reply brief pdf-a
TRANSCRIPT
-
8/2/2019 Reply Brief PDF-A
1/26
No. 11-35923
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT_______________________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee, D.C. No. 3:10-cv-00097-MPOU.S. District Court for Oregon,Portland
vs.
$11,500 IN UNITED STATESCURRENCY, in rem, $2,971 INUNITED STATES CURRENCY, in rem,
Defendants,
and
CHARLES GUERRERO,
Claimant-Appellant
______________________________
Appeal from the United States District Court
for the District of Oregon_______________________________
REPLY BRIEF OF APPELLANT
_______________________________
Frank de la Puente, Esq.
1610 12th Street SESalem, Oregon 97302
VOICE (503) 851-1877; FAX 364.2655
Email: [email protected]
Attorney for Claimant-Appellant
-
8/2/2019 Reply Brief PDF-A
2/26
-
8/2/2019 Reply Brief PDF-A
3/26
LIST OF AUTHORITIES
SUPREME COURT CASES
Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99 (1957). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Foman v. Davis, 371 U.S. 178 (1962). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 6
CIRCUIT COURT CASES
United States v. $ 49,000 Currency, 330 F.3d 371 (CA5 2003). . . . . . . . . . . . . . . . . . 18
United States v. $639,558 in U.S. Currency, 293 U.S. App. D.C. 384 F.2d 712 (CA
DC 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
United States v. $639,558, 955 F.2d 712 (D.C. Cir.1992). . . . . . . . . . . . . . . . . . . . . . . 15
United States v. $874,938.00 in U.S. Currency, 999 F.2d 1323 (CA9 1993). . . . . . . 9
United States v. Funds in the Amount of Thirty Thousand Six Hundred Seventy
Dollars ($30,670.00), 403 F.3d 448 (CA7 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
United States v. Mondragon, 313 F.3d 862 (CA 2002). . . . . . . . . . . . . . . . . . . . . . . . . 18
United States v. US Currency, $ 30,060, 39 F.3d 1039 (CA9 1994). . . . . . . . . . . . . . 15
DISTRICT COURT CASES
FEDERAL STATUTES
18 U.S.C. 983. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-10, 12
FEDERAL RULES OF CIVIL PROCEDURE
FRCP 12(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
FRCP 15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ii
-
8/2/2019 Reply Brief PDF-A
4/26
Supplemental Rule of Civil Procedure G(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 4, 7
Supplemental Rule of Civil Procedure G(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
OTHER AUTHORITIES
iii
-
8/2/2019 Reply Brief PDF-A
5/26
INTRODUCTION
In his opening brief Claimant Charles Guerrero argued that (1) where Claimant
properly asserted a possessory interest in his claim, he was not required to assert a
bailee interest, and accordingly the district court erred by striking Claimants motion
for failure to assert a bailee interest, (2) the court erred by not granting summary
judgment to Claimant on the issue of Art. III standing, (3) the court erred by not
ordering a return of the money to Claimant, after the court found that the government
did not provide timely notice of the seizure for forfeiture of the $11,500 and the
$2,971, and (4) the court erred by finding that the $11,500 was forfeitable to the
government.
In response, the government argues that Claimant lacked statutory standing on
the ground that Claimant was a bailee of the $11,500 and failed to assert a claim as a
bailee. The government cites no authority for its proposition that a bailee must assert
a bailee interest in his claim for standing in a forfeiture proceeding. As to the issue
of Art. III standing, the government argues that the issue is moot by the fact that the
district court found that Claimant lacked statutory standing.
The government advances an argument on the issue of timeliness of the notice
of forfeiture, viz., that the notice was timely, though the government did not appeal
1
-
8/2/2019 Reply Brief PDF-A
6/26
-
8/2/2019 Reply Brief PDF-A
7/26
-
8/2/2019 Reply Brief PDF-A
8/26
government is essentially arguing that in a transfer of possession between spouses
such as here, when a person cautions his/her spouse to keep property safe, the transfer
is a bailment in the legal sense as that of a transfer between a bank and a customer
who uses the banks safe deposit box, or between an opera house and each patron who
entrusts his coat to the coat check room for safekeeping while watching the opera, in
each instance the parties clearly understand that a return of the property is expected.
The district courts holding is in error, because the evidence showed that
Claimant Guerrero properly asserted a possessory interest in his Rule G claim. There
was no bailee-bailor relationship between Claimant and Rosalie. Even if Claimant
was a bailee in the legal sense of the term, neither the court nor the government has
cited any authority for the proposition that a claimant who obtains possession of
property as a bailee is required to plead a bailee interest.
Along with its other arguments regarding a bailor-bailee relationship between
Rosalie Guerrero and Claimant, the governments argument that Claimants interest
was that of a bailee with Rosalie as the bailor, infers that Claimant had statutory
standing as a bailee. But, that acquiescence of Claimants standing conflicts with the
governments distorted reading of Rule G that because Claimant failed to plead a
bailees interest, Claimant does not have standing. The governments argument that
4
-
8/2/2019 Reply Brief PDF-A
9/26
a claimant should forfeit its property to the government on a technicality has no place
in American law regarding property rights. The government should not be permitted
to deprive someone of his interest in property on a technicality which would operate
to strike a claimants statutory claim. See Foman v. Davis, 371 U.S. 178, 181 (1962)
(it is too late in the day and entirely contrary to the spirit of the Federal Rules of Civil
Procedure for decisions on the merits to be avoided on the basis of mere
technicalities).
Claimants Rule G claim precisely and affirmatively asserted his possessory
interest and it adequately put the government on notice that Claimant had a legitimate
basis for claiming the $11,500 seized for forfeiture.
B. The governments motion to strike was moot, because the court ruled
on claimants motion to dismiss, before ruling on the motion to strike.
Rule G(8) provides under subsection (c) (Motion to Strike) that a motion to strike
must be decided before any motion by the claimant to dismiss the action. Rule
G(8)(c)(ii)(A). The procedural inference is that the government is barred from
moving to strike a claimants claim after the court rules on a claimants motion to
dismiss.
Here, on 3-15-10, Claimant filed a motion to dismiss under FRCP 12(b). ER 3;
5
-
8/2/2019 Reply Brief PDF-A
10/26
(# 8). [# refers to document number in the district court as indicated in the Court
Docket Sheet] On 5-21-10, the government filed its response to Claimants 12(b)
motion. ER 4; (# 17). On 7-28-10, the court ruled on Claimants 12(b) motion. ER
5; (#29).
On 10-22-10, Claimant filed a second motion under FRCP 12(b). ER 5; (# 36).
On 11-5-10, the government filed its response to Claimants 12(b) motion. ER 6; (#
41). On 12-8-10, the court ruled on Claimants 12(b) motion. ER 6; (#42). On 1-18-
11, the government filed its motion to strike. ER 6; (#45).
The government thus filed a response to each motion to dismiss, before filing its
motion to strike Claimants claim. By those responses, the government caused the
court to rule on Claimants motions to dismiss, before the governments motion to
strike. Thereafter, the government was barred from filing its motion to strike.
C. The court could have sua sponte granted leave to amend the claim.
Under FRCP 15, when a complaint is dismissed for failure to state a claim for
relief, a court has discretion to allow a plaintiff to amend his pleading. FRCP 15 has
two overall mandates that judges must follow: (1) liberally give leave, and (2) use
leave as a tool for justice. See Foman v. Davis, 371 U.S. 178 (1962). The Federal
Rules reject the approach that pleading is a game of skill in which one misstep by
6
-
8/2/2019 Reply Brief PDF-A
11/26
counsel may be decisive to the outcome and accept the principle that the purpose of
pleading is to facilitate a proper decision on the merits. Conley v. Gibson, 355 U.S.
41, 48, 78 S.Ct. 99, 103 (1957). The Rules themselves provide that they are to be
construed to secure the just, speedy, and inexpensive determination of every action.
Id.
Here, the district court concluded that Claimants Rule G(5) claim should be
stricken, because, according to the court, Claimant was a bailee who failed to name
a bailor. ER 25-26. At that juncture, the court should have used its discretionary
authority tosua sponte grant to Claimant leave to amend his claim. After all, the court
wrote that Claimant did not move to amend, ER 15, (# 73) (Order page 12),
inferring that the court would have granted leave to amend upon a motion by
Claimant. Procedurally, however, when the district court struck Claimants Rule G(5)
claim as to the $11,500, the court determined that Claimant had no standing as to the
$11,500. Without standing, Claimant could not move to amend his claim.
7
-
8/2/2019 Reply Brief PDF-A
12/26
II. ONCE THE COURT FOUND THAT THE GOVERNMENT FAILED
TO TIMELY SERVE NOTICE OF THE SEIZURE, THE COURT
WAS REQUIRED TO ORDER THE RETURN OF THE PROPERTY
TO CLAIMANT.
A. The government did not appeal the finding of untimeliness of notice.
The district court found that the government was untimely in providing to
Claimant notice of the seizure for forfeiture of the $11,500 and of the $2,791. ER 30
(# 73, Order at p. 15). In its brief, the government argues that the government timely
complied with the notice requirements of 18 U.S.C. 983 (a)(1)(A)(i) (notice of
seizure must be given within sixty (60) days of any seizure). Gov Brief pp 20-22.
However, the government did not cross-appeal the courts ruling and the appellate
panel here should leave undisturbed the district courts finding of untimely notice.
B. Federal law requires the return of the $11,500 and the $2,971.
Federal law under18 U.S.C. 983(a)(1)(A)(ii) requires the return of the money
to Claimant where the government seizes for forfeiture a persons property and fails
to give timely notice of the seizure. Federal law does not condition the return of that
property to the aggrieved person on his ability to prove that he has been prejudiced by
the governments failure to provide him with timely notice. The government reads
983(a) as providing that where notice of a seizure is untimely, the government is not
8
-
8/2/2019 Reply Brief PDF-A
13/26
required to return property where a claimant does not suffer any prejudice. Gov Brief
p. 22. As support for this reading of 983(a) the government cites United States v.
$874,938.00 in U.S. Currency, 999 F.2d 1323, 1325 (CA9 1993), a case decided
before CAFRA, in which the government had provided timely notice of a seizure, but
had delayed in filing a judicial forfeiture action. The Ninth Circuit employed a four-
factor due process analysis to find that the delay was occasioned by the government
and by the claimant, and did not violate due process; there was no issue about failure
to meet a statutory deadline regarding notice to potential claimants. The case does not
support the governments position that where the government seizes property for
forfeiture under CAFRA, and fails to provide notice, the government need not return
the property. The government has cited no authority for its reading of 983(a).
When it comes to potential deprivation of property, the Ninth Circuit must
enforce harshly the consequences of untimely notice in a civil forfeiture context under
CAFRA. Had Claimant failed to timely file a claim, the government would not be
as forgiving as it now asks this appellate court to be.
If the Court of Appeals affirms the district courts refusal to order the government
to return the property to Claimant, then the government will never have to comply
with 18 U.S.C. 983 (a)(1)(A)(ii) (requiring the return of the money for untimely
9
-
8/2/2019 Reply Brief PDF-A
14/26
noticing). The government will always be allowed to ignore the notice requirement
so long as it files its complaint for forfeiture within the time allowed by CAFRA. A
federal court must not allow that re-writing of that which Congress enacted, and this
court should order the immediate return Claimants property.
III. THE $11,500 WAS NOT PROCEEDS OF NOR TRACEABLE TO AN
EXCHANGE OF A CONTROLLED SUBSTANCE.
A. Government must prove the 983(c) substantial connection.
Section 983(c)(3) of 18 U.S.C. (General rules for civil forfeiture proceedings)
provides that if the government's theory of forfeiture is that the property was used to
commit or facilitate the commission of a criminal offense, or was involved in the
commission of a criminal offense, the government shall establish that there was a
"substantial connection" between the property and the offense. 18 U.S.C.
983(c)(3)(emphasis provided)
The spirit of 983(c) is that any property seized for forfeiture must be connected
in a substantial way to the commission of a criminal offense. It is obvious that an
allegation such as the one here that property seized for forfeiture represents proceeds
traceable to a criminal offense is an allegation that the property is substantially
connected a criminal offense. Accordingly, there is no need to specifically require
10
-
8/2/2019 Reply Brief PDF-A
15/26
that proceeds be substantially connected to the offense. The requirement is
understood.
Where the allegation is that the property facilitated a criminal offense, federal law
specifically requires proof of a substantial connection, because facilitate connotes
a broader and vaguer connection between the property and an offense. Without that
requirement, then under a facilitation theory of a civil forfeiture proceeding, the
danger of overreaching by the government would be present. A facilitation theory
can bring into the scope of a forfeiture proceeding property which is remotely
connected to the criminal offense. For example, in a proceeding for forfeiture of a
house, if the allegation is that the house was used as a place for an offender to eat
meals and sleep, but not to sell drugs, the government could argue that the house
facilitated the commission of the offense, but would be hard-pressed to connect the
house to the offense in a substantial way as where the offender used the house to store,
manufacture or as a place out which to sell drugs. But for 983(c), the government
would be free to seize and obtain forfeiture of property which is remotely connected
to a criminal offense. Claimant submits the above argument as the reason why
Congress may have included in 983(c) the specific requirement that the government
must prove the existence of a substantial connection when alleging that property
11
-
8/2/2019 Reply Brief PDF-A
16/26
subject to forfeiture facilitated the commission of an offense.
Here, at summary judgment, the court read 983(c) as requiring the government
to prove a substantial connection between the $11,500 and drug trafficking. Indeed,
the district court wrote:
The government opposes claimants motion, and moves for summary
judgment in its favor, on the basis that there is compelling evidence in the
record to refute claimants contention that the funds came from legitimate
sources--evidence which undeniably establishes the substantial connection
between the seized currency and illegal drug activity. I agree with the
governments position as to the $11,500 only. ER 32.
In his opening brief, Claimant has argued that the district court erred in finding
that the government had established the 983(c) substantial connection. In response,
the government argues that it proved its case under its proceeds theory, i.e., that the
money seized was forfeitable because, it represent[ed] proceeds traceable to an
exchange for controlled substances. Gov Brief at p. 26. Accordingly, the
government argues under its proceeds theory the government was not required to
prove the existence of a substantial connection between the money and illegal activity.
The government is mistaken.
If the government chose to prove only its theory that the money was proceeds
traceable to an exchange for a controlled substance, then, by the above reasoning, the
12
-
8/2/2019 Reply Brief PDF-A
17/26
-
8/2/2019 Reply Brief PDF-A
18/26
Claimant stated the insurance settlement was a result of a car accident, and that
Rosalie was a passenger in the car. ER 47. Those facts were undisputed, and squarely
controverted the governments speculation that the money represented proceeds
traceable to an exchange for a controlled substance. Speculation is not evidence.
Summary judgment should have ben granted to Claimant Guerrero.
C. Neither Nikkos sniff, claimants history of selling drugs, or
$100" bills support the governments proof.
(1) Nikko the Drug-Detection Dog
The government argues that Officer Groshong confirmed that the dog alerted to
the odor of narcotics when it sniffed the $11,500 seized from Woods trunk. Gov
Brief at P. 32. The government is wrong: Groshong confirmed that Nikko alerted;
Groshong did not write the Nikko alerted to the odor of drugs. The $11,500 was not
seized from Woods trunk; Agent Gino had Wood place the money in a bag, seized
the money and took it to the basement of the jail to have Nikko sniff it. ER 3 (# 1,
Affi SSA Gino 13-14).
At summary judgment Claimant pointed out to the court that Groshong did not
write that Nikko alerted to the odor of drugs in that Nikko did not bite and claw at the
bag containing the $11,500 as Nikkos handler had stated that Nikko would do when
14
-
8/2/2019 Reply Brief PDF-A
19/26
alerting to the presence of narcotics. ER 69; Gino Dec in Support of Gov MSJ (#67),
Ex. 2. In his declaration, (#67) at paragraph 4, Agent Gino stated Officer Groshong
informed me that Nikko alerted to the odor of narcotics; if offered for to prove that
Nikko had alerted to the odor of drugs, that statement was inadmissible hearsay and
the district court should have precluded it from the evidence.
The bottom line is that a jury could have found that Nikkos failure to bite or
claw at the bag containing the money was evidence in Guerreros favor that the money
was not proceeds of narcotics. The jury could have distrusted Nikkos sniff
altogether. He federal courts have considered distrust of drug-detection dog sniffs.
For example, expert testimony has been offered in other cases suggesting that between
70 and 97 percent of all bills in circulation in this country are contaminated by
cocaine. See United States v. $639,558 in U.S. Currency, 293 U.S. App. D.C. 384,
955 F.2d 712, 714 n.2 (CA DC 1992). Courts have also observed, on the basis of
expert testimony, that as many as one in three circulating bills have been involved in
a cocaine transaction. SeeUnited States v. $639,558, 955 F.2d 712, at 714 n.2 (D.C.
Cir.1992). Cocaine and other drugs attach to the oily surface of currency and as each
bill passes through cash registers, wallets and counting machines, trace amounts of
drugs pass to other bills. See United States v. US Currency, $ 30,060, 39 F.3d 1039
15
-
8/2/2019 Reply Brief PDF-A
20/26
at 1042-43 (CA9 1994). If, in fact, such a large percentage of bills are contaminated
with drugs, then a jury could have found that an alert by a drug-sniffing dog that
$11,500 in currency bills in a paper bag is contaminated was of limited probative
value.
(2) Claimants History is Insufficient to Support a Summary Judgment.
At his deposition Claimant testified that he made money selling drugs and in
ways other than selling drugs, e.g., Claimant testified that he sold personal property
and worked odd jobs. ER 55, 11. Rosalie was obviously legitimately employed,
else she would not have received one years worth of wage compensation under the
PIP component of the policy of the person who injured Rosalie in a traffic accident.
ER 50. Claimant is married to Rosalie Guerrero.; Rosalies income was Claimants
income.
Claimant Guerrero testified that the insurance settlement was the result of a car
accident. ER 6; Government Statement of Undisputed Facts (#47) at 28, citing
Guerrero Dep. 29:3-5, 30:6-31:7. The government did not present evidence to
controvert Claimants statements regarding the source of the $11,500 which were
consistent with the declaration of Kerry Trask, ER 50. That was enough for the court
to find that the $11,500 was not proceeds of drug-trafficking. Otherwise, had the
16
-
8/2/2019 Reply Brief PDF-A
21/26
government controverted Claimants evidence regarding the source of the $11,500,
the controversy would have created a genuine issue of material fact for a jury.
(3) Money in $100" Bills Evidences a Legitimate Source.
In its most absurd argument, the government reasons that $11,500 seized in
$100" bills evidences that it was proceeds of drug-trafficking. The government has
argued that the amount of drugs found in Virgil Woods car was consistent with street-
level quantities of distribution, i.e., that Claimant was dealing in street-level quantities
of drugs. ER 8 (#68, plaintiffs memo in opposition to claimants second motion for
summary judgment at p. 7). It is unreasonable to believe that a street-level seller
would deal in $100" bills. It is more reasonable to believe that the $100 bills came
from a bank transaction where Rosalie presented an insurance settlement check for
cashing, and that as any other reasonable and prudent person would do when cashing
a check for even one thousand dollars, Rosalie would have requested $100" bills.
Furthermore, unlike cases in which money was found neatly stacked in bundles
and bound with rubber bands or sealed in plastic bags which is consistent with themanner in which cash is handled in the drug trade, there was nothing about the way
the cash in this case was found that would cause a belief that it represented proceeds
of drug trafficking. See, e.g., United States v. Mondragon , 313 F.3d 862, 864 (CA4
17
-
8/2/2019 Reply Brief PDF-A
22/26
2002) ($500,000 in cash found in professional-grade hidden compartment of an
automobile sealed in 15 plastic bags, consistent with practice in the drug trade);
United States v. $ 49,000 Currency , 330 F.3d 371, 373 (CA5 2003) (cash found inside
garment bag divided into seven bundles, each bearing a small piece of paper denoting
the amount, as is common in the drug trade); United States v. Funds in the Amount of
Thirty Thousand Six Hundred Seventy Dollars ($30,670.00), 403 F.3d 448, 450 (CA7
2005) (money found in a garment bag and stuffed in claimant's clothes in bundles
wrapped in rubber bands). By comparison, there is nothing in SSA Ginos affidavit
about the manner in which Wood was found to carry the $11,500 in cash that is
consistent with the way money is found in the drug trade.
The problem with the governments case is that it put the cart before the horse:
it seized the money on a hunch that it would be proceeds of drug trafficking, and then
went about the business of proving its hunch by finding and creating evidence, the
syllogism being: all drug-traffickers money is drug money, Guerrero is a drug-
trafficker, therefore all of Guerreros money is drug money. The falsity of the first
premise makes the conclusion false.
18
-
8/2/2019 Reply Brief PDF-A
23/26
CONCLUSION
For all of the above reasons, the Court of Appeals should reverse the district
courts holdings on all of the issues presented for appeal, and order entry of judgment
in favor of Claimant Charles Guerrero.
RESPECTFULLY submitted on April 13, 2012.
F. de la Puente
______________________________
Frank de la Puente, OSB 910170
19
-
8/2/2019 Reply Brief PDF-A
24/26
No. 11-35923
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, ))
Plaintiff-Appellee, ))
vs. ))
$11,500 IN UNITED STATES )CURRENCY, in rem, $2,971 IN )UNITED STATES CURRENCY, in rem, )
)Defendants, )
)and )
)CHARLES GUERRERO, )
)Claimant-Appellant )
CERTIFICATION OF RELATED CASES
I, FRANK DE LA PUENTE, counsel of record for claimant-appellant, Charles Guerrero state,
pursuant to the Ninth Circuit Court of Appeals Rule 28-2.6, that there is no case with a closely
related issue as this case and which could be deemed related.
RESPECTFULLY submitted on April 13, 2012.
F. de la Puente
______________________________
Frank de la Puente, OSB 910170
20
-
8/2/2019 Reply Brief PDF-A
25/26
No. 11-35923
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, ))
Plaintiff-Appellee, ))
vs. ))
$11,500 IN UNITED STATES )CURRENCY, in rem, $2,971 IN )UNITED STATES CURRENCY, in rem, )
)Defendants, )
)and )
)CHARLES GUERRERO, )
)Claimant-Appellant )
_______________________________
CERTIFICATE OF COMPLIANCEWITH NINTH CIRCUIT RULE 32(a)(7)(C)
_______________________________
Pursuant to Ninth Circuit Rule 32(a)(7)(B)(ii) and (C), I certify that Claimants reply brief is
proportionately spaced, it has text that is double spaced, has typeface of 14 points and contains less
then 7,000 words from its Jurisdictional Statement to its Conclusion.
RESPECTFULLY submitted on April 13, 2012.
F. de la Puente
______________________________Frank de la Puente, OSB 910170
21
-
8/2/2019 Reply Brief PDF-A
26/26
CERTIFICATE OF SERVICE
On April 13, 2012, I electronically filed the foregoing brief with the Clerk of the Court for the
United States Court of Appeals for the Ninth Circuit, and I caused a copy of this brief to be served
on the following counsel registered to receive electronic service.
Robert Nesler ([email protected]), (503) 727-1069
F. de la Puente
______________________________Frank de la Puente, OSB 910170