United States Court of Appeals,
Fifth Circuit.
No. 95-50071.
Alphonso BARRERA-MONTENEGRO, Plaintiff-Appellant,
v.
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
1
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....
1
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
2
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
3
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.
4
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
5
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,
4
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.
6
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.
7
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
8
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).
9
10