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U.S. v. $57

May 20, 2003


The opinion of the court was delivered by: John Rhoades, Senior District Judge.


I. Introduction

This is a forfeiture action in which the standing of claimants Enedina Pereza-Soto and Ricardo Perez-Lopez has been hotly contested. The court previously ruled that claimants must establish standing by a preponderance of the evidence. Claimants have sought reconsideration of the court's ruling. The motion for reconsideration is denied for the reasons set forth below.

II. Background

This civil forfeiture action is brought pursuant to the Civil Asset Forfeiture Reform Act of 2000. The United States seeks to forfeit $57,790 in cash ("the subject currency") which, it is undisputed, was seized by U.S. Customs Service and U.S. Drug Enforcement Administration agents on July 27, 2000 from a vehicle driven by Mr. Perez-Lopez. See July 30, 2003 Pretrial Order. Mr. Perez-Lopez was stopped after driving away from 692 Arga Place, Chula Vista, California. The subject currency was found in the console of the vehicle and behind the driver's seat.

For purposes of providing context to the issue presented, the court notes that it is the government's contention that in February 2000, U.S. Customs Service agents were conducting a criminal investigation relating to suspected marijuana smuggling and distribution activities of Mr. Perez-Lopez. The investigation included surveillance and drive-bys of Mr. Perez-Lopez's residence located at 692 Arga Place. On several occasions, the agents examined bags of garbage collected from the front of the residence as well as bags that were collected from the landfill after being transported from the residence to the landfill. Inside the bags was cellophane and packing tape with marijuana debris. When defendant was stopped in July of 2000, Mr. Perez-Lopez consented to a search of 692 Arga Place. A canine narcotic detector alerted to the possible presence of narcotics in several areas of the house.

Ms. Peraza-Soto filed a claim pursuant to Rule C(6) of the Supplemental Rules, Federal Rules of Civil Procedure, claiming to be the owner of the currency. Mr. Perez-Lopez also filed a claim pursuant to Rule C(6) "as an owner of said currency, and/or as bailor/bailee of Enedina Perez-Soto. . . ." Neither claimant explained in their claim the basis for their claim of ownership.

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.

III. Analysis

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 ...

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