Court Opinion

ID: 2998278
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:42:23.012875+00
Date Added: 2024-06-11T11:45:36.045925
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 04-3894
KYM LOBZUN,
                                               Plaintiff-Appellant,
                                 v.

UNITED STATES OF AMERICA,
                                              Defendant-Appellee.
                          ____________
            Appeal from the United States District Court
       for the Northern District of Illinois, Eastern Division.
             No. 04 C 4065—Paul E. Plunkett, Judge.
                          ____________
   ARGUED JUNE 10, 2005—DECIDED SEPTEMBER 2, 2005
                    ____________

  Before FLAUM, Chief Judge, and POSNER and KANNE,
Circuit Judges.
  FLAUM, Chief Judge. The Drug Enforcement Administra-
tion (“DEA”) seized a large sum of currency from plaintiff-
appellant Kym Lobzun, and after sending Lobzun notice of
intention to forfeit the money, declared the property
forfeited. Lobzun then filed a motion seeking the return of
the property on the ground that the notice provided by the
government prior to the forfeiture was constitutionally
inadequate. The district court denied the motion, finding
that the notice satisfied due process. Lobzun appeals, and
for the reasons stated herein, we affirm.
                        I. Background
2                                               No. 04-3894

  On September 3, 2003, DEA agents seized $379,931 in
United States currency from Lobzun in Chicago, Illinois. At
the time of the seizure, the currency was in twelve
clear plastic heat-sealed packages. The agents gave Lobzun
a DEA form entitled “Address Acknowledgment/Receipt for
Seized Property.” Among other things, the form listed the
date, amount of money seized, DEA case number, and the
address of the DEA’s chief counsel in Arlington, Virginia.
The form stated that if the DEA sought to forfeit the seized
currency, it would provide Lobzun with written notice. The
form also stated that if Lobzun had any questions about her
notice, she should send them to the office of the DEA’s chief
counsel at the address provided. The form indicates that
Lobzun advised the agents that her address was: 257 W.
King Edward, Vancouver, BC, V54 2J1.
  No charges were ever filed against Lobzun in connect-
ion with the seizure of funds. Lobzun nevertheless re-
tained an attorney in Canada, John Conroy, to represent
her interest in the funds. Conroy advised Lobzun to
notify him immediately and provide him with a copy of any
notice or correspondence she received from the DEA.
  On October 2, 2003, Lobzun told Conroy that she had
received a telephone message from Ken Pavlina, a DEA
agent in the Chicago office. On October 3, 2003, Lobzun
received another message from Pavlina in which he left
his telephone number. On October 6, 2003, Conroy con-
tacted Pavlina by telephone. During this conversation,
Conroy advised Pavlina that he was representing Lobzun in
connection with the September 3, 2003 seizure of funds and
provided Pavlina with his contact information. Pavlina told
Conroy that Lobzun would receive notice of the seizure.

  The DEA sent Lobzun a “Notice of Seizure” dated October
7, 2003. The notice was addressed to “Kym Louise Lobzun
No. 04-3894                                               3

aka Kim Louise Lobzun” and was sent by certified mail to
the address Lobzun had provided at the time of the seizure:
257 W. King Edward, Vancouver, BC V542J1 Canada. The
notice identified the property in question as $379,931.00 in
U.S. Currency seized in Chicago, Illinois on September 3,
2003. The form advised:
    Pursuant to Title 18, U.S.C. Section 983 and Title 19
    U.S.C. Sections 1602-1619, procedures to administra-
    tively forfeit this property are underway. You may
    petition the DEA for return of the property or your
    interest in the property (remission or mitigation),
    and/or you may contest the seizure and forfeiture of the
    property in Federal court. You should review the
    following procedures very carefully.
  The form further explained the procedures for request-
ing remission or mitigation of forfeiture and for contest-
ing the forfeiture. To request remission or mitigation,
Lobzun would have to file a petition with the Forfeiture
Counsel of the DEA within thirty days of her receipt of the
notice. In order to contest the forfeiture in district court
pursuant to 18 U.S.C. § 983, Lobzun had to “file a claim
with the Forfeiture Counsel of the DEA by November 11,
2003.”
  The return receipt for that notice indicates that it was
received at the correct address on November 3, 2003. The
signature in the space designated for “signature of the
addressee,” however, is illegible.
  Lobzun and her attorney had no further contact with the
DEA until December 22, 2003. On that date, Conroy left
Pavlina a message stating that Lobzun had not yet received
notice of the seizure. Pavlina returned the call on December
29, 2003, and left Conroy a message stating that the DEA’s
records showed that Lobzun had received written notice of
the seizure on November 3, 2003.
4                                             No. 04-3894

   As of January 5, 2004, no administrative claims had been
filed, and the DEA administratively forfeited the money,
claiming title pursuant to 19 U.S.C. § 1609(b). Two days
later, on January 7, Pavlina again called Conroy to confirm
that Conroy had received his previous message. Conroy
called back the same day and informed Pavlina that Lobzun
still had not received the notice. He asked Pavlina to
provide him with a copy of the notice that purportedly had
been sent to Lobzun. The next day, January 8, 2004,
Pavlina faxed Conroy a copy of a DEA notice from another
case along with a note stating that he was providing a
“sample of the notice that was sent to Lobzun.” Pavlina
explained that, because “the notice is mailed out of [the
DEA’s] headquarters in Virginia,” he did not have access to
the original notice that was sent to Lobzun. The same day,
the DEA’s Asset Forfeiture Section mailed Conroy copies of
the notice that had been sent to Lobzun and the signed
certified mail return receipt showing that the notice had
been received on November 3, 2003. For reasons that are
unclear from the record, Conroy did not receive these
documents until January 28, 2004.
  After he received the January 8, 2004 fax from Pavlina,
Conroy consulted with another attorney in California,
David Michael. On January 22, 2004, Michael wrote a letter
to Douglas Kash, a senior attorney in the DEA’s Asset
Forfeiture Section, stating that Lobzun had never received
notice regarding the seizure. Michael also requested all
documentation pertaining to the notice and administrative
forfeiture of Lobzun’s property. In response, the DEA sent
Michael copies of the relevant documents. On February 9,
2004, after reviewing these documents, Michael wrote
another letter to Kash advising him that the signature on
the return receipt was not Lobzun’s. Michael asserted that
the DEA should have been aware since November 3, 2003
that Lobzun had not received notice of the forfeiture. He
requested that the DEA immediately set aside the forfeiture
No. 04-3894                                                       5

and permit Lobzun to file an administrative claim pursuant
to 18 U.S.C. § 983 or any other applicable statute or
regulation.
   In a letter dated February 22, 2004, Kash responded that,
although the notice provided by the DEA was legally
adequate, as a matter of discretion, it would grant Lobzun
thirty additional days to file a petition for remission of
the seized currency. The letter referred Michael to the
Notice of Seizure for further information. Lobzun did not
file such a petition with the DEA.1
  On June 16, 2004, Lobzun filed a motion for the return of
property in district court pursuant to Federal Rule of
Criminal Procedure 41(g),2 arguing that the government’s
notice to her did not satisfy the constitutional requirements
of due process. The district court denied Lobzun’s motion,
concluding that, although it would have been appropriate
for the government to begin the notice process anew once it

1
   In her reply brief, Lobzun argues that the government’s
representation that it allowed her an opportunity to file a late
claim is “disingenuous.” She reasons that, because the declaration
of forfeiture had already been made, the sole remedy available to
her was a motion to set aside the administrative forfeiture
pursuant to 18 U.S.C. § 983(e). We need not resolve the question
of whether petitioner could have filed a petition for remission
within the additional thirty-day period referred to in Kash’s letter
because the only question properly before this Court is whether
the original notice of seizure sent by the DEA prior to the
forfeiture comported with due process.
2
  Rule 41(g) provides that “[a] person aggrieved by an unlawful
search and seizure of property or by the deprivation of proper-
ty may move for the property’s return. The motion must be filed in
the district where the property was seized. The court must receive
evidence on any factual issue necessary to decide the motion. If it
grants the motion, the court must return the property to the
movant, but may impose reasonable conditions to protect access
to the property and its use in later proceedings.”
6                                                  No. 04-3894

learned that Lobzun had not received the notice that had
been sent, the government had satisfied the minimum
requirements of due process. Lobzun appeals.

                       II. Discussion
   The federal government is authorized to forfeit “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” as well
as “all proceeds traceable to such an exchange.” 21 U.S.C.
§ 881(a)(6). In order to institute a forfeiture action for
property valued at $500,000 or less, the government must
comply with the notice procedures set forth in 19 U.S.C.
§§ 1607-1609. See 18 U.S.C. § 981(d); 21 U.S.C. § 881(b).
Section 1607(a) of Title 19 requires the appropriate customs
officer to send “written notice of the seizure together with
information on the applicable procedures . . . to each party
who appears to have an interest in the seized article.” The
statute and regulations also require the government to
publish notice of the seizure and intent to forfeit the
property for at least three weeks “in a newspaper of general
circulation in the judicial district” in which the proceeding
for forfeiture is brought. See id.; 21 C.F.R. § 1316.75(a).3 A
person claiming an interest in such property has twenty
days from the date of the first publication of the notice to
file a claim and post a bond. See 19 U.S.C. § 1608. If no
such claim is filed, the property will be declared forfeited
and title will vest in the United States. See § 1609.
  Federal courts have jurisdiction to review whether the
notice provided in the administrative forfeiture proceed-

3
  Although publication is not at issue here, the record indicates
that the notice in this case was published in The Wall Street
Journal.
No. 04-3894                                                 7

ing afforded the claimant constitutional due process. Garcia
v. Meza, 235 F.3d 287, 290 (7th Cir. 2000); Krecioch v.
United States, 221 F.3d 976, 980 (7th Cir. 2000). If the
notice fails to comport with the requirements of due
process, the underlying forfeiture action is void. Garcia, 235
F.3d at 290. We review de novo the issue of whether the
DEA’s notice procedures complied with due process. Chairez
v. United States, 355 F.3d 1099, 1101 (7th Cir. 2004).
  “An elementary and fundamental requirement of due
process in any proceeding which is to be accorded finality is
notice reasonably calculated, under all the circumstances,
to apprise interested parties of the pendency of the action
and afford them an opportunity to present their objections.”
Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306,
314 (1950), quoted in Garcia, 235 F.3d at 290. Absent
exceptional circumstances, written notice of forfeiture by
certified mail to the claimant’s residence satisfies due
process, even if the claimant does not receive actual notice.
Garcia, 235 F.3d at 290; Krecioch, 221 F.3d at 981; see also
Dusenbery v. United States, 534 U.S. 161, 170 (2002) (due
process does not require the government to provide actual
notice). Due process is not satisfied, however, “if the
notifying party knew or had reason to know that the notice
would be ineffective.” Krecioch, 221 F.3d at 980 (holding
that written notice sent to claimant’s residence after the
government knew he had been incarcerated was inade-
quate).
  Lobzun relies on our decision in Garcia in arguing that
the notice in her case was inadequate because the govern-
ment learned prior to the forfeiture that she had not
received actual notice. She asserts that, once the DEA
was informed prior to the forfeiture that she had not
received the notice, it was constitutionally obligated to
resend the notice. In Garcia, we held that written notice
of forfeiture proceedings that was returned to the fed-
eral government as “undeliverable” five days after it was
8                                                No. 04-3894

sent did not meet the minimum requirements of due
process. 235 F.3d at 291. We declined, however, to “impose
an affirmative duty upon the government to seek out
claimants in each case where its initial notice is returned
undelivered or to require actual notice in every case.” Id.
Rather, we envisioned a case-specific approach, following
the due process standard set forth in Mullane, which
requires us to consider all the circumstances of each case to
determine whether the notice provided is reasonably
calculated to apprise the claimant of the impending pro-
ceeding. Id.
  In Garcia, federal agents had seized $21,700 in cash
found on top of a bedroom dresser during a search of the
plaintiffs’ apartment. Id. at 288. The plaintiffs attempted to
reclaim the money through various courses, including filing
an action for conversion in state court as well as a federal
claim under the Federal Tort Claims Act. Id. at 288-89. One
month after the plaintiffs filed their administrative claim
(which they had to exhaust before they could pursue a
federal tort remedy), the Secret Service sent written notice
of impending forfeiture proceedings to each of the potential
claimants via Federal Express overnight delivery. See id. at
289. Five days later, Federal Express returned each of the
letters to the Secret Service indicating that they were
undeliverable. Id. The government never attempted to
resend the notice, and the Secret Service administratively
forfeited the funds several months later. Id. at 289, 291.
  In Garcia, as in this case, it was undisputed that the
notice was adequate at the time it was sent. Id. at 290. The
question was whether the government was required to do
more after it learned from the third-party carrier that the
notice was not received. Id. at 291. We summarized the
facts in that case as follows:
    While the government may have believed at the time of
    sending the FedEx that it was providing ade-
No. 04-3894                                                   9

    quate notice, five days later it was specifically notified
    that the attempted delivery by Federal Express was not
    successful. Thus, three months before the government
    administratively forfeited the plaintiffs’ property, it
    knew for a fact that the plaintiffs had never received
    written notice of the impending proceeding instruct-
    ing them how to correctly petition for the return of their
    property.
Id. Under those specific circumstances, we found that
the unsuccessful written notice provided to the plaintiffs did
not meet the minimum due process standards re-
quired under Mullane. Id.
  This case differs significantly from Garcia in that here, it
is undisputed that the DEA successfully sent notice to the
address provided by Lobzun. The delivery was confirmed by
a third-party carrier through the return receipt signed at
that address. When Lobzun’s attorney told Agent Pavlina
several weeks later that his client claimed not to have
received the notice, Pavlina did not simply ignore Conroy’s
phone call. He followed up by double-checking the DEA
records and again informing Conroy that the notice had
been received at Lobzun’s address on November 3, 2003.
Pavlina received no further response from Lobzun or her
attorney throughout the following week, during which time
the forfeiture took place. The DEA was not obligated to wait
for further communication from plaintiff before proceeding
with the forfeiture.
  In Garcia, we found it significant that the government
was aware that the plaintiffs were actively pursuing their
interest in the forfeited property. See id. (“It is ironic that
the government was involved in extended litigation with the
plaintiffs, pointedly admonishing them to exhaust their
administrative remedy under the [Federal Tort Claim Act],
and yet was unable to provide the plaintiffs with actual
notice of its ongoing forfeiture proceeding.”). In this case, by
10                                               No. 04-3894

contrast, both Lobzun’s and her attorney’s attempts to
pursue Lobzun’s interest in a much larger sum of money
were comparatively lax. Despite the information provided
on her original receipt instructing Lobzun to contact DEA
headquarters in Virginia if she had any questions about her
claim, plaintiff made no such effort. Furthermore, once the
DEA agent informed Lobzun’s attorney that the DEA
records showed that Lobzun had received notice almost two
months earlier, Conroy waited nine days (albeit during the
holiday season) to return the call, and even then did so only
after another follow-up call from the agent. By that time,
the forfeiture had already taken place. Under these circum-
stances, it was reasonable for the DEA to assume that
Lobzun had received the notice but had decided not to file
a claim.
  Plaintiff is essentially seeking a per se rule requiring
the government to resend notice if a potential claimant
later says she did not receive the notice despite written
documentation from a third-party carrier that the orig-
inal notice was received at the correct address. We decline
to adopt such a rule. The Supreme Court has not required
that the government achieve actual notice; “it requires only
that the Government’s effort be ‘reasonably calculated’ to
apprise a party of the pendency of the action.” Dusenbery,
534 U.S. at 170. Moreover, the rule advocated by Lobzun
would provide incentives for potential claimants to delay in
pursuing their claims and then later assert that they never
received proper notice. To avoid this kind of deceptive
behavior, the government would be forced to achieve actual
notice in every case.
  We conclude that the notice provided by the DEA to
Lobzun was “reasonably calculated, under all the circum-
stances” to apprise plaintiff of the pendency of the forfeiture
proceeding and afford her an opportunity to present her
objections. See Mullane, 339 U.S. at 314. The DEA did not
deprive plaintiff of any process she was due.
No. 04-3894                                          11

                  III. Conclusion
  For the foregoing reasons, we AFFIRM the decision of
the district court.

A true Copy:
      Teste:

                     ________________________________
                     Clerk of the United States Court of
                       Appeals for the Seventh Circuit

                 USCA-02-C-0072—9-2-05