United States District Court, Northern District of California
December 17, 2004
IN RE THE MATTER OF: THE SEIZURE OF APPROXIMATELY 28 GRAMS OF MARIJUANA
The opinion of the court was delivered by: Patel, J.
MEMORANDUM & ORDER
This action arises out of the seizure of approximately twenty-eight grams of marijuana by the United States Drug Enforcement Agency ("DEA"), pursuant to a warrant issued by this court. On September 18, 2003, this court ruled that the warrant used to seize this marijuana was invalid and ordered that the marijuana be returned to the Sheriff of Humboldt County. At some point in August of 2003, petitioner Christopher Giauque went missing, and his whereabouts are still unknown. By order of this court on May 28, 2004, Rebecca Giauque, petitioner's wife and the executor of his estate, was substituted as party to Mr. Giauque's claims. Remaining before this court is the government's Motion to Alter or Amend, or for Relief From Judgment, or in the alternative, for Stay Pending Appeal. Also before this court is plaintiff's motion for attorney fees. Having considered the parties' arguments and for the reasons set forth below, the court enters the following memorandum and order.
On April 24, 1999, police arrested Christopher Giauque in Humboldt County and seized approximately twenty-eight grams of marijuana from his vehicle. On May 31, 2000, following the entry of charges against him and pursuant to a negotiated plea, Giauque entered a plea of no contest to a single count of disturbing the peace in violation of California Penal Code section 415. All other charges arising out of the arrest were dismissed.
On September 6, 2000, Giauque filed a motion in the state criminal case for the return of property seized by the Humboldt County Sheriff's Department incident to his arrest, including the approximately 28 grams of marijuana. The parties stipulated that Giauque possessed a legitimate physician's recommendation card for the use of medical marijuana under California's Compassionate Use Act of 1996, Cal. Health & Safety Code § 11362.5. On January 18, 2001, Superior Court Judge W. Bruce Watson issued an order for return of Giauque's property, including the marijuana. Humboldt County Sheriff Dennis Lewis failed to follow the court's order, resulting in an order for contempt with a stay of enforcement filed on May 7, 2001.
On March 30, 2001, the County of Humboldt and the Humboldt County Sheriff's Department, by and through Sheriff Lewis, filed a Complaint for Interpleader and Declaratory relief in this court against Giauque, the United States Department of Justice, the Drug Enforcement Administration, and several unnamed "John Doe" federal defendants. The action sought a determination as to who was entitled to the subject marijuana.
On May 23, 2001, the United States Drug Enforcement Agency presented United States District Judge Charles A. Legge with an application for issuance of a seizure warrant, pursuant to 21 U.S.C. § 881, to allow seizure and forfeiture of the marijuana at issue. Judge Legge issued the warrant, and the Sheriff's Department surrendered the subject marijuana to the Department of Justice. On June 8, 2001, Judge Legge dismissed the civil interpleader action as moot. Following Judge Legge's retirement from the bench, the matter was transferred to this court for resolution.
On July 25, 2001, Giauque filed a motion for return of property pursuant to Federal Rule of Criminal Procedure 41(e). On August 25, 2003, this court entered an order holding that the California state court had exclusive jurisdiction over the subject marijuana, and, therefore, the district court lacked jurisdiction to issue the seizure warrant. The court ordered the DEA to return the subject marijuana to the Humboldt County Sheriff's Department and the state court which asserted jurisdiction over it. Judgment in favor of Giauque was filed on September 18, 2003.
On August 9, 2003, Giauque disappeared and is now believed to be deceased. On May 28, 2004, this court allowed Rebecca Giauque, petitioner's wife and the executor of his estate, to substitute herself as plaintiff in this case. Now before this court is the government's motion to alter or amend or for relief from the court's August 25, 2003 judgment, or, in the alternative, for stay pending appeal. Also before this court is petitioner Rebecca Giauque's motion for attorney fees.
I. Alteration or Amendment of Judgment
Rule 59(e) of the Civil Rules of Civil Procedure allows a court to alter or amend judgment "in an action tried without a jury, for any of the reasons for which rehearings have heretofore been granted in suits in equity in the courts of the United States." Fed.R.Civ.P. 59(a)(2), (e). The court may open the judgment, take additional testimony, amend findings of fact and conclusions of law, and direct the entry of a new judgment. Id. A motion to amend judgment is committed to the "considerable discretion" of the district court. See Turner v. Burlington Northern Santa Fe R. Co., 338 F.3d 1058, 1063 (9th Cir.2003). The Ninth Circuit has identified four grounds upon which a Rule 59(e) motion may be granted: (1) the motion is "necessary to correct manifest errors of law or fact upon which the judgment is based;" (2) the moving party presents "newly discovered or previously unavailable evidence;" (3) the motion is necessary to "prevent manifest injustice;" or (4) there is an "intervening change in controlling law." McDowell v. Calderon, 197 F.3d 1253, 1254 n. 1 (9th Cir.1999). Motions pursuant to Rule 59(e) must be filed within 10 days following the entry of judgment. Fed.R.Civ.P. 59(e).
Federal Rule of Civil Procedure 60(b) grants relief from judgment on the basis of "newly discovered evidence" or "any other reason justifying relief." Fed.R.Civ.P. 60(b)(2), (6). Application of Rule 60(b)(6) is to be used sparingly to "prevent manifest injustice" where "extraordinary circumstances prevent the party from taking timely action to prevent or correct an erroneous judgment." See Hamilton v. Newland, 374 F.3d 822, 824 (9th Cir.2004). Relief under any provision of Rule 60(b) turns on a failure to timely file to alter or amend a judgment under 59(e). See American Ironworks & Erectors, Inc. v. North American Construction Corp., 248 F.3d 892, 899 (9th Cir.2001).
II. Stay Pending Appeal
Federal Rule of Civil Procedure 62 governs stays of proceedings to enforce a judgment, including stays pending motions for new trial or judgment, injunctions pending appeal, and stays upon appeal. Three subsections of the rule are relevant to the pending motion.
Federal Rule of Procedure 62(b) allows courts to stay the enforcement of a judgment pending disposition of a motion for a new trial or to alter or amend a judgment, a motion for relief from a judgment, a motion for judgment in accordance with a motion for a directed verdict, or a motion for amendment to the findings or for additional findings. Fed.R.Civ.P. 62(b) ("In its discretion and on such conditions for the security of the adverse party as are proper, the court may stay the execution of or any proceedings to enforce a judgment pending the disposition of [post-trial motions pursuant to Rules 50, 52(b), 59, and 60]").
When appeal is taken from a final judgment affecting or denying an injunction, Federal Rule of Civil Procedure 62(c) allows courts to grant or change an injunction during the pendency of appeal. Fed.R.Civ.P. 62(c) ( "When an appeal is taken from an interlocutory or final judgment granting, dissolving, or denying an injunction, the court in its discretion may suspend, modify, restore, or grant an injunction during the pendency of the appeal ... as it considers proper for the security of the rights of the adverse party"). The Ninth Circuit has required that parties seeking a stay pursuant to Rule 62(c) must satisfy two "interrelated legal tests," namely a combination of probable success on the merits and the possibility of irreparable injury, on the one hand, and the existence of serious questions going to the merits and the balance of hardships, on the other. See Artukovic v. Rison, 784 F.2d 1354, 1355 (9th Cir.1986).
Under Federal Rule of Civil Procedure 62(d), a district court may stay enforcement of a judgment when appeal is taken by accepting a form of security from appellant, including but not limited to a supersedeas bond. See Fed. R. of Civ. P. 62(d); Townsend v. Holman Consulting Corp., 929 F.2d 1358, 1367 (9th Cir.1990) (holding that a district court may permit security other than a bond).
III. Attorney fees
The Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412 provides, in relevant part, that "fees and other expenses" should be awarded to a "prevailing party ... in any civil action (other than cases sounding in tort) ... brought by or against the United States ... unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A). A "substantially justified" position "must have a reasonable basis both in law and in fact." United States v. Real Property at 2659 Roundhill Drive, 283 F.3d 1146, 1151 (9th Cir.2002) (internal quotation marks omitted). The "position of the United States" is defined under the EAJA as not only its litigation position in the civil action, but also the government actions upon which the civil suit is based. See 28 U.S.C. § 2412(d)(2)(D). See Gutierrez v. Barnhart, 274 F.3d 1255, 1259 (9th Cir.2001) (defining the inquiry as whether the "original action" and the "action in court" were both substantially justified).
I. Alteration or Amendment of Judgment
Following the entry of judgment by this court on August 25, 2003, defendants timely filed a motion to alter or amend this court's judgment under Fed.R.Civ.P. 59(e). In the ensuing period since that motion was argued, this court granted Rebecca Giauque the right to substitute as plaintiff for her missing husband. The question before this court is whether, notwithstanding a substitution of plaintiff under Rule 25, Christopher Giauque's disappearance and presumed death prior to issuance of the judgment rendered the action moot.
The jurisdiction of federal courts depends on the existence of a "case or controversy" under Article III of the Constitution. Public Utilities Comm'n v. F.E.R.C., 100 F.3d 1451, 1458 (9th Cir.1996). A claim is non-justiciable for reasons of mootness where the action "has lost its character as a present, live controversy." American Rivers v. National Marine Fisheries Service, 126 F.3d 1118, 1123 (9th Cir.1997) (citing American Tunaboat Ass'n v. Brown, 67 F.3d 1404, 1407 (9th Cir.1995)). "In the context of declaratory and injunctive relief, [a plaintiff] must demonstrate that she has suffered or is threatened with a concrete and particularized legal harm, coupled with a sufficient likelihood that she will again be wronged in a similar way." Bird v. Lewis & Clark College, 303 F.3d 1015, 1019 (9th Cir.2002) (internal quotation marks and citation omitted), cert. denied, 538 U.S. 923. "The burden of demonstrating mootness is a heavy one." Northwest Environmental Defense Ctr v. Gordon, 849 F.2d 1241, 1243 (9th Cir.1988).
Defendant argues that Christopher Giauque's disappearance has mooted the court's order to return the seized property to the county. Analysis of substitution of the parties, which this court undertook after the government's filing of its motion, is inherently a question of whether a live claim or controversy exists between a defendant and a deceased plaintiff's survivors or estate representatives. As laid out by this court in the Order granting substitution of Rebecca Giauque in place of her husband, the issue of attorney fees remained in controversy in this action, in spite of Christopher Giauque's disappearance. As this court made clear in that Order, the Judgment in this case did not order a return of the contested property to plaintiff, but rather ordered that the DEA return the subject marijuana to the custody of the Sheriff of Humboldt County and the state court whose jurisdiction had been usurped. In Re the Seizure of Approximately 28 Grams of Marijuana, 278 F.Supp.2d 1097, 1111 (N.D.C.A.2003) (Patel, J.). Until such time as Ms. Giauque filed a legal action in state court to regain possession of the seized marijuana, which she was unlikely to do, it was unnecessary for any court to evaluate the merits of a property claim she might lay to the marijuana.
Defendants are correct that the death or disappearance of a party seeking relief can moot pending claims, and, where a decedent's claims have been mooted, the death of a party can bar substitution. See e.g., Ulaleo v. Paty, 902 F.2d 1395, 1398-99 (9th Cir.1990) (holding that where a plaintiff died during pendency of appeal, his individual claims were moot). It is also certainly true that an action must terminate on justiciability grounds where a plaintiff has voluntarily dismissed his or her case or where a plaintiff has died or disappeared and no party has sought substitution in plaintiff's stead. See Szabo Food Serv., Inc. v. Canteen Corp., 823 F.2d 1073, 1078 (7th Cir.1987) (dicta noting the truism that a controversy is dissolved where a plaintiff has voluntarily dismissed his case under Rule 41(a) or the court has involuntarily dismissed his case under Rule 41(b)).
However, Rule 25 provides that where parties die and their claim has not been extinguished, the court may order a substitution of the proper parties. Fed.R.Civ.P. 25(a)(1). See Magnuson v. Baker, 911 F.2d 330, 332 n. 4 (9th Cir.1990) (noting that the court granted a substitution in place of a deceased plaintiff because live claims remained between the parties, i.e. because the case was "not moot"). On the basis of remaining live controversies between the parties, this court granted Rebecca Giauque's motion to substitute in as the plaintiff in this action. The substitution of a live plaintiff in Christopher Giauque's place thus resolved the issue raised by defendants that the action must necessarily terminate due to the original plaintiff's death.
Based on the foregoing, plaintiff's case does not satisfy a McDowell basis for granting a Rule 59(e) motion. See McDowell v. Calderon, 197 F.3d 1253, 1254 n. 1 (9th Cir.1999). The intervening event of Mr. Giauque's disappearance did not constitute an error of fact on which the judgment is based, nor a "newly discovered or previously unavailable evidence." Instead, the court's final judgment turned on the California state court's exclusive jurisdiction over the contested marijuana and this court's lack of jurisdiction to issue a seizure warrant for that contraband. With this court's subsequent ruling that Ms. Giauque could substitute for her husband as plaintiff, there is no basis for granting a Rule 59(e) motion. As the government's motion under 59(e) was timely filed, there no reason for this court to amend the judgment under Rule 60(a). The government's motion under Federal Rules of Civil Procedure 59(e) and 60(a) is thus denied.
II. Stay Pending Appeal
The United States has moved in the alternative to stay the enforcement of judgment in this case pursuant to Federal Rule of Civil Procedure 62(b) (stay on motion for new trial or for judgment), 62(c) (injunction pending appeal), and 62(d) (stay upon appeal). The government's motion for stay under Rule 62(b) sought a stay of enforcement for the time prior to disposition of the Rule 59(e) motion presently resolved by this Court. Thus the motion under Rule 62(b) is now moot. The application of Rules 62(c) and (d) is also problematic in this case, as both provisions expressly apply to cases in which "an appeal is taken." The government has provided no evidence of the filing of an appeal, plaintiff asserts that no appeal has been filed or taken in this case, and this court's docket reflects no such filing. The case therefore does not yet fall within the ambit of Rule 62's plain language, and the government's motion is premature at this time.
III. Attorney fees
Analysis of plaintiff's motion for attorney fees under the Equal Access to Justice Act turns on whether plaintiff was the "prevailing party" for purposes of the statute and whether the government's position was "substantially justified." 28 U.S.C. § 2412(d)(1)(A).*fn1 On the first issue, the government argues that Christopher Giauque's death precludes the existence of a "prevailing party" in this case, severing any claim to fees by his counsel. The government argues that it is parties, not their attorneys, to whom fees are due. See Shalala v. Schaefer, 509 U.S. 292, 304 (1993) (noting that the jurisprudence of "prevailing parties" in the 42 U.S.C. § 1988 context is often applied in the EAJA context); Evans v. Jeff D., 475 U.S. 717, 730 n. 19 (1986) (noting that the "prevailing party" language in 42 U.S.C. § 1988 signifies that an award of attorney fees is the right of the party to the litigation, not of the attorney).
The only case known to this court to address the specific issue of awarding EAJA legal fees to a deceased party found such an award permissible. See Hoffman v. Heckler, 656 F.Supp 1136, 1137 (E .D. Pa.1987) (rejecting the argument that since the original plaintiff in the case was deceased, plaintiff's counsel had no right to bring an action for attorney fees under the EAJA). Id. In that case, as in the present action, the attorney fees were awarded to the original plaintiff's wife, a substituted party. Id.
In accord with Heckler, this court finds that the substitution of Rebecca Giauque in place of her husband created a "prevailing party" for the purposes of the EAJA. "The substituted party steps into the same position as [ ] original party." Hilao v.. Estate of Marcos, 103 F.3d 762, 766 (9th Cir.1996). Mr. Giauque was the prevailing party on the dispositive motion in this litigation, namely his challenge to the federal district court's jurisdiction to issue a seizure warrant for the marijuana in possession of state officials. His wife, in "the same position as the original party," is thus also the prevailing party.
The second tenet of the EAJA is that the government bears the burden of demonstrating that its position--in the original action upon which the suit is based as well as in its position in the civil action--was "substantially justified." See 28 U.S.C. § 2412(d)(2)(D); Gutierrez, 274 F.3d at 1259. Standing alone, "[f]ailure to prevail does not raise a presumption that its position was not substantially justified." Kali v. Bowen, 854 F .2d 329, 334 (9th Cir.1988). Under the EAJA, the government position in the original action and in the litigation is evaluated in terms of reasonableness. See Real Property at 2659 Roundhill Drive, 283 F.3d at 1151 (holding that a "substantially justified" position must have a "a reasonable basis both in law and in fact"). This court thus evaluates the reasonableness of the government's position in terms of, first, obtaining a seizure warrant to seize marijuana held under the control of state officials, and second, the government's legal arguments to defend that same warrant.
The initial government action at the heart of this civil case involved seeking and obtaining a warrant based on probable cause that Mr. Giauque had violated 21 U.S.C. § 844. Yet the government later stipulated to Mr. Giauque's possession of a physician's recommendation card which was valid under state law, indicating that the government was knowingly and explicitly attempting to trump state jurisdiction over the res. In addition, the government was involved in the interpleader order and thus aware of the state court order, both of which brought this court's jurisdictional hurdles to the fore. That context would indicate to most jurists that a jurisdictional inquiry would need to precede a simple application of federal seizure law. In defense of the seizure warrant issued in this case, the government argued the existence of a sister court within this circuit which, confronted with a similar warrant, denied a motion seeking the return of the contested property. See Opp'n, Exh. 1 (In re the Seizure of Approximately 2.49 Grams of Marijuana, Cr. No 02-M--469, slip op. (D.Or. Jan 30, 2002). The presence of that case, along with Judge Legge's issuance of the warrant itself, would suggest that the issuance of the warrant itself was not patently unreasonable, though it rested on an untenable foundation.
The second dimension of the government's position was dramatically less reasonable. In defense of the seizure warrant in this case, the government asserted that a violation of federal law prohibiting the possession of contraband ended the inquiry in the case. In fact, the government failed to argue any basis for this court's jurisdiction whatsoever, only siting one clearly distinguishable case involving the preclusive effect of state court decisions in a subsequent federal administrative proceeding. See Arapahoe County Public Airport Authority v. F.A.A., 242 F.3d 1213, 1219 (10th Cir.2001) cert. denied 534 U.S. 1064 (2001). After having clear notice of plaintiff's extensive jurisdictional arguments regarding concurrent in rem jurisdiction, the government's position ceased to be "substantially justified."
The EAJA's legislative history demonstrates a concern for protecting government extensions of existing law, presuming that there is a legal beachhead from which the government launches its position. See Cardwell v. Kurtz, 765 F.2d 776, 781-82 (9th Cir.1985) (stating that "[i]n limiting attorney fees awards under the EAJA to cases in which the position of the United States is not substantially justified, Congress intended to avoid deterring the government from advancing in good faith ... novel but credible extensions and interpretations of the law") (internal quotations omitted). However in this case, the government avoided the issue of jurisdiction entirely, failing to make a "colorable interpretation" of any governing law that would allow a federal court to trump a state court's in rem or quasi in rem jurisdiction. See In Re the Seizure of Approximately 28 Grams of Marijuana, 278 F.Supp.2d at 1101 n. 3. Contra In re Petition of Hill, 775 F.2d 1037, 1042 (upholding the denial of attorney fees under the EAJA because the government had presented a "colorable interpretation" of governing law).
As discussed in this court's August 25, 2003 Order, plaintiff was correct that the rule against concurrent in rem jurisdiction is a well-established principle of comity in our system of federalism. See Penn Gen. Casualty Co. v. Pennsylvania ex rel. Schnader, 294 U.S. 189, 195 (1935) (holding that in suits which are in rem or quasi in rem, where control of the res at issue is essential to the court's jurisdiction, exclusive jurisdiction in one court is necessary in order to "avoid unseemly and disastrous conflicts in the administration of our dual judicial system"). The fact that this particular litigation involved the issuance and execution of a facially valid seizure warrant, as well as a conflict of laws between the state and federal system, did not change the well-settled premise that "the court first assuming jurisdiction over the property may maintain and exercise that jurisdiction to the exclusion of the other." Id. The government did not need to seek this court's interpretation of that settled principle in a more contemporary context, because the Ninth Circuit had already done so in United States v. One 1985 Cadillac Seville, 866 F.2d 1142 (9th Cir.1989), in which the court applied the Penn General prohibition on concurrent in rem jurisdiction to federal seizure of property under state authorities' control. Contra Foster v. Tourtellotte, 704 F.2d 1109, 1112 (9th Cir.1983) (upholding a denial of attorney fees under the EAJA because "[it] was reasonable for the Government to seek a court's guidance in resolving [a conflict between an emerging legal position and the facts of the case] in the absence of any precedent on the question").
The dispute over jurisdiction in the present action, in the context of clearly conflicting state and federal laws, was relatively unchartered territory, if not a matter of first impression, when this court issued its order. See Raich v. Ashcroft, 352 F.3d 1222 (9th Cir.2003), cert. granted, 124 S.Ct. 2909 (2004) (a subsequent case confronting the conflict between 21 U.S.C. § 801 et seq. and the California Compassionate Use Act of 1996). However, this court rested its holding on well-established principles of concurrent in rem jurisdiction. The novelty of aspects of the plaintiff's motion for summary judgment--namely the collision of federal and state drug laws in the context of a dispute over the rightful possession of an item of res--is one factor supporting the reasonableness of the government's broad legal inquiries in the litigation. See United States v. Marolf, 277 F.3d 1156, 1163 n. 2 (9th Cir.2002) (noting that "whether an issue is one of first impression is but one factor to be considered; it is not dispositive," but that the absence of governing precedent was an appropriate factor for the inquiry into substantial justification for the government's position"). However, by failing to provide any basis for overcoming binding precedent on the jurisdictional threshold for this litigation, the government did not advance a reasonable litigation position that was "substantially justified."
Plaintiff has therefore satisfied the requirements of section 2412(d)(1)(A). There are no "special circumstances that would make such an award unjust," and thus this court turns to the question of the amount of attorney fees due. "EAJA fees are determined not by a percent of the amount recovered, but by the 'time expended' and the attorney's '[hourly] rate,' § 2412(d)(1)(B), capped in the mine run of cases at $125 per hour, § 2412(d)(2)(A)." Gisbrecht v. Barnhardt, 535 U.S. 789, 796 (2002).
Plaintiff has requested a $150 hourly rate for 114.4 hours, for a total of $17,160.00. Kenny Dec., Exh. 2. The government did not contest the reasonableness of the requested fees or costs. See Gates v. Deukmejian, 987 F.2d 1392, 1398 (9th Cir.1992) (holding that in the analogous context of claims for attorney fees under 42 U.S.C. § 1988, a "fee applicant bears the burden of documenting the appropriate hours expended in the litigation and must submit evidence in support of those hours worked," but that the opposing party bears a burden of rebuttal "that requires submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged or the facts asserted by the prevailing party in its submitted affidavits"). As there are no "special factor[s]" which justify awarding a higher fee in this case, the court declines to exceed the rate prescribed by the statute of $125 per hour. 28 U.S.C. § 2412(d)(2)(A)(ii) ("attorney fees shall not be awarded in excess of $125 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceeding involved, justifies a higher fee"). Adhering to the applicable statutory guidance, the hourly rate awarded will thus be $125 per hour, for a total of $14,300 in attorney fees.
For the foregoing reasons, the government's motion to alter or amend the judgment, or in the alternative for a stay pending appeal, is DENIED. Plaintiff's motion for attorney fees is GRANTED. Plaintiff is awarded $14,300 in attorney fees.
IT IS SO ORDERED.