Opinion
Civil No. 01-4255 (JBS).
Filed: February 27, 2002
David M. McGlaughlin, Esq., Newman and McGlaughlin, P.C., The Benjamin Franklin, Philadelphia, PA, Attorney for Plaintiff.
Christopher Christie, United States Attorney, By: Peter G. O'Malley, Assistant United States Attorney, Newark, NJ, Attorney for Defendants.
OPINION
Plaintiff Sandra Clarke-Dunbar seeks the return of a 1998 Lexus GS-300 automobile, seized by the United States Customs Service ("Customs"). Customs seized the property pursuant to 22 U.S.C. § 401 in connection with plaintiff's attempt to export it to Jamaica. Plaintiff filed a motion for return of property pursuant to Fed.R.Crim.P. 41(e), that was received by the Clerk of Court on Septemr 7, 2001. Currently before this Court is defendant's motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction or, alternatively, Rule 12(b)(6) for failure to state a claim upon which relief can be granted.
BACKGROUND
The facts of the instant case are undisputed. Customs received documentation required under 19 C.F.R. § 192.2 regarding the export of plaintiff's Lexus on January 11, 2001. Customs determined that it had probable cause to believe that plaintiff was exporting the car in violation of the law. On April 18, 2001, Customs seized plaintiff's property pursuant to 22 U.S.C. § 401.
Customs sent plaintiff notice of the seizure on April 25, 2001. The notice included an "Election of Proceedings" form to be completed by the plaintiff. Among the three options listed, plaintiff's attorney, David McGlaughlin, Esquire, elected to have the case referred to the U.S. Attorney for civil forfeiture action. The selection checked by plaintiff's attorney read:
"I REQUEST THAT THE CUSTOMS SERVICE SEND MY CASE FOR COURT ACTION. Please immediately send the case to the U.S. Attorney for a court decision. I am filing/will file a claim and cost bond."
(Goldberg Aff., Ex. 1.) Plaintiff's counsel returned the "Election of Proceedings" form, the "Petition for Remission or Mitigation of Forfeitures and Penalties Incurred" form, and attached a letter explaining that no cost bond would be provided because he believed the requirement had been deleted from federal forfeiture statutes. (Goldberg Aff., Ex. 2.)
Customs called plaintiff's counsel on May 16, 2001 and advised him that the cost bond requirement in forfeiture cases pursuant 22 U.S.C. § 401 had not been eliminated by the Civil Asset Forfeiture Reform Act of 2000, 18 U.S.C. § 983(i)(2)(E) ("CAFRA"). (Goldberg Aff., ¶ 6.) Plaintiff's counsel responded by letter on May 17, 2001 challenging Customs's use of 22 U.S.C. § 401 forfeiture because it is entitled "Illegal Exportation of War Materials" and primarily concerns questions of illegal arms shipments. (Goldberg Aff., Ex. 3.) Customs called plaintiff's counsel once again on June 7, 2001 and explained that Customs employed 22 U.S.C. § 401 for export violations of all laws, not merely the exportation of war materials. (Goldberg Aff., ¶ 8.)
Plaintiff has never forwarded the cost bond. Instead, plaintiff filed suit against the federal government in the United States District Court, Eastern District of Pennsylvania. Plaintiff subsequently voluntarily discontinued the action and filed the present claim in the form of a motion for return of property pursuant to Fed.R.Crim.P. 41(e). On November 5, 2001, defendant filed a Notice of Motion for dismissal pursuant to Fed.R.Civ.P. 12(b)(1) or, alternatively, Rule 12(b)(6). For the following reasons, Defendant's motions will be granted and Plaintiff's claims dismissed.
DISCUSSION
Defendant and plaintiff agree that plaintiff's automobile was seized pursuant to 22 U.S.C. § 401. Defendant asserts that 22 U.S.C. § 401 permits seizure and forfeiture of property to be exported in violation of law. Defendant insists that the statute does not merely apply to the seizure of "war materials." Defendant further posits that 22 U.S.C. § 401 seizures are not subject to the CAFRA provisions codified in 18 U.S.C. § 983 that have eliminated the requirement of cost bond for civil forfeitures. Defendant argues that 22 U.S.C. § 401 is specifically excluded from the CAFRA provisions by 18 U.S.C. § 983(i)(2)(E). Defendant additionally argues that Fed.R.Crim.P. 41(e) cannot be invoked while a civil forfeiture action is pending. Defendant concludes that this Court should dismiss plaintiff's claim pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction or, alternatively, pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted. This Court agrees.
I. Defendant's Rule 12(b)(1) Motion to Dismiss.
A. Rule 12(b)(1) Standard
When considering a motion to dismiss for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1), the court must accept as true all material allegations of the complaint and construe that complaint in favor of the non-moving party. Warth v. Seldin, 422 U.S. 490, 501 (1975). The court's focus must not be on whether the factual allegations would entitle the plaintiff to relief, but instead should be on whether this Court has jurisdiction to hear the claim and grant relief. New Hope Books, Inc. v. Farmer, 82 F. Supp. 2d 321, 324 (D.N.J. 2000). To determine this, the Court can find facts based on affidavits or materials submitted to the Court. Id.
B. Subject Matter Jurisdiction Over Plaintiff's Fed.R. Crim. P. 41(e) Motion
Generally, "`once the government initiates an administrative forfeiture proceeding and the property is not the subject of an ongoing criminal proceeding, the district court loses jurisdiction to resolve the issue of return of property.'" U.S. v. McGlory, 202 F.3d 664, 670 (3rd Cir. 2000); quotingLinarez v. U.S. Dep't of Justice, 2 F.3d 208, 212 (7th Cir. 1993). Federal courts do have jurisdiction to review whether a forfeiture satisfied statutory and constitutional requirements.McGlory, at 670 (citing U.S. v. Woodall, 12 F.3d 791, 793 (8th Cir 1993)). In McGlory, the Third Circuit held, "a district court has jurisdiction to consider a claim that a person received inadequate notice of completed administrative forfeiture proceedings, notwithstanding that the claim was styled as a Rule 41(e) motion and filed after criminal proceeding had been completed." Id. at 670. McGlory mandates that a district court will have jurisdiction to hear a Rule 41(e) motion for return of seized property when there is no ongoing criminal proceeding only when the moving party alleges inadequate notice.
In the present case there is no ongoing criminal proceeding. Rather, plaintiff instituted civil forfeiture proceedings when her counsel selected court action on the "Election of Proceedings" form on May 11, 2001 and returned the "Petition for Remission or Mitigation of Forfeitures and Penalties Incurred" on May 14, 2001. (Goldberg Aff., Ex. 2.) Additionally, plaintiff does not challenge the adequacy of notice of the seizure and forfeiture. Such a claim would be impossible given that: (1) plaintiff received notification of the seizure from Customs sent on April 25, 2001; (2) signed and returned the notice along with the "Election of Proceedings" form, the "Petition for Remission or Mitigation of Forfeitures and Penalties Incurred" form, and an appended letter on May 14, 2001; and (3) received two calls from Customs concerning the need to post a cost bond. (Goldberg Aff., ¶¶ 6 and 8, Exs. 1 and 2.) Plaintiff's only arguments are that 22 U.S.C. § 401 forfeiture cannot apply to her automobile because it has nothing to do with war, and that 18 U.S.C. § 983 eliminated the cost bond requirement from civil forfeiture statutes.
This Court does not have subject matter jurisdiction because no criminal proceedings are ongoing, and because plaintiff has not challenged the adequacy of notice of the seizure. McGlory, at 670 (holding district court has jurisdiction to hear Rule 41(e) motion for return of seized property when there no ongoing criminal proceeding only when moving party alleges inadequate notice). Accordingly, defendant's motion for dismissal for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) will be granted. Plaintiff's Fed.R.Crim.P. 41(e) motion for return of property will be dismissed.
Even if this Court had subject matter jurisdiction over plaintiff's claim, her Rule 41(e) motion would nonetheless be dismissed pursuant to Fed.R.Civ.P. 12(b)(6), as discussed below.
II. Defendant's Rule 12(b)(6) Motion to Dismiss.
A. Rule 12(b)(6) Standard
A motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted does not attack the merits of the case, but merely tests the legal sufficiency of the Complaint. See Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996). When considering a Rule 12(b)(6) motion, the reviewing court must accept as true all well-pleaded allegations in the Complaint and view them in the light most favorable to the plaintiff. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Jordan v. Fox, Rothschild, O'Brien Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994); Palladino Ex Rel U.S. v. VNA of Southern New Jersey, Inc., 68 F. Supp. 2d 455 (D.N.J. 1999).
In considering the motion, a district court must also accept as true any and all reasonable inferences derived from those facts.See Oshiver v. Levin, Fishbein, Sedran Berman, 38 F.3d 1380, 1384 (3d Cir. 1994); Schrob v. Catterson, 948 F.2d 1402, 1405 (3d Cir. 1991). A court may not dismiss the Complaint "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Therefore, in deciding a motion to dismiss, a court should look to the face of the complaint and decide whether, taking all of the allegations of fact as true and construing them in a light most favorable to the non-movant, plaintiff's allegations state a legal claim. See Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990).
B. Property Subject to Seizure Pursuant to 22 U.S.C. § 410
The plain language of 22 U.S.C. § 401 envisions seizure and forfeiture of property other than arms and munitions. 22 U.S.C. § 401 states, in the pertinent part:
(a) Seizure and forfeiture of materials and carriers
Whenever an attempt is made to export or ship from or take out of the United States any arms or munitions of war or any other articles in violation of law, or whenever it is known or there shall be probable cause to believe that any arms or munitions of war or other articles are intended to be or are being or have been exported or removed from the United States in violation of law, the Secretary of the Treasury, or any person duly authorized for the purpose by the President, may seize and detain such arms or munitions of war or other articles. . . .22 U.S.C. § 401(a) (emphasis added).
Additionally, case law supports the defendant's contention that the statute can be employed to seize property other than war materials. The Second Circuit addressed this very issue in U.S. v. Ajlouny, 629 F.2d 830 (2d Cir. 1980). In denying the assertion that 22 U.S.C. § 401 is limited to the seizure of war material, the Second Circuit wrote:
Appellant further contends that even if constitutional standards were not exceeded, the search of the container and the subsequent seizure of its contents violated the statutory limitations of 22 U.S.C. § 401(a)(1976). This statute authorizes seizure of articles exported in violation of law. It conditions this seizure authority on the existence of probable cause to believe that the articles "are intended to be or are being or have been exported . . . in violation of law." The statute applies in terms to arms and munitions, but includes "other articles" and has been consistently applied to any items destined for unlawful export.Id. at 835 (internal footnotes omitted).
22 U.S.C. § 401 is not limited to the seizure of war materials. The statute permits seizure and forfeiture of "other articles" upon the existence of probable cause to believe the articles are or will be exported in violation of the law. 22 U.S.C. § 401(a). Ajlouny, at 835. Customs claims that it had probable cause to believe that an attempt was made to export the property in violation of the law. (Goldberg Aff., ¶ 3.) Plaintiff cites no cases to the contrary. Additionally, Plaintiff does not challenge that Customs did not have probable cause to seize her automobile. Accordingly, her claim that 22 U.S.C. § 401 does not apply to her automobile fails.
C. 22 U.S.C. § 410's Cost Bond Requirement.
The CAFRA amendments codified in 18 U.S.C. § 983 added additional procedural and notice requirements to civil forfeiture statutes. The defendant concedes that 18 U.S.C. § 983 removed the requirement of a cost bond in many forfeiture cases. (Def.'s Br. in Support at 4.) Defendant is correct in its assertion that the cost bond requirement of 22 U.S.C. § 410 seizures has not been eliminated by 18 U.S.C. § 983. 18 U.S.C. § 983(i)(2)(E) specifically excludes 22 U.S.C. § 401 seizures from the 18 U.S.C. § 983 reforms. 18 U.S.C. § 983(i) provides:
(i) Civil forfeiture statute defined. — In this section, the term "civil forfeiture state" —
* * *
(2) does not include —
* * *
(E) section 1 of title VI of the Act of June 15, 1917 ( 40 Stat. 233; 22 U.S.C. 401).
Because 18 U.S.C. § 983(i)(2)(E) states that 22 U.S.C. § 401 is not a "civil forfeiture statute" for the purposes of CAFRA 18 U.S.C. § 983, the latter statute's elimination of cost bonds does not apply to 22 U.S.C. § 401. Accordingly, 22 U.S.C. § 401, the statue governing the seizure and forfeiture of plaintiff's automobile, requires a cost bond. Therefore, plaintiff's contention that no cost bond is due is without merit.
In reviewing defendant's motion to dismiss pursuant to Rule 12(b)(6), this Court accepts as true all well-pleaded allegations in the plaintiff's compliant as well as any and all reasonable inferences derived therefrom. See Scheuer, at 236 (holding court must accept all well-pleaded facts in compliant);Oshiver, at 1384 (holding court to accept all reasonable inferences draw from those facts). Plaintiff has not argued insufficient notice or any other substantive violation of the forfeiture statute or of the Constitution. Plaintiff merely posited that 22 U.S.C. § 401 could not apply to her seized car because the automobile is not a war material, and that 18 U.S.C. § 983 eliminated the cost bond in civil forfeiture cases. As discussed above, plaintiff's assertions are countered by both the plain language of 22 U.S.C. § 401(a) and 18 U.S.C. § 983(i)(2)(E), and by applicable case law. See Ajlouny, at 835 (holding 22 U.S.C. § 401 permits seizure and forfeiture of any property exported in violation of law). Taking all of the plaintiff's allegations of fact as true and construing them in a light most favorable to the plaintiff, her allegations nonetheless fail to state a legal claim. Accordingly, defendant's motion to dismiss pursuant to Rule 12(b)(6) will be granted. Plaintiff's claim will be dismissed on that basis.
CONCLUSION
For the reasons discussed above, the Court grants defendant's motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), and alternatively for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(1). The accompanying Order is entered.
ORDER
THIS MATTER having come before the Court on defendant's motions to dismiss [Docket Item 3-1] for lack of subject matter pursuant to Fed.R.Civ.P. 12(b)(1) and for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6); and the Court having considered all written submissions by the parties; and for the reasons set forth in the accompanying Opinion; and for good cause shown;IT IS on this ____ day of February 2002, hereby
ORDERED that defendant's motions to dismiss are GRANTED ;
IT IS FURTHER ORDERED that plaintiff's Complaint is DISMISSED WITH PREJUDICE.