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United States v. Approx. $9

October 1, 2010

UNITED STATES OF AMERICA, PLAINTIFF,
v.
APPROX. $9,693.00 IN U.S. CURRENCY, ET AL., DEFENDANTS.



FINDINGS & RECOMMENDATIONS

Before the court is plaintiff United States of America's July 24, 2010 motion for default judgment, requesting (1) entry of default judgment against the interests of Erin Patrick O'Neil ("O'Neil") and Amy O'Neil ("Amy") in approximately $9,693.00 in U.S. currency ("the defendant currency") and (2) entry of final judgment of forfeiture vesting plaintiff all right, title and interest in the defendant currency.

FACTUAL BACKGROUND

Since January 1, 2009, the Drug Enforcement Administration's Diversion Group ("DEA") and the West El Dorado Narcotics Enforcement Taskforce ("WENET") have executed eight undercover purchases of anabolic steroids with Jason Glavin ("Glavin"). (Compl. at 2.) During the course of the investigation, O'Neil and Amy have been identified as the source of supply for Glavin. Both O'Neil and Amy have also been identified as the manufacturers and co-conspirators in the manufacturing and distributing of anabolic steroids for each of the undercover purchases executed. (Id.)

As of September 4, 2009, the DEA and WENET have purchased ninety-five vials of Nandrolone Decanoate (Schedule III) and five hundred capsules of various anabolic steroids, and seized an additional four hundred capsules of anabolic steroids, all manufactured by O'Neil in a manufacturing site in Elverta, California. (Compl. at 2.) As of September 15, 2009, the DEA and WENET have spent $15,050.00 in authorized funds. (Id.)

On October 14, 2009, Glavin was arrested after he delivered 100 vials of anabolic steroids to an undercover officer. (Compl. at 2.) Following his arrest, law enforcement agents executed search warrants at three locations, including the residence of O'Neil and Amy. (Id. at 2-3.) During the search of O'Neil and Amy's residence, a DEA agent located a white envelope in the top drawer of a dresser in the master bedroom which contained an undetermined amount of U.S. currency. (Id. at 3.) A wallet with an undetermined amount of U.S. currency was also located in the top drawer of this dresser. (Id.) It was later determined that the amount located contained thirty-five one hundred dollar bills of DEA Official Authorized Funds and approximately $9,693.00 in U.S. currency (the defendant currency). (Id.) Law enforcement agents also found, inter alia, approximately 98 vials of anabolic steroids, 100 anabolic steroid capsules, syringes, and one box of Omifin Clomifino tablets. (Id. at 3-4.)

On October 14, 2009, O'Neil and Amy were arrested. (Compl. at 4.) On or about March 24, 2010, the El Dorado County District Attorney charged O'Neil and Glavin for violations of Penal Code § 182(a)(1) (Conspiracy to Commit a Crime) (1 count), Health & Safety Code § 11378 (Possession for Sale of a Controlled Substance) (1 count), and Health & Safety Code § 11379(A) (Sale of a Controlled Substance) (6 counts).

PROCEDURAL BACKGROUND

On April 1, 2010, plaintiff filed the present complaint for forfeiture in rem against the defendant currency. On April 6, 2010, a warrant for arrest of articles in rem was issued. On April 9, 2010, the warrant was executed.

On April 8, 2010, plaintiff sent separate packets with copies of the complaint, application and order for publication, order regarding clerk's issuance of warrant for arrest, warrant for arrest, order requiring joint status report, and court notices to O'Neil and Amy by first class mail and by certified mail. (Teglia Decl. at ¶ 3, Ex. A.) The packets were both signed by "Erin P. O'Neil" and received on April 23, 2010. (Id.)

On April 29, 2010 and May 4, 2010, personal service was attempted by the U.S. Marshals Service on O'Neil and Amy. (Doc. No. 7.) On May 6, 2010, service was accomplished by leaving the documents at O'Neil and Amy's last known address. (Id.)

On April 27, 2010, the undersigned authorized publication of the forfeiture action via the internet forfeiture website (www.forfeiture.gov) for at least thirty days. According to plaintiff's Declaration of Publication (Doc. No. 8), a Notice of Civil Forfeiture was published on the official government internet site (www.forfeiture.gov) for thirty days beginning on April 29, 2010. To date, no claim or answer has been filed on behalf of O'Neil or Amy.

On June 9, 2010, plaintiff moved for default judgment. On June 10, 2010, entry of default was entered as to O'Neil and Amy.

LEGAL STANDARD

A court has the discretion to enter a default judgment against one who is not an infant, incompetent, or member of the armed services where the claim is for an amount that is not certain on the face of the claim and where (1) the defendant has been served with the claim; (2) the defendant's default has been entered for failure to appear; (3) if the defendant has appeared in the action, the defendant has been served with written notice of the application for judgment at least three days before the hearing on the application; and, (4) the court has undertaken any necessary and proper investigation or hearing in order to enter judgment or carry it into effect. Fed. R. Civ. P. 55(b); Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1988). Factors that may be considered by courts in exercising discretion as to the entry of a default judgment and as to setting aside a default include the nature and extent of the delay, Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986); the possibility of prejudice to the plaintiff, Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986); the merits of plaintiff's substantive claim, id.; the sufficiency of the allegations in the complaint to support judgment, Alan Neuman Productions, Inc., 862 F.2d at 1392; the amount in controversy, Eitel v. McCool, 782 F.2d at 1471-72; the possibility of a dispute concerning material facts, id.; whether the default was due to excusable neglect, id.; and, the strong policy underlying the Federal Rules of Civil Procedure that favors decisions on the merits, id.

With respect to default judgments in proceedings that are in rem actions for forfeiture, both the general Federal Rules of Civil Procedure and the Supplemental Rules for Certain Admiralty and Maritime Claims ("Supp. R.") apply, but the latter rules prevail if there is an inconsistency. Supp. R. A(1). Supp. R. G(1) provides that the rule governs a forfeiture action in rem arising from a federal statute; to the extent that Rule G does not address an issue, Supp. Rules C and E also apply. Supplemental Rule G, which took effect on December 1, 2006, incorporates a common-sense approach to notice grounded in defined and recognized principles of due process of law. Supp. Rule G, Adv. Comm. Note on 2006 Adoption. The Advisory Committee Note indicates that the rule was added to bring together the central procedures governing civil forfeiture actions; it also states that the rule generally applies to actions governed by the Civil Asset Forfeiture Reform Act of 2000 (CAFRA) as well as those excluded from it; thus, the intended scope of application is very broad. The rule permits flexibility as to the time of service of any warrant and supplemental process. Id. The provisions for notice incorporate the traditional means of publication and ...


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