United States v. Lopez-Burgos

United States Court of Appeals
For the First Circuit

No. 04-1995

UNITED STATES OF AMERICA,
Plaintiff, Appellant,

ROBERTO LÓPEZ-BURGOS,
Claimant, Appellee,

$219,860 IN U.S. CURRENCY,
Defendant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]

Before
Torruella, Circuit Judge,
John R. Gibson, Senior Circuit Judge,*
and Howard, Circuit Judge.

Richard L. Hoffman, Assistant Chief United States Department
of Justice, Criminal Division, Asset Forfeiture & Money Laundering
Section, with whom Richard Weber, Chief, United States Department
of Justice, Criminal Division, Asset Forfeiture & Money Laundering
Section and H.S. Garcia, United States Attorney, were on brief,
for appellant.
Francisco Rebollo-Casalduc, with whom Law Offices of Francisco
Rebollo-Casalduc, was on brief, for appellee.

January 10, 2006

*
Of the United States Court of Appeals for the Eighth Circuit,
sitting by designation.
HOWARD, Circuit Judge. In early April 2003, federal and

Puerto Rico law enforcement officials exercised their authority

under the Shippers Export Declaration guidelines, see 15 C.F.R.

Part 30, to examine a parcel shipped from New York City to a FedEx

station within the Commonwealth. The shipping manifest stated that

the parcel contained a "scrap book, color and photo paper." The

shipper was identified as John Ramirez, 308 Canal Street, New York,

and the addressee as Roberto López Burgos of San Juan.

The parcel in fact contained nearly $220,000 in $20

bills. The investigating agents permitted the parcel to be

delivered to López Burgos, who had come to the FedEx station to

pick it up. López Burgos drove off with the parcel in a Toyota

FourRunner registered in his name. A short time later, he was

stopped and asked for his driver's license. He replied that he did

not have it with him. When asked about the contents of the parcel

in plain view in the back seat, he had no comment. At this point,

the agents arrested him and his wife, who was riding with him at

the time.

At the police station, López Burgos stated that he was

unemployed and asked for a lawyer. His wife, who was interviewed

separately, told the agents the neither she nor her husband was

employed (though she baked wedding cakes part-time). She stated

that she had no knowledge of the currency in the parcel, and signed

a form relinquishing any claim to it. Meanwhile, a drug detection

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dog alerted to the presence of narcotics in the currency.

Subsequent investigation revealed that there is no John Ramirez at

the company located at 308 Canal Street in New York City.

The money was formally seized and López Burgos filed an

administrative claim to it. The United States subsequently

commenced a civil judicial forfeiture by filing a verified

complaint for forfeiture in rem. See 21 U.S.C. § 881(a)(6) and 18

U.S.C. §§ 981 and 983. After several months of procedural

skirmishing that we shall not describe because it has no bearing on

our analysis, López Burgos filed a claim to the money and a motion

to dismiss the forfeiture complaint. In support of his motion,

López Burgos invoked statutorily superseded (and therefore legally

irrelevant) authority requiring the government to plead facts

sufficient to establish probable cause to believe that the currency

is subject to forfeiture. See United States v. One Lot of U.S.

Currency ($36,674), 103 F.3d 1048, 1053 (1st Cir. 1997)

(interpreting the since repealed 19 U.S.C. § 1615); see also United

States v. 255 Broadway, 9 F.3d 1000, 1003-04 (1st Cir. 1993).

Inadequately alerted to López Burgos's legal error by the

government's opposition papers (which made only oblique references

to the new statutory regime, which we shall discuss momentarily),

the district court granted the motion to dismiss. In the court's

view, the facts set forth in the complaint (which we have

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summarized above) were insufficient to establish probable cause to

forfeit the currency.

The government has brought this appeal to secure a remand

and the reinstitution of the forfeiture action. The government

says that the district court's decision was incorrect even under

our old law -- that it failed to appreciate the effect of the

pleaded facts in their totality -- but we shall focus on its other

argument: that a remand is required for proper application of the

decisional standards ushered in by the Civil Asset Forfeiture

Reform Act of 2000 (CAFRA). We agree that a remand is appropriate.

Although CAFRA increased the government's burden of proof at trial

from mere probable cause (the old standard) to the preponderance of

the evidence, see 18 U.S.C. § 983(c)(1), it made clear that the

pleading requirements imposed by cases such as One Lot of U.S.

Currency ($36,674) no longer apply. It did so by stating that no

civil forfeiture complaint may be dismissed because the government

lacked sufficient evidence of forfeitability at the time of filing,

see 18 U.S.C. § 983(a)(3)(D), and that the government may use

evidence gathered after filing to meet its burden of proof, see 18

U.S.C. § 983(c)(2). As a consequence, the government no longer

must plead facts sufficient to establish probable cause to forfeit;

it need only satisfy Rule E(2)(a) of the Supplemental Rules for

Certain Admiralty and Maritime Claims. See 18 U.S.C. §

983(a)(3)(A). In relevant part, the rule provides: "In actions to

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which this rule is applicable the complaint shall state the

circumstances from which the claim arises with such particularity

that the . . . claimant will be able, without moving for a more

definite statement, to commence an investigation of the facts and

to frame a responsive pleading."1

López Burgos concedes that the district court applied the

wrong legal standards, and he, quite properly, does not argue that

the complaint was inadequate under current law. Instead, he argues

1
In August 2004, the Advisory Committee on Civil Rules
published for comment a draft of proposed Supplemental Rule G,
which would merge most provisions of the Supplemental Rules
governing forfeiture actions into a single rule. Proposed
Supplemental Rule G(8)(b)(ii) states: "In an action governed by 18
U.S.C. § 983(a)(3)(D) the complaint may not be dismissed on the
ground that the government did not have adequate evidence at the
time the complaint was filed to establish the forfeitability of the
property. The sufficiency of the complaint is governed by
subdivision (2)."
The cross-referenced "subdivision (2)," Proposed Supplemental
Rule G(2), states that a forfeiture complaint must

(a) be verified;

(b) state the grounds for subject-matter jurisdiction, in
rem jurisdiction over the defendant property, and venue;

(d) if the property is tangible, state its location when
any seizure occurred and -- if different -- its location
when the action is filed;

(e) identify the statute under which the forfeiture
action is brought; and

(f) state sufficiently detailed facts to support a
reasonable belief that the government will be able to
meet its burden of proof at trial.

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that we should affirm the judgment on alternative grounds: that

the government affirmatively waived its entitlement to have its

complaint assessed under CAFRA because, as we have said, the

government's opposition papers inadequately alerted the district

court to CAFRA's requirements;2 that the court actually treated its

motion as one for summary judgment and, under summary judgment

principles, appropriately entered judgment in its favor; and that

a remand would be futile because the government will be unable to

augment its evidence during the discovery process.

These arguments lack merit. The first two are without

record support, and the third invites us to accept López Burgos's

predictions about the effects on the proceedings (if any) of still

unfolding events -- namely, his anticipated invocation of the Fifth

Amendment's privilege against self-incrimination at his deposition,

and the recent indictment of one of the law enforcement officers

involved in the seizure of the currency. And, in any event, we

simply do not share López Burgos's conviction that the verified

complaint falls significantly short of establishing a trialworthy

issue as to forfeitability. Under the circumstances, the only

prudent course is to vacate and remand for further proceedings

consistent with this opinion.

2
López Burgos asserts that the government sought to hide the
CAFRA standards from the court because it wished to avoid
application of the higher burden of proof the statute imposes on
the government at trial. There is nothing in the record to
substantiate this allegation.

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It is so ordered.

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