Opinion
No. 02-CV-5752 (SJF)(RML).
December 8, 2004
OPINION ORDER
I. Introduction
The United States brought this action pursuant to 21 U.S.C. § 881 and 18 U.S.C. § 981 seeking the forfeiture of eighteen-thousand eight-hundred dollars ($18,800.00) in United States currency seized by United States Customs Service ("Customs") and Drug Enforcement Agency ("DEA") agents from an apartment where claimant Marlene Martinez Jimenez ("claimant" or "Martinez Jimenez") resided. The Government has moved to strike or dismiss claimant's claim and answer pursuant to Rules 12(b)(1) and 12(c) of the Federal Rules of Civil Procedure ("Fed.R.Civ.P.") or, in the alternative, for summary judgement pursuant to Fed.R.Civ.P. 56. For the reasons set forth below, the motion is GRANTED.
On March 1, 2003, the United States Customs Service, along with several other federal agencies, was reorganized under the newly-created Department of Homeland Security. At that time, certain functions of Customs were merged with those of other agencies and a new federal agency, the Bureau of Customs and Border Protection, was created.
The facts are derived from the Government's statement of material facts pursuant to Local Rule 56.1 and the accompanying evidentiary material filed in support of the Government's motion. Since claimant has failed to controvert the facts asserted by plaintiff, and since claimant received notice of such failure's consequences, the Court accepts the Government's factual assertions as true. See Local Civ. R. 56.1(c).
On August 8, 1997, a Customs Contraband Enforcement Team ("CET") discovered approximately fifty-four (54) pounds of cocaine in the gas tank of a 1984 Chrysler LeBaron that had been imported on a commercial vessel from Panama to Newark, New Jersey. (Compl. para. 10-11). The agents obtained a court order for the installation of a monitoring device on the vehicle, arranged for pick-up of the vehicle, and followed the car to 1054 East 100th Street in Brooklyn. (Id. para. 14, 17). After observing three men removing the gas tank, the agents identified themselves and arrested the men. (Id. para. 18).
Based upon information developed by Customs, the United States District Court for the District of New Jersey issued arrest warrants for Luis Javier and Luis Alfonso, Colombian citizens living in Panama who had attempted to arrange the delivery of the vehicle and cocaine. (Id. para. 21). On September 2, 1997, the Panamanian Federal Police arrested Luis Javier Concha-Granja, a/k/a Luis Javier, in Panama City, Panama. (Id. para. 24).
Customs secured a court order for authorization to intercept electronic communications of digital pager numbers (917) 875-0311 and (917) 990-3636, which were local numbers obtained by Customs when attempting to arrange for delivery of the cocaine. (Id. para. 26). One of the telephone numbers that contacted each of the pager numbers was identified by subscriber information as belonging to Jose Fernandez Paz, who had been previously arrested by the DEA for conspiracy to distribute cocaine. (Id. para. 28-29).
On December 4, 1997, surveillance units from Customs, DEA, and the United States Probation Office ("Probation") identified Paz's location. (Id. para. 31). The same day, Paz was seen entering an apartment complex at one of his known residences, 86-06 35th Avenue in Jackson Heights, New York. (Id. para. 32). Later that day, Paz, who was on supervised release for his 1991 narcotics arrest, was stopped in his van by the surveillance team and questioned by Probation Officer Carl Beck. (Id. para. 33-34). An electronic address book found in Paz's possession included the two intercepted pager numbers: (917) 875-0311 and (917) 990-3636. (Id. para. 35). That evening, Customs and DEA agents approached Paz on 35th Avenue in Jackson Heights and received consent to search Apartment 4N located at 86-05 35th Avenue. (Id. para. 37, 39).
Although Paz informed the agents that his girlfriend, Martinez Jimenez, rented the apartment, (id. para. 38), Paz signed the lease, paid a majority of the rent, and had unrestricted access to the apartment. (Mirabile Decl. exh. 12 at 95-96, 128-29). While searching a closet in the apartment, the agents discovered a shoe box containing eighteen-thousand eight-hundred dollars ($18,800.00) in United States currency (the "currency"), in ten ($10.00) and twenty ($20.00) dollar denominations bundled in rubber bands. (Compl. para. 40; Mirabile Decl. exh. 12 at 270). Both Paz and Martinez Jimenez denied ownership of the currency. (Compl. para. 41; Answer para. 41). Although Martinez Jimenez told the agents that the currency belonged to her cousin, she later admitted at her deposition that this information was untrue. (Compl. para. 42; Mirabile Decl. exh. 12 at 273-74). After the currency was seized by the agents, a Customs canine indicated the presence of narcotics on the money. (Compl. para. 43-44).
On October 30, 2002, the Government filed a verified complaint seeking forfeiture of the currency. (Compl.). The next day, Magistrate Judge Robert M. Levy issued a warrant authorizing the Department of the Treasury to maintain custody of the currency. (Warrant for the Arrest of Articles in Rem). The Department of the Treasury then served the complaint, warrant, and interrogatories on potential claimants by certified mail, (Mirabile Decl. exh. 3). A legal notice of this action was published in the New Jersey Star Ledger on three separate dates in December 2002. (Id. exh. 4). Martinez Jimenez submitted a claim to the currency and an answer to the complaint. (Id. exh. 5-6). Ana S. Jimenez, Jose Ramiro Martinez, and Gloria Martinez provided responses to the Government's interrogatories although the Department of the Treasury's certified mail was returned as unclaimed as to these individuals. (Id. para. 14; id. exh. 13, 14, 15). However, none of these individuals filed a verified claim to the currency pursuant to Rule C(6) of the Supplemental Rules for Certain Admiralty and Maritime Claims.
III. Standing
The Government seeks dismissal of claimant's claim and answer for lack of standing pursuant to Fed.R.Civ.P. 12(b)(1). See Fed.R.Civ.P. 12(b)(1). However, "since claimants are akin to intervenor-defendants and their claims amount to defenses to the forfeiture," the proper procedural vehicle for the Government's motion to strike the claim for lack of standing is Fed.R.Civ.P. 12(f). United States v. $79,000 in Account Number 2168050, No. 96-3693, 1996 WL 648934, at *2 (S.D.N.Y. Nov. 7, 1996); see also United States v. All Funds on Deposit on or Before November 8, 1994 in Citibank Account Number 42773634 in the Name of Imtiaz Ahmed Kahn, 955 F. Supp. 23, 25 (E.D.N.Y. 1997). Rule 12(f) provides that "the court may order stricken from any pleading any insufficient defense. . . ." Fed.R.Civ.P. 12(f).
A Rule 12(f) motion is generally solely decided on the pleadings. D.S. America (East), Inc. v. Chromagrafx Sys., 873 F. Supp. 786, 797 (E.D.N.Y. 1995); LNC Investments, Inc. v. First Fidelity Bank, No. 92-7584, 1997 WL 528283, at *49 (S.D.N.Y. Aug. 27, 1997) ("[A] Rule 12(f) motion is ordinarily decided based on the pleading, and in examining the defenses, the Court must accept the matters well-pleaded as true and should not consider matters outside the pleadings.") (internal citation omitted). "However, although `conversion of a motion to strike into a motion for summary judgment is not explicitly authorized by the Federal Rules of Civil Procedure,' where the parties have `bolstered their papers with affidavits and other extrinsic evidence,' the motion to strike may be treated as one for summary judgment." LNC Investments, Inc., 1997 WL 528283, at *49 (quoting Paretti v. Cavalier Label Co., 702 F. Supp. 81, 85 (S.D.N.Y. 1988); see also Charles Alan Wright Arthur R. Miller, Federal Practice and Procedure: Civil § 1380 at 405-06 (3d ed. 2004) ("If matters outside the pleadings were freely presented and considered by the district judge, motions under Rule 12(f), especially those testing the legal sufficiency of a defense, might be transformed into motions testing the factual or evidentiary, as well as the legal, basis for the challenged pleading and would serve much the same function as a motion for summary judgment."). Since plaintiff has submitted extrinsic materials that will not be excluded by the Court, and since claimant has had a reasonable opportunity on notice to file sworn affidavits or other evidentiary materials pursuant to Local Civil Rules 56.1 and 56.2, plaintiff's motion to strike shall be treated as one for summary judgment for the limited purpose of determining whether claimant has standing to contest the forfeiture.
"Whether a claimant has standing is the threshold question in every federal case, determining the power of the court to entertain the suit."United States v. Cambio Exacto, S.A., 166 F.3d 522, 526 (2d Cir. 1999) (citations omitted). The aim of this threshold requirement is "to ensure that the government is put to its proof [of its right to forfeiture] only where someone with a legitimate interest contests the forfeiture." United States v. $557,933.89, More or Less, in U.S. Funds, 287 F.3d 66, 79 (2d Cir. 2002). Prior to contesting a government forfeiture action, claimants must have procedural standing under the statutes governing their claims and substantive standing under Article III of the Constitution as required for any federal court action. Id. The burden of demonstrating an interest in the seized property rests with the claimant. Mercado v. United States Customs Serv., 873 F.2d 641, 644 (2d Cir. 1989).
a) Procedural Standing
To establish standing in a civil forfeiture proceeding, a claimant must adhere to the procedural requirements of Rule C(6) of the Supplemental Rules for Certain Admiralty and Maritime Claims, which include filing a verified claim stating the claimant's interest in the property subject to forfeiture. Fed.R.Civ.P. Supp. Adm. R. C(6). There is no dispute that Jimenez satisfied this requirement. All other potential claimants, having been given proper notice of these proceedings, are in default.
b) Substantive Standing
The Government contends that Jimenez lacks standing under Article III of the Constitution, which limits the subject matter jurisdiction of federal courts to "Cases" and "Controversies." Thus, to establish constitutional standing, a claimant must demonstrate a "`sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy.'"Cambio Exacto, S.A., 166 F.3d at 526-27 (quoting Sierra Club v. Morton, 405 U.S. 727, 731, 92 S. Ct. 1361, 31 L. Ed. 2d 636 (1972)). "[A] litigant must allege a distinct and palpable injury to himself that is the direct result of the putatively illegal conduct of the adverse party and likely to be redressed by the requested relief." Id. at 527.
In determining standing to contest a forfeiture, courts look to ownership and possession of the seized property as reliable indicators of standing to claim injury. Id. at 527; Mcrcado, 873 F.2d at 645; Kahn, 955 F. Supp. at 26. However, "while ownership and possession generally may provide evidence of standing, it is the injury to the party seeking standing that remains the ultimate focus." Cambio Exacto, S.A., 166 F.3d at 527. Martinez Jimenez initially denied ownership of the currency on the day of the seizure, (Mirabile Decl., exh. 6, para. 41-42;id. exh. 12 at 272), but now claims that she received the currency as gifts from various relatives. According to Martinez Jimenez, her relatives posted $15,000 for her bail on a New Jersey criminal charge and, upon the return of the bond, permitted her to keep the money to purchase a vehicle for employment with a car service company. She claims that the returned bond checks were cashed at a Citibank by her brother. (Mirabile Decl., exh. 7, id. exh. 10). Although Martinez Jimenez originally claimed that the additional $3,800 seized from the apartment was also donated to her by relatives for the purchase of a car, (id. exh. 10), she later testified at her deposition that this money represented her profit from the sale of perfumes, watches, and clothes. (Id. exh. 12 at 192-94). However, she has failed to provide any documentation showing that the currency was either gifts or proceeds from business. "`[A] bare assertion of ownership of the res, without more, is inadequate to prove an ownership interest sufficient to establish standing.'" Kahn, 955 F. Supp. at 27 (quoting $79,000, 1996 WL 648934, at *3) (internal citation omitted).
The mere fact that the currency was seized from the apartment where Martinez Jimenez resided is insufficient to demonstrate the requisite injury. "[W]here a mere custodian has possession, it is only a `naked claim of possession' and does not thereby impart Article III standing." Cambio Exacto, S.A., 166 F.3d at 527 (quotingMercado, 873 F.2d at 645). Although Martinez Jimenez may indeed own the shoe box in which the currency was found, such fact does not necessarily show the required "facially colorable interest" in the forfeiture proceedings. $557,933.89, 287 F.3d at 78. The Second Circuit has noted, "The owner of a safety deposit box who does not also own its contents is not necessarily injured and therefore lacks standing when funds found in the box are seized."Cambio Exacto, S.A., 166 F.3d at 528. Based upon the foregoing, Martinez Jimenez has not met her burden of demonstrating an interest in the seized currency and her claim is therefore striken.
IV. Conclusion
For the foregoing reasons, the Government's motion for judgment and forfeiture of the currency is GRANTED. The Department of Treasury and its agencies are directed to dispose of the currency in accordance with all applicable laws and regulations. The Clerk of the Court is instructed to close this case.
IT IS SO ORDERED.