Neither claimant appeared at the Early Neutral Evaluation Conference despite local rules and a court order that required their appearance. Moreover, Mr. Perez-Lopez did not appear at the Case Management Conference and Settlement Conference, nor did he appear for his deposition.
This case was set for trial on November 19, 2002. Prior to that date, the court ruled that at trial claimants must, as a threshold issue, establish their standing by a preponderance of the evidence. On the first day of trial, the government appeared, ready to proceed. Ms. Peraza-Soto appeared along with claimants' counsel. Mr. Perez-Lopez did not appear. At that time, claimants' counsel orally moved the court to reconsider its previous ruling on the issue of standing. Counsel contended that his clients had already sufficiently demonstrated their standing by filing a notice of claim in accordance with Rule C(6).
The court continued the trial and permitted the parties to file supplemental briefs on the standing issue. As set forth in more detail below, the court adheres to its previous ruling.
The Ninth Circuit "require[s] proper standing to contest a forfeiture both as a statutory matter and as an Article III and prudential requirement." United States v. One 1985 Cadillac Seville, 866 F.2d 1142, 1148 (9th Cir. 1989). Standing is a question of law for the court. San Diego County Gun Rights v. Reno, 98 F.3d 1121, 1124 (9th Cir. 1996).
It is clear that in the Ninth Circuit an individual with an ownership interest in property has standing to challenge a forfeiture. See United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051, 1058 (9th Cir. 1994), superseded by statute on other grounds. Moreover, an individual with a possessory interest in the property will have standing if that interest is explained. See Id. ("[W]here a claimant asserts a possessory interest and provides some explanation of it (e.g., that he is holding the item for a friend), he will have standing."). What is not necessarily clear at first glance is whether a simple allegation of the requisite interest will suffice to establish Article III standing at all stages of a forfeiture proceeding or whether a claimant must at trial prove the interest by a preponderance of the evidence. The Ninth Circuit has not squarely addressed this issue.
The Ninth Circuit has, without explanation, announced what appears at first glance to be different tests for determining the requisite amount of evidence a claimant must tender to support standing in a forfeiture action. For example, a cursory reading of $191,910.00 in U.S. Currency might suggest that a bare allegation of the requisite interest is enough for standing at all stages of the forfeiture proceeding. See United States v. $191,910.00 in U.S. Currency, 16 F.3d at 1057 ("To have standing to challenge a forfeiture, a claimant must allege that he has an ownership or other interest in the forfeited property."). In contrast, in United States v. Real Property Located at Section 18, Tp. 23, Range 9, Sunnyview Plat, Lots 4 & 5, Block 4, Lakeview Dr., Quinault Lake, Olympic Nat. Park, Grays Harbor County, WA., 976 F.2d 515, 520 (9th Cir. 1992), the Ninth Circuit explained that to establish standing "[t]he claimant has the burden of establishing, by a preponderance of the evidence, that he has an interest in the property."
The apparent conflict between these two cases evaporates, however, when these cases are considered in light of the United States Supreme Court case of Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992), which was followed by the Ninth Circuit in Central Delta Water Agency v. United States, 306 F.3d 938 (9th Cir. 2002). As the Supreme Court explained in Lujan, "the core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III" and, accordingly, the elements of standing "must be supported at each stage of litigation in the same manner as any other essential element of the case." Lujan, 504 U.S. at 560, 561, 112 S.Ct. 2130. Thus, for example, although at the motion to dismiss stage it is enough to allege the elements of standing, at the summary judgment stage the party with the burden of demonstrating standing must demonstrate that there is a genuine issue of material fact as to the standing elements, and at trial standing must be proved by a preponderance of the evidence. See Lujan, 504 U.S. at 561, 112 S.Ct. 2130; Central Delta Watet Agency, 306 F.3d at 947.
Granted, the Ninth Circuit has never considered whether Lujan applies in the context of a forfeiture action, and forfeiture actions differ from typical actions brought in federal court because standing is not a part of the plaintiff's case given that the government, not the claimant, is the plaintiff. However, regardless of the position of the claimant vis-a-vis the government in a forfeiture action, a claimant must establish Article III standing. See One 1985 Cadillac Seville, 866 F.2d at 1148. The court can find no principled basis for concluding that the rationale and holding of Lujan regarding the requirements for the establishment of standing should not apply in a forfeiture action. Moreover, as explained below, application of Lujan in the forfeiture context works to harmonize Ninth Circuit case law. Finally, application of Lujan to forfeiture cases makes practical sense.
As noted, in $191,910.00 in U.S. Currency the Ninth Circuit stated that a mere allegation of ownership is sufficient for standing in a forfeiture action. However, in $191,910.00 in U.S. Currency, the issue of standing was raised in an appeal of the district court's order denying the government's motion to dismiss for lack of standing.*fn1 Therefore, the court's focus was properly on the allegations of the claimant's claim. In contrast, in Real Property Located at Section 18, the Ninth Circuit was reviewing a standing decision made after a bench trial. Thus, under Lujan, it was appropriate for the Ninth Circuit to examine the claimant's claim of ownership under a preponderance of the evidence standard.
Claimants contend that the holding of Real Property Located at Section 18 "that the claimant had the burden of establishing by a preponderance of the evidence that he had an interest in the property was simply one element of the innocent owner defense he proffered." Claimants' Supplemental Standing Argument p. 4, lines 16-18. Claimants misread this case. In Real Property Located at Section 18, the claimant made two arguments on appeal:
First, he assert[ed] that the district court erred in
finding that he did not have an interest in the land,
thus denying his standing to contest its forfeiture.
Second, he argue[d] that the distriet court's finding
that he had knowledge of the marijuana growing
operation was clearly erroneous.