Garcia, Floriberto v. Meza, Gus

Citation: 235 F.3d 287Docket: 00-1578

Court: Court of Appeals for the Seventh Circuit; December 11, 2000; Federal Appellate Court

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Floriberto Garcia and Galilia Rivera filed a lawsuit against Gus Meza and Angela Alonso, agents of the Immigration and Naturalization Service (INS), under the Federal Tort Claims Act (FTCA) for the recovery of $21,700 seized from their apartment during a warrantless search on June 6, 1997. The search was part of a broader investigation into counterfeit identification. The plaintiffs asserted that they sought the return of their money after the search, but there was a dispute regarding the communication between Garcia and Agent Meza. The plaintiffs subsequently retained an attorney who attempted to engage with Meza, who advised her to contact the Secret Service, as the funds had been transferred there.

Initially, the plaintiffs filed a complaint for conversion in the Circuit Court of Cook County, but the government removed the case to federal court, claiming the agents acted within their employment scope. The government moved to dismiss the case, arguing that the plaintiffs failed to exhaust administrative remedies required by the FTCA, which necessitates filing a claim with the relevant federal agency before initiating a lawsuit. The plaintiffs subsequently filed an administrative claim on September 12, 1997, but the district court dismissed their lawsuit on October 14, 1997, for lack of subject matter jurisdiction, anticipating prompt action from the government on the claim. During this period, the government was also pursuing administrative forfeiture of the seized funds. The appellate court ultimately reversed the district court's dismissal and remanded the case for further proceedings.

In June 1997, the INS seized funds from the plaintiffs' home and transferred them to the Secret Service. On October 17, 1997, the Secret Service notified potentially interested parties of imminent forfeiture proceedings, but all notices sent via Federal Express were returned as undeliverable. The Secret Service also published notice of the forfeiture in the New York Times on three occasions. On February 5, 1998, the funds were administratively forfeited without any charges against the plaintiffs. The plaintiffs, waiting for the statutory period to expire, filed a Federal Tort Claims Act (FTCA) claim on March 27, 1998. The government moved to dismiss, claiming the completed administrative forfeiture deprived the district court of jurisdiction. The district court denied this motion on August 28, 1998, due to insufficient evidence of notice. After the government provided proof of notice, the court granted a motion for reconsideration on November 1, 1999, leading to the dismissal of the lawsuit with prejudice. A subsequent motion for reconsideration by the plaintiffs was denied, and they appealed.

The district court ruled it lacked subject matter jurisdiction because the government had completed the administrative forfeiture proceedings. Under 18 U.S.C. § 981, the government can forfeit assets related to counterfeiting, following notice procedures outlined in 19 U.S.C. § 1607, which mandates written notice to interested parties and publication for three successive weeks. Failure to file a claim within twenty days results in administrative forfeiture, barring district court review. Claims not raised during the administrative process cannot be challenged later, although federal courts can review whether the notice provided met constitutional due process standards.

Failure to meet due process requirements renders a forfeiture action void. The district court found that plaintiffs were not deprived of due process, leading to the central issue of whether the notice given to them met constitutional standards. The notice, sent via Federal Express to Garcia and returned marked undeliverable five days later, is scrutinized against the requirement that notice be "reasonably calculated" to inform interested parties of pending actions (Mullane v. Central Hanover Bank, Trust Co., 339 U.S. 306, 314 (1950)). While certified mail generally suffices for due process, it does not if the notifying party knows the notice would be ineffective (Krecioch, 221 F.3d at 981). The adequacy of the notice is assessed at the time it was sent, even if it was later returned undelivered. Other circuit courts have varied in their rulings on whether additional steps must be taken when notices are returned. This court declines to adopt a rigid rule focusing only on the initial notice, nor does it impose an obligation on the government to locate claimants for every undelivered notice. Instead, it favors a case-specific analysis based on the circumstances surrounding each case, as outlined in Mullane. In this instance, while the government successfully accessed the plaintiffs' residence to seize their money, it failed to make further attempts to notify or locate the plaintiffs after the initial notice was returned undeliverable. Despite ongoing litigation and communication efforts by the plaintiffs and their attorney regarding the seized funds, the government did not provide them with actual notice of the forfeiture proceeding.

The government's single attempt at providing written notice to the plaintiffs regarding an impending forfeiture action was deemed inadequate, particularly because it was aware that the notice had not reached the plaintiffs after being informed of the failed delivery. This knowledge indicated that the plaintiffs were not properly apprised of their rights to petition for the return of their property prior to the administrative forfeiture. The court found that another written notice was reasonable and necessary, underlining that the initial notice did not meet due process standards as established in Mullane v. Central Hanover Trust. 

Additionally, publication notice in the New York Times was deemed insufficient to remedy the shortcomings of the inadequate written notice, especially since the plaintiffs' names and addresses were known. The district court's jurisdiction over the administrative forfeiture was upheld, but the forfeiture declaration must be set aside due to the failure to provide proper notice, requiring the government to either return the seized currency or initiate judicial forfeiture proceedings, allowing the plaintiffs to present their defenses.

The court noted that while the government attempted to notify other family members, it failed to send any notice to Galilia Rivera, another resident who may have had an interest in the seized funds. The plaintiffs faced delays in retrieving their money under the Federal Tort Claims Act (FTCA), which excludes certain claims related to the detention of goods by law enforcement. The district court did not rule on the FTCA issue, focusing instead on the proper jurisdiction for challenging civil forfeitures.

Although co-plaintiff Rivera argued that she did not receive notice, the government maintained it was unaware of her interest in the seized money. The court found the government's notification efforts to Garcia were reasonably calculated to inform Rivera, but due to the inadequacy of notice to Garcia, the issue of notifying a spouse was not addressed. The plaintiffs sought to amend their complaint to include a Bivens action against federal agents, but the necessity of this amendment was rendered moot by the remand to the district court to address the forfeiture issue.