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United States v. $65

United States District Court, D. New Mexico

October 31, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
$65, 020 UNITED STATES CURRENCY, 2008 HONDA ACCORD VIN JHMCP26738C002908, Defendants-in-rem, and JULIO CESAR FIGUEROA-RIVERA, Claimant.

          MEMORANDUM OPINION AND ORDER

         THIS MATTER is before the Court on the United States' Motion for Summary Judgment (Doc. 28). 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. Doc. 15. The Court has reviewed the motion, the submissions of the parties and the relevant authorities. On October 26, 2018, the Court also heard the oral arguments of AUSA Stephen Kotz for Plaintiff (“United States” or “Government”) and Attorney Adam Flores for Claimant Julio Cesar Figeroa-Rivera (“Figeroa-Rivera” or “Claimant”). For the reasons set forth below, the Court finds that there are no material issues of fact in dispute and that Plaintiff United States is entitled to judgment as a matter of law as to the $65, 029 at issue (“Defendant Currency”).[1] Therefore, the motion will be granted, and the Defendant Currency will be forfeited to the United States.

         I. Summary Judgment Standard

         Pursuant to Federal Rule of Civil Procedure 56, “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “The movant bears the initial burden of making a prima facie demonstration of the absence of a genuine issue of material fact and entitlement to judgment as a matter of law.” Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670-71 (10th Cir. 1998). The burden then shifts “to the nonmoving party to show that there is a genuine issue of material fact.” Bacchus Indus., Inc., v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991). Both the movant and the party opposing summary judgment are obligated to “cit[e] to particular parts of materials in the record” to support their factual positions. Fed.R.Civ.P. 56(c)(1)(A). In this district, “[a]ll material facts set forth in the Memorandum will be deemed undisputed unless specifically controverted.” D.N.M.LR-Civ. 56.1(b).

         A “genuine” dispute exists where the evidence is such that a reasonable jury could resolve the issue either way. See Adler, 144 F.3d at 670 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A mere scintilla of evidence in the non-movant's favor is not sufficient. Anderson, 477 U.S. at 252. “When applying this standard, the Court examines the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment.” Hartwell v. Sw. Cheese Co., L.L.C., No. CV 15-1103 JAP/GJF, 2017 WL 944125, at *2 (D.N.M. Jan. 23, 2017). “Summary judgment is not ‘a disfavored procedural shortcut but rather [it is] an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action.'” Garcia v. Vilsack, 628 F.Supp.2d 1306, 1308-09 (D.N.M. 2009) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986)).

         II. STANDARD FOR FORFEITURE

         “A civil forfeiture proceeding is an in rem action that proceeds on the legal fiction that the property itself is guilty of wrongdoing.” United States v. $152, 160.00 U.S. Currency, 680 F.Supp. 354, 356 (D.Colo. 1988). In the past, the Government bore the burden to show probable cause that the property subject to forfeiture was involved in criminal activity. United States v. $39, 000 in Canadian Currency, 801 F.2d 1210, 1216 (10th Cir. 1986). However,

[t]he Civil Asset Forfeiture Reform Act of 2000 change[d] the government's initial burden of proof. Pursuant to 18 U.S.C. § 983(c)(1), the “burden of proof is on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture.”

United States v. Wagoner Cty. Real Estate, 278 F.3d 1091, 1097 n.5 (10th Cir. 2002) (quoting 18 U.S.C. § 983(c)(1)). To prevail in the case at hand, the “Government must show by a preponderance of the evidence that the currency at issue was the proceeds of drug offenses or used or intended to be used to facilitate a drug offense.” United States v. U.S. Currency Totaling $101, 207.00, No. CV 101-162, 2007 WL 4106262, at *5 (S.D. Ga. Nov. 16, 2007).

         Claimant contends that the Government “bears the burden to establish a ‘substantial connection' between the offense and the property.” Doc. 30 at 2 (citing United States v. $252, 300.00, 484 F.3d 1271, 1272 (10th Cir. 2007). The applicable statute provides:

(c) Burden of proof. -- In a suit or action brought under any civil forfeiture statute for the civil forfeiture of any property--
(1) the burden of proof is on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture;
(2) the Government may use evidence gathered after the filing of a complaint for forfeiture to establish, by a preponderance of the evidence, that property is subject to forfeiture; and
(3) if the Government's theory of forfeiture is that the property was used to commit or facilitate the commission of a criminal offense, or was involved in the commission of a criminal offense, the Government shall establish that there was a substantial connection between the property and the offense.

18 U.S.C. § 983. The Government cites to opinions of other circuits which hold that

[t]he unambiguous language of § 983(c)(3) provides on its face that the substantial connection requirement applies only to facilitating property. Therefore, the Government need not show a substantial connection between seized currency and a drug offense when it bases the forfeiture on a proceeds theory.

Doc. 31 at 3 (citations omitted). Because the Government here premises its theory of forfeiture on the seized currency as proceeds of drug trafficking, it contends it bears no obligation to establish a “substantial connection.”

         Yet the Government concedes that the Tenth Circuit specifically cited to § 983(c)(3) in United States v. $252, 300.00 when stating that the Government bore the “substantial connection” burden in a forfeiture case. Id. But the Government argues, and the Court agrees, that the Tenth Circuit failed to “distinguish between proceeds and facilitating property” in that opinion. If ruling on a clean slate, this Court would adopt the Government's position that § 983(c)(3) ...


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