United States v. Two Parcels of Real Property Located in Russell County

United States Court of Appeals,

Eleventh Circuit.

No. 95-6267.

UNITED STATES of America, Plaintiff-Appellee,

v.

TWO PARCELS OF REAL PROPERTY LOCATED IN RUSSELL COUNTY, ALABAMA,
and One Parcel of Real Property Located in Lee County, Alabama,
with all Appurtenances and Improvements Thereon, and More
Particularly Described Hereinafter, Defendant,

Joseph Carl Brown, Naomi Matichka, James William Brown, Michael
W. Brown, Carrie Mae Brown, Claimants-Appellants,

and

One Parcel of Real Property Located at Route 1, Box 650, Salem,
Lee County, Alabama, with all Appurtenances and Improvements
Thereon, Defendant,

Carl Brown, Naomi Matichka, Claimants-Appellants,

Terry Brown, et al., Claimants,

and

Four Parcels of Real Property Located in Russell County, Alabama,
with all Appurtenances and Improvements Thereon, Defendant,

Angela Brown, et al., Claimants,

Michael Brown, Joseph Carr Brown, Carrie Mae Brown, Claimants-
Appellants,

and

One Parcel of Real Property Described as Lot 9, Rite-Way
Subdivision, Highway No. 12, Lee County, Alabama, with all
Appurtenances and Improvements Thereon, Including a Mobile Home,
Defendant,

James William Brown, Carrie Mae Brown, Claimants-Appellants.

Aug. 28, 1996.

Appeals from the United States District Court for the Middle
District of Alabama. (Nos. CV-92-D-500-E, CV-92-D-693-E, CV-92-D-
1332-E, CV-92-D-1436), Ira De Ment, Judge.

Before ANDERSON and COX, Circuit Judges, and RONEY, Senior Circuit
Judge.

PER CURIAM:

On this appeal from a summary judgment of forfeiture of

several pieces of property purchased with the proceeds of marijuana

transactions or used for the production of marijuana, the claimants

allege several errors:

1. The complaints should have been dismissed because the

conclusory allegations did not comply with the strict pleading

requirements in forfeiture cases.

2. The court failed to consider claimants' evidence which

established an issue of fact, or should have resulted in a summary

judgment for claimants.

3. The court improperly considered evidence acquired after the

filing of the complaints.

4. The court improperly considered the claimants' invocation

of the Fifth Amendment in response to discovery questions in

concluding there was probable cause for forfeiture.

Finding no merit to any of these assignments of error, we

affirm.

Law of Forfeiture

Federal statutes provide that property is forfeited to the

Government when it is used or intended to be used to facilitate

illegal drug activities, 21 U.S.C. § 881(a)(7) (Supp.1994); or

when it constitutes proceeds traceable to the exchange of money for

a controlled substance, section 881(a)(6) (1981). Once the

Government seizes property, the claimant must establish ownership

of the property in question. E.g., United States v. 1012
Germantown Road, 963 F.2d 1496, 1500 (11th Cir.1992). Then it is

the Government's burden to show probable cause for the belief that

the property to be forfeited is substantially connected to drug

dealing. 21 U.S.C. § 881(a)(3) (1988) (incorporating procedures in

19 U.S.C. § 1615 (1982) for shifting burden of proof in civil

forfeiture proceeding). 1012 Germantown Road, 963 F.2d at 1500-01;

United States v. Four Parcels of Real Property, 941 F.2d 1428, 1440

(11th Cir.1991) (en banc ). Once the Government has met its

burden, the ultimate burden falls upon the claimant to prove by a

preponderance of the evidence a defense to the forfeiture, such as

the innocent owner defense, 963 F.2d at 1501, or that the property

derived from a legitimate source. Section 881(d); 941 F.2d at

1438.

Thus, the critical issue in a forfeiture case is whether the

Government has shown probable cause which, unrebutted by the

claimants, is sufficient to permit forfeiture.

1. Sufficiency of Complaint

A complaint for forfeiture must adhere to the pleading

requirements set forth in Rule E(2)(a) of the Supplemental Rules of

Certain Admiralty and Maritime Claims. These rules impose a more

stringent obligation on the Government than the notice pleading

requirements of the Federal Rules of Civil Procedure to set forth

grounds for forfeiture. See generally United States v. Property

Located at 4880 S.E. Dixie Highway, 838 F.2d 1558 (11th Cir.1988);

United States v. $38,000 in United States Currency, 816 F.2d 1538

(11th Cir.1987). Specifically Rule E(2)(a) requires a complaint to

"state the circumstances from which the claim arises with such
particularity that the defendant or claimant will be able, without

moving for a more definite statement, to commence an investigation

of the facts and to frame a responsive pleading." To satisfy this

specificity requirement, the complaint "must allege sufficient

facts to provide a reasonable belief that the property is subject

to forfeiture: in particular, that the Government has probable

cause to believe that a substantial connection exists between the

property to be forfeited and the exchange of a controlled

substance." $38,000, 816 F.2d at 1548.

In applying this standard, this Court has dismissed a

forfeiture complaint where it has contained "not even a whiff of

evidence" to suggest the property was in any way linked to illegal

drug activity. $38,000, 816 F.2d at 1548. The complaint in

$38,000 merely stated that the Government seized the currency, and

recited some probable cause language from section 881. Neither the

complaint nor the accompanying affidavit recited any facts to

support the Government's claim of probable cause. $38,000, 816

F.2d at 1541.

The complaints in this case allege that James Brown and his

son, Carl Brown, dealt in quantity sales of marijuana and cocaine

over a period of time and generally describe the method of

operation.1 Specific sales were not alleged, except for two sales

1
The complaints state the following facts:

3. The facts and circumstances supporting the
seizure and forfeiture of the Defendant property are
that James William Brown (James Brown) and his son,
Joseph Carl Brown (Carl Brown), deal in large quantity
sales of marijuana and cocaine (controlled substances).
On a weekly or bi-weekly basis one of the Browns would
go to Texas and purchase 50-100 pounds of marijuana
which would not generate the kind of money needed for the purchase

of the properties involved. The complaints then alleged the

general methods of large scale drug dealers in the handling of

cash, and specifically alleged the purchase with cash of each of

the properties sought to be forfeited, from whom they were bought,

and how the title was handled. They alleged the properties were

purchased with the proceeds of drug sales, and that one parcel was

used to facilitate the sale of controlled substances.

The complaints specified no date or location of any purported
or intended drug dealings, no dollar amounts, no specific types or

quantities of drugs sold, and no identified participants, other

than the two Browns. Yet, there were sufficient facts detailed in

and/or several ounces of cocaine. Occasionally, the
Browns would take a "driver" with them and allow the
driver to return alone in the car with the marijuana or
cocaine. Generally, the Browns only dealt in pound
quantities of marijuana and ounce quantities of
cocaine. The foregoing information was obtained from a
reliable confidential informant (hereinafter,
Informant).

4. In early 1991, this Informant was arrested for
selling five pounds of marijuana. The Informant had
received the marijuana from a man known as "James," who
in fact was James Brown.

5. The Informant agreed to cooperate with law
enforcement officials and telephoned James Brown. The
Informant told James Brown that he/she had the money
for the five pounds of marijuana and also wanted to
purchase an additional ten pounds of marijuana. The
Informant arranged by telephone for the purchase of the
marijuana and agreed to meet at the mobile home on the
Defendant Parcel located in Lee County, Alabama
(hereinafter, Defendant Parcel Three). The Informant
met with James Brown at Defendant Parcel Three, paid
James Brown for the original five pounds of marijuana,
and arranged for the purchase and pickup of the
additional ten pounds of marijuana. Thereafter, James
Brown was arrested while in and on Defendant Parcel
Three.
the complaint to put claimants on notice as to the Government's

basis for seizure. Indeed, as the Government notes, the claimants

filed responsive pleadings (claims, answers, and on the same day,

a motion for summary judgment), without obtaining a more definite

statement, indicating that the complaints were sufficient under

Rule E(2)(a). The motion to dismiss the complaint for failure to

allege a claim with sufficient specificity was not filed until

later.

When probable cause is based on evidence that the

participants are generally engaged in the drug business over a

period of time, have no other source of income, and that the

properties were bought with the income produced from that drug

business, it is not necessary to identify specific drug

transactions in the complaint. See United States v. Four Parcels,

941 F.2d 1428, 1440 (11th Cir.1991).

Contrary to appellants' motion for summary judgment or dismiss

argument, there was no error in denying the motion to dismiss the

complaint for insufficiency.

2. Whether Sufficient Evidence to Establish An Issue of Fact

Claimants next argue the district court erred in considering

evidence acquired after seizure in determining whether there was

probable cause to "forfeit the property." Examination of probable

cause in the civil forfeiture context may require a two-tiered

analysis. First, the Government must have probable cause toseize

the property. Second, the Government in court must show probable

cause for "forfeit of property." Claimants, on this issue, appear

to confuse probable cause to seize the property initially with the
ultimate determination whether forfeiture was proper.

At the summary judgment stage where the court's focus is on

the ultimate determination of whether the property is forfeit, it

is perfectly appropriate for the court to consider all the evidence

adduced by the Government. United States v. $121,100 in United

States Currency, 999 F.2d 1503 (11th Cir.1993); Four Parcels, 941

F.2d at 1440.

a. Claimant's Motion for Summary Judgment

The application of the burdens of proof in reviewing these

cross-motions is set out in United States v. Four Parcels of Real

Property, 941 F.2d 1428 (11th Cir.1991). As a preliminary matter,

whether it is the Government or the claimant who moves for summary

judgment, the court must determine whether the Government has shown

probable cause. Four Parcels, 941 F.2d at 1439. It is the

claimant's initial responsibility to point out to the court why it

believes the Government does not have probable cause for the

forfeiture. 941 F.2d at 1439 n. 25.

The verified complaint stated that on a weekly or bi-weekly

basis, either James Brown or his son, Carl Brown, would travel to

Texas to purchase 50-100 pounds of marijuana and/or several ounces

of cocaine. The complaint also detailed a drug transaction

involving James Brown conducted in a mobile home located on one of

the defendant parcels for which James Brown was later arrested. In

addition, the complaint detailed the cash purchases of the property

in question and how it was titled to various members of the Brown

family.

As a result of discovery, the Government also adduced the
following evidence: (1) four of the claimants, James William

Brown, Angela Brown, Joseph Carl Brown, and Michael W. Brown had

been convicted of drug related offenses; (2) the cost of the

purchased property amounted to more than the claimants' income as

reported on their income tax returns; (3) the claimants purchased

valuable pieces of real property totally, or predominantly, with

cash; (4) the claimants are related by blood or marriage; (5)

each of the defendant properties was used for the purposes of at

least one claimant; and (6) some of the claimants asserted their

Fifth Amendment right against self-incrimination during their

depositions.

Evidence that claimants are generally engaged in the drug

business over a period of time, have no visible source of

substantial income, use cash for large purchases, and are nominee

owners is all probative evidence of probable cause, Four Parcels,

941 F.2d at 1441-42, as is a history of drug violations, $121,100

in United States Currency, 999 F.2d at 1506-07. Finally, as we

discuss in more detail below, claimants' invocation of the Fifth

Amendment can also be considered as an element of probable cause.

We hold that the Government's showing in this case is sufficient to

establish probable cause.

Even though the Government has shown probable cause, summary

judgment for claimants would be proper if they offered

uncontroverted evidence that the funds used to purchase the

property were obtained from legitimate sources, or that they were

innocent owners unaware of the property's connection with drug

sales. U.S. v. A Single Family Residence, 803 F.2d 625, 629 (11th
Cir.1986); United States v. $4,255,000 in United States Currency,

762 F.2d 895, 906 (11th Cir.1985), cert. denied, 474 U.S. 1056, 106

S.Ct. 795, 88 L.Ed.2d 772 (1986).

As evidence the property was bought with legitimate funds,

claimants offered the affidavit of Robert Jones, who testified that

he loaned Carl Brown in excess of $100,000 and that he frequently

loaned Carl Brown large amounts of cash. Claimants point to no

other evidence in the record to establish this defense, nor do they

offer any detailed explanation of the allocation of these funds to

purchase the various properties. That affidavit is insufficient to

prove that the property was obtained from legitimate funds.

As to the innocent owner defense, the claimants attempt to

cast the burden on the Government, stating the Government has

failed to offer evidence that claimants were not innocent owners.

It is claimants' burden, not the Government's, to prove innocent

ownership. Claimants identify nothing in the record to support

such a defense. The district correctly denied their motion for

summary judgment.

b. Government's Motion for Summary Judgment

Once the Government has met its initial responsibility to

establish probable cause and the absence of a genuine issue of

material fact, the claimants must produce "significant, credible

evidence" that the claimant is entitled to the property. Four

Parcels, 941 F.2d at 1439. The claimants filed no response to the

Government's motion, and the bare bones affidavit concerning the

loan of cash from a friend is insufficient to create an issue of

fact on that defense.
 In their appellate brief, claimants contend the district

court erred by holding all the property forfeit rather than making

decisions about individual pieces of property. By example, the

claimants contend Naomi Matichka's property should not be forfeited

when she stated in her deposition that she purchased part of the

defendant property for $75,000 with $100,000 she alone had saved

from her $6.00 per hour job at the mill. The mere allegation of a

highly unlikely legitimate source of income without some support to

give the allegation credibility cannot constitute an issue of

material fact defeating summary judgment for forfeiture. Claimant

produces nothing to establish her total income versus expenditures

to explain how she could have established such a large amount of

cash.

As for claimants' complaint that the district court

considered all income of the claimants against the total purchases,

such a particularized accounting is not necessary for the

Government to establish probable cause, and the claimants offered

no evidence that would enable the court to make an accurate

analysis. In any event, considering the income of all the

claimants rather than just the income of only Carl Brown and James

Brown as the true purchasers inured to the benefit of the

claimants.

3. Consideration of the Claimants' Invocation of the Fifth
Amendment

In deposition, three of the seven claimants refused to answer

questions, asserting their Fifth Amendment privilege. The district

court inferred that the answers to the questions would not have

been favorable to the claimants asserting the privilege.
 The claimants had a right to assert the Fifth Amendment

privilege in this civil forfeiture proceeding. United States v.

United States Coin and Currency, 401 U.S. 715, 91 S.Ct. 1041, 28

L.Ed.2d 434 (1971); Boyd v. United States, 116 U.S. 616, 6 S.Ct.

524, 29 L.Ed. 746 (1886). This Court has held, however, that the

trier of fact may take an adverse inference against the parties to

a civil action refusing to testify on Fifth Amendment grounds.

United States v. A Single Family Residence, 803 F.2d 625, 629 n. 4

(11th Cir.1986). There is an exception to this rule when a

claimant in the civil case is also a defendant in the criminal case

and is forced to choose between waiving the privilege and losing

the case on summary judgment. United States v. Premises Located at

Route 13, 946 F.2d 749 (11th Cir.1991). The testifying claimants

here were not defendants in a criminal case.

The claimants argue that because of a recent trend in

forfeiture cases, we should hold that the so-called civil

forfeiture is no longer civil and that the criminal rules should

apply. See Austin v. United States, 509 U.S. 602, 113 S.Ct. 2801,

125 L.Ed.2d 488 (1993) (Excessive Fines Clause limits scope of

civil forfeiture judgments); United States v. 2751 Peyton Woods

Trail, S.W., 66 F.3d 1164 (11th Cir.1995) (notice and hearing in

accordance with Due Process Clause required prior to seizure).

This argument is foreclosed by the Supreme Court's recent

pronouncement in United States v. Ursery, --- U.S. ----, 116 S.Ct.

2135, 135 L.Ed.2d 549 (1996), that civil in rem forfeitures do not

constitute "punishment" for double jeopardy purposes.

Contrary to the claimants' argument, their invocation of the
Fifth Amendment was not the "linchpin" of the summary judgment

case, and the district court would have been justified in making

its decision without regard to the assertion of the Fifth Amendment

privilege.

AFFIRMED.