United States v. Giraldo

January 19, 1995 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 94-1454

UNITED STATES,
Appellee,

v.

JAMES GIRALDO,
Defendant, Appellant.

ERRATA SHEET

This opinion of this court issued on January 19, 1995 is
amended as follows:

On page 4, line 20, replace the word "know" with the word
"known."

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 94-1454

UNITED STATES,

Appellee,

v.

JAMES GIRALDO,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Jose Antonio Fuste, U.S. District Judge]

Before

Torruella, Chief Judge,

Selya and Boudin, Circuit Judges.

James Giraldo, on motion.

January 19, 1995

Per Curiam. Appellant James Giraldo appeals from

the denial by the district court of his motion for the return

of property seized by the United States Customs Service.

I.

Giraldo was stopped for inspection by Customs

officials at the Luis Munoz Marin International Airport in

Puerto Rico in February 1993. He had arrived on a flight

from Aruba, N.A. An x-ray, to which Giraldo consented,

showed bulges in his intestines. He then was given a

laxative and expelled about 50 pellets of heroin. He was

charged with one count of possessing heroin with the intent

to distribute it in violation of 21 U.S.C. 841(a)(1) and

one count of importing heroin into the Customs Territory of

the United States from Colombia in violation of 21 U.S.C.

952(a). The court appointed a Federal Public Defender to

represent Giraldo. On March 31, 1993, Giraldo pleaded guilty

to both counts. On June 28, 1993, the district court

sentenced him to concurrent terms of 57 months imprisonment

and four years of supervised release.

Almost one year later, on March 1, 1994, Giraldo

filed a motion for the return of property under Fed. R. Crim.

P. 41(e).1 He claimed that when he was arrested at the

1. Rule 41(e) provides that "[a] person aggrieved by . . .
the deprivation of property may move the district court for
the district in which the property was seized for the return
of the property on the ground that such person is entitled to
lawful possession of the property."

-3-

airport, government agents seized $2,126 in United States

currency and about $60,000 in Colombian pesos (the equivalent

of about $179 in United States dollars). Giraldo argued that

his Fourth Amendment rights had been violated by the seizure

and that the currency was not related to drug activity. He

also asserted that the government had not commenced any

forfeiture proceedings and that, as a result, the money

should be returned to him.

The government responded that the Customs Service

had, in fact, initiated an administrative forfeiture

proceeding concerning the money. According to the

government, notice of this proceeding had been mailed to

Giraldo in February and December 1993 and returned by the

United States Post Office to the Service. When Giraldo did

not respond in accordance with the procedures set forth in

the letter of December 1993, the money was forfeited in

January 1994. Therefore, the government argued, Giraldo was

prevented from pursuing any judicial remedies.

Giraldo filed a rebuttal in which he pointed out

that he had been incarcerated in December 1993 when the

letter was mailed and that the government knew this;

nonetheless, the Customs Service sent the letter to Giraldo's

home address in Flushing, New York. Having never received

notice of the administrative forfeiture, Giraldo maintained

that he had not had a meaningful opportunity to object to the

-4-

forfeiture. Further, Giraldo averred, the district court had

"ancillary" jurisdiction to consider his motion and could

treat it as a civil equitable action.

The district denied Giraldo's motion by endorsement

on March 24, 1994. This appeal ensued.

II.

In 21 U.S.C. 881(a), Congress has provided for

the civil forfeiture of property or money "furnished or

intended to be furnished by any person in exchange for a

controlled substance in violation of this subchapter, all

proceeds traceable to such an exchange, and all moneys . . .

used or intended to be used to facilitate any violation of

this subchapter . . . ." Id. 881(a)(6). Section 881(d)

states that the seizure of such property is to be

accomplished through the application of the customs laws, 19

U.S.C. 1600 et seq.

These laws provide that property worth $500,000 or

less is subject to administrative forfeiture without judicial

involvement. 19 U.S.C. 1607. The administrative process

requires the government to publish notice of its intent to

forfeit the property once a week for three weeks and to send

written notice to any party known to have an interest in the

property. Id. 1607(a); 21 C.F.R. 1316.75. A claimant

then has 20 days after the first publication to file a claim

and a cost bond of not less than $250. 19 U.S.C. 1608.

-5-

The filing of the claim and the bond stops the administrative

process and requires the seizing agency to hand the matter

over to the United States Attorney for the commencement of a

judicial forfeiture proceeding. Id.; see also 21 C.F.R.

1316.76(b). A claimaint's failure to follow these procedures

results in a declaration of forfeiture by the seizing agency

and the vesting of title in the United States. 19 U.S.C.

1609. This declaration has the same effect as a final decree

and order of forfeiture entered in a judicial proceeding.

Id.

Notwithstanding the above, district courts have

jurisdiction to entertain collateral due process attacks on

administrative forfeitures. United States v. Woodall, 12

F.3d 791, 793 (8th Cir. 1993) ("the federal courts have

universally upheld jurisdiction to review whether an

administrative forfeiture satisfied statutory and due process

requirements").

Whereas most challenges to forfeiture
would be foreclosed by a plaintiffs'
[sic] failure to utilize the mechanism
for obtaining judicial relief provided in
the forfeiture statute and regulations,
courts have entertained challenges to the
adequacy of notice, reasoning that the
mechanism is not available to a plaintiff
who is not properly notified of the
pending forfeiture.

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

17 (1st Cir.) (citations omitted), cert. denied, 114 S.Ct.

241 (1993).

-6-

We have indicated that such challenges may be

pursued in a civil action under 28 U.S.C. 1331. See United

States v. Mosquera, 845 F.2d 1122, 1126 (1st Cir. 1988) (per

curiam). See also Marshall Leasing, Inc. v. United States,

893 F.2d 1096, 1102-03 (9th Cir. 1990) (district court had

jurisdiction over due process attack on forfeiture under

1331); Willis v. United States, 787 F.2d 1089, 1093 (7th Cir.

1986) (general federal question subject matter jurisdiction

exists over constitutional challenge to forfeiture), cited in

Sarit, 987 F.2d at 17. The fact that Giraldo termed his

motion as one under Rule 41(e) does not defeat the district

court's jurisdiction. "Where criminal proceedings against

the movant have already been completed, a district court

should treat a rule 41(e) motion as a civil complaint."

Onwubiko v. United States, 969 F.2d 1392, 1397 (2d Cir.

1992). See also United States v. Martinson, 809 F.2d 1364,

1366-67 (9th Cir. 1987) (motions to return property filed

under Rule 41(e) are treated as "civil equitable proceedings"

when criminal proceedings have been completed); cf. Woodall,

12 F.3d at 794 n. 1 (once criminal proceedings have ended, a

pleading by a pro se plaintiff which is styled as a Rule

41(e) motion should be liberally construed as seeking to

invoke the proper remedy).

In this situation, due process requires "notice

reasonably calculated, under all the circumstances, to

-7-

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 (1950).

[I]f the government is incarcerating or
prosecuting the property owner when it
elects to impose the additional burden of
defending a forfeiture proceeding,
fundamental fairness surely requires that
either the defendant or his counsel
receive actual notice of the agency's
intent to forfeit in time to decide
whether to compel the agency to proceed
by judicial condemnation.

Woodall, 12 F.3d at 794-95. See Robinson v. Hanrahan, 409

U.S. 38, 40 (1972) (per curiam) (the state violated

defendant's right to due process by mailing a notice of

forfeiture to defendant's home when it knew that he was in

jail). Thus, where a claimant is "residing at a place of the

government's choosing," the seizing agency must take steps to

locate the claimant in order to satisfy due process. Torres

v. $36,256.80 United States Currency, 25 F.3d 1154, 1161 (2d

Cir. 1994) (a "simple call" to the Bureau of Prisons often

suffices to determine where a claimant is serving his or her

sentence).

III.

Although the record now before this court indicates

that Giraldo did not receive constitutionally adequate notice

of the administrative forfeiture, we cannot be sure. If the

forfeiture is valid, Giraldo has waived judicial challenge to

-8-

it by failing to file a timely claim and post bond. See

Woodall, 12 F.3d at 795. If the notice turns out to have

been inadequate, the forfeiture is void. Id. The district

court then must set aside the declaration of forfeiture and

order the Customs Service to return the money to Giraldo or

to begin judicial forfeiture in the district court. See id.

In this latter instance, Giraldo need not post the $250 bond

if the district court determines that the government has

seized all of his money. See Onwubiko, 969 F.2d at 1399.

Given our disposition of the matter, we deny

Giraldo's motion for the appointment of counsel. However, he

is free to request such an appointment from the district

court. See Torres, 25 F.3d at 1161 (court ordered the

appointment of pro bono counsel based on the presence of

complex issues of law); Martinson, 809 F.2d at 1370 (court

permitted public defender to continue to represent claimant

on a motion for the return of property holding that it was an

"ancillary" proceeding for purposes of the Criminal Justice

Act, 18 U.S.C. 3006A(c)); United States v. 1604 Oceola, 803

F.Supp. 1194, 1196 (N.D.Tex. 1992) (listing sources for the

authority to appoint counsel in forfeiture actions).

We therefore summarily reverse the judgment of the

district court, see Local Rule 27.1, and remand the matter

for further proceedings.

-9-