
USCA1 Opinion

	




        June 30, 1992           [NOT FOR PUBLICATION]                                 ____________________        No. 91-2292                                   JOSE ROSADO-ACHA,                                Plaintiff, Appellant,                                          v.                             WILLIAM J. SNYDER, DIRECTOR,                         THE DRUG ENFORCEMENT ADMINISTRATION,                 AND FOUR THOUSAND DOLLARS IN UNITED STATES CURRENCY,                                Defendants, Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                   [Hon. Gilberto Gierbolini, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                  Breyer, Chief Judge                                          ___________                            Selya and Cyr, Circuit Judges.                                           ______________                                 ____________________            Jose Rosado-Acha on brief pro se.            ________________            Daniel  F.  Lopez-Romo,  United  States  Attorney,  and Miguel  A.            ______________________                                  __________        Fernandez, Assistant United States Attorney, on brief for appellees.        _________                                 ____________________                                 ____________________                 Per  Curiam.   Plaintiff Jose  Rosado Acha  brought suit                 ___________            seeking the  return of $4,000 that  had been administratively            forfeited  by  the  Drug  Enforcement  Administration  (DEA).            Plaintiff challenged the  forfeiture on due  process grounds,            alleging  that he  had been  given inadequate  notice of  the            administrative proceeding.  Without ruling on this issue, the            district court granted summary  judgment to defendants on the            ground that the currency  was properly subject to forfeiture.            As  we  find  the   evidence  insufficient  to  support  this            conclusion in  the summary  judgment context, we  reverse and            remand for further proceedings.                                          I.                 While  the evidentiary  record, as  discussed infra,  is                                                               _____            less   than  fully   developed,  the   following  facts   are            undisputed.   On January 28, 1988,  plaintiff was arrested by            Puerto Rico authorities on an outstanding warrant for failure            to appear  for  sentencing in  a  narcotics case  in  federal            court.  Another narcotics  case was then pending against  him            in Puerto Rico Superior Court.  In his possession at the time            of  arrest  were  two   bundles  of  United  States  currency            totalling $4,000  and $3,022, respectively.1   Both plaintiff            and  the  currency were  turned  over  to federal  officials.                                            ____________________            1.  As reflected in a property receipt  provided by the State            Police (attached to plaintiff's complaint), the $4,000 bundle            contained the following denominations: two  100-dollar bills,            39 "fifties," 86 "twenties," ten "tens," and six "fives."                                         -2-            Plaintiff was remanded without bail to  the Rio Piedras State            Penitentiary, and he remained there following  his sentencing            in federal court on February 29, 1988.                 The DEA  then commenced  measures to forfeit  the seized            currency pursuant to  21 U.S.C.   881(a)(6).   That provision            authorizes forfeiture of all moneys "furnished or intended to            be  furnished  by any  person  in exchange  for  a controlled            substance  in  violation  of  this subchapter,  all  proceeds            traceable to such  an exchange,  and all moneys  ... used  or            intended  to  be used  to  facilitate any  violation  of this            subchapter."  With respect to the $4,000, the DEA on March 4,            1988 sent  notices of seizure  to plaintiff's last  two known            addresses:  his  home  and  the state  penitentiary.    These            notices   described   the   procedure   for   contesting  the            forfeiture,  as  well  as   that  for  seeking  remission  or            mitigation.    The  notice  mailed to  plaintiff's  home  was            returned "unclaimed";  the one  sent to the  penitentiary was            returned  with the  notation "addressee  unknown."2   The DEA            also published notice of the $4,000's  seizure in a newspaper                                            ____________________            2.  The DEA likewise mailed identical notices with respect to            the $3,022.  Plaintiff acknowledges  that he did receive this            notice at the penitentiary.  Plaintiff  filed no objection to            the forfeiture  of the $3,022,  and has  raised no  challenge            thereto  in this  action.   The  instant appeal  is concerned            solely with the forfeiture of the $4,000.                                         -3-            of general circulation on  April 20, 1988.3   Having received            no   response  from   plaintiff,  the   DEA  administratively            forfeited the $4,000 (along with the $3,022) on June 1, 1988.                 In the  meantime,  plaintiff's  mother,  acting  on  his            behalf, moved on March 31  in the underlying federal criminal            case for return of the $4,000.  She stated that she had given            her son $5,000  in November  1987 to pay  attorney's fees  in            connection with the pending criminal case in Superior Court--            money which she had borrowed from a local  bank on August 13,            1987.  Her implication  was that the seized  currency derived            from this loan.   The government opposed the motion  on April            7,  contending that  the money  was connected  to plaintiff's            drug  activities;   it  made  no  mention   of  the  proposed            forfeiture.    After  the  June 1  forfeiture  had  occurred,            however, the government relied on this fact to argue that the            district  court lacked jurisdiction  to entertain the motion.            The  court  agreed  and  denied  relief,  while  noting  that            plaintiff "may  have an action for  declaratory and equitable            relief against the United States for return of property under            the Fifth  Amendment due process clause  and federal question            jurisdiction," citing Willis v. United States, 787 F.2d 1089,                                  ______    _____________            1092-93 (7th Cir. 1986).                                            ____________________            3.  Whether  such notice  was  published for  at least  three            successive weeks,  as required by  statute, see  19 U.S.C.                                                           ___            1607(a);  21 C.F.R.   1316.75(a), is unclear from the present            record.                                         -4-                 Plaintiff  filed  just such  an  action  in April  1990,            seeking return of the $4,000 on the ground that notice of the            administrative forfeiture  was violative of due  process.  In            his pleadings,  plaintiff relied  on  the statutory  mandate,            applicable in this context, that "[w]ritten 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."  19  U.S.C.    1607(a) (made  applicable to            forfeitures under 21 U.S.C.   881(a) by virtue of 21 U.S.C.              881(d)).  And he relied on  Supreme Court pronouncements that            notice  must  be   "reasonably  calculated,  under   all  the            circumstances, to  apprise interested parties of the pendency            of the action."  Mullane v. Central Hanover Bank & Trust Co.,                             _______    ________________________________            339  U.S. 306, 314 (1950); see also Robinson v. Hanrahan, 409                                       ________ ________    ________            U.S.  38,  40  (1972)  (per  curiam)  (when  state knew  that            appellant  was incarcerated,  sending  notice  of  forfeiture            action to his home address violated due  process).  Plaintiff            contended  that,   given   the   DEA's   awareness   of   his            incarceration,  its failure  to take  further steps  once the            notice  mailed  to the  penitentiary  was  returned with  the            notation "addressee  unknown" contravened  due process.   The            government responded  by moving for summary  judgment on this            issue,  arguing that  it  had made  a  good faith  effort  to            provide   written   notice  and   that   it   was  under   no            constitutional obligation to ensure that such notice actually                                         -5-            be  received.   Plaintiff  opposed  this motion  and  filed a            cross-motion  "for   equitable  relief  in  the   form  of  a            declaratory judgment."                 The   district   court  called   for   further  briefing            "regarding the  merits of plaintiff's claim  that these funds            were  not  the  proceeds  of  drug  money."   The  government            responded   with  a  two-page  memorandum,  unaccompanied  by            supporting  affidavits or  other  evidence.   It argued  that            plaintiff's effort  to connect the $4,000  to money allegedly            received from  his mother was  unpersuasive; no corroborating            evidence  had  been  offered,  and five  months  had  elapsed            between receipt  of the  alleged bank  loan and  the seizure.            And  it contended,  without elaboration,  that plaintiff  had            been in "constructive possession"  of approximately 500 grams            of cocaine at the time of  his arrest.4  Given this fact, and            given that plaintiff  had been prosecuted in both federal and            state court for narcotics offenses, a "very strong inference"            arose  that the  $4,000 were  connected to  plaintiff's "drug            trafficking activities."  In  his reply, plaintiff  submitted                                            ____________________            4.  The government  had advanced this assertion  earlier.  In            an   unsworn  statement   of  "uncontested   material  facts"            submitted in  conjunction with  its summary  judgment motion,            the  government stated:  "At the time  of his  arrest, Rosado            Acha  was  in  possession   of  approximately  500  grams  of            cocaine."    Plaintiff, in  his  initial  opposition to  this            motion, did  not contest  this assertion; his  arguments were            directed  to the  adequacy  of the  notice.   Plaintiff first            disputed this statement  in his response to the  court's call            for supplemental briefing.                                          -6-            an affidavit from his mother  documenting the above-described            representations  concerning   the   $5,000  loan   to   cover            attorney's  fees.   He  added in  this  regard that  only two            months elapsed between  the time he  received this money  and            his arrest.   And plaintiff disputed that he was in actual or            constructive possession of cocaine at the time of his arrest.            He  had been  arrested while  driving in  the  Santurce area,            whereas  the "500 grams of cocaine were allegedly seized as a            result of  a completely unrelated and illegal search ... upon            certain premises located  at Isla  Verde."   No evidence,  he            asserted, had been adduced connecting him to such premises.                   The  district court,  after  surveying these  responses,            deemed  the  government's  position "well  taken."    Without            addressing  the issue  of notice,  it held  that "the  $4,000            found  in claimant's person while he was in possession of 500            grams of cocaine was connected to drug trafficking activities            and  subject  to  forfeiture."   On  that  basis,  it granted            judgment for the government.                                           II.                  Plaintiff first  contends that the district  court erred            in addressing the propriety of  the forfeiture.  His specific            claim is that  the court lacked jurisdiction to do  so in the            context of  an equitable  action seeking return  of forfeited            property because  of a due  process violation.   He suggests,            more generally,  that the  forfeiture issue is  irrelevant to                                         -7-            the  constitutional  claim,  and  that the  district  court's            decision unfairly  afforded the  government a second  bite of            the apple.     We see  no jurisdictional bar  to the  court's            consideration of the forfeiture.  Plaintiff points to general            statements in the case law to the effect that "federal courts            lack  jurisdiction  to  review  the merits  of  a  forfeiture            decision that the  Secretary has reached  in the exercise  of            his  discretion."  In re  $67,470, 901 F.2d  1540, 1543 (11th                               ______________            Cir. 1990).  Yet the district court here did not conduct such            a  "review."    In fact,  there  was  no  exercise of  agency            discretion  to  review;  the  administrative  forfeiture  was            ordered  due  to  the  absence  of  objection  by  interested            parties.    And as  plaintiff  concedes,  the district  court            possessed jurisdiction under 28 U.S.C.    1331 and the waiver            of  sovereign immunity  contained in  5 U.S.C.    702.   See,                                                                     ___            e.g., Marshall Leasing, Inc. v. United States, 893 F.2d 1096,            ____  ______________________    _____________            1098-1102  (9th Cir.  1990); United  States v.  Mosquera, 845                                         ______________     ________            F.2d  1122, 1126  (1st  Cir. 1988)  (per  curiam); Willis  v.                                                               ______            United States, 787 F.2d at 1092-93.            _____________                 Nor  are we  persuaded  that the  forfeitability of  the            currency  is irrelevant  in an  equitable action  seeking its            return  due  to  constitutional  violations.    In  analogous            contexts  involving allegedly deficient  notice of forfeiture            proceedings,  courts   have  not  deemed   such  an   inquiry            inappropriate.   See, e.g., Vance  v. United States, 676 F.2d                             ___  ____  _____     _____________                                         -8-            183,  187  (5th  Cir.  1982)   (agreeing,  under  "irregular"            circumstances,  to  convert  equitable  action  into judicial            forfeiture proceeding); Fisher v.  Stutman, 1987 WL 20223, *2                                    ______     _______            (D.  Mass. 1987)  (finding administrative  forfeiture invalid            due  to   inadequate  notice,  but  proceeding  to  entertain            subsequently  filed  judicial  forfeiture;  property  ordered            forfeited); Winters  v. Working,  510 F.  Supp. 14, 17  (W.D.                        _______     _______            Tex. 1980) (finding forfeiture proceeding invalid due to lack            of notice;  "[a]ssuming arguendo  that the plaintiff  has the                                    ________            burden    of   also   establishing   [that   forfeiture   was            unwarranted], she has sustained  her burden").  Cf. Cepulonis                                                            ___ _________            v. United  States, 543 F.  Supp. 451, 453-54  (E.D.N.Y. 1982)               ______________            (action under  28 U.S.C.    1346(a)(2) for  damages; although            notice  of forfeiture  was inadequate,  only nominal  damages            awarded since vehicle was properly forfeited).  As this issue            was  not addressed by the  district court nor  briefed by the            parties, and as  a remand is necessary  in any event, we  are            reluctant at this point  to explore it further.   It suffices            to note our disagreement with plaintiff's contention that the            forfeitability  of the currency  is irrelevant per  se to the            instant action.                 We  part  company  with  the  district  court  over  the            sufficiency of the evidence demonstrating that the $4,000 was            subject to  forfeiture.   The framework for  civil forfeiture            proceedings  is  well-established.     The  government   must                                         -9-            initially show  probable cause  to believe that  the property            was  connected to illegal  drug activity.   See, e.g., United                                                        ___  ____  ______            States  v. One Parcel of Real Estate (Great Harbor Neck), 960            ______     _____________________________________________            F.2d 200,  204 (1st Cir. 1992) (must  show "required nexus");            United States v. Parcel of Land  (28 Emery St.), 914 F.2d  1,            _____________    ______________________________            3-4 (1st  Cir. 1990)  ("substantial connection").   "Probable            cause  to  forfeit requires  only  a  'reasonable ground  for            belief  ... supported by less than prima facie proof but more            than  mere  suspicion'  that   the  property  is  subject  to            forfeiture."   Id. at 3 (quoting United States v. $250,000 in                           ___               _____________    ___________            United States Currency,  808 F.2d 895, 897 (1st  Cir. 1987)).            ______________________            Once  probable  cause is  shown,  the  burden shifts  to  the            claimant to prove by a preponderance of the evidence that the            currency  was not  connected to  drug activity.   See,  e.g.,                                                              ___   ____            Great  Harbor  Neck, 960  F.2d  at 204.    Our review  of the            ___________________            finding of probable cause is plenary,  id. at 206 n.2, as  is                                                   ___            of course our overall review in the summary judgment context,            id. at 204.              ___                 Viewing  the  record  in  the light  most  favorable  to            plaintiff, and "indulging all  reasonable inferences in [his]            favor," Griggs-Ryan  v. Smith,  904 F.2d  112, 115  (1st Cir.                    ___________     _____            1990), we find the showing of probable cause insufficient  to            support summary  judgment.  The entirety  of the government's            proof consists of the following: plaintiff's two prosecutions            for   narcotics  offenses,   and  his   alleged  constructive                                         -10-            possession  of cocaine at the time of  his arrest.  As to the            latter assertion,  the  government has  adduced  no  evidence            whatsoever.  From plaintiff's  pleadings, it appears that the            cocaine was seized at a private residence in Isla Verde.  And            the  record indicates  that the  forfeiture  notice allegedly            mailed to  plaintiff's home (which was  returned "unclaimed")            was  sent to  an address  in  Isla Verde.   Beyond  this, the            record is silent.  Absent some evidence documenting where and            when the  cocaine was found  and how plaintiff  was connected            thereto, this  assertion contributes nothing  to the probable            cause determination.                 That plaintiff was twice convicted of narcotics offenses            is undisputed (the record shows that he entered a guilty plea            in Superior Court).  Again,  however, the record is otherwise            silent.    The  government's  assertion  that  plaintiff  was            involved in drug "trafficking"  is unsupported; the nature of            these  offenses, the dates  on which  they occurred,  and the            type of drugs involved are all unknown.  As such, it would be            speculative to infer that the forfeited currency derived from            drug  sales.   While the  government  has not  mentioned this            fact, the  denominations of the currency  found on plaintiff,            see note 1  supra, admittedly invite  suspicion.  Yet  absent            ___         _____            some  evidence   as  to   the  nature  of   plaintiff's  drug            activities,  nothing more  than suspicion  can be  drawn from                                         -11-            this circumstance.   And "mere  suspicion" is  not enough  to            establish probable cause.  $250,000, 808 F.2d at 897.                                       ________                 For  these reasons,  we  find the  government's evidence            insufficient  to "create  a necessary connection  between the            property and drug  trafficking."  28 Emery St., 914 F.2d at 6                                              ____________            (reversing grant  of summary judgment); accord,  e.g., United                                                    ______   ____  ______            States v. $80,760 in United States Currency, 781 F. Supp. 462            ______    _________________________________            (N.D.   Tex.   1991)  (denying   summary   judgment   due  to            insufficient proof of probable cause).                 Vacated and remanded for further proceedings.                 _____________________________________________                                         -12-
