Court Opinion

ID: 183517
Source: CourtListenerOpinion
Date Created: 2011-01-25 17:35:27+00
Date Added: 2024-06-11T17:26:03.466188
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
              __________________________

          INNOVAIR AVIATION LIMITED,
                Plaintiff-Appellee,
                           v.
                  UNITED STATES,
                  Defendant-Appellant.
              __________________________

                      2010-5025
              __________________________

    Appeal from the United States Court of Federal
Claims in case no. 96-CV-408, Senior Judge Loren A.
Smith.
              _________________________

               Decided: January 25, 2011
               _________________________

   H. CHRISTOPHER BARTOLOMUCCI, Hogan Lovells US
LLP, of Washington, DC, argued for plaintiff-appellee.
With him on the brief were TY COBB and JOSHUA D.
HAWLEY.

    SHERYL L. FLOYD, Senior Trial Counsel, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, argued for defendant-
appellant. With her on the brief were TONY WEST, Assis-
tant Attorney Director, JEANNE E. DAVIDSON, Director. Of
INNOVAIR AVIATION LIMITED   v. US                       2

counsel on the brief was MARK A. MELNICK, Assistant
Director.
              __________________________

    Before GAJARSA, LINN, and PROST, Circuit Judges.
GAJARSA, Circuit Judge.
    The issue before this court is whether or not a con-
tract right was extinguished as part of a seizure pursuant
to 21 U.S.C. § 881. The United States (“Government”)
appeals the final decision of the United States Court of
Federal Claims (“Court of Federal Claims”), which held
that the Government had taken Innovair Aviation Lim-
ited’s (“Innovair”) property without just compensation
under the Fifth Amendment. Innovair Aviation, Ltd. v.
United States (Innovair III), 72 Fed. Cl. 415, 416 (2006).
Because we find that the Court of Federal Claims lacked
subject matter jurisdiction, we reverse the judgment.
                      BACKGROUND
    Innovair’s Fifth Amendment takings claim against
the Government arises from a lengthy procedural history
spanning the past three decades and involving litigation
in various federal courts. In order to place the issues in
proper perspective, we must review the background and
each of the proceedings in historical sequence.
                              A.
    In the mid-1980s, Bryan Carmichael and Barry Wil-
son investigated a method of upgrading DC-3 planes,
which had been in service for many decades, by replacing
the planes’ piston engines with turboprop engines. Inno-
vair III, 72 Fed. Cl. at 417. Mr. Carmichael and Mr.
Wilson partnered with the Basler Group, a family-owned
business, to perform the conversions. Id. The partner-
ship subsequently established two corporations: one was
3                           INNOVAIR AVIATION LIMITED   v. US

Innovair, a Hong Kong corporation, formed to perform all
foreign sales and conversions, except for those under the
Foreign Military Sales Act (“FMSA”), and the other was
Basler Turbo Conversions, Inc. (“BTC”), a domestic corpo-
ration, formed to perform all domestic sales and conver-
sions, plus those under the FMSA.          Id.   The two
corporations had a cross ownership where Mr. Carmichael
and Mr. Wilson owned 51% of Innovair and 49% of BTC,
while the Basler Group owned 51% of BTC and 49% of
Innovair. Id.
    The Federal Aviation Administration (“FAA”) requires
a Multiple Supplemental Type Certificate 1 (“MSTC”) to
perform an unlimited number of plane conversions com-
mercially. Id. On June 24, 1988, in anticipation that the
FAA would issue an MSTC to BTC, Innovair and BTC
executed a Technology License Agreement (“TLA”) for
Innovair’s exclusive right “to market, manufacture, sell,
and use the [MSTC] and conversion kits based upon it” in
exchange for $1,675,000. Innovair paid BTC $300,000 by
July 1, 1988 and the remaining balance of $1,375,000 on
or after April 15, 1989. In February of 1990, the FAA
granted BTC an MSTC on the DC-3 plane conversion
technology. Innovair III, 72 Fed. Cl. at 417.
     In December of 1988, Innovair and BTC contracted to
sell six planes to Air Colombia. Id. at 418. Air Colombia

    1    Before a developer can make a significant modifi-
cation to an aircraft, the developer must obtain a “one-off
supplemental type certificate” from the FAA that allows
for the modification of a limited number of aircraft.
Innovair III, 72 Fed. Cl. at 417 n.2. The developer must
also perform safety testing and provide the testing data to
the FAA. Id. If the FAA determines that the modification
is safe, the FAA issues a “multiple supplemental type
certificate” that allows for the modification of an unlim-
ited number of aircraft. Id.
INNOVAIR AVIATION LIMITED   v. US                        4

presented itself as a legitimate cargo carrier from Colom-
bia, South America, id., but the Government began to
expose the airline’s ties to a drug cartel around the time
the contracts were executed, Innovair Aviation, Ltd. v.
United States (Innovair II), 58 Fed. Cl. 560, 560 (2003).
Two of the plane contracts were later canceled, and one of
the four remaining contracts was for the conversion and
sale of Aircraft N95BF for $2,800,000. Innovair III, 72
Fed. Cl. at 418.
    In 1990 and 1991, 2 Innovair contracted with United
Technology Corporation (“UTC”), a United States airplane
parts manufacturer. Id. Pursuant to the agreement,
Innovair granted UTC the exclusive right to sell the plane
conversion technology in most of Asia. Id. In return,
UTC committed to purchase from Innovair at least five
conversion kits per year for seven years. Id.
                              B.
     On August 2, 1990, the Government seized the four
Air Colombia planes pursuant to 21 U.S.C. § 881 because
the Government alleged that Air Colombia was under the
control of a drug cartel and that the money Air Colombia
used to pay for the four planes was traceable to drug
proceeds. Id. at 418, 422. Two of the seized planes were
still in the conversion process, including Aircraft N95BF.
Id. at 418.
    On November 29, 1990, the Government brought an
in rem action (“Arizona Litigation”) against the four
planes in the United States District Court for the District
of Arizona (“Arizona Court”). Id. The in rem action was
brought in the Arizona Court because the seizure of the

   2   In 1990, Innovair and UTC had a preliminary
agreement, and in 1991, they had a seven-year agree-
ment. Innovair III, 72 Fed. Cl. at 418 n.6.
5                           INNOVAIR AVIATION LIMITED   v. US

aircraft stemmed from the Government’s investigation of
Burton Golb, who was convicted of money laundering in
the Arizona Court. United States v. Basler Turbo-67
Conversion DC-3 Aircraft, 906 F. Supp. 1332, 1336 (D.
Ariz. 1995); see 21 U.S.C. § 881(j) (“[A] proceeding for
forfeiture under this section may be brought . . . in the
judicial district in which the criminal prosecution is
brought.”). The evidence presented at Mr. Golb’s trial
established that “all of the money received on behalf of
the contracts in the name of Air Colombia . . . was the
proceeds of illegal drug or money laundering transac-
tions.” Basler, 906 F. Supp. at 1336.
    On July 12, 1991, the controller of Basler Flight ser-
vices, also owned by the Basler family, informed the
Government that Innovair used part of the Air Colombia
proceeds to pay for a portion of the TLA. Innovair III, 72
Fed. Cl. at 418. Because of this information, the Govern-
ment added the TLA to the in rem action on July 16,
1991. Id.
    After the TLA was seized, Innovair offered to post a
substitute res bond of $1,250,000 in the Arizona Litigation
to obtain the right to operate under the TLA. In a related
action (“Wisconsin Litigation”) brought in the United
States District Court for the Eastern District of Wisconsin
(“Wisconsin Court”), 3 Innovair had requested a prelimi-
nary injunction requiring BTC to transfer the conversion
technology to Innovair pursuant to the TLA; however, the
injunction was denied by the Wisconsin Court. Because of
the denial of the injunction, Innovair withdrew its substi-
tute res bond offer in the Arizona Litigation on September
17, 1991. On October 18, 1991, Innovair, however, again
offered to post a substitute res bond on terms that Inno-

    3  The specifics of the Wisconsin Litigation are dis-
cussed hereinafter.
INNOVAIR AVIATION LIMITED   v. US                            6

vair contends were “strikingly similar” to terms BTC later
offered. Innovair alleged that the Government ignored its
second proposal that was characterized by the Govern-
ment as “far too little and far too late.”
    On December 9, 1991, the Government and BTC
stipulated to a substitute res bond transferring the TLA to
BTC and extinguishing the rights of all other claimants.
In exchange, BTC posted a substitute res bond amount of
$1,375,000 representing the amount Air Colombia paid to
Innovair and Innovair paid to BTC. Innovair III, 72 Fed.
Cl. at 418. BTC also agreed to finish the conversion of
Aircraft N95BF, which BTC would sell in the open market
with the proceeds being paid to the Government in the
amount equal to Air Colombia’s interest in Aircraft
N95BF. Id. at 418–19.
     Innovair objected to the substitute res bond alleging
eight different reasons: (1) it was willing to post a substi-
tute res bond for the TLA on the same terms as BTC, but
was not afforded the opportunity to do so; (2) the value of
the TLA would be irreparably harmed if it was used by
BTC who lacked international marketing experience; (3)
its contract with UTC would be impaired and potentially
irreparably damaged if BTC was allowed to sell conver-
sions internationally; (4) if it prevailed on its claim for the
return of the TLA, the TLA would not be returned in the
same condition as at the time of seizure because BTC
could have established contractual relationships in Inno-
vair’s exclusive territory; (5) it would be severely damaged
if BTC were allowed to retain profits from international
sales, including from Aircraft N95BF; (6) the bond would
interfere with the Wisconsin Litigation; (7) the bond
amount was miscalculated and artificially inflated; and
(8) the Arizona Court lacked authority to allow BTC to
post bond.
7                          INNOVAIR AVIATION LIMITED   v. US

     Over Innovair’s objection, the Arizona Court approved
the substitute res bond finding that: (1) BTC had standing
to post the bond; (2) Innovair’s standing to object to the
bond was questionable, but the Arizona Court assumed
Innovair had standing for the purpose of deciding the
motion to approve the bond; (3) no equitable ground for
refusing to approve the bond existed; (4) approval of the
bond would not interfere with the Wisconsin Litigation;
(5) the Government’s best interest was protected; and (6)
the “compromise” proposal 4 suggested by Innovair had no
merit and would result in a windfall for Innovair. The
Arizona Court granted summary judgment for the Gov-
ernment in the civil forfeiture action, permitting the
Government to seize, inter alia, the TLA and Aircraft
N95BF. Basler, 906 F. Supp. at 1334.
    Innovair appealed the Arizona Court’s “deter-
min[ation] that Innovair lacked standing” to “assert[] a
claim to both assets.” United States v. Basler Turbo-67
Conversion DC-3 Aircraft, No. 94-16876, 1996 WL 88075,
*1 (9th Cir. Feb. 29, 1996). The Ninth Circuit reversed
the Arizona Court and found that Innovair had standing
as to both the TLA and Aircraft N95BF and was an inno-
cent owner that did not have any knowledge of the source
of Air Colombia’s money. Id. at *1–2. The court also
found that the Government’s transfer of the TLA to BTC
terminated Innovair’s rights in the TLA. Id. at *2.

    4   Innovair’s “compromise” proposal suggested that
the substitute res bond be replaced with an agreement
that granted BTC only the right to market Aircraft
N95BF and Aircraft N510NR, another seized plane.
Innovair contended that the Government would receive
$1,827,807 from the sale of Aircraft N95BF, which would
secure Air Colombia’s funds intended as progress pay-
ments for the plane and would give the Government no
basis for keeping the TLA as security for the funds.
INNOVAIR AVIATION LIMITED   v. US                       8

    On remand, the Arizona Court granted summary
judgment for Innovair, finding the Government’s seizure
of the TLA and Aircraft N95BF wrongful because Inno-
vair was an innocent owner of the assets. Innovair III, 72
Fed. Cl. at 419. However, because the TLA had already
been transferred to BTC by the Government and could not
be retransferred to Innovair, the Arizona Court awarded
Innovair $1,939,310 plus prejudgment interest as com-
pensation for the wrongful seizure of the TLA. According
to the Arizona Court, $1,939,310 represented Innovair’s
share of the cost of obtaining another MSTC.
    The Government appealed and argued that the Ari-
zona Court lacked jurisdiction to award any amount in
excess of the substitute res bond amount, while Innovair
cross-appealed and argued that the Arizona Court under-
valued the TLA. In the case’s second appeal, the Ninth
Circuit vacated in part and remanded in part because it
determined that the Arizona Court had jurisdiction over
the TLA only up to the amount of the substitute res bond,
which was $1,375,000, plus prejudgment interest. United
States v. Basler Turbo-67 Conversion DC-3 Aircraft, Nos.
99-15369, 00-15090, 2000 WL 1770611, *1 (9th Cir. Nov.
30, 2000).
    On remand for the second time, in the third proceed-
ing the Arizona Court awarded Innovair the substitute res
bond amount plus prejudgment interest, totaling
$1,783,879.25, for the TLA. The order resulting from this
third proceeding was not appealed by Innovair.
                              C.
    In May of 1991 while the Arizona Litigation was
pending, Innovair and BTC brought separate actions
against each other in the Wisconsin Court. The parties
asserted numerous causes of action against each other,
including breach of fiduciary duty and breach of contract.
9                            INNOVAIR AVIATION LIMITED   v. US

Innovair moved for a preliminary injunction requiring
BTC to provide Innovair with information about DC-3
plane conversion technology. Carmichael v. Basler Turbo
Conversions, Inc., No. 91-3278, 1992 WL 9867, *1 (7th Cir.
Jan. 24, 1992). The court denied the motion and consoli-
dated the two actions. Innovair appealed the Wisconsin
Court’s denial of a preliminary injunction. Id. The Sev-
enth Circuit vacated the Wisconsin Court’s denial for lack
of detailed findings and remanded the matter to the
district court for further proceedings. Id. at *5.
    On September 23, 1993, Innovair and BTC settled all
of their claims against each other in the Wisconsin Litiga-
tion. The settlement agreement required BTC to pay
$2,750,000 to Innovair in exchange for Innovair relin-
quishing its rights to the TLA. As part of the agreement,
Innovair retained the right to assert a claim against the
Government for the seizure of the TLA.
                             D.
    Following the settlement of the Wisconsin Litigation,
but concurrent with the then-pending Arizona Litigation,
Innovair filed the present action in the Court of Federal
Claims on July 10, 1996. Innovair III, 72 Fed. Cl. at 419.
Innovair alleged that the Government’s seizure of the
TLA without just compensation violated its Fifth
Amendment property right. Id. The trial court stayed the
action pending resolution of the second Ninth Circuit
appeal in the Arizona Litigation. Id.
    Upon lifting the stay, the trial court requested brief-
ing on “why this case should not be dismissed in light of . .
. the Federal Circuit’s . . . decision in Vereda LTDA v.
United States, 271 F.3d 1367 (Fed. Cir. 2001).” Innovair
Aviation, Ltd. v. United States (Innovair I), 51 Fed. Cl.
569, 569 (2002). Vereda held that the Court of Federal
Claims’ Tucker Act jurisdiction was preempted by the
INNOVAIR AVIATION LIMITED   v. US                        10

comprehensive statutory scheme in the Controlled Sub-
stances Act (“CSA”) for reviewing an in rem forfeiture.
Vereda, 271 F.3d at 1375. The trial court “carefully
reviewed the Court of Appeals’ Vereda opinion and [wa]s
fairly well convinced it must dismiss this case.” Innovair
I, 51 Fed. Cl. at 569. However, after briefing and oral
argument, the court found that it had subject matter
jurisdiction over Innovair’s Fifth Amendment takings
claim because Innovair did not bring a substantive chal-
lenge to the Government’s seizure of the TLA. Innovair
II, 58 Fed. Cl. 560. The court held that Innovair demon-
strated “that the transfer of its TLA was a taking outside
the scope of Vereda.” Id. at 563; see Vereda, 271 F.3d
1367.
    After the trial court found it had jurisdiction over In-
novair’s takings claim, the court granted summary judg-
ment for Innovair because the forfeiture of the TLA, of
which Innovair was an innocent owner, resulted in a
taking due just compensation under the Fifth Amend-
ment. Innovair III, 72 Fed. Cl. at 425. In reaching its
holding, the trial court first found that Innovair held a
valid property interest in the TLA in the form of contract
rights as of the time of the seizure and maintained that
interest until the property’s forfeiture. Id. at 421. The
trial court also found that Innovair’s rights were not
terminated by either a termination letter BTC sent to
Innovair because BTC failed to complete the termination
process, or by the settlement of the Wisconsin Litigation
because Innovair expressly retained the right to bring suit
against the Government on the TLA. Id. at 420–21.
Second, the trial court determined that the Government’s
actions constituted a per se taking because the Govern-
ment permanently deprived Innovair of the TLA by
transferring the TLA to BTC. Id. at 422–25. The court
11                           INNOVAIR AVIATION LIMITED   v. US

further found that the substitute res bond amount did not
justly compensate Innovair for the TLA. Id. at 425.
    After the trial court entered its summary judgment
order, the Government filed a motion for reconsideration
based on AmeriSource v. United States, 525 F.3d 1149
(Fed. Cir. 2008). Innovair Aviation, Ltd. v. United States
(Innovair IV), 83 Fed. Cl. 105, 106 (2008). In Ameri-
Source, this court held that the Government’s seizure and
retention of property under its police power does not
constitute a “public use” within the meaning of the Fifth
Amendment Takings Clause, regardless of whether the
property owner is innocent. 525 F.3d at 1152–57. The
trial court denied the motion and distinguished Ameri-
Source because the seized TLA was not an instrument in
the alleged criminal activity and was not subject to forfei-
ture as held by the Ninth Circuit. Innovair IV, 83 Fed. Cl.
at 107.
    Next, the trial court determined what just compensa-
tion Innovair was due. Innovair Aviation, Ltd. v. United
States (Innovair V), 83 Fed. Cl. 498 (2008). The court
awarded damages to Innovair for the value of the TLA at
the time of the taking based on the discounted cash flow
method with a 10% discount rate. Id. at 502, 506. After
the parties submitted calculations of the total damages in
this case, the court awarded Innovair $16,100,741. The
award amount consisted of $6,122,468, which is the
$7,497,468 that represented the net income value of the
discounted TLA as of the date of taking minus the
$1,375,000 previously awarded to and received by Inno-
vair, and $9,978,273, which is the interest through the
date of final judgment on September 30, 2009.
    The Government appeals the trial court’s decisions,
raising three specific issues: (1) whether the court erred in
exercising subject matter jurisdiction over Innovair’s Fifth
INNOVAIR AVIATION LIMITED   v. US                         12

Amendment takings claim, (2) whether the court erred in
finding that the transfer of the TLA constituted a taking
for public use without just compensation, and (3) whether
the court erred in applying a 10% discount rate to calcu-
late the fair market value of the TLA. We have jurisdic-
tion under 28 U.S.C. § 1295(a)(3).
                       DISCUSSION
    In reviewing the judgments of the Court of Federal
Claims, this court reviews legal conclusions de novo.
Holland v. United States, 621 F.3d 1366, 1374 (Fed. Cir.
2010); Suess v. United States, 535 F.3d 1348, 1359 (Fed.
Cir. 2008); Bass Enters. Prod. Co. v. United States, 133
F.3d 893, 895 (Fed. Cir. 1998); Columbia Gas Sys., Inc. v.
United States, 70 F.3d 1244, 1246 (Fed. Cir. 1995).
Whether the Court of Federal Claims has jurisdiction is a
question of law. Vereda, 271 F.3d at 1374; Adkins v.
United States, 68 F.3d 1317, 1321 (Fed. Cir. 1995).
    The Government contends that the trial court lacked
jurisdiction over Innovair’s suit. For the following rea-
sons, we agree.
    Initially, the trial court itself was “fairly well con-
vinced it must dismiss this case.” Innovair I, 51 Fed. Cl.
at 569. In the court’s show cause order requesting brief-
ing on how this case was distinguishable from the Vereda
case, the trial court correctly explained:
   Congress created a comprehensive administrative
   and judicial review of government forfeitures un-
   der 21 U.S.C. § 881 and 18 U.S.C. § 981. In
   Vereda, the Federal Circuit made it clear that
   “[t]his statutory scheme evinces Congress’ intent
   to preempt any Tucker Act jurisdiction over a
   money claim that challenges the propriety of an in
   rem administrative forfeiture of property seized . .
13                            INNOVAIR AVIATION LIMITED   v. US

     . .” While the Plaintiff does not challenge the pro-
     priety of the administrative forfeiture, it instead
     challenges the award it received for the property
     taken. However, the Federal Circuit also made it
     clear in Vereda that this Court cannot “entertain a
     taking[s] claim that requires the court to ‘scruti-
     nize the actions of another tribunal.’” While the
     Plaintiff here does not ask this Court to overturn
     the forfeiture proceedings of the [Arizona Court],
     it is asking the Court to find that the district court
     reached a wrong decision as to the value of the
     [TLA] that the government took from Innovair.
     This the Court cannot do, nor can it review the
     forfeiture decision of the district court.
Id. (citations omitted); see Vereda, 271 F.3d 1367.
     However, after receiving the parties’ briefing and
hearing oral arguments, the court found that it had
subject matter jurisdiction. Innovair II, 58 Fed. Cl. at
562–63. The trial court reviewed Vereda and the facts
and allegations surrounding Innovair’s claim and found
that the only distinguishing fact between the two cases
was that Innovair was not bringing a substantive chal-
lenge to the Government’s seizure of the TLA, while the
claimant in Vereda attacked the merits of the forfeiture.
Id.; see Vereda, 271 F.3d at 1375.
    Contrary to the trial court’s finding, this court’s deci-
sion in Vereda is controlling and directly on point. See
Vereda, 271 F.3d 1367. In Vereda, the Drug Enforcement
Administration (“DEA”) seized a plane in which Vereda,
Ltda. (“Vereda”) had an interest because there was prob-
able cause to believe that the plane was used to transport
drugs and had been purchased with drug proceeds. Id. at
1370. After the DEA declared the airplane administra-
tively forfeited, Vereda brought suit alleging that the
INNOVAIR AVIATION LIMITED   v. US                           14

DEA’s forfeiture constituted “a compensable taking under
the Fifth Amendment.” Id. This court held that the trial
court lacked jurisdiction in Vereda “because relevant
statutes provide for a comprehensive administrative and
judicial system to review the in rem administrative forfei-
ture of property seized pursuant to 21 U.S.C. § 881.” Id.
at 1375. Thus, the Court of Federal Claims’ “Tucker Act
jurisdiction over the subject matter covered by the scheme
[wa]s preempted.” Id. The court found that the CSA’s
statutory scheme provided for complete review of “(i) the
merits of a seizure and forfeiture of property initiated
under 21 U.S.C. § 881 and (ii) any related due process
claims.” Id.
    In addition, this court held in Allustiarte v. United
States, 256 F.3d 1349, 1351 (Fed. Cir. 2001) that the
Court of Federal Claims lacked jurisdiction to entertain a
takings claim that “would have to determine whether
appellants suffered a categorical taking of their property
at the hands of the . . . courts.” In Allustiarte, debtors
who filed for bankruptcy alleged that “the losses they
suffered as a result of the bankruptcy courts’ approval of
the actions of the [court-appointed] bankruptcy trustees
constitute[d] takings of which they [we]re entitled to just
compensation.” Id. at 1350–51. This court found that
exercising jurisdiction “would require the court to scruti-
nize the actions of the bankruptcy trustees and courts.”
Id. at 1352.
    In this case, the CSA’s comprehensive statutory
scheme vested in the Arizona Court exclusive jurisdiction
to approve the substitute res bond, which necessarily
included the extinguishing clause. See Vereda, 271 F.3d
at 1375 (“Congress created a statutory scheme that pro-
vides a claimant . . . with the ability to challenge the
merits of an in rem forfeiture . . . before a district court.”)
15                          INNOVAIR AVIATION LIMITED   v. US

    Before the Arizona Court, Innovair had the opportu-
nity to object to the substitute res bond and did object on
numerous grounds. However, Innovair did not object to
the clause in the substitute res bond that extinguished all
of the rights of other claimants. See J.A. 69–70 (“[A]ny
claimant or potential claimant receiving notice of this
Stipulated Substitute Res Bond[] shall have no claim to
the Technology Licensing Agreement.”). Innovair’s failure
to object is particularly telling because Innovair clearly
anticipated that it might be found “entitled to return of
the [TLA]” when it objected to the substitute res bond on
the ground that “if BTC [wa]s allowed to post a bond for
the [TLA], the government w[ould] not be able to return
Innovair’s asset in the same condition as it was at the
time of the seizure.” Because Innovair anticipated that it
might later prevail as an innocent owner after BTC
posted bond, it was on notice that it should contest the
approval of the bond on the ground that the approval
would permanently deprive Innovair of the TLA. Thus,
any potential relief for Innovair should have been brought
through the Arizona Court, where Innovair could have
objected to the extinguishing clause and then appealed if
the objection was overruled.
    Innovair argues that it was deprived of its interest in
the TLA when the Arizona Court approved the substitute
res bond. If the Arizona Court’s approval allowed a taking
of the TLA to occur, Innovair should have appealed that
approval to the Ninth Circuit to protect its interest in the
TLA. However, Innovair failed to appeal the Arizona
Court’s approval of the substitute res bond, including the
extinguishing clause, to the Ninth Circuit. See Basler,
1996 WL 88075, at *1. Innovair limited its first appeal to
the Arizona Court’s finding that Innovair lacked standing
to challenge the substitute res bond, id., and its second
appeal to the Arizona Court’s valuation of the TLA, Ba-
INNOVAIR AVIATION LIMITED   v. US                           16

sler, 2000 WL 1770611, at *1. Innovair’s failure to appeal
the approval of the bond to the Ninth Circuit is disposi-
tive of its claim and extinguished jurisdiction of the Court
of Federal Claims over Innovair’s claim.
    As this court held in Vereda, the Court of Federal
Claims “does not have jurisdiction to review the decision
of district courts” and “cannot entertain a taking[s] claim
that requires the court to ‘scrutinize the actions of’ an-
other tribunal.” Vereda, 271 F.3d at 1375 (quoting Al-
lustiarte, 256 F.3d at 1352). Indeed, the Court of Federal
Claims “does not have jurisdiction over [a] taking[s] claim
requiring a determination of the correctness of the admin-
istrative forfeiture.” Id. at 1375. Innovair admits that in
this action against the Government it is seeking just
compensation for the full value of the TLA. Consideration
of Innovair’s claim necessarily involves a collateral attack
on the Arizona Court’s approval of the substitute res bond,
which encompassed determining whether the amount was
the fair value of the TLA. See 19 U.S.C. § 1606 (“The
appropriate . . . officer shall determine the domestic value,
at the time and place of appraisement, of any . . . mer-
chandise . . . seized . . . .”); 21 C.F.R. § 1316.98 (“Where a
conveyance is being forfeited in a judicial proceeding for a
drug-related offense, the owner may obtain release of the
property by filing a substitute res bond with the seizing
agency. The conveyance will be released to the owner
upon the payment of a bond in the amount of the ap-
praised value of the conveyance . . . .”). In fact, it is clear
from the trial court’s opinion that its holding is premised
on its belief that the bond amount did not reflect the fair
market value of the TLA. Innovair, 72 Fed. Cl. at 425.
Although the United States Attorney’s Office never for-
mally appraised the TLA, the Arizona Court’s approval of
the substitute res bond necessarily included a finding that
the bond amount was the fair value of the TLA. Thus, the
17                          INNOVAIR AVIATION LIMITED   v. US

trial court’s finding that the bond amount was not just
compensation is a collateral attack on the Arizona Court’s
approval of the bond amount. Vereda prohibits precisely
such a collateral attack.
    Vereda challenged “the substantive validity of the for-
feiture,” but “the Court of Federal Claims does not have
authority to determine whether the airplane . . . met the
criteria for forfeiture.” Vereda, 271 F.3d at 1374–75.
Innovair argues that Vereda is distinguishable because
the merits of the Government’s forfeiture are not at issue
in this case, as Innovair has already challenged the
Government’s forfeiture and prevailed at the Ninth Cir-
cuit. See Basler, 1996 WL 88075. Although Innovair is
correct that the TLA was forfeited despite not being
forfeitable, Innovair was already granted appropriate
compensation for the wrongful forfeiture when the Ari-
zona Court awarded Innovair the substitute res bond
amount. See 21 U.S.C. § 881(a)(4)(C) (“A party who is
innocent of wrongdoing [may] not have its interest in
property forfeited.”).
    Innovair’s disagreement with the Arizona Court’s
valuation of the TLA in the substitute res bond is a sepa-
rate issue. The substitute res bond amount was what the
Government had in its possession in exchange for the TLA
as a result of the Arizona Court’s valuation of the TLA.
The Ninth Circuit found that the Arizona Court had
jurisdiction only up to the bond amount, and its belief
concerning the fair value of the TLA is irrelevant. Basler,
1996 WL 88075, at *1–*2 (“[W]hat Innovair paid [for the
TLA] is not necessarily, or even particularly, a proper
measure of what its rights were worth.”). Further, al-
though Innovair argued that the Arizona Court underval-
ued the TLA in the second appeal to the Ninth Circuit,
Innovair previously argued in its objection to the substi-
tute res bond at the Arizona Court that the bond amount
INNOVAIR AVIATION LIMITED   v. US                        18

was “artificially inflated.” It cannot now complain that
the TLA was undervalued by the Arizona Court.
     Notwithstanding Innovair’s failure to object to the
substitute res bond’s extinguishing clause at the Arizona
Court or to appeal the bond’s approval to the Ninth Cir-
cuit, the CSA’s comprehensive statutory scheme limits
Innovair’s relief to that obtainable through the district
court, not the Court of Federal Claims. See Vereda,
271 F.3d at 1375. Innovair’s failure to challenge the
extinguishing clause of the TLA is dispositive and limits
its recovery.
    For the foregoing reasons, we conclude that Innovair
has not asserted a claim within the Court of Federal
Claims’ jurisdiction. Because the trial court improperly
exercised jurisdiction over Innovair’s claim, we reverse.
Thus, we need not consider the Government’s other
appeal grounds, namely whether the transfer of the TLA
constituted a taking for public use without just compensa-
tion and whether a 10% discount rate used to calculate
the fair market value of the TLA was improper.
                       CONCLUSION
    Because Congress provided a comprehensive adminis-
trative and judicial system in the district courts to review
the in rem forfeiture of property seized pursuant to
21 U.S.C. § 881, we hold that the Court of Federal Claims
did not have subject matter jurisdiction over this case and
reverse.
                       REVERSED
No costs.