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Lopez v. United States

September 26, 2006


The opinion of the court was delivered by: Alan Kay United States Magistrate Judge


Presently pending before the Court are the following cross-motions for summary judgment:

1. Plaintiff's Motion for Summary Judgment and Statement of Material Facts as to Which there is No Genuine Issue ("Pl. Mot.") [96], Defendant's Opposition and Memorandum in Support ("Def. Opp'n") [125], and Plaintiff's Reply ("Pl. Reply") [128];

2. Defendants' (First) Motion for Summary Judgment ("1st Def. Mot.") [99], Plaintiff's Opposition ("1st Pl. Opp'n") [101], and Defendants' Reply ("1st Def. Reply") [102]; and

3. Defendants' (Second) Motion for Summary Judgment*fn1 ("2nd Def. Mot.") [126], Plaintiff's Opposition*fn2 ("2nd Pl. Opp'n") [128], and Defendants' Reply in Further Support of Defendants' Second Cross Motion for Summary Judgment ("2nd Def. Reply") [131].

Factual and Procedural Background

In the later part of 1992, Plaintiff Ramon Lopez, who had been convicted of multiple counts of drug trafficking, arranged to buy his way out of prison for $50,000. Lopez made a deal with U.S. Marshal Mickey Hernandez, who was working undercover and who agreed to arrange Lopez's escape under the guise of an administrative mistake. (See Conboy Report of Investigation dated 8/11/1992 ("8/11/92 Report of Investigation"), attached as Ex. 2 (unnumbered page 1) to Pl. Mot.) Hernandez met with Lopez several times and the meetings were tape recorded.*fn3

Lopez arranged to have the money delivered to Hernandez by his girlfriend Alix Coba. On October 29, 1992, Ms. Coba delivered an initial $10,000 in cash in a shopping bag to Hernandez. (See 8/11/92 Report of Investigation at 4; United States Marshals Service ("USMS") Report of Investigation dated 10/29/1992, attached as Ex. 19 to Def. Opp'n & 2nd Def. Mot.; Criminal Compl. & Attached Aff. of U.S. Marshal Shawn Conboy ¶ 7, attached as Ex. 20 to Def. Opp'n & 2nd Def. Mot.) Approximately two weeks later, on November 11, 1992, Alix Coba was arrested while trying to deliver the rest of the money. Marshals seized the remaining $40,000 in a search of the Chevy van driven by Alix Coba. (See Conboy Report of Investigation dated 11/11/1992 at 2, attached as Ex. 2 (unnumbered page 10) to Pl. Mot.; see also Def. Separate Stmt. of Genuine Issues in Response to Pl.'s Stmt. of Mat. Facts Not in Dispute ¶ 8.) At some point, Hernandez provided the money to U.S. Marshal Shawn Conboy. It is undisputed that Conboy has no recollection of anything Hernandez may have said to him when Hernandez gave him the money.

Based on Lopez's prior drug trafficking convictions, the Marshals Service suspected the $50,000 might be subject to forfeiture. (Dep. of U.S. Marshal Shawn Conboy ("Conboy Dep.") at 18-20, attached as Ex. 10 to Def. Opp'n & 2nd Def. Mot.) However, because the Marshals Service lacked seizure authority, it turned the money over to the DEA to determine whether forfeiture proceedings were appropriate. (See id.; see also Def. Separate Stmt. of Genuine Issues in Response to Pl.'s Stmt. of Mat. Facts Not in Dispute ¶ 13.) On or around January 26, 1993, Conboy delivered the $50,000 to DEA Special Agent Kevin Pederson. According to Conboy, he told Pederson how the money came into the possession of the Marshals Service, and that any "actual forfeiture facts were up to [the] Drug Enforcement Administration." (Conboy Dep. at 22.)

On or around January 27, 1993, Agent Pederson witnessed a Florida Highway Patrol dog named "Gator" alert to the smell of narcotic substance on the $50,000. Agent Pederson subsequently seized the $50,000 and submitted the case for administrative forfeiture. (See Record/Receipt of Asset Form at 1, attached as Ex. 9 to Pl. Mot.; DEA Form 453 at 3, attached as Ex. 10 to Pl. Mot.) The DEA accepted the case for administrative forfeiture and issued a Notice of Seizure on March 1, 1993. The DEA sent the notice to Lopez's last known home address and the Dade County Jail. Lopez, however, was not incarcerated at the Dade County Jail. Not surprisingly, both notices were returned to the DEA as undeliverable. See Lopez v. United States, 201 F.3d 478, 480 (D.C. Cir. 2000). The DEA also sent a notice of seizure to Ms. Coba, and published a notice in USA Today. Id. The Government received no response and in May, 1993, declared the $50,000 forfeited. Id.

Lopez first learned about the seizure and forfeiture from Ms. Coba a year later, in the Spring of 1994. Id. He immediately petitioned the DEA for the return of his money, but the DEA dismissed his claim as untimely. Id. Lopez sought review in this Court in 1996, which granted summary judgment in favor of the DEA on the grounds that it had satisfied its constitutional obligations to provide adequate notice. Id. On January 18, 2000, the D.C. Circuit reversed, holding that the DEA's notice was constitutionally inadequate. Id. at 480-81. The Circuit remanded the case to this Court for "further proceedings on the merits of Mr. Lopez's challenge to the forfeiture of his property." Id. at 482. On remand, the parties engaged in extensive discovery spanning several years. Both sides have filed cross-motions for summary judgment, which are now ripe for decision.


Summary judgment is appropriate when the "pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law." See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Once the moving party points to facts showing that there is an absence of evidence supporting the nonmoving party's case, the nonmoving party may not rest on mere allegations, but must point to specific facts in the record showing that there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "[T]he mere scintilla of evidence in support of [the non-movant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving] party." Id. at 252. In considering a motion for summary judgment, the "evidence of the non-movant is to be believed, and all inferences are to be drawn in his favor." Id. at 255. However, when the non-moving party bears the burden of proof at trial, he or she must come forward with sufficient admissible evidence for a reasonable jury to find in his or her favor. Celotex Corp., 477 U.S. at 322-24, 327.

I. Standing

The Government challenges Plaintiff's constitutional standing to contest the forfeiture of the $50,000.*fn4 As constitutional standing is a threshold question implicating the Court's jurisdiction to even entertain Plaintiff's suit, the Court will address this issue first. See United States v. Cambio Exacto, S.A., 166 F.3d 522, 526(2d Cir. 1999) (noting that claimants bear the burden of establishing both statutory and constitutional standing in order to contest a governmental forfeiture).

The fundamental inquiry for Article III standing is whether the claimant has alleged a sufficiently personal stake in the outcome of the controversy to assure the court that the parties' interests are truly adverse and that the court is "refereeing an actual, rather than a hypothetical, dispute." United States v. 5 S 351 Tuthill Road, 233 F.3d 1017, 1023 (7th Cir. 2000); see also Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992); Cambio Exacto, 166 F.3d at 527. Respondents rightly note that the threshold burden for demonstrating Article III standing in forfeiture proceedings is not rigorous. A claimant need only show a "'facially colorable interest in the proceedings sufficient to satisfy the case-or-controversy requirement and the prudential considerations defining and limiting the role of the court.'" United States v. $557,933.89, More or Less, in U.S. Funds, 287 F.3d 66, 78 (2d Cir. 2002) (quoting Torres v. $36,256.80 U.S. Currency, 25 F.3d 1154, 1158 (2d Cir. 1994)). "Courts generally do not deny standing to a claimant who is either the colorable owner of the res or who has any colorable possessory interest in it." United States v. Contents of Accounts Nos. 3034504504 & 144-07143, 971 F.2d 974, 985 (3d Cir. 1992); see also United States v. U.S. Currency, $81,000.00, 189 F.3d 28, 35 (1st Cir. 1999).

At the pleading stage, a simple claim of ownership is sufficient to establish standing to contest a forfeiture.*fn5 United States v. $515,060.42 in U.S. Currency, 152 F.3d 491, 498-99 (6th Cir. 1998); United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051, 1058 (9th Cir. 1994), superseded by statute on other grounds; United States v. $138,381.00 in U.S. Currency, 240 F. Supp. 2d 220, 231 (E.D.N.Y. 2003). At the summary judgment stage, the claimant must generally support his claim of ownership with some additional evidence of his interest in the res. *fn6 $515,060.42 in U.S. Currency, 152 F.3d at 499; $138,381.00 in U.S. Currency, 240 F. Supp. 2d at 231. Thus, while bald allegations of ownership unsubstantiated by affidavits or other evidence are insufficient, see United States v. 38,570 U.S. Currency, 950 F.2d 1108, 1112 (5th Cir. 1992); $138,381.00 in U.S. Currency, 240 F. Supp. 2d at 233, "an allegation of ownership and some evidence of ownership are together sufficient to establish standing to contest a civil forfeiture[,]" Torres, 25 F.3d at 1158 (vacating district court's order granting summary judgment to the government); see also Cambio Exacto, 166 F.3d at 527.

Additional evidence sufficient to support a claim of ownership can include evidence of actual title, possession or other evidence of dominion or control that indicates the existence of some financial stake in the res. See United States v. Funds From Prudential Securities, 300 F. Supp. 2d 99, 107 (D.D.C. 2004) (discussing cases). In Torres v. $36,256.80 U.S. Currency, for example, the Second Circuit found that a claimant had provided sufficient evidence that she had an ownership interest in a certificate of deposit that was only listed in her husband's name when she provided a sworn statement that she had loaned her husband the $30,000 with which he bought the CD in order to help him establish a credit history, and supported that claim with evidence that she had taken out a $30,000 consumer loan and that the bank disbursed the loan to claimant's husband at her request. Torres, 25 F.3d at 1156-57.

Courts have also found standing when the claimant asserts an ownership interest and the government's allegations indicate some involvement with the res. See Funds From Prudential Securities, 300 F. Supp. 2d at 107 (discussing cases). In United States v. $38,570 U.S. Currency, the court found standing based on claimant's assertion of ownership coupled with the government's allegations that the claimant "exercised some form of dominion over the currency." 950 F.2d at 1113. There, the police had seized the currency from the claimant's girlfriend, who was riding in the passenger seat of a rental car that the claimant was driving. Id. at 1110. Similarly, in United States v. $515,060.42 in U.S. Currency, 152 F.3d 491, 499 (6th Cir. 1998), the court found standing where the claimant asserted ownership and the government's allegations indicated that the claimant had some involvement with the currency. In $515,060.42 in U.S. Currency, IRS and FBI agents seized over seven hundred thousand dollars in currency from the home of Virginia Hurst. See 152 F.3d at 495. Hurst was indicted and subsequently convicted of conspiring to conduct an illegal gambling operation. Id. In its complaint, the government alleged that Hurst and others operated illegal gambling schemes for several organizations, including the Jellinek Center, a not-for-profit organization that ran drug treatment and rehabilitation programs. Id. at 495-96. The Jellinek Center later contested the forfeiture, claiming that the bingo operations were legal and asserting that $149,075 of the currency seized from Hurst's home belonged to the organization. Id. at 499. Despite the fact that Jellinek provided no additional evidence of its ownership of that particular sum, the court found that its claim of ownership, together with the government's allegations regarding Jellinek's involvement with the gambling scheme, were sufficient to establish standing. Id.

In the present case, Lopez has provided more than sufficient evidence demonstrating a "colorable interest" in the $50,000 that he admittedly used in an attempt to bribe his way out of prison. Since first learning of the forfeiture of his money, Lopez has consistently and repeatedly asserted a claim of ownership under oath, and has supported that claim with sworn answers to interrogatories and deposition testimony. See $557,933.89, More or Less, in U.S. Funds, 287 F.3d at 79 n.10 (finding claim of ownership made under oath sufficient to establish Article III standing to contest forfeiture). Additionally, the Government's own allegations demonstrate that Lopez controlled the payment of the $50,000 from prison:

Q: Now, in October or November, 1992, you attempted to escape from prison by arranging for $50,000 to be paid as a ...

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