Babb v. U.S. Drug Enforcement Agency

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 04-1528

DAVID A. BABB,

Plaintiff - Appellant,

versus

U.S. DRUG ENFORCEMENT AGENCY,

Defendant - Appellee,

and

WILLIAM LUNSFORD, Seizing DEA Agent,

Defendant.

No. 04-1902

DAVID A. BABB,

Plaintiff - Appellee,

versus

U.S. DRUG ENFORCEMENT AGENCY,

Defendant - Appellant.
Appeals from the United States District Court for the District of
South Carolina, at Greenville. Henry M. Herlong, Jr., District
Judge. (CA-97-1553-6-20)

Argued: March 16, 2005 Decided: August 26, 2005

Before TRAXLER and DUNCAN, Circuit Judges, and Frederick P. STAMP,
Jr., United States District Judge for the Northern District of West
Virginia, sitting by designation.

Vacated and remanded by unpublished per curiam opinion.

ARGUED: Brian William Shaughnessy, SHAUGHNESSY, VOLZER & GAGNER,
Washington, D.C., for David A. Babb. Stefan Dante Cassella, UNITED
STATES DEPARTMENT OF JUSTICE, Asset Forfeiture & Money Laundering,
Washington, D.C., for the U.S. Drug Enforcement Agency. ON BRIEF:
J. Strom Thurmond, Jr., United States Attorney, Marvin Jennings
Caughman, Assistant United States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Columbia, South Carolina, for the U.S. Drug
Enforcement Agency.

Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).

2
PER CURIAM:

In 1993, the government administratively forfeited $57,690 in

cash seized from David Anthony Babb during a drug sting operation.

In 1998, Babb brought an equitable action challenging the

administrative forfeiture. The district court invalidated the

forfeiture, concluding that the government’s attempts to notify

Babb, who was incarcerated at the time, were insufficient for the

government to take advantage of the summary administrative

forfeiture process. Upon learning that the administrative

forfeiture was invalid, the government immediately commenced a

judicial forfeiture proceeding and successfully obtained an order

of forfeiture following a bench trial. On appeal, however, this

court determined that the government’s judicial forfeiture action

was barred by the statute of limitations and declined to apply

equitable tolling to stay the limitations period between 1993 (when

it administratively forfeited the currency) and 1998 (when it first

learned the administrative proceeding was invalid). See United

States v. Babb, 54 Fed. Appx. 772, 774 (4th Cir. 2003) (per

curiam).

Following the appeal in the judicial forfeiture action, Babb

returned to district court and moved for the return of the cash

seized from him, as well as interest and related attorney’s fees.

The district court entered an order awarding Babb the money but

denying him interest and fees. The parties now cross-appeal that

3
order. The primary issue is whether the district court should have

returned the money to Babb in the first place. The government

claims that the district court committed error by returning the

currency to Babb without requiring him to show that he is legally

entitled to the money. Babb, however, claims that he was entitled

to a return of the currency as a result of the government’s failure

to quiet title to the currency through statutory forfeiture

proceedings. We conclude that although a forfeiture proceeding,

with its presumptions in favor of the government, may be the

easiest means to quiet title in seized property, it is not the

government’s exclusive means. The government may still quiet title

by demonstrating that Babb is not lawfully entitled to the

currency. Because there has not yet been a determination as to

whether Babb may lawfully claim this money, we vacate and remand

for the court to make such a determination.

I.

In June 1991, a confidential informant identified for police

officers in Spartanburg, South Carolina, a number of individuals,

including Babb, who were interested in purchasing marijuana.

Officers used the informant to arrange an undercover transaction,

during which Babb was arrested. Immediately after the arrest,

officers seized from Babb $57,960 in cash. State prosecutors

initially retained custody of the cash seized from Babb and

4
commenced a civil forfeiture proceeding, but they later dropped the

proceedings, allowing the Drug Enforcement Agency (the “DEA”) to

pursue the money in federal court.

In September 1993, the DEA brought an administrative

forfeiture action, see 19 U.S.C.A. § 1609 (West 1999), a procedure

which enables the government to quiet title to seized property

without judicial process. In this summary forfeiture proceeding,

the agency seeking forfeiture must publish notice that it intends

to declare forfeiture of the seized property and furnish notice to

interested parties. See 19 U.S.C.A. § 1607 (West 1999). If no

person files a timely claim for the property, the government may

declare the property forfeited. See 19 U.S.C.A. § 1609. If,

however, a claim is filed, the government must then commence

judicial forfeiture proceedings. See 19 U.S.C.A. §§ 1608 (West

1999); see also United States v. Minor, 228 F.3d 352, 354 (4th Cir.

2000).1 Because no claim was filed after the government sent its

1
If a claimant files a claim asserting that the seized
property is not subject to forfeiture, then the administrative
proceedings halt and the agency conducting the forfeiture must
refer the case to the United States Attorney for the commencement
of a judicial forfeiture proceeding (under 21 U.S.C.A. § 881 (West
1999) for drug seizures). At that point, the government must show
that there was probable cause to believe that the seized property
was subject to forfeiture. If the government carries this
relatively light burden, a presumption arises that the government
is entitled to the property. The burden then shifts to the
claimant to show either that the property is not subject to
forfeiture or that he is an innocent owner.

5
notice of forfeiture, the DEA declared the $57,960 administratively

forfeited in December 1993.

In 1997, Babb brought an action in federal court to invalidate

the administrative forfeiture, alleging that it was invalid because

he did not receive sufficient notice. On May 20, 1998, the

district court agreed and ordered that “the DEA must either return

the money to Babb or commence judicial forfeiture proceedings in

the district court.” JA 35-36.2

In July 1998, the government commenced a judicial forfeiture

proceeding. Babb moved to dismiss, arguing that the proceeding was

time-barred by 19 U.S.C.A. § 1621, which required the government to

commence a judicial forfeiture action “within five years after the

time when the alleged offense was discovered.”3 The district

court, however, ruled that the statute of limitations was equitably

tolled from the time the DEA initiated administrative proceedings

until the time the administrative proceedings were invalidated.

The district court then conducted a bench trial and found that the

$57,960 should be forfeited to the DEA. The evidentiary basis for

2
The government did not appeal this ruling--only Babb did, and
on a point not relevant here. See Babb v. United States Drug
Enforcement Admin., 172 F.3d 862, 1999 WL 31159 (4th Cir. Jan. 26,
1999) (unpublished).
3
Congress amended the statute to require a forfeiture action
to be commenced “within five years after the time when the alleged
offense was discovered” or “within 2 years after the time when the
involvement of the property in the alleged offense was discovered,
whichever was later.” 19 U.S.C.A. § 1621 (West Supp. 2005).

6
the court’s conclusion included testimony that the “currency was

seized from Babb as he attempted to use it to purchase marijuana,”

that Babb was involved in drug trafficking, and that Babb lacked

employment during the relevant time frame. J.A 42. Babb appealed.

This court reversed, concluding that equitable tolling was not

appropriate because the administrative proceeding was void, having

never been properly commenced by the DEA in the first place. See

United States v. Babb, 54 Fed. Appx. 772, 774 (4th Cir. 2003) (per

curiam). Accordingly, equitable tolling was not available and the

DEA’s judicial forfeiture action was time-barred by 19 U.S.C.A.

§ 1621. We therefore reversed the order of the district court

granting the DEA title to the currency and remanded for further

proceedings.

In January 2004, Babb filed a “Motion for Return of Property,”

seeking an order directing that the government return the currency

and pay “interest on the corpus since the date of the seizure,” as

well as related attorney’s fees. J.A. 50. Babb filed this motion

under the same caption and civil action number as his action to set

aside the administrative forfeiture. Indeed, the motion for return

of the $57,960 was based solely upon the order of the district

court entered in that action on May 20, 1998, directing the DEA to

return the money to Babb or commence judicial forfeiture

proceedings. Babb requested interest and attorney’s fees pursuant

to the Civil Asset Forfeiture Reform Act(“CAFRA”) of 2000, see 28

7
U.S.C.A. 2465 (West Supp. 2005), and the Equal Access to Justice

Act, see 28 U.S.C.A. § 2412 (West 1994 & Supp. 2005).

On March 1, 2004, the district court denied Babb’s request for

interest and attorney’s fees, but did not address Babb’s motion for

the currency itself. Babb then filed a pro se motion to alter or

amend the judgment, seeking a more specific ruling with respect to

the currency still held by the DEA. On May 21, 2004, the district

court issued an order reaffirming its denial of interest and fees,

but adding a directive that judgment be entered on behalf of Babb

in the amount of $57,960.

Babb appeals from the district court’s order denying interest

and attorney’s fees on the $57,960 seized from Babb during the drug

transaction. The government cross-appeals the district court’s

judgment awarding Babb the currency. We address the government’s

cross-appeal first because Babb’s claim for interest and attorney’s

fees arises only if he is entitled to the currency in the first

place.

II.

The government argues that, despite its unsuccessful attempts

to use the shortcuts and presumptions afforded through statutory

administrative and judicial forfeiture proceedings, Babb is not

entitled to the return of the $57,960 seized from him during the

undercover drug sale. Relying on decisions by the Second and Tenth

8
Circuits, the government argues that its failure to quiet title to

the currency by means of civil forfeiture proceedings does not

automatically vest title in Babb, because such a result would give

Babb presumptive ownership rights in currency seized in connection

with illegal drug trafficking and relieve him of the burden of

proving lawful entitlement to the currency. See Alli-Balogun v.

United States, 281 F.3d 362, 371-72 (2nd Cir. 2002); United States

v. Clymore, 245 F.3d 1195, 1200 (10th Cir. 2001). We agree with

the government for two interrelated reasons.

First, a civil forfeiture proceeding is not the exclusive

means for the government to quiet title to property it has seized

in connection with criminal activity. For example, the government

may quiet title to such property as part of a criminal proceeding

wherein it alleges a forfeiture count in the indictment and proves,

by a preponderance of the evidence, that the subject property was

“derived from the proceeds of illegal drug activities, or . . .

used in any way to facilitate the commission of such violations.”

United States v. Tanner, 61 F.3d 231, 233 (4th Cir. 1995); see 21

U.S.C.A. § 835(a) (West 1999). The government may also settle the

issue of title to the confiscated property as a defendant or

respondent in an equitable proceeding brought by the claimant for

the return of the property. See United States v. Minor, 228 F.3d

352, 355-57 (4th Cir. 2000) (holding that an equitable cause of

action lies for a claimant seeking to invalidate an administrative

9
forfeiture and recover currency seized during drug arrest); see

also Alli-Balogun, 281 F.3d at 371 (explaining that alternative to

forfeiture proceedings is “opposi[tion] [to] a . . . civil

equitable motion filed by the claimant”); Clymore, 245 F.3d at 1200

(“The government . . . does not have to quiet title to § 881

property only through civil forfeiture proceedings. . . [T]he

government may [instead] be awarded quiet title to confiscated

property in a civil equitable proceeding . . . brought by one who

alleges a lawful right to possession.”).

Because this latter means of quieting title to seized

property--responding to a claimant’s equitable action--is

essentially a back-door method for the government to retain the

property, it presents greater procedural obstacles to the

government. When the government fails to utilize the statutory

forfeiture process, it

can still perfect its title to the seized property, but
rather than do so by means of a judicial forfeiture
proceeding in which the government’s case is assisted by
presumptions, it is relegated to opposing a Rule 41(e) or
civil equitable motion filed by the claimant in which the
government “los[es] the benefit of the opportunity to
perfect its right to title by using the statutory
shortcuts, presumptions, and statutory burdens of proof.”

Alli-Balogun, 281 F.3d at 371 (quoting Clymore, 245 F.3d at 1201).

The Tenth Circuit provided this concise comparison:

In a forfeiture action, if the government establishes
probable cause to seize the subject property, the
claimant bears the burden of proving that the requested
forfeiture does not fall within the four corners of the
statute [and i]f no such rebuttal is made, a showing of

10
 probable cause alone will support a judgment of
forfeiture. A claimant in a Rule 41(e) or equitable
proceeding, on the other hand, must prove only a right to
lawful possession of the property and an equitable right
to its return, and no presumptions exist in favor of the
government.

Clymore, 245 F.3d at 1201.

Second, as the foregoing discussion suggests, a party who

claims that the government must return seized property still must

demonstrate lawful entitlement to the property and an equitable

right to its return. Even when the claimant does not face the more

daunting task of challenging forfeiture, he must make at least a

threshold showing of lawful entitlement. See United States v.

Maez, 915 F.2d 1466, 1468 (10th Cir. 1990). Usually, this showing

is minimal, as “the person from whom the property was seized is

presumed to have a right to its return.” United States v.

Chambers, 192 F.3d 374, 377 (3rd Cir. 1999). The burden then

shifts to the government, which must “demonstrate that it has a

legitimate reason to retain the property.” Id. The government

meets this burden if, “at a hearing on the Rule 41(e) or civil

equitable motion, [it] establishes that the property is § 881(a)

property--i.e., proceeds traceable to illegal drug transactions.”

Alli-Balogun, 281 F.3d at 372. At that point, “the claimant cannot

prove a right to lawful possession and an equitable right to its

return unless the claimant is an innocent owner.” Id.

If the currency seized from Babb was automatically returned to

him because it was not forfeited, Babb would essentially enjoy an

11
irrebutable presumption of ownership in property seized in

connection with a drug transaction. Such a result does not square

with federal law, under which “no property right shall exist in .

. . moneys . . . furnished or intended to be furnished by any

person in exchange for a controlled substance,” “proceeds traceable

to such an exchange,” or “moneys . . . used or intended to be used

to facilitate any violation of [drug trafficking laws].” 21

U.S.C.A. § 881(a)(6) (West 1999).4 There is no exception to the

prohibition against property rights in § 881(a)(6) property that

applies when the government does not quiet title through forfeiture

proceedings. Only an innocent owner can claim ownership rights

when such property was lawfully seized.5

In sum, even when the government is foreclosed from perfecting

its title to drug-related currency via forfeiture proceedings, or

fails to pursue forfeiture in the first place, the government may

4
In fact, when the government seizes property connected to a
narcotics offense, “it holds an unperfected right to title to it,
and ownership will retroactively vest in the government from the
time the illegal act was committed upon a judicial quieting of
title to the property in favor of the government.” Clymore, 245
F.3d at 1200; see Alli-Balogun, 281 F.3d at 371.
5
At the time that the government seized the currency at issue
here, section 881(a)(6) excepted money “furnished or intended to be
furnished . . . in exchange for a controlled substance” from the
scope of forfeiture “to the extent of the interest of an owner” if
the forfeiture was “by reason of any act or omission established by
that owner to have been committed or omitted without the knowledge
or consent of that owner.” See 21 U.S.C.A. § 881(a)(6); see United
States v. Federal Nat’l Mortgage Ass’n, 946 F.2d 264, 265 (4th Cir.
1991).

12
retain the property until the claimant files an equitable action or

motion and demonstrates that he is lawfully entitled to the return

of the property. In response to such an action or motion, the

government may still establish its ownership by demonstrating the

property at issue is § 881(a) property. See Mantilla v. United

States, 302 F.3d 182, 187 (3rd Cir. 2002); Alli-Balogun, 281 F.3d

at 371; Clymore, 245 F.3d at 1201; Kadonsky v. United States, 216

F.3d 499, 507 (5th Cir. 2000). The district court made no

determination that Babb was lawfully entitled to the return of the

currency seized by the government, and Babb points to no evidence

in the record that would support such a conclusion. The remaining

question, therefore, is whether the government is foreclosed from

making its argument at this time.

III.

Regardless of whether the government ordinarily has means

other than forfeiture to establish its right to retain currency

seized during a drug transaction, Babb argues that the government

is barred from pursuing these means in this case. Specifically,

Babb views the district court’s order of May 20, 1998, directing

that the government return the seized funds to Babb or commence

judicial forfeiture, as dispositive of the issue of his right to

the currency. Babb argues that we lack jurisdiction to review the

government’s cross-appeal because the government is, in essence,

13
bringing an untimely appeal of the district court’s May 20, 1998,

order. Alternatively, Babb argues the government is barred from

pursuing its cross-appeal by the doctrines of claim preclusion,

issue preclusion, and waiver, or by the mandate rule.

A.

Babb contends that the government’s notice of appeal, filed

July 22, 2004, was untimely, leaving us without appellate

jurisdiction over the cross-appeal. See, e.g., Browder v.

Director, Dep’t of Corr., 434 U.S. 257, 264 (1978) (explaining that

the filing of a timely notice of appeal is “mandatory and

jurisdictional”). Babb views the government’s cross-appeal as

nothing more than a challenge to the May 1998 order which directed

the government to return the money or commence a forfeiture action

in district court. Thus, Babb claims the government’s notice of

cross-appeal is far too late to afford us jurisdiction to review

the district court’s May 1998 order.

The government’s notice of appeal specifies the district

court’s order of judgment entered May 24, 2004, as the subject of

its cross-appeal. With respect to that order, the notice of appeal

is unquestionably timely. Nothing contained in the notice of

appeal or the briefs filed by the government suggests that the

government is attempting to appeal the May 1998 order. Therefore,

we cannot agree with Babb’s contention that the government is

14
appealing the 1998 order. Moreover, in this circuit, a notice of

appeal is not a strict jurisdictional requirement for purposes of

a cross-appeal, as Babb suggests. Rather, we treat the notice of

cross-appeal requirement as a non-jurisdictional rule of practice.

See LaFaut v. Smith, 834 F.2d 389, 394 n.9 (4th Cir. 1987); Tug

Raven v. Trexler, 419 F.2d 536, 548 (4th Cir. 1969).6

We conclude that the government’s notice of appeal is not

defective and in no way deprives us of jurisdiction to review the

cross-appeal. The crux of Babb’s objection to the cross-appeal is

not the timeliness of the notice of appeal, but rather that the

government is trying to raise an issue -- Babb’s entitlement to the

cash -- that, in Babb’s view, was or could have been settled

previously. Hence, Babb offers several preclusion theories as a

bar to the government’s claims. These theories, however, are not

jurisdictional in nature. See, e.g., Castro v. United States, 540

U.S. 375, 384 (2003) (explaining that “[t]he law of the case

doctrine . . . simply expresses common judicial practice; it does

not limit the courts’ power” (internal quotation marks omitted));

6
The circuits are divided over this question. Compare
Mendocino Environmental Center v. Mendocino County, 192 F.3d 1283,
1298 (9th Cir. 1999) (treating the cross-appeal requirement as non-
jurisdictional); Texport Oil Co. v. M/V Amolyntos, 11 F.3d 361, 366
(2nd Cir. 1993) (same); Spann v. Colonial Village, Inc., 899 F.2d
24, 33 (D.C. Cir. 1990) (same), with Johnson v. Teamsters Local
559, 102 F.3d 21, 29 (1st Cir. 1996) (cross-appeal is
jurisdictional); Francis v. Clark Equip. Co., 993 F.2d 545, 552-53
(6th Cir. 1993) (same); Rollins v. Metro. Life Ins. Co., 912 F.2d
911, 917 (7th Cir. 1990) (same).

15
Andrews v. Daw, 201 F.3d 521, 524 n.1 (4th Cir. 2000) (noting that

the res judicata doctrine is an affirmative defense subject to

waiver); United States v. Matthews, 312 F.3d 652, 657 (5th Cir.

2002) (observing that the “mandate rule” is not jurisdictional).

B.

We now turn to Babb’s alternative position that even if we

have jurisdiction to consider the cross-appeal, the government’s

arguments are barred by either the doctrine of res judicata or the

doctrine of waiver and the mandate rule. Res judicata includes the

related concepts of claim preclusion and issue preclusion. Issue

preclusion “forecloses the relitigation of issues of fact or law

that are identical to issues which have been actually determined

and necessarily decided in prior litigation.” Sedlack v. Braswell

Servs. Group, Inc., 134 F.3d 219, 224 (4th Cir. 1998) (internal

quotation marks and citation omitted). Claim preclusion bars

claims in later litigation arising from the same cause of action as

an earlier case in which final judgment on the merits has been

entered. It is broader, extending to claims that were not but

“might have been presented” in the earlier case. In re Varat

Enters., Inc., 81 F.3d 1310, 1315 (4th Cir. 1996). Both doctrines

serve to limit relitigation of issues settled in separate, prior

litigation.

16
 The mandate rule is closely related to the doctrine of the law

of the case. See South Atlantic Ltd. P’ship of Tenn. v. Riese, 356

F.3d 576, 583 (4th Cir. 2004) (noting that the mandate rule is “a

more powerful version of the law of the case doctrine” (internal

quotation marks omitted)). The law of the case doctrine, too,

proscribes relitigation of issues that were previously settled;

however, the focus is on ensuring that “when a court decides upon

a rule of law, that decision should continue to govern the same

issues in subsequent stages in the same case.” Christianson v.

Colt Indus. Operating Corp., 486 U.S. 800, 816 (1988) (emphasis

added) (internal quotation marks omitted).

Because we view the district court’s May 20, 1998, order as

having been entered in an earlier stage of this litigation, not in

a prior separate action, we find that the mandate rule and the

doctrine of waiver fit better analytically than res judicata.

After the district court directed that “the DEA must either return

the money to Babb or commence judicial forfeiture proceedings in

the district court,” J.A. 35-36, the government immediately

commenced a separate forfeiture action. When this court

subsequently determined that the forfeiture action was barred by

the statute of limitations, See United States v. Babb, 54 Fed.

Appx. 772, 774 (4th Cir. 2003) (per curiam), Babb returned to

district court in January 2004 and filed his motion for return of

the property under the original caption and civil action number as

17
his equitable action to invalidate the administrative forfeiture.

Babb’s motion merely sought to bring to a conclusion his equitable

claim for the money.7 Babb contends that the government should

have challenged the district court’s May 20, 1998, order at the

time it was entered, and that its failure to do so amounted to a

waiver of its ability to challenge the directive that the money be

returned to Babb. Babb contends further that the district court

was barred by the mandate rule from reconsidering its directive.

The mandate rule provides that “a lower court generally may not

consider questions that the mandate has laid to rest.” See South

Atlantic Ltd. P’ship, 356 F.3d at 583-84. The mandate rule

“forecloses litigation of issues decided by the district court but

foregone on appeal or otherwise waived.” United States v. Bell, 5

F.3d 64, 66 (4th Cir. 1993).

We cannot agree that the government has waived the issue of

Babb’s lawful right to possess the currency by failing to raise it

in a prior appeal. A brief review of the procedural history

demonstrates that the district court did not decide this issue in

its May 20, 1998, order. In 1997, Babb filed his pro se action

challenging the administrative forfeiture proceedings which were

completed in December 1993. The complaint alleged that Babb owned

the money, that the DEA seized it, and that the DEA failed to

7
Our opinion in 2003 addressed only the statute of limitations
issue and did not pass explicitly or implicitly on any other issue
relevant to this appeal.

18
provide him sufficient notice of its intent to forfeit the currency

and thereby deprived him of his opportunity to contest forfeiture.

Although Babb requested the return of the currency seized by the

government, his complaint, construed liberally, sought an order

invalidating the administrative forfeiture. The complaint also

asserted that William Lunsford, a DEA agent who took custody of the

seized currency from state officials, was individually liable for

the currency.

Instead of filing an answer, the government moved immediately

to dismiss the complaint on the grounds that the district court did

not have subject matter jurisdiction over Babb’s claims and that

Agent Lunsford was protected by qualified immunity. The district

court dismissed the claims against Agent Lunsford, but concluded

that it had jurisdiction to consider a challenge to the sufficiency

of the notice of forfeiture given to Babb.

Babb then filed a motion for summary judgment. On May 20,

1998, the district court entered an order granting summary judgment

for Babb on his claim of insufficient notice, concluding that “the

administrative forfeiture is void as a matter of law” because “the

DEA’s attempts at notice did not comport with due process.” J.A.

35. In light of this conclusion, the district court declined to

address Babb’s alternative basis for voiding the administrative

forfeiture -- that the DEA lacked in rem jurisdiction over the

currency. The district court ultimately concluded that “the DEA

19
must either return the money to Babb or commence judicial

forfeiture proceedings in the district court.” J.A. 35-36. The

government did not appeal this ruling. See Babb v. United States

Drug Enforcement Admin., 172 F.3d 862, 1999 WL 31159 (4th Cir. Jan.

26, 1999) (unpublished) (affirming the dismissal of Babb’s claims

against Agent Lunsford individually).

The district court’s ruling simply permitted Babb to have his

day in court to contest the government’s right to the money and

precluded the government from holding the money indefinitely

without affording Babb due process. The effect of the district

court’s order was to place Babb in the position he would have

occupied if he had received sufficient notice of the administrative

forfeiture proceedings and had filed a claim--participating as a

claimant in a judicial forfeiture proceeding in which the

government’s ownership interest, not Babb’s, was at issue. See

United States v. $557,933.89, 287 F.3d 66, 77 (2nd Cir. 2002) (“It

must be remembered that what is adjudicated in a judicial civil

forfeiture proceeding is the government’s right to the property,

not the claimant’s . . . . [T]he claimant’s ownership of the

defendant property is not at issue in determining the primary

question of the government’s right to forfeiture.”). Hence, the

district court directed the government only to “commence” judicial

forfeiture proceedings, not to obtain an order of forfeiture. The

court did not discuss, much less reach, an alternate holding in the

20
event forfeiture proceedings failed. Such a holding would have

been superfluous given that forfeiture is not the exclusive method

for the government to establish ownership of the currency. We also

note that the court entered its order before the government could

even file an answer to Babb’s complaint. Thus, in our view, the

district court reasonably left open the issue of whether Babb was

legitimately entitled to the money if the government was unable to

establish title through forfeiture proceedings. And, because the

issue was left open, the government did not waive it by failing to

raise it previously, nor is the government barred by the mandate

rule from taking this position in this appeal.

Because there has been no determination as to whether Babb is

lawfully entitled to the currency, we remand Babb’s claim to the

district court. The government asserts that Babb cannot make the

requisite showing that he has a lawful right to the money because

it is undisputed that Babb and his associates intended the $57,960

in cash to be furnished in exchange for drugs. Thus, Babb can have

“no property right” in the money. 21 U.S.C.A. § 881(a)(6). We

decline to make findings in the first instance on the incomplete

record before us.

IV.

We conclude that the district court prematurely ordered that

the currency be returned to Babb without determining whether he was

21
lawfully entitled to it. Accordingly, we need not address Babb’s

argument that the district court erred in denying his claim for

interest and attorney’s fees.

VACATED AND REMANDED

22