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United States v. $65

United States District Court, D. New Mexico

May 1, 2018

$65, 020 UNITED STATES CURRENCY, 2008 HONDA ACCORD VIN JHMCP26738C002908, Defendant-in-rem. and JULIO CESAR FIGUEROA-RIVERA, Claimant.


         THIS MATTER is before the Court on the United States' Motion to Strike Julio Cesar Figueroa-Rivera's Verified Claim (Doc. 22), filed February 21, 2018. Pursuant to 28 U.S.C. § 636(c) and Fed.R.Civ.P. 73(b), the parties have consented to me serving as the presiding judge and entering final judgment. See Docs. 13-15. Having considered the record, submissions of counsel, and the relevant law, the Court finds that the motion to strike is not well-taken and will be denied.

         I. BACKGROUND

         On August 30, 2017, the United States filed a Verified Complaint for Forfeiture In Rem, seeking forfeiture of $65, 020.00 in United States Currency, as well as a 2008 Honda Accord, VIN JHMCP26738C002908, pursuant to 21 U.S.C. § 881(a)(6), (4). Doc. 1 at 1. The allegations giving rise to the forfeiture action are set forth in the Verified Complaint. See id. On March 23, 2016, Bernalillo County Sheriff's Office (“BSCO”) Deputy Leonard Armijo conducted a traffic stop of the subject Honda Accord, which was traveling on Interstate 40, for an unsafe lane change and improper display of a temporary registration plate. Id. at ¶ 7. The driver and sole occupant of the Honda Accord was Julio Cesar Figueroa-Rivera (“Claimant”). Id. Upon visual inspection of the vehicle's exterior, Deputy Armijo noticed that the exhaust system was hanging well below the normal limits. Id. at ¶ 10. After Figueroa-Rivera declined to consent to a search of the vehicle, BCSO Deputy Pat Rael and his certified drug detection dog conducted an open-air sniff, and the dog alerted positively for the odor of illegal drugs near the rear of the vehicle. Id. at ¶ 12. Deputy Armijo inspected the rear underside of the vehicle and discovered non-factory parts, tooling on the bolts, freshly cut metal, and fresh paint. Id. at ¶ 13. A more thorough inspection of the vehicle at a public works facility revealed two non-factory compartments containing six cellophane-wrapped and rubber-banded bundles containing $65, 020.00. Id. at ¶ 14.

         Following commencement of this forfeiture action, Claimant filed a Verified Claim to Property on October 24, 2017, asserting an ownership interest only in the currency identified in the complaint, not the car. Doc. 7. More specifically, Claimant stated that he is “the owner of sixty-five thousand and twenty dollars ($65, 020.00) in U.S. Currency” and that he “was in lawful possession of all of the U.S. Currency at the time of the seizure.” Id. at 1. Additionally, on November 14, 2017, Claimant filed an Answer to Plaintiff's Verified Complaint for Forfeiture In Rem, in which he responded to a number of the government's assertions by invoking the “right provided under the state and federal constitutions to remain silent.” Doc. 9.

         As permitted by Supplemental Rule G(6)(a) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions, [1] the United States served special interrogatories on Claimant in order to gather information bearing on his standing to bring a claim to the currency seized from the Honda Accord. Doc. 22 at 6. In response to each of the special interrogatories, Claimant Figueroa-Rivera asserted his Fifth Amendment right not to incriminate himself. See Doc. 22-1. Thereafter, the United States moved to strike Claimant's verified claim and answer. Doc. 22.

         II. ANALYSIS

         Supplemental Rule G provides a mechanism for the government to move to strike a claim or answer in a civil forfeiture case. Specifically, Supplemental Rule G(8)(c) authorizes the filing of such a motion at any time before trial for one of the following reasons: 1) failure to comply with Supplemental Rule G(5), a provision that requires the timely filing of a proper verified claim; 2) failure to comply with Supplemental Rule G(6), a provision that requires a claimant to answer or object to special interrogatories from the United States; or 3) because the claimant lacks standing. See Supp. R. G(8)(c)(i). A motion to strike “may be presented as a motion for judgment on the pleadings or as a motion to determine after a hearing or by summary judgment whether the claimant can carry the burden of establishing standing by a preponderance of the evidence.” See Supp. R. G(8)(c)(ii)(B).

         Under Tenth Circuit law, a claimant who has “asserted an ownership interest in the res at issue and has provided some evidence tending to support the existence of that ownership interest, . . . has standing to challenge the forfeiture.” United States v. $148, 840.00 in United States Currency, 521 F.3d 1268, 1276 (10th Cir. 2008). Moreover, the unequivocal claim of ownership over the res coupled with undisputed evidence that the res was taken from the claimant's possession and control are together sufficient to confer constitutional standing. See Id. at 1276-78.

         Here, the United States' motion to strike is not presented as either a motion for judgment on the pleadings or as a motion for summary judgment. Instead, it asks the Court to exercise its discretion to strike Claimant's verified claim based upon his refusal to answer special interrogatories in favor of invoking his Fifth Amendment privilege. Clarifying that “standing is not the issue before the Court, ” the United States suggests that Claimant's assertion of his Fifth Amendment privilege justifies the striking of his claim and answer. Doc. 22 at 2.

         Supplemental Rule G(8) does not expressly permit the striking of a verified claim and answer under the circumstances here; the United States seems to acknowledge as much in its reply brief. Doc. 25 at 4 (“The Court is not considering a motion under Supplemental Rule G(8).”). Although Supplemental Rule G(8) sanctions striking a claim when a claimant fails to answer or object to special interrogatories pursuant to Supplemental Rule G(6), Claimant was technically compliant with Supplemental Rule G(6). That rule merely requires that a claimant's “[a]nswers or objections to [special interrogatories] be served within 21 days after the interrogatories are served.” Supp. R. G(6)(b). Claimant provided his Fifth-Amendment assertions in response to the special interrogatories on November 29, 2017. See Doc. 22-1. In the Court's view, Claimant thereby provided timely objections to United States' special interrogatories, in compliance with Supplemental Rule G(6). Given such compliance, the United States cannot rest its motion to strike upon procedural rules. It relies, instead, upon case law, or perhaps more accurately on dicta, from the Tenth Circuit, as well as persuasive authority from other courts.

         First, the United States suggests that its motion comports with the “guidance” provided by the Tenth Circuit in United States v. $148, 840.00, 521 F.3d 1268 (10th Cir. 2008) for addressing a claimant's use of the Fifth Amendment as an “offensive litigation tool” in civil forfeiture cases. See Doc. 25 at 4. Although the government asserts that the factual posture of this case is “virtually identical” to that in United States v. $148, 840.00, the primary issue there was whether the claimant had advanced sufficient jurisdictional facts to support his constitutional standing. 521 F.3d at 1270. The Tenth Circuit examined the determination by Honorable Martha Vazquez of this District that the claimant lacked constitutional standing to challenge the forfeiture of currency discovered in a cooler in the trunk of the vehicle he was driving. Id. at 1270-71. The claimant had filed a verified claim opposing forfeiture, as well as an answer to the government's complaint, both of which asserted that he was the owner of the currency. Id. at 1272. At his deposition, the claimant testified that he was the owner of the currency seized; however, he invoked his Fifth Amendment privilege in response to more specific questions about the currency and its source. Id.

         Moving to strike his claim and answer, the government argued that because the claimant had invoked his Fifth Amendment privilege in response to questions about his possession of the currency, he “should be barred from contesting the forfeiture action on the ground that he failed to carry his burden of establishing constitutional standing.” Id. While Judge Vazquez agreed, the Tenth Circuit did not. The Tenth Circuit held that because the claimant asserted ownership of the currency, as opposed to possession on behalf of another, “it was of no moment that he invoked his privilege against self-incrimination at his deposition when asked to explain his interest in detail.” Id. at 1275. The court clarified that it was enough, for purposes of constitutional standing at the summary judgment stage, that he claimed to own the money taken from his possession. Id. at 1275.

         Although there are factual similarities, as Claimant here also asserted ownership of money seized from a vehicle he was driving, the court's holding in United States v. $148, 840.00 does not resolve the issue presented in the government's Motion to Strike. Even so, the Tenth Circuit does offer some commentary bearing on the issues currently before the Court. It projected that it would have been a “different case if the district court had exercised its discretion to strike [the] claim of ownership to the currency in light of [the claimant's] repeated invocations of the Fifth Amendment privilege.” Id. at 1277. It explained:

It is well established that in a civil case a district court may strike conclusory testimony if the witness asserts the Fifth Amendment privilege to avoid answering relevant questions, yet freely responds to questions that are advantageous to his cause. This doctrine exists to prevent a party from converting the Fifth Amendment privilege from its ...

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