Court Opinion

ID: 75324
Source: CourtListenerOpinion
Date Created: 2010-04-26 09:10:00+00
Date Added: 2024-06-11T13:27:10.478438
License: Public Domain

[PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS
                                                            FILED
                   FOR THE ELEVENTH CIRCUIT         U.S. COURT OF APPEALS
                                                      ELEVENTH CIRCUIT
                                                          MAY 22, 2001
                    ________________________
                                                       THOMAS K. KAHN
                                                            CLERK
                          No. 99-11130
                    ________________________

                    D.C. Docket No. 91-1077 CIV

UNITED STATES OF AMERICA,

                                                  Plaintiff-Appellee,

    versus

1461 WEST 42ND STREET, HIALEAH, FLORIDA,
Real property together with all
improvements, fixtures and appurtenances
thereon and therein, and all rent and
profit derived therefrom, et al.,

                                                  Defendants,

JOSE ANGEL RIVERA, ARGELIA RIVERA,
ARSENIO J. FALCON, MARTA M. FALCON,

                                                  Claimants-Appellants,

M R & F ENTERPRISES, a partnership,
RIDGEWOOD DEVELOPMENT CORPORATION, a
Florida Corporation,
                                                           Consolidated Claimants-
                                                           Appellants.

                             __________________________

                     Appeals from the United States District Court
                         for the Southern District of Florida
                          __________________________
                                   (May 22, 2001)

Before ANDERSON, Chief Judge, CARNES and OAKES*, Circuit Judges.

OAKES, Circuit Judge:

       In a quite complicated procedural context, this appeal deals with the

considerations that ensue when real property that the government has seized in

civil forfeiture proceedings is foreclosed by the property’s mortgagee so that when

it is time to return the property, after dismissal of the forfeiture action, the

property, by virtue of the foreclosure, can no longer be returned. We are presented

here with the task of tailoring an appropriate remedy under such circumstances

when due process was violated pursuant to United States v. James Daniel Good,

Real Property, 510 U.S. 43 (1993).

                                     BACKGROUND

       *
        Honorable James L. Oakes, U.S. Circuit Judge for the Second Circuit, sitting by
designation.

                                               2
      This appeal arises from an in rem action against two rental apartment

buildings identified respectively as Certain Real Property Known as and Located at

1461 West 42nd Street and 8500 N.W. 8th St., Miami, Florida (“Property #2") and

Certain Real Property Known as and Located at 8401-8425 N.W. 8th St., Miami,

Florida (“Property #4") (together, the “Properties”). Property #2 was titled by way

of a warranty deed in the name of Ridgewood Development Corp. (“Ridgewood”),

and Property #4 was titled by way of a quitclaim deed in the name of MR&F

Enterprises, a partnership (“MR&F”) (together, “claimants”). Each of the

Properties consisted of 80 rental units, was valued at approximately $3 million, and

carried a mortgage of approximately $2.8 million.

      On May 16, 1991, the government secured an ex parte warrant and

protective order under 21 U.S.C. §§ 853(e) and (f) authorizing the seizure of the

Properties in anticipation of criminal forfeiture in connection with the drug-

trafficking indictment of Augusto Falcon and Salvadore Magluta, who are relatives

of the claimants. The protective order prohibited the encumbrance, sale or

destruction of the Properties and required all rents to be paid to the U.S. Marshal as

custodian pending final disposition of the criminal case. On February 16, 1996,

                                          3
Augusto Falcon and Salvadore Magluta were acquitted of the criminal charges

against them.1

       On May 23, 1991, the government also instituted civil forfeiture proceedings

in rem against the Properties pursuant to 21 U.S.C. § 881(a)(6) on the allegation

that the Properties represented proceeds of the drug-trafficking activities of Falcon

and Magluta.2 The government filed notices of lis pendens on the same day and

subsequently seized the Properties pursuant to warrants of arrest in rem issued by

the district court.

       After seizing the Properties, the government installed its own property

management firm to run and manage the rental buildings. Despite collecting rents

beginning in June 1991, the government allegedly refused to make any mortgage

payments on the Properties to the secured lender, Citicorp Savings of Florida

(“Citibank”).

        On June 21, 1991, the loans were declared in default by reason of non-

payment, and in September 1991, Citibank accelerated payment and initiated state

       1
         The government asks us, and we agree, to take judicial notice of the fact, for whatever
bearing it may have, that the foreperson of the acquitting jury was prosecuted for taking a cash
bribe from individuals acting on behalf of the Falcon-Magluta organization and received a
sentence of 210 months’ term imprisonment. In August 1999, Falcon and Magluta were re-
indicted on criminal charges stemming from their criminal trial.
       2
      This action originally involved five defendant properties. The government’s second
amended complaint, dated September 23, 1991, charged sixteen total properties.

                                                4
foreclosure proceedings. On September 24, 1991, Ridgewood and MR&F filed a

motion to compel the government to make mortgage payments on the seized

Properties. On November 5, 1991, Citibank filed a similar motion to compel the

government to pay all rents, profits and revenues from the Properties toward the

outstanding mortgages.

      Soon thereafter, the United States and Citibank entered into a joint

stipulation, approved by the district court on December 18, 1991, which: (1)

recognized Citibank’s status as an innocent lienholder; (2) agreed to seek a joint

interlocutory sale of the Properties; (3) agreed to drop the United States as a

defendant in Citibank’s foreclosure action; and (4) required the United States to

apply all rents and profits collected from the Properties toward the outstanding

mortgages, less expenses of seizure, custody and maintenance. Ridgewood’s and

MR&F’s joint motion to vacate the stipulation was denied.

      On January 14, 1993, the United States and Citibank petitioned the court for

an order confirming the sale of the Properties. Despite the court’s confirmation,

the Properties were not immediately sold, and on October 6, 1993, Citibank

purchased them at a Sheriff’s sale without objection from the government.

      On December 13, 1993, the Supreme Court issued its opinion in United

Stated v. James Daniel Good Real Property, 510 U.S. 43 (1993), which held that

                                          5
the Fifth Amendment Due Process Clause requires the government to provide

notice and a meaningful opportunity to be heard to owners of real property that is

seized under civil forfeiture, absent exigent circumstances. Thereafter, the

government sought to dismiss the civil forfeiture action and to attain a certificate of

reasonable cause pursuant to 28 U.S.C.

§ 2465.3 On June 10, 1995, the district court granted the dismissal, but conditioned

it upon: (1) the government’s paying Citibank’s expenses; (2) the magistrate

judge’s determination of whether any other claimants were entitled to fees or costs;

and (3) Citibank’s continued receipt of the net income from the Properties. The

district court granted the government’s request for a certificate of reasonable cause

on April 7, 1997.

      After the government dismissed the civil forfeiture action, claimants filed a

motion under Good for damages and reimbursement for the illegal seizure of the

Properties. On February 20, 1998, the district court, Brown, Magistrate Judge,

issued a memorandum order finding that the United States was responsible for

      3
       Section 2465 provides:
             Upon the entry of judgment for the claimant in any proceeding to condemn or
             forfeit property seized under any Act of Congress, such property shall be returned
             forthwith to the claimant or his agent; but if it appears that there was reasonable
             cause for the seizure, the court shall cause a proper certificate thereof to be
             entered and the claimant shall not, in such case, be entitled to costs, nor shall the
             person who made the seizure, nor the prosecutor, be liable to suit or judgment on
             account of such suit or prosecution.

                                               6
rents and profits, as well as loss of use damages, if any, of which the claimants

were deprived during the illegal seizure period, and ordered an evidentiary hearing

to determine the amount of damages. See United States v. 1461 West 42nd St.,

998 F. Supp. 1438 (S.D. Fla. 1998).

      Upon reconsideration, on April 21, 1998, the district court rejected its prior

ruling, which had awarded claimants damages for loss of use, as barred by

sovereign immunity, and held that only a disgorgement of property via the return

of rents and profits was an acceptable remedy under Good. On March 10, 1999,

the district court issued a damages order awarding Ridgewood and MR&F

damages for rents and profits less operating expenses and mortgage payments,

ultimately totaling $265,252.99 and $252,903.93, respectively. This appeal

followed.

                                    DISCUSSION

      Generally, civil forfeiture involves the forfeiture of real or personal property

to the state when that property is found to be linked to the violation of the state’s

laws. Criminal forfeiture and civil forfeiture are distinct doctrines. Criminal

forfeiture occurs in criminal court and comes into play only after the court has

found the defendant guilty, though seizure does occur beforehand under the federal

system. In contrast, civil forfeiture is an in rem action, unrelated to the guilt or

                                           7
innocence of the property owners. Criminal forfeiture is understood to be punitive

insofar as it is intricately tied to the defendant’s criminal proceeding, whereas civil

forfeiture is understood to be remedial insofar as it “punishes” only the res itself.

See generally United States v. Ursery, 518 U.S. 267, 274-78 (1996) (discussing

difference between civil and criminal forfeiture in context of Double Jeopardy

Clause).

      Claimants argue that the government indisputably violated the Fifth

Amendment Due Process Clause under Good. They also claim that the

government wrongly permitted the Properties to be subject to foreclosure, levy and

loss of record title, and that the district court was required to order the return of the

buildings and to construct a remedy for the constitutional violation tailored to the

injury. They claim damages, including: (1) the loss of more than $4,305,000 of net

operating income, which included mortgage payments; (2) the loss of the use and

enjoyment of the Properties during the pendency of the trial; and (3) the loss of

record title. Moreover, claimants argue that all sums returned should have

included interest. The bottom line of claimants’ argument is that whether in the

form of a return of the value of the Properties or in the form of damages, they are

entitled to have their injury redressed by the district court. Independent of that,

                                            8
claimants argue that the return of the Properties, or their money equivalent, is

statutorily required under 28 U.S.C. § 2465.

      The government argues, on the other hand, that the district court committed

no reversible error by subtracting legitimate mortgage and operating expenses from

returnable rents and proceeds or by denying loss of use and enjoyment damages

pursuant to sovereign immunity. The government additionally maintains that, as

an adversary, it had no duty to claimants, who lost title to the Properties on their

own doing, and that

§ 2465 does not permit of claimants’ relief.

      We note at the outset that we review de novo a district court’s fashioning of

remedies for violations under Good. See United States v. 47 W. 644 Route 38,

190 F.3d 781, 782 (7th Cir. 1999). Similarly, we review a sovereign’s immunity

from suit de novo. See Tamiami Partners, Ltd. v. Miccosukee Tribe, 177 F.3d

1212, 1224 (11th Cir. 1999).

A).   United States v. James Daniel Good

      In United States v. James Daniel Good Real Property, the Supreme Court

declared for the first time that in the context of civil forfeiture, the Due Process

Clause of the Fifth Amendment requires the government to provide the owner of

                                           9
real property notice and a meaningful opportunity to be heard before it seizes

property, absent a showing of exigent circumstances. See 510 U.S. at 59.

       We note that Good applies retroactively to this case because the government

did not dismiss its civil forfeiture action against defendant Properties until after

Good was decided. See Harper v. Virginia Dep’t of Taxation, 509 U.S. 86, 96-99

(1993) (holding that new rules of law apply to pending civil cases on direct appeal

regardless of whether events predate announcement of rule); United States v. 2751

Peyton Woods Trail, S.W., 66 F.3d 1164, 1166 n.2 (11th Cir. 1995) (applying

Good retroactively); see also United States v. 20832 Big Rock Drive, 51 F.3d

1402, 1405-6 (9th Cir. 1995) (same). Applying Good to the facts here, we find

that the government did not provide claimants with a notice and hearing prior to

seizing the Properties nor did it allege or establish the existence of exigent

circumstances.4

       Although the Good Court announced a new constitutional rule, it declined to

carve a remedy for violations. Hence, the onus of tailoring remedies for Good

       4
         The government questions Good’s applicability to this case on the reasoning that it first
seized the Properties pursuant to criminal warrants and protective orders. Once the government
seized the Properties under civil forfeiture, however, any protections retroactively afforded under
Good kicked in to protect claimants insofar as the civil forfeiture was concerned. Moreover,
because the government did not prevail in the criminal action, the Properties were never
criminally forfeited; even were Good inapplicable, the government was probably under an initial
obligation to return the Properties or to repay the rents anyway.

                                                10
violations has fallen to the courts. This Court recently addressed the issue of

remedies in United States v. 408 Peyton Road, S.W., 162 F.3d 644 (11th Cir. 1998)

(en banc), holding that:

       [W]hen the Government fails to provide predeprivation notice and a
       hearing, but the property is found to be subject to forfeiture after the
       process due has been afforded, the proper remedy for a seizure in
       violation of the Fifth Amendment Due Process Clause is the return of
       any rents received or other proceeds realized from the property during
       the period of illegal seizure.

Id. at 652 (footnote omitted).5

       5
         This conclusion is consistent with the view of the majority of circuits that have
considered the issue. See, e.g., United States v. Marsh, 105 F.3d 927, 931 (4th Cir. 1997);
United States v. All Assets and Equip. of West Side Building Corp., 58 F.3d 1181, 1193 (7th Cir.
1995); 20832 Big Rock Drive, 51 F.3d at 1406; United States v. 51 Pieces of Real Property, 17
F.3d 1306, 1315-16 (10th Cir. 1994); United States v. One 1989 23 Foot, Wellcraft, Motor
Vessel, 910 F. Supp. 46, 52 (D.P.R. 1995), aff’d, No. 97-1220, (1st Cir. Sept. 30, 1997)(unpub.);
but see United States v. 9638 Chicago Heights, 27 F.3d 327, 330 (8th Cir. 1994) (concluding that
dismissal of forfeiture complaint was appropriate remedy for Good violation). Some courts have
chosen to afford themselves the flexibility to carve remedies individually tailored to the
circumstances of specific violations. See, e.g., United States v. 6380 White Canyon Road, 59
F.3d 974, 981 (9th Cir. 1995) (holding that claimants may be entitled to damages for loss of use
and enjoyment in addition to returned rents and profits); United States v. 4492 South Livonia
Road, 889 F.2d 1258, 1265 (2d Cir. 1989) (suppression of evidence that government may have
obtained from an unlawful seizure may be appropriate remedy); United States v. Property
Identified as Lot Numbered 718, 20 F. Supp. 2d 27, 39 (D.D.C. 1998) (noting that although
remedy of dismissal is the minority view, under facts of the case, dismissal is the only solution
that would afford claimant any meaningful relief).

                                               11
In 408 Peyton Road, the Court was not presented with an opportunity to define the

contours of the remedy it set out.6 See id. We now address the meaning of “rents

received or other proceeds realized.”

i.     Mortgage Payments

       The district court formulated “rents and proceeds” as the sum of all rents

received during the illegal seizure period less operating expenses, such as repairs

and mortgage payments, but including “wasted” expenses that would not have been

incurred “but for” the illegal seizure, such as rental commissions and property

management fees.

       Claimants’ principal contention is that the district court erred by subtracting

mortgage payments from rents and proceeds. They argue that because they

ultimately lost legal title to the Properties through state foreclosure, the mortgage

payments that the government made to Citibank were for all intents and purposes

“wasted.” Thus, claimants argue, the district court should have treated these

       6
         Claimants contend that 408 Peyton Road is not controlling in this case. They
differentiate their case on the basis that in 408 Peyton Road the defendant property was
ultimately found to be subject to forfeiture whereas, claimants assert, they prevailed in the
forfeiture action. Even if we were to interpret so felicitously the government’s voluntary
dismissal of its forfeiture action, we believe that this is a distinction with no difference. A
claimant’s right to predeprivation notice and hearing does not hinge on the outcome of the in rem
action. The due process rights announced in Good pertain to the rights of all claimants in
forfeiture actions at the point of seizure, not the point of forfeiture. Therefore, we would be
relatively diminishing these rights were we to make them turn on the ultimate “guilt” or
“innocence” of the defendant property.

                                               12
payments as it treated wasted property management fees from which claimants

never benefitted, that is, it should not have subtracted them from net returnable

rents and proceeds. Claimants ask us to carve a remedy directly under Good that

would include such “wasted” mortgage payments.

      The government, in contrast, points out that it made mortgage payments

from the rental proceeds, as claimants had requested, in good faith and pursuant to

a court-ratified agreement, and that those payments benefitted claimants by

reducing their loan obligations. The government argues that if claimants lost legal

title to the Properties, it was their own fault, since they remained contractually

obligated to make mortgage payments on the loans. The government also insists

that claimants, as mortgagors, were fully represented in the state foreclosure

proceedings.

      We agree with the district court that in constructing the meaning of rents and

proceeds, it would be an “absurd construction” simply to return to the claimants all

of the rents and proceeds collected by the government during the illegal seizure

period without deducting any amounts that the government paid out in order to

maintain the Properties. Furthermore, we agree that mortgage payments should be

categorized as one such operating expense deductible from the total amount of

returnable rents and proceeds.

                                          13
      While it is true that mortgage payments go toward building equity in

property and thereby represent a capital expenditure, the payment of mortgage

interest also represents a deductible normal operating expense. Presumably, had

the Properties not been foreclosed upon, claimants would not be asking this court

to deduct mortgage payments from their returnable rents and proceeds. This

highlights the fact that claimants’ primary grievance concerns their loss of equity

from their loss of legal title to the Properties. While we may sympathize with

claimants’ loss, we are unable to address, let alone redress, it in the current action.

Damages, if any, for loss of property may be appropriate in a separate action.

Were we to allow claimants recovery of mortgage payments in this action, their

possible recovery of damages in another action for the loss of the Properties would

unjustifiably duplicate their remedies.

      We find the Seventh Circuit’s opinion in United States v. All Assets and

Equipment of West Side Building Corp., 188 F.3d 440 (7th Cir. 1999) (“All Assets

II”), instructive. There, in the only other case involving constructing a remedy

under Good after the seized property was foreclosed upon and the civil forfeiture

action dismissed, the government returned to the claimants rents minus additional

expenses, including mortgage payments. The court held that:

      When the government returned the rents, it made [claimants] whole.
      To require the government to compensate them for the ordinary cost

                                           14
       of renting their land as well would create an unnecessary windfall for
       claimants.
               Similar reasoning applies to the mortgage payments. As the district
       court pointed out, the mortgage payments constitute both an ordinary
       operating expense -- payment of the interest -- and a capital expense --
       payment going toward equity. The former expense should be assessed in a
       manner similar to that employed for analyzing the utility bills and taxes.
       While the latter expense may raise some concerns, we believe the district
       court's analysis to be essentially correct. If the government had not illegally
       seized the property without pre-deprivation process, claimants would still
       have had to make these payments and gained equity, which they would have
       lost at the subsequent proceeding. The fact that the deprivation happened in
       a constitutionally suspect manner does not alter this result. Holding the
       government liable for these losses would unjustly enrich claimants.

Id. at 445.

        The government would have us believe that claimants “can blame only

themselves” for having lost title to the Properties and that, ultimately, they would

have lost them anyway.7 We are unwilling to engage in this kind of speculation.

While it is true that claimants had an independent obligation to meet their

mortgage obligations, it is also arguably true that, absent the seizure(s), they would

have continued to meet them through rental income, apparently as they had done

during the years prior to the seizure. Thus, we base our holding that claimants are

not entitled to mortgage payments not on speculation about their ability to retain

       7
         The government’s argument that claimants’ loans were in default prior to the time of
seizure is unsupported. As the record bears out, the first payment default occurred on June 1,
1991, after seizure on May 17, 1991, and it was payment of interest earned for May 1991 that
was due. Mortgage interest, as provided for by the loan documents, is paid in arrears.

                                               15
equity in the Properties but, rather, on the recognition that claimants have failed to

launch their complaint against the government or Citibank under an appropriate

cause of action.

ii.    Loss of Use and Enjoyment

       Claimants argue that the district court erred in its reconsideration order by

denying damages for the loss of use and enjoyment of the Properties, and they ask

us to create such damages directly under Good.

       The district court reasoned that any damages beyond the return of claimants’

property would be barred by governmental immunity. The court differentiated the

return of rents and profits from loss of use and enjoyment damages on the basis

that the former represented “in essence, a return of a portion of the claimants’

‘property’ which was seized” whereas the latter represented consequential damages

barred by governmental immunity. We agree with the district court’s reasoning

and hold that claimants are barred by governmental immunity from receiving

damages for the loss of use and enjoyment of the Properties.8

       8
         Even if claimants’ claim were not barred by sovereign immunity, they would not have a
claim for loss of use and enjoyment damages. Because the Properties were rental properties,
claimants have no presumptive claim for such damages. See All Assets II, 188 F.3d at 445-46
(stating that, as rental properties, claimants had already contracted to relinquish use and
enjoyment of lands and that record indicated no desire on claimants’ part to break contracts for
right to use and enjoy the land in other ways). Indeed, although the Supreme Court did not limit
its holding in Good to personal residences, it did observe that an individual's "right to maintain
control over his home, and to be free from governmental interference, is a private interest of

                                                16
       Claimants’ argument seems to conflate Good violations with takings law. A

Good violation is a due process violation, not an unconstitutional taking of private

property for public use for which just compensation is due. See Owens v. United

States, No. 99-5021, (Fed Cir. Aug. 6, 1999) (unpub.). In contrast to takings law,

the government is immune, absent waiver, from suit for damages arising from due

process violations under the Fifth Amendment. See FDIC v. Meyer, 510 U.S. 471,

475 (1994); United States v. Timmons, 672 F.2d 1373, 1380 (11th Cir. 1982); see

also Lane v. Pena, 518 U.S. 187, 192 (1996) (immunity can be waived only by

unequivocal, express act of Congress). The return of rents and profits under Good

is not barred by sovereign immunity because it does not represent consequential

damages. Rather, it represents disgorgement of property held by the government

during the illegal seizure period.

iii.   Pre-Judgment Interest

       Claimants’ request for an award of interest on all returnable rents and profits

can also be disposed of under the doctrine of sovereign immunity, which precludes

the government's liability for prejudgment interest. See Library of Congress v.

Shaw, 478 U.S. 310, 314 (1986) (“In the absence of express congressional consent

historic and continuing importance." 510 U.S. at 53-54.

                                              17
to the award of interest separate from a general waiver of immunity to suit, the

United States is immune from an interest award.”).

      It is true that the government may be liable for pre-judgment interest to the

extent that it has earned interest on the seized res. In such cases, the government

must disgorge its earnings along with the property at the time when the property is

returned. See United States v. $515,060.42, 152 F.3d 491, 504 (6th Cir. 1998)

(“there is no issue of sovereign immunity because the Government is not being

asked to pay interest, but to disgorge property that was not forfeited”).

      However, in this case, the government did not earn interest on the Properties

during the illegal seizure period. Rather, it used the rental income to pay

management and operating expenses, including mortgage payments to Citibank.

There are no earnings to disgorge here. Therefore, we are barred by the doctrine of

sovereign immunity from awarding claimants prejudgment interest on the returned

rents and proceeds.

iv.   Government’s Duty of Care

      Claimants ask us to find that the government had a duty to take care of the

Properties and to protect claimants’ proprietary interests during the seizure period.

Specifically, claimants argue that the government should have required

reinstatement of the mortgages or a stay of the state foreclosure prosecution. We

                                          18
believe that if the government had any such duty of care which was violated in this

case, an action for its breach was not properly brought before this court in this

proceeding.

B.    Return of Property Under 28 U.S.C. § 2465

      Claimants alternatively contend that they are entitled to an award of

damages under 28 U.S.C. § 2465. We disagree.

      Claimants ask us to read § 2465 as standing for the proposition that even

where claimants are barred by a reasonable cause certificate from receiving costs,

they are entitled to a return of the value of the property, if not a return of another

piece of property of comparable value. However, claimants are unable to cite any

case holding for this remarkable interpretation of § 2465.

      As the court in United States v. One (1) 1979 Cadillac Coup De Ville, 833

F.2d 994 (Fed. Cir. 1987), stated:

      On its face, [§ 2465] requires only that . . . ”the property seized” shall
      be returned . . . . It does not say “the equivalent value of the property
      seized” shall be returned. . . . If Congress had intended the
      government not only to return the seized property but also to make the
      claimant whole for any depreciation in the value of the property
      during the period of government custody, it presumably would have
      so stated or indicated.

Id. at 998.

                                           19
      Additionally, claimant’s preferred interpretation of § 2465 rides against the

current of the statute’s purpose, which is to insulate the government from, rather

than broaden the government’s exposure to, liability for costs or damages for

initially reasonable but ultimately improvident seizures. See United States v.

$637,944.57, 746 F. Supp. 1441, 1446 (D. Haw. 1990) (“Clearly, Congress enacted

28 U.S.C. § 2465 for the important purpose of preventing the ‘chilling effect’ that

liability for improvident seizures based on reasonable cause might have on the

government.”); United States v. Tito Campanella Societa Di Navigazione, 217 F.2d

751, 756 (4th Cir. 1954) (purpose of § 2465 “is to protect against liability for costs

or damages on account of the institution of [forfeiture] proceedings”).

      Moreover, even if we were to indulge claimants’ interpretation, the doctrine

of sovereign immunity would prevent suit for damages against the United States.

The requirement that seized property “shall be returned forthwith to the claimant”

cannot be interpreted as mandating compensation by the federal government for

the damages sustained by the claimant as a result of the seizure. Such an

interpretation would amount to the assessment of damages beyond the amount of

monies received pursuant to the illegal seizure, which would, absent waiver,

trespass upon the government’s sovereign immunity. See FDIC v. Meyer, 510

U.S. at 475; United States v. Timmons, 672 F.2d at 1380. Courts have generally

                                          20
prohibited consequential damages from the government for loss of value. See, e.g.,

One (1) 1979 Cadillac Coup De Ville, 833 F.2d at 998-99 (reversing award of

damages for depreciation and holding by virtue of doctrine of sovereign immunity

government not liable for such consequential damages under § 2465); United

States v. $277,000, 69 F.3d 1491, 1498 (9th Cir. 1995) (holding that liability for

depreciation would constitute consequential damages barred by sovereign

immunity where government did not benefit from property that lost value during

seizure period); United States v. Silvers, 932 F. Supp. 702, 705 (D. Md. 1996)

(finding that § 2465 does not permit depreciation costs). There was no waiver

here; by bringing an in rem action, the government has not submitted to in

personam jurisdiction or to a waiver of its sovereign immunity. See One (1) 1979

Cadillac Coup De Ville, 833 F.2d at 999.

       Of course, claims for damages may be brought under Bivens v. Six

Unknown Named Agents, 403 U.S. 388 (1971), but such claims are only

cognizable when brought against federal officials individually.9 At the same time,

claims for equitable relief, such as the return of property or rents received from

property during a constitutional violation, do not impinge upon sovereign

       9
        Notably, in this case, Bivens actions were brought but later voluntarily dismissed by
appellants.

                                               21
immunity. See generally Bowen v. Massachusetts, 487 U.S. 879, 893 (1988).

Alternatively, relief for government torts may be attained under the Federal Torts

Claims Act, 28 U.S.C. § 2671, which is a cause of action that is not before us and

which may be precluded under 28 U.S.C. § 2675 (requiring presentation of the

claim to the federal agency involved) or may be barred by the statute of limitations.

However, these are not avenues that claimants chose to pursue. In short, in this

action, claimants are without further remedy.

                                   CONCLUSION

      For the foregoing reasons, we hold that the district court properly concluded

in this case that appellants were entitled only to a return of net rental proceeds after

the court had subtracted operating expenses including mortgage payment amounts,

repairs and utility expenses.

      AFFIRMED.

                                           22