United States v. $19,440.00 in U.S. Currency

Citations: 829 F. Supp. 303; 1993 U.S. Dist. LEXIS 10875Docket: No. A92-252-CIVIL

Court: District Court, D. Alaska; February 17, 1993; Federal District Court

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Claimant Patrick Sterling seeks dismissal of the forfeiture action regarding $19,440 on two grounds: 1) the seizure violated his Fourth Amendment rights, and 2) the United States delayed the action, infringing on his Fifth Amendment due process rights. The United States counters by cross-moving for summary judgment, asserting it has probable cause to believe the funds were involved in drug transactions. 

The facts are largely uncontroverted and align with those in Sterling’s criminal appeal. On May 2, 1989, Sterling, a black Jamaican, attempted to send a package containing clothing and the cash via Mail Boxes, Etc. The Anchorage Police Department, investigating a Jamaican drug ring, had alerted the service to report Jamaican males. Despite a narcotics dog not alerting to the package, a clerk, after consultations, opened it and found the money, leading to its confiscation without a warrant. 

Sterling was later charged with conspiracy and distribution of cocaine and, following a motion to suppress, the district court ruled the warrantless seizure violated the Fourth Amendment. Nevertheless, the government presented some evidence at trial linking part of the seized money to drug transactions. Sterling was ultimately convicted, and the Ninth Circuit affirmed this conviction. The United States initiated the forfeiture action on February 21, 1992, with Sterling filing a motion for summary judgment on November 16, 1992.

Sterling argues the prior ruling on the illegal seizure should dismiss the forfeiture, as the government cannot use evidence obtained in violation of the Fourth Amendment for establishing probable cause. However, the government may still pursue forfeiture if it can demonstrate probable cause using untainted evidence. Additionally, Sterling contends that the 33-month delay in prosecuting the forfeiture action violates his Fifth Amendment due process rights.

The Fifth Amendment ensures that property owners whose assets are seized by the government for forfeiture have the right to a post-seizure hearing in a timely manner. Criminal proceedings do not suspend this right, and the government must justify any substantial delays in initiating forfeiture actions. In Mr. Sterling's case, $19,440 was seized by the Anchorage Police on May 2, 1989, and the DEA forfeited the money on September 20, 1989. Mr. Sterling attempted to challenge this forfeiture, but the DEA misplaced his correspondence, leading him to file a Petition for Remission on March 30, 1990, after his conviction on April 9, 1990. The forfeiture action by the United States began on February 21, 1992, after a significant delay.

The Supreme Court, in United States v. 8,850 in United States Currency, established standards to evaluate government compliance with due process in forfeiture actions. Despite an 18-month delay, the Court found that it did not violate due process rights, adopting a balancing test similar to that used for assessing delays in criminal trials under the Sixth Amendment. This test includes four factors: length of delay, reasons for delay, assertion of rights by the defendant, and any prejudice suffered. 

In Sterling's case, his motion highlights two significant delays: 33 months from seizure to the start of forfeiture proceedings and 22 months from conviction to initiation of the case. Although these durations are not inherently unconstitutional, they are considerable compared to other cases where delays violated due process. The government justified its delay by citing judicial economy and the necessity of the seized money as evidence, arguing that proceeding with forfeiture before the Ninth Circuit’s decision on Sterling’s appeal would have been inefficient.

The government's justification for delaying the forfeiture proceedings is deemed flawed. Evidence obtained after the seizure of the parcel, including money, was suppressed at trial, and the government did not appeal this suppression. Consequently, the government could not present the money as evidence regardless of the appeal's outcome. The existence of ongoing criminal proceedings does not inherently delay the application of due process concerning forfeiture proceedings, though it is an important factor. In the case of $8,850, the Supreme Court ruled that delaying civil forfeiture until the resolution of a claimant's criminal trial did not violate due process, as it prevented inconsistent defenses and protected the integrity of criminal proceedings. 

In this instance, the government delayed the forfeiture action for an additional twenty-two months beyond the criminal trial and during its appeal, which was deemed unreasonable without specific case-related justifications. No legal precedents were found regarding the implications of postponing forfeiture hearings pending a criminal appeal, but it is established that the pendency of a criminal trial or appeal does not automatically extend the timeline for forfeiture actions. The reasons for delaying forfeiture hearings due to ongoing criminal trials do not apply to appeals, as the facts are already established and known. The government's lengthy delay could hinder defendants in their appeals and infringe upon their rights to timely hearings. The Supreme Court's reasoning in $8,850 also indicated that a claimant's failure to assert the right to a hearing could be interpreted as acquiescence to the delay.

A claimant can initiate an equitable action to compel the government to return seized property, but Mr. Sterling has not done so. Although he claims to have sought a hearing shortly after the seizure on May 2, 1989, his supporting letter to the DEA only requested the return of his property without asserting a right to a hearing. An August 10, 1989, letter is cited as evidence of his ongoing assertion of due process rights, but neither party has produced this letter, and its content remains speculative. The court notes that Sterling's silence for over two and a half years suggests acquiescence to the delay in hearings, as established in the Supreme Court case $8,850.

The Supreme Court defines prejudice in this context as the claimant's inability to present a defense due to delays causing loss of evidence or witnesses. Mr. Sterling has not demonstrated such prejudice from the delay in the hearing regarding the seizure of $19,440. The government has not justified its delay beyond claims of judicial economy and costs, while Sterling has not actively pursued a post-seizure hearing.

The court highlights the Ninth Circuit's view that prolonged government seizure of substantial amounts of money without charges can cause irreparable harm to claimants. While the government charged and convicted Sterling, it has failed to explain its delay in the forfeiture proceedings. The court emphasizes that the government must act promptly to afford individuals a meaningful opportunity to contest property seizures, particularly when relying on probable cause. It acknowledges that some cases may justify delays, such as pending criminal appeals, but this case does not meet that standard, contrasting it with other cases where delays were permissible due to ongoing prosecutions.

The court granted Patrick Sterling’s Motion for Summary Judgment due to a 22-month delay in bringing a forfeiture action following his conviction, which violated his Fifth Amendment right to a timely post-seizure hearing. The government's rationale of efficiency for the delay was deemed insufficient. The United States’ Cross Motion for Summary Judgment was denied. Both parties failed to submit a Statement of Genuine Issues as mandated by Local Rule 5(F)(2). Sterling cited 21 U.S.C. 881(b), emphasizing the necessity for prompt forfeiture proceedings, noting that delays raise due process issues. The court clarified that this statute did not introduce new constitutional concerns. The DEA confirmed they did not possess Sterling’s clothing, and neither party provided documentation regarding an August 10, 1989, letter. The U.S. could not argue that the administrative process satisfied Sterling's due process rights, as it does not allow property contestation. Statutory provisions indicate that once a claim and cost bond are filed, the administrative process concludes, necessitating judicial intervention for forfeiture.