Barrera-Montenegro v. USA & Drug Enforcement Administration

United States Court of Appeals,

Fifth Circuit.

No. 95-50071.

Alphonso BARRERA-MONTENEGRO, Plaintiff-Appellant,

USA and Drug Enforcement Administration, Defendants-Appellees.

Feb. 9, 1996.

Appeal from the United States District Court for the Western
District of Texas.

Before REAVLEY, HIGGINBOTHAM and BARKSDALE, Circuit Judges.

REAVLEY, Circuit Judge:

This appeal arises from an administrative forfeiture by the

United States Drug Enforcement Agency ("DEA") under authority of 21

U.S.C. § 881(a)(6)1. The question presented is whether the

Plaintiff-Appellant, Alphonso Barrera-Montenegro (henceforth

Barrera) received sufficient notice of the government's intent to

forfeit money seized during a temporary detention. Because we hold

he did not, we reverse the district court's order dismissing his

complaint.

I. Facts

On July 22, 1992, at a United States Border Patrol checkpoint

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21 U.S.C. § 881(a)(6) provides in part:

(a) The following shall be subject to forfeiture to
the United States and no property right shall exist in
them:

(6) 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 in violation of this subchapter....

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at Sierra Blanca, Texas, a search of the bags and a coat found

hanging on the front passenger seat inside Barrera's car revealed

the presence of $240,678.00 in United States currency. Agents

seized the money with the exception of $1,000 in "traveling

expenses" which was returned to Barrera along with a receipt for

the balance. Agents then informed Barrera of the procedures

necessary for recovery of his money. No drugs or other contraband

were found and Barrera has never been charged with any criminal

offense in connection with the seizure.

Shortly after the seizure, on August 6, 1992, and again on

August 24, Barrera's attorney, Ronald Kuba, contacted DEA's

Houston/El Paso office regarding the status of the case and the

return of the money. He spoke with Special Agents Jerry Wells and

Pamela Borquez, who seized the money, and Efrain DeJesus. The

agents told him that no file had been created and no charges had

been filed against Barrera, but they said Kuba would be contacted

if and when something happened. Although Kuba advised DEA of

Barrera's correct address and that of his own, Kuba was never

contacted by DEA.

On August 10, 1992, only four days after this initial contact

with Kuba, DEA commenced forfeiture proceedings by mailing a notice

of seizure to Barrera's New York address as listed on his driver's

license. The notice was returned unclaimed. On August 19, 1992,

DEA began a three-week publication of the notice in USA TODAY, as

required by 19 U.S.C. § 1607(a). Three months later, on November

9, 1992, Kuba filed a Petition for Remission with DEA, which he

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resubmitted in February 1993 because DEA claimed it was never

received.2 On December 4, 1992, DEA issued a declaration of

forfeiture without actual notice to either Barrera or Kuba.

On August 16, 1993, DEA denied Barrera's Petition for

Remission. He then filed a motion for reconsideration on September

3, 1993. Then, on July 22, 1994, since no action had been taken on

his motion, Barrera commenced this action alleging jurisdiction

under 21 U.S.C. §§ 877 and 881, and 28 U.S.C. §§ 1331 and 1335. In

his complaint Barrera alleged: he was entitled to recover the

money because neither he nor it had ever been made the subject of

any criminal or civil action; DEA's decision denying his Petition

for Remission was not supported by substantial evidence; there was

no basis for the seizure; the seizure violated the Fourth

Amendment; and the seizure violated his right to due process. On

September 15, 1994, DEA rejected Barrera's Request for

Reconsideration. Kuba asserts in an unsworn declaration that he

had no actual knowledge of the forfeiture until he had read the

government's motion to dismiss the instant complaint for lack of

subject matter jurisdiction filed October 3, 1994, almost two years

after the money had been forfeited.3

2
Although DEA claimed this Petition was not received, a
photocopy of the "green card" receipt appears in the record as
Government's Exhibit 9 to its Motion to Dismiss and shows the
petition was received and signed for on November 9, 1992.
3
Although it is clear DEA never sent actual notice of the
forfeiture to either Barrera or Kuba, DEA's rejection of the
petition for remission did refer to the forfeiture. Thus, by the
time Kuba had filed his motion for reconsideration on September 3,
1993, it is reasonable to assume he had by this time surmised that
the money had been summarily forfeited, as his motion requested

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The district court granted the government's motion to dismiss

pursuant to Fed.R.Civ.Pro. 12(b)(1), reasoning it had no

jurisdiction to review Barrera's claim because there was no factual

or legal support for his argument that the DEA violated his due

process rights by failing to give him actual notice of the

forfeiture proceeding. The district court held that DEA gave

notice reasonably calculated to notify Barrera that forfeiture

proceedings were underway. Under the circumstances of Kuba's

contacts, returned mail and publication, we disagree and will

reverse with instructions to return this case to the point at which

Barrera may be given proper notice of the government's intent to

forfeit the money.

II. Standard of Review

It is well settled in this circuit that "[t]he district court

... has the power to dismiss [pursuant to Rule 12(b)(1) ] on any

one of three separate bases: (1) the complaint alone; (2) the

complaint supplemented by undisputed facts evidenced in the record;

or (3) the complaint supplemented by undisputed facts plus the

court's resolution of disputed facts." Voluntary Purchasing

Groups, Inc. v. Reilly, 889 F.2d 1380, 1384 (5th Cir.1989) (quoting

Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.), cert. denied,

454 U.S. 897, 102 S.Ct. 396, 70 L.Ed.2d 212 (1981)). In the

instant case, the district court dismissed based upon the complaint

either "remission of all currency seized," or "mitigation of the
forfeiture...." However, there is no indication that Kuba was so
informed before August 16, 1993, the date DEA rejected his petition
for remission, which was a year after the money was seized, and too
late for Barrera to respond to the notice of forfeiture.

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and the undisputed facts evidenced in the record, holding that no

hearing was required to resolve any underlying factual issues.

Therefore, our review is limited to determining whether the

district court's application of the law is correct and, if the

decision was based on undisputed facts, whether those facts are

indeed undisputed. Ynclan v. Department of the Air Force, 943 F.2d

1388, 1390 (5th Cir.1991); Williamson, 645 F.2d at 413.

III. Discussion

This court has jurisdiction to review the procedural

safeguards of a summary forfeiture of property by the Attorney

General. Scarabin v. Drug Enforcement Admin., 919 F.2d 337, 338

(5th Cir.1990). Barrera contends the government should have

notified Kuba of its intent to forfeit the money, and failure to do

so denied him due process. 19 U.S.C. § 1607(a) requires DEA to

publish notice of the seizure and intent to forfeit seized property

for at least three successive weeks in such manner as the
Secretary of the Treasury may direct. Written notice of
seizure together with information on the applicable procedures
shall be sent to each party who appears to have an interest in
the seized article.

If the party files a claim and cost bond within twenty days from

the date of the first publication, the agency must forward the

matter to the United States Attorney for the district in which the

seizure took place for commencement of a judicial forfeiture

proceeding. 19 U.S.C. § 1608. If a party fails to respond within

the prescribed time period, the property is summarily forfeited.

19 U.S.C. § 1609(a).

The government responds that the notice was proper because it

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was sent to Barrera's last known address4 and was published as

required by § 1607(a). Barrera failed to file a claim or a bond

for the institution of judicial forfeiture proceedings and instead

sought remission, which is a matter of grace with DEA. According

to DEA, since Barrera has elected his remedy, he may not now seek

judicial scrutiny of the forfeiture. However, Barrera argues it is

the lack of notice, resulting from errors by the government, which

caused Barrera's failure to seek his judicial remedy.

Notice must be "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. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70

S.Ct. 652, 657, 94 L.Ed. 865 (1950). The "claimant's right to

compel the agency to proceed by judicial forfeiture is an important

statutory check on the government's power to forfeit private

property. Therefore, DEA's compliance with statutory and

constitutional notice requirements are essential components of the

statutory regime." Glasgow v. United States Drug Enforcement

Admin., 12 F.3d 795, 797 (8th Cir.1993).

Although DEA is under no obligation to employ extraordinary

means to notify an interested party to a forfeiture proceeding,

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DEA sent the notice to 8783 Lefferts Boulevard, New York,
N.Y. 11418, the address listed on Barrera's driver's license.
Barrera asserts in his brief that this address was incorrect, and
during oral arguments his counsel pointed out that the address is
actually 87-83 Lefferts. Omission of the hyphen resulted in an
error of about eighty blocks. However, there is no indication the
government intentionally omitted the hyphen, nor does Kuba state in
his unsworn declaration which address he gave DEA.

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when the government has in its possession information which would

enable it to effect actual notice on an interested party, it is

unacceptable for DEA to ignore that information and rely on

notification by publication. Cf. Aero-Medical, Inc. v. United

States, 23 F.3d 328, 331 (10th Cir.1994) (notice was unreasonable

when DEA knew address to which notice sent was invalid, and made no

attempt to notify plaintiff's registered agent, whose identity was

in its possession); United States v. Woodall, 12 F.3d 791, 794

(8th Cir.1993) (notice sent to incorrect address was unreasonable

when DEA had actual knowledge of party's whereabouts); Glasgow, 12

F.3d at 798 (notice unreasonable when government failed to disclose

when claimant should file claim, information critical to his right

of judicial forfeiture). The government does not dispute the lack

of actual notice to either Barrera or Kuba, nor does it dispute the

fact that DEA was contacted on two occasions by Kuba regarding the

seizure.

If we are to accept the facts as recited by Barrera, then it

is clear that Barrera's retained counsel contacted DEA within two

weeks after the seizure, provided DEA with his and Barrera's

correct addresses, and made DEA aware that Barrera was interested

in retrieving his money and was willing to contest any forfeiture.

It is apparent that on August 24, 1992, when Kuba contacted DEA for

the second time, DEA agents knew or should have known that

forfeiture proceedings had been commenced against Barrera on August

10, 1992, the date the notice of seizure was mailed to the New York

address, only four days after the initial contact with Kuba.

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Barrera also had filed on November 9, 1992, his petition for

remission, which was received by DEA before it had issued its

declaration of forfeiture on December 4, 1992.

The critical fact, dispositive of the present case, is the

misinformation given to Kuba on August 26, 1992 when he could have

contested the forfeiture on Barrera's behalf. DEA untruthfully

informed Kuba that no file had even been opened and then proceeded

to complete the publication of the notice. Agency practices which

"reflect an "attitude of concealment rather than enlightenment' do

not meet the basic demands of due process." Glasgow, 12 F.3d at

799 (quoting Menkarell v. Bureau of Narcotics, 463 F.2d 88, 94 (3d

Cir.1972)).

During oral argument counsel for the government stated he was

relying primarily on Madewell v. Downs, 68 F.3d 1030 (8th Cir.1995)

and Sarit v. United States Drug Enforcement Admin., 987 F.2d 10

(1st Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 241, 126 L.Ed.2d

195 (1993). In Madewell there was no reason for DEA to have known

the address to which it had sent notice was ineffective. In Sarit,

counsel was on notice that forfeiture was imminent, yet did not

notify DEA his client's address had changed, or contact DEA to

determine when the notice would be published. The First Circuit

held the ineffective notice was a result of counsel's conduct, and

not that of DEA. Sarit, 987 F.2d at 16. Both Madewell and Sarit

are thus factually distinguishable from the instant case because

here Kuba did nothing to deceive or manipulate DEA, but made a good

faith effort to elicit information regarding the retrieval of his

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client's money. DEA knew Barrera had not received notice, and

though it knew how to give notice, failed to do so.5

IV. Conclusion

The facts of this case demonstrate either bureaucratic

misfeasance or worse. Barrera's money was seized and no charges

were filed against him. When his duly retained attorney attempted

to probe the inner workings of DEA to discover what it was doing

with his client's money, he was misinformed and manipulated by the

system for almost two years. Under all the circumstances, Barrera

did not receive proper notice of the government's intent to forfeit

his money. We therefore hold the order of forfeiture void. The

case is remanded for renewed administrative proceedings unless a

judicial proceeding is commenced pursuant to 19 U.S.C. § 1608.

REVERSED AND REMANDED.

* * * * * *

5
In tax cases the Internal Revenue Service usually satisfies
the statutory requirement by sending the notice via certified or
registered mail to the taxpayer's last known address. However, if
IRS fails to exercise reasonable diligence in ascertaining the
taxpayer's proper address, the notice is defective. See, e.g.,
Ward v. Commissioner of Internal Revenue, 907 F.2d 517, 522 (5th
Cir.1990) (notice defective when IRS failed to process taxpayer's
new address furnished to it by him, and sent notice to old
address); Mulder v. Commissioner of Internal Revenue, 855 F.2d
208, 212 (5th Cir.1988) (where notice sent to taxpayer's last known
address was neither delivered nor claimed, IRS was required to take
further action, such as contacting tax-preparer whose identity and
address were in its possession); Johnson v. Commissioner of
Internal Revenue, 611 F.2d 1015, 1020-1021 (5th Cir.1980) (notice
sent to taxpayer's last known address defective where IRS had
misplaced power of attorney filed with the commissioner by taxpayer
directing that notice be sent to his attorneys at their address).

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