operate his
cocaine distribution network. This resulted in his 1994
conviction for engaging in a continuing criminal enterprise
(“CCE”), in violation of 21 U.S. C. § 848. This Court
affirmed his conviction and sentence. See United States v.
Dusenbery, No. 94-3804, 1996 WL 306517, at *1 (6th Cir.
June 6, 1996). Incident to this conviction, the Government
obtained administrative civil forfeiture of several items of
Dusenbery’s property. These items included: (1) $18,672.74
seized on July 9, 1990, and forfeited on October 19, 1990; (2)
$80,141.93, seized on July 9, 1990, and forfeited on October
19, 1990; (3) a 1990 Oldsmobile Delta 88 convertible, seized
on October 10, 1991, and forfeited on April 20, 1992; (4) a
1956 Corvette convertible, seized on October 21, 1991, and
forfeited on April 28, 1992; and (5) a $20,754.23 National
City Bank cashier’s check, listed in the name of Dusenbery
and Edward Clouse (his mother’s boyfriend), seized on
August 8, 1990, and forfeited on July 29, 1992.
  On July 10, 1996, Dusenbery moved, under Fed. R. Crim.
P. 41(e)2, for the return of his property. Dusenbery claimed
that the seizure of his property violated due process because
the Government failed to notify him of its intent to forfeit his
property. Significantly, Dusenbery did not claim at that time
that the statute of limitations had already run when the

proceedings were improper. This court reversed, and remanded for
further proceedings. See Dusenbery v. United States, 1996 WL 549818
(6th Cir. Sept. 25, 1996). On July 23, 1997, an evidentiary hearing was
held regarding Dusenbery’s motion for return of property. See Dusenbery
v. United States, No. 5:95-CV-1872 (N.D. Ohio July 23, 1997)
(hereinafter “Dusenbery I”). These items are not at issue in this appeal.
    2
     Rule 41(e) provides in pertinent part:
    A person aggrieved by an unlawful search and seizure or by the
    deprivation of property may move the district court for the
    district in which the property was seized for the return of the
    property on the ground that such person is entitled to lawful
    possession of the property.
Fed. R. Crim. P. 41(e).
4       United States v. Dusenbery                Nos. 98-4014/4036          Nos. 98-4014/4036            United States v. Dusenbery       13

Government sent the allegedly defective notices.3          The                                  ___________________
Government responded that Dusenbery received notice
because it sent personal notice to Dusenbery’s mother and to                                         DISSENT
the Milan Federal Correctional Institute (“Milan FCI”), where                                   ___________________
the Government maintained Dusenbery was incarcerated. The
Government also stated that notice of the proposed forfeiture
was published in the Cleveland Plain Dealer. Finally, the                      R. GUY COLE, JR., dissenting. I disagree with the
Government argued that Dusenbery was put on notice through                   majority opinion in this case because I find the reasoning of
the evidence presented at his CCE trial. Dusenbery replied                   the Ninth and Tenth Circuits in United States v. Marolf, 173
that he was not at Milan FCI when the notice was sent                        F.3d 1213 (9th Cir. 1999) and Clymore v. United States, 164
because he had been transferred to a local jail to await trial.              F.3d 569 (10th Cir. 1999) more persuasive than the Second
                                                                             Circuit’s decision in Boero v. Drug Enforcement Agency, 111
  The district court denied the Rule 41(e) motion, concluding                F.3d 301 (2nd Cir. 1997).
Dusenbery had received adequate notice of each proposed
forfeiture, and that the Government had properly executed the                  As the majority stated, in Boero, the Second Circuit held
forfeiture process. On appeal, we reversed and remanded for                  that defective notices of appeal should be treated as voidable
an evidentiary hearing. See United States v. Dusenbery, No.                  rather than void, thereby tolling the statute of limitations for
96-3941, 1997 WL 321148, at *2 (6th Cir. June 11, 1997).                     the filing of judicial forfeiture proceedings. I disagree, seeing
We held that, “under all the circumstances of this case, the                 no reason to determine the merits of a challenged forfeiture
record before this court does not establish that Dusenbery was               when the original notice was constitutionally defective and
provided constitutionally adequate notice of the seizures and                the statute of limitations has run. Inadequate notice is void
impending forfeitures at issue.” Id. at *2. We instructed the                and constitutionally defective. In this instance, there is simply
district court that if it found insufficient notice, “Dusenbery              no reason to disregard the five-year statute of limitations set
should be given an opportunity to contest the forfeitures at                 forth in 19 U.S.C. § 1621, short of the rare occasions when
this time.” Id. at *3.                                                       the government has a valid basis for the application of laches
                                                                             or equitable tolling. Such would be the case when a claimant
   On remand, the district court determined that an evidentiary              receives borderline notice and sits on a Rule 41(e) motion
hearing was not necessary because “documentary evidence                      until the five-year statute of limitations has run, a scenario
filed by the government, alone, reveal that Dusenbery never                  that the majority fears.
received actual notice of the pending forfeitures of his
property.” It proceeded to find that the notices were thus                     As noted in Marolf, courts should be “particularly wary of
insufficient as a matter of law. It also found that “the                     civil forfeiture statutes, for they impose ‘quasi-criminal’
government’s motion for summary judgment assumed                             penalties without affording property owners all of the
insufficient notice,” thereby making an evidentiary hearing                  procedural protections afforded criminal defendants.” 173
unnecessary. The district court rejected Dusenbery’s                         F.3d at 1217 (citation and quotation omitted). Further, “[d]ue
argument, made for the first time on remand, that further                    process protections ought to be diligently enforced, and by no
                                                                             means relaxed, where a party seeks the traditionally
                                                                             disfavored remedy of forfeiture.” Clymore, 164 F.3d at 574
    3
      It appears that the applicable statute of limitations, which is five   (citation and quotation omitted). For these reasons, I
years from the discovery of the alleged offense, had already run on some     respectfully dissent from the majority opinion.
of the items at issue. See 19 U.S.C. § 1621.
12   United States v. Dusenbery         Nos. 98-4014/4036     Nos. 98-4014/4036               United States v. Dusenbery            5

obviates any need to address the Government’s cross-appeal.   forfeiture proceedings were barred by the five-year statute of
Accordingly, we AFFIRM the judgment of the district court.    limitations. See 19 U.S.C.A. § 1621 (West 1999). After
                                                              considering the merits of the forfeiture, the district court
                                                              found that the Government established probable cause that the
                                                              property constituted proceeds, 4 or was purchased with
                                                              proceeds from illegal drug sales. Because Dusenbery failed
                                                              to rebut this showing of probable cause, the district court held
                                                              that forfeiture was proper and granted summary judgment to
                                                              the Government.
                                                                                          II. Analysis
                                                                The court of appeals reviews an order granting summary
                                                              judgment de novo and uses the same test as used in the
                                                              district court. See Terry Barr Sales Agency, Inc. v. All-Lock
                                                              Co., 96 F.3d 174, 178 (6th Cir. 1996). Summary judgment is
                                                              proper “if the pleadings, depositions, answers to
                                                              interrogatories, and admissions on file, together with the
                                                              affidavits, if any, show that there is no genuine issue as to any
                                                              material fact and that the moving party is entitled to a
                                                              judgment as a matter of law.” Fed. R. Civ. P. 56(c).
                                                                Section 881 of Title 21 of the United States Code, which is
                                                              part of the Comprehensive Drug Abuse Prevention and
                                                              Control Act, Pub. L. 91-313, Title II, § 511, 84 Stat. 1276
                                                              (1970), authorizes the United States to subject proceeds of
                                                              drug transactions to civil forfeiture proceedings.    See 21
                                                              U.S.C.A. § 881(a)(6) (West Supp. 1999).5 Under the

                                                                  4
                                                                    At the evidentiary hearing on the motion for return of property in
                                                              Dusenbery I, Dusenbery testified that he had used the money he earned
                                                              through selling drugs to purchase seventeen items of personal property
                                                              and the Monte Carlo seized in connection with the 1986 conviction. See
                                                              supra, note 1.
                                                                  5
                                                                    21 U.S.C. § 881(a)(6) provides that the following are subject to
                                                              forfeiture:
                                                                   All moneys, negotiable instruments, securities, or other things of
                                                                   value furnished or intended to be furnished by any person in
                                                                   exchange for a controlled substance . . . , all proceeds traceable
                                                                   to such an exchange, and all moneys, negotiable instruments,
6       United States v. Dusenbery                 Nos. 98-4014/4036           Nos. 98-4014/4036           United States v. Dusenbery       11

applicable statute of limitations, the government agency has                      Like the Second Circuit, we think that inadequate notices
five years from the discovery of the alleged offense to                        should be treated as voidable, not void, and that the proper
institute a judicial forfeiture proceeding. 19 U.S.C.A. § 1621                 remedy is simply to restore the right which a timely Rule
(West 1999).6                                                                  41(e) notice would have conferred on the claimant: the right
                                                                               to judicially contest the forfeiture and to put the Government
   If the property is valued at $500,000 or less, the DEA may                  to its proofs under a probable cause standard. Thus, the
use an administrative forfeiture process in the customs laws.                  Government is not required to institute “new” forfeiture
See 19 U.S.C.A. § 1607(a)(West 1999); 21 U.S.C.A.                              proceedings, and the applicable statute of limitations, § 1621,
§ 881(d)(West 1999). Publication of notice begins the                          therefore has no bearing.
administrative forfeiture. See 19 U.S.C.A. § 1607(a); 21
C.F.R. § 1316.75 (1999). The DEA is also required to send                         Rule 41(e) proceedings are equitable in nature if criminal
notice to every party with an interest in the property. See 19                 proceedings are no longer pending. See United States v.
U.S.C.A. § 1607(a). A claimant who has received                                Duncan, 918 F.2d 647, 654 (6th Cir. 1990); Marolf, 173 F.3d
constitutionally adequate notice of intent to forfeit then has                 at 1216. We fail to see the equity in allowing the claimant
twenty days from the date of the first publication of the notice               more than he would have been accorded in the first place;
of seizure to judicially contest the forfeiture by filing a claim              namely the fortuitous benefit of avoiding the forfeiture
with the DEA and a cost bond, or a declaration of inability to                 process altogether. After all, this is not a situation where the
file a cost bond. See 19 U.S.C.A. § 1608 (West 1999); 21                       Government never bothered to send notices of forfeiture. Nor
C.F.R. §§ 1316.75-.76 (1999). If no claim is filed, an                         can Dusenbery claim that he was completely blindsided,
administrative forfeiture occurs by default. See 19 U.S.C.A.                   because the property in question had obviously been out of his
§ 1609 (West 1999); 21 C.F.R. § 1316.77 (1999).                                possession since the date of seizure. Finally, a contrary
                                                                               ruling, one similar to that of the Ninth and Tenth Circuits,
  A properly filed claim stops the administrative forfeiture                   might encourage some claimants with borderline notices and
process and requires the seizing agency to refer the matter to                 nothing to lose (presumably because they will not be able to
the United States Attorney to institute judicial forfeiture                    rebut the Government’s proofs) to sit on their Rule 41(e)
proceedings. See 19 U.S.C.A. §§ 1608; 1610 (West 1999); 21                     motions until the five-year statute of limitations has run. We
C.F.R. §§ 1316.76(b); 1316.78 (1999). The DEA is then                          therefore reject the Ninth and Tenth Circuits’ approach, as
required to show probable cause for the forfeiture. See 19                     articulated in Marolf and Clymore. We affirm the district
U.S.C.§ 1615; United States v. $67,220.00 in U.S. Currency,                    court’s adoption of Boero and its decision to rule on the
957 F.2d 280, 283 (6th Cir. 1992). Upon a showing of                           merits of Dusenbery’s forfeitures.
probable cause, the burden of proof shifts to the claimant to
                                                                                                             III.
                                                                                  As indicated above, we have assumed that the
    and securities used or intended to be used to facilitate any               Government’s notices were constitutionally inadequate. We
    violation of this subchapter.                                              conclude that the merits of the forfeiture were properly
21 U.S.C.A. § 881(a)(6) (West Supp. 1999).
                                                                               considered, notwithstanding the intervening expiration of the
    6
      “No . . . forfeiture of property accruing under the customs laws shall
                                                                               statute of limitations. Additionally, we adopt the district
be instituted unless such suit or action is commenced within five years        court’s determination of the merits of the forfeiture. This
after the time when the alleged offense was discovered.” 19 U.S.C.A.
§ 1621 (West 1999).
10       United States v. Dusenbery               Nos. 98-4014/4036           Nos. 98-4014/4036                United States v. Dusenbery              7

administrative remedy, over five years after the date of the                  demonstrate that the property is his and not the proceeds of
initial seizure. The practical effect of the Boero court’s                    drug transactions. The claimant may meet his burden by
reversal and remand for a determination on the merits of the                  showing that the property was not the proceeds of illegal drug
forfeiture was to treat the ineffective notice as voidable rather             activities or that the claimant is an “innocent owner” and was
than void, so that the statute of limitations was tolled.                     unaware of the proceeds’ criminal connection. See 19 U.S.C.
                                                                              § 1615; United States v. Certain Real Property 566
  Conversely, two other cases, one from the Ninth Circuit and                 Hendrickson Blvd., 986 F.2d 990, 995 (6th Cir. 1993). If the
one from the Tenth Circuit, reject the Second Circuit’s                       claimant fails in his burden, the government is entitled to a
approach in Boero and hold that a forfeiture without adequate                 judgment of forfeiture. See id.
notice is void, and if the statute of limitations has run against
the government, a decision on the merits of the forfeiture is                   On appeal Dusenbery argues that forfeiture is no longer
barred. See United States v. Marolf, 173 F.3d 1213, 1217-18                   available because of the applicable statute of limitations.
(9th Cir. 1999); Clymore v. United States, 164 F.3d 569, 574                  That is, Dusenbery argues that the Government could not
(10th Cir. 1999). In Clymore, the Tenth Circuit held that                     reinstate forfeiture proceedings during the 1997 remand
“[w]here obvious statute of limitations problems exist, we                    because the factual basis for Dusenbery’s CCE charges was
think the offending forfeiture [i.e. inadequate notice] should                more than five years old. He therefore contends that all his
be vacated and the statute of limitations allowed to operate,                 property and funds should be returned, with interest.
subject, of course, to any available government arguments
against it.” Clymore, 164 F.3d at 574. Following the                            In deciding Dusenbery’s claim under Rule 41(e)7, we will
reasoning of Clymore, the Ninth Circuit held that, absent the                 assume that the notices of forfeiture were insufficient and
rare application of laches or equitable tolling principles,                   proceed to the forfeiture question: What is the proper remedy
courts may not ignore the statute of limitations in forfeiture                for a due process violation in an administrative forfeiture
cases when an administrative forfeiture is9 invalidated on a                  proceeding when the statute of limitations for filing a judicial
Rule 41(e) motion due to defective notice. See Marolf, 173                    forfeiture action has expired? Few circuits have addressed
F.3d at 1217-18. See also United States v. $57,960.00 in                      this issue, and those that have are divided.
United States Currency, 58 F. Supp. 2d 660, 1999 WL 566616
(D.S.C. July 28, 1999) (agreeing with Ninth and Tenth                           In Boero v. DEA, 111 F.3d 301, 305-07 (2d Cir. 1997), the
Circuits).                                                                    Second Circuit resolved the problem of a defective notice and
                                                                              an untimely claim outside the statute of limitations by
                                                                              directing the trial court to resolve the dispute on the merits.
                                                                              See id. at 305-07. There, the DEA administratively forfeited
                                                                              $1799.46 on January 31, 1991. The money had been seized
     9
      In supporting its conclusion that inadequate notices should be
                                                                              from Boero when he was arrested on October 25, 1990 for
treated as void, the Marolf court remarked that the forfeiture statutes       violations of federal narcotics laws. The DEA sent notices of
“impose no duty on a defendant to prevent the government from losing its      seizure to Boero’s home and to his presumed place of
rights through carelessness,” United States v. Marolf, 173 F.3d 1213,
1217 (9th Cir. 1999) (internal quotation marks omitted); and that statutes
of limitations historically have “represent[ed] a pervasive legislative           7
judgment that it is unjust to fail to put the adversary on notice to defend        We have jurisdiction to entertain collateral due process attacks on
within a specified period of time and that the right to be free of stale      administrative forfeitures, including challenges to the adequacy of notice.
claims in time comes to prevail over the right to prosecute them.” Id. at     See United States v. Giraldo, 45 F.3d 509, 511 (1st Cir. 1995) (per
1217-18 (internal quotation marks omitted).                                   curiam); United States v. Woodall, 12 F.3d 791, 793 (8th Cir. 1993).
8      United States v. Dusenbery           Nos. 98-4014/4036     Nos. 98-4014/4036                United States v. Dusenbery            9

incarceration, in accordance with 19 U.S.C. § 1607. The             forfeiture proceedings under the customs laws must be
DEA also published notice in USA Today pursuant to 21               commenced within five years after the time when the
C.F.R. § 1316.75. However, Boero never received the notices         alleged offense was discovered. See 19 U.S.C. § 1621;
because he had been transferred to a state prison.                  21 U.S.C. § 881(d)).
   On January 31, 1991, the DEA declared the property             Id. at 304-05 (internal footnotes omitted). The Second Circuit
administratively forfeited to the United States under 19          therefore concluded that Boero’s proper remedy was to
U.S.C. § 1609. Boero filed a civil complaint against the DEA      restore  his right to seek a hearing in district court. See id. at
on April 13, 1994, and subsequently moved for summary             307.8 See also Kadonsky v. United States, 1998 WL 119531,
judgment, arguing that his property should be returned as         at *2-3 (N.D. Tex. March 6, 1998) (holding that the remedy
equitable relief for the failure of notice. The DEA conceded      for a due process violation in a forfeiture proceeding where
inadequate notice, but argued that Boero’s motion should be       the statute of limitations has run is a hearing on the merits of
treated as a timely but unperfected administrative claim under    the forfeiture question).
19 U.S.C. §§ 1603(b) and 1608. In other words, the DEA
argued that Boero was limited to his administrative claim and       Although the Second Circuit in Boero did not directly
could not recover the money in the district court. The district   address the statute of limitations problem, it did expressly
court agreed with the DEA and held that the claimant’s            note that the district court had allowed Boero to pursue an
remedy was via administrative claims procedures. See id. at
303-04.
                                                                      8
    The Second Circuit reversed, holding that:                          The Boero court catalogued various approaches taken by other
                                                                  circuits:
                                                                            The First and Eighth Circuits have ruled that when notice of
    In Onwubiko v. United States, 969 F.2d 1392, 1398 (2d              administrative forfeiture is inadequate, the district court must set
    Cir. 1992), we explained that an administrative forfeiture         aside the forfeiture and either order return of the seized property
    ordinarily removes the subject matter of the action--the           or direct the government to commence judicial forfeiture in
    property or res--from the district court, and thereby              district court. See, e.g, United States v. Volanty, 79 F.3d 86,88
    deprives the court of jurisdiction to review administrative        (8th Cir. 1996); United States v. Giraldo, 45 F.3d 509, 512 (1st
    decisions once the administrative process has begun. An            Cir. 1995); United States v. Woodall, 12 F.3d 791, 795 (8th Cir.
                                                                       1993). The Federal Circuit has held that a district court can
    exception to this rule is when property is taken                   excuse a property owner’s failure to comply with the statutory
    accidentally, fraudulently, or improperly. In actions              requirements when notice in an administrative forfeiture
    asserting such a claim, the district court has jurisdiction        proceeding is inadequate. Litzenberger v. United States, 89 F.3d
    to correct the deficiency. Id. Boero’s complaint that his          818, 822 (Fed. Cir. 1996). The Ninth Circuit, upon ruling that
    property was taken improperly-- without proper notice--            a district court has jurisdiction over due process challenges to
                                                                       administrative proceedings under 28 U.S.C. § 1331, remanded
    correctly invoked district court jurisdiction. The court’s         the case for an adjudication on the merits. Marshall Leasing,
    findings concerning impropriety of the forfeiture gave the 893 F.2d at 1103. The Fifth Circuit, in Armendariz-Mata v.
    court power to correct the deficiency. See id. The court,          DEA, 82 F.3d 679, 683 (5th Cir.), cert. denied, -- U.S. --, 117 S.
    however, did not correct the deficiency, and instead               Ct. 317, 136 L. Ed. 2d 232 (1996), having found notice in an
    allowed Boero to pursue an administrative remedy, over             administrative forfeiture proceeding to be insufficient, directed
                                                                       the district court to vacate the DEA’s administrative forfeiture
    five years from the date of the initial seizure, as if an          without providing further instructions or comment.
    improper forfeiture had never occurred. (Ordinarily,          Boero v. DEA, 111 F.3d 301, 307 n.6 (2d Cir. 1997). None of these cases
                                                                  address the effect of the running of the statute of limitations, however.