Chapter 24

Removal To District Court

24.1 Removal To District Court - Overview

24.2 Authority for the Judicial Process

24.3 Judicial Process Commencement

24.3.1 Claim Requirements

24.3.2 Bond Requirements

24.3.3 Proceeding in Forum Pauperis

24.4 Confirming filing and expediting referral to U.S. Attorney

24.5 Confirming receipt by U.S. Attorney and expediting filing and service of Complaint for Forfeiture

24.1 Removal To District Court - Overview

If the decision has been made to force judicial forfeiture of the seized property instead of or in addition to administrative review, then timely and appropriate actions must be taken to invoke this right or it will be procedurally barred. The three necessary steps are: (i) a timely filed, (ii) competent claim with (iii) proper cost bond or in forma pauperis petition.

Deviation from these requirements are authorized only in the discretion of the court, an unenviable place to have landed. Hence, critical attention to these requirements must be an early priority.

24.2 Authority for the Judicial Process

The authority for the judicial review of a seizure and proposed forfeiture is found at 19 U.S.C. 1604 (1998) which states in pertinent part:

It shall be the duty of the Attorney General of the United States immediately to inquire into the facts of cases reported to him by customs officers and the laws applicable thereto, and, if it appears probable that any fine, penalty, or forfeiture has been incurred by reason of such violation, for the recovery of which the institution of proceedings in the United States district court or the Court of International Trade is necessary, forthwith to cause the proper proceedings to be commenced and prosecuted, without delay, for the recovery of such fine, penalty, or forfeiture in such case provided . . .

In order to force the government to institute the condemnation or forfeiture proceedings, 19 U.S.C. 1608 (1998), "Seizure; claims; judicial condemnation:, requires that:

Any person claiming such vessel, vehicle, aircraft, merchandise, or baggage may at any time within twenty days from the date of the first publication of the notice of seizure file with the appropriate customs officer a claim stating his interest therein. Upon the filing of such claim, and the giving of a bond to the United States in the penal sum of $5,000 or 10 percent of the value of the claimed property, whichever is lower, but not less than $250, with sureties to be approved by such customs officer, conditioned that in case of condemnation of the articles so claimed the obligor shall pay all the costs and expenses of the proceedings to obtain such condemnation, such customs officer shall transmit such claim and bond, with a duplicate list and description of the articles seized, to the United States attorney for the district in which seizure was made, who shall proceed to a condemnation of the merchandise or other property in the manner prescribed by law.

From these two statutes, which are incorporated by reference in most all federal forfeiture laws and regulations, the district court obtains its jurisdiction to determine the validity of a forfeiture.

24.3 Judicial Process Commencement

In order to take advantage of the judicial process, the claim and cost bond must be filed "within twenty days from the date of the first publication of the notice of seizure" (19 U.S.C. 1608). Note that the USFWS allows 30 days. (50 CFR 12.23(b)(2)). Failure to file within that time closes the door to judicial resolution - the matter will be forfeited administratively.

As a practical matter, while the seizing agency is under no obligation to publish that notice earlier than 60 days from the date of seizure. Interestingly, that obligation flows not from congressional action, but the D.O.J.'s realization that due process requires some time limit be imposed. (Directive 93-4, Office of Asset Forfeiture).

However, an anxious claimant does not have to wait for that first publication in order to file the claim and cost bond, thereby removing the matter to district court for prosecution "without delay". (19 U.S.C. 1604). In United States v. 52,8000, 33 F.3d 1337 (11th Cir. 1994), the court held that a claimant to property doesn't have to wait for notice to file cost bond and claim.

Short of filing an action to compel the filing of a forfeiture action, agencies routinely take 4-6 weeks to refer the matter the U.S. Attorney. Once it arrives there, several more weeks may pass before the actual forfeiture complaint is filed.

24.3.1 Claim Requirements

Initially, it is important to keep in mind that in a forfeiture proceeding, there are two claims that must be filed. The first claim, along with the bond or in forma pauperis petition, is filed with and divests the seizing agency of the matter and forces referral of the case to the U.S. Attorney. The second claim is filed in response to the complaint for forfeiture with the district court.

Most agencies do not define what constitutes a proper "claim". The DEA and FBI requires only "a claim" (21 CFR 1316076 and 28 CFR 8.7). Customs likewise only requires a "claim" (19 CFR 162.47). The INS requires somewhat more stating that the "claim must set forth the basis of the claimed ownership and allege why the conveyance was not subject to seizure" (8 CFR 274.10(a)(1)). Similarly, the IRS requires that the claim state "his interest in the articles seized" (26 CFR 403.26. Last, BATF also requires that the claim state the claimant's "interest in the articles or carriers seized . . .". (27 CFR 72.22(a)(6)).

In so much as two claims are going to be filed, and to avoid the possibility of rejection by an agency official grounded upon the insufficiency of the claim, practicality dictates employing the standard of the second claim which in all events will satisfy any agency's internal ideas on a proper claim. Additionally, that second claim will ultimately have to be filed so having the client execute two originals of the claim saves time and possible discrepancies between the claims.

The standard for the second claim is found, in of all places, the "Supplemental Rules for Certain Admiralty and Maritime Claim" which are found following the Federal Rules of Civil Procedure. Why the Admiralty Rules? These rules are well tested, generally constitutional, in rem procedural rules which have arisen in the Maritime context where in personam jurisdiction was often difficult to accomplish.

Hence, as forfeitures became more commonplace, these rules were employed to provide the framework for prosecuting forfeiture cases. Thus, in Rule C (1)(b), an action in rem may be brought whenever "a statute of the United States provides for a maritime action in rem or a proceeding analogous thereto." Returning back to the primary forfeiture statute, 21 U.S.C. 881(b) "Seizure pursuant to Supplemental Rules for Certain Admiralty and Maritime", this section provides that "Any property subject to civil forfeiture to the United States under this title may be seized by the Attorney

General upon process issued pursuant to the Supplemental Rules for Certain Admiralty and Maritime Claims". Similar provision is found at 18 U.S.C. 981(b)(2).

Supplemental Rule C(6) requires that the claim "shall be verified under oath or solemn affirmation, and shall state the interest in the property by virtue of which the claimant demands its restitution and the right to defend the action. If the claim is made on behalf of the person entitled to possession by an agent, bailee or attorney, is shall also state that the agent, bailee or attorney is duly authorized to make the claim." From this language, the claim can then be drafted. Sample claims forms for individuals, corporations and attorneys are included in the appendix to this chapter.

It bears repeating once again that the assertions of fact under oath by the claimant in the claim had better be able to withstand the light of day which in due course will be cast upon them.

24.3.2 Bond Requirements

In addition to the claim, a proper "bond" must be filed. This provision, conditioning access to the judicial branch upon the posting of surety, is remarkable but, unfortunately, completely constitutional.

The amount of the bond is always at least $250 or 10% of the value of the property up to $5000, which ever is greater. (19 U.S.C. 1608). Again, each agency has its only rules regarding the bond which must be consulted if in fact a bond is to be posted. For example, Customs requires use of its own "bond" form and will accept bonds only from approved sureties. (19 CFR 162.47(b). Similar rules are in place for other agencies.

As a practical matter, the premium for a bond of only up to $5,000 is very rarely worth the cost - hence cash is usually posted and always accepted in the form of cashier's check, postal order or money order. (DEA & FBI 21 CFR 1316.76.(b)). The bond amount is then deposited with the U.S. Marshal pending disposition of the case.

Procedurally, the bond is suppose to serve the purpose of paying the usual costs of the lawsuit as detailed in 28 U.S.C. 1920 and 1921. These costs include clerk fees, U.S. Marshall fees, court reporters, witness fees and interpreter fees among other costs. It is the policy of the DOJ to seek these costs in the event of a successful forfeiture, return the bond if no property is forfeited and allow the AUSA to return the bond and waive costs as part of any settlement. (Chapter 2; III, Asset Forfeiture Policy Manual).

Finally, remember that the bond does not represent the ceiling of costs that an unsuccessful claimant may face after losing a forfeiture case - a consideration that should be addressed early on in determining how, and whether, to proceed.

24.3.3 Proceeding in Forum Pauperis

In the event the claimant is unable to post the required bond, waiver of the bond requirement is allowed if the claimant can establish indigency. This process is invoked by filing an in forma pauperis petition.

While the seizing agency has the authority to initially determine the validity of in forma pauperis petition, the DOJ has stepped in to set policy on these petitions. This policy is contained in Directive 93-2 from the DOJ Office of Asset Forfeiture and applies to all the seizing agencies. It requires a six step process. Those steps are:

1. Each agency must in its "notice of seizure" provide express reference to the right to proceed in forma pauperis with instructions on how to do so.

2. The format for claiming in forma pauperis status is submission of a sworn affidavit under oath. The form used is Form 4, of the Federal Rules of Appellate Procedure and must demonstrate that the claimant is unable to post the required bond. A copy of Form 4 is included in the appendix to this chapter.

3. In all cases were indigency is established to the seizing agency's satisfaction, the case will be immediately referred to the U.S. Attorney.

4. In all cases where the seizing agency has "clear and articulable" reasons for denial of the in forma pauperis petition, then the seizing agency must refer the petition to the DOJ Office for Asset Forfeiture for final determination.

5. If the in forma pauperis petition is denied by the Office of Asset Forfeiture, then the seizing agency must inform the petitioner that they may seek judicial review of the denial of the waiver of bond request. During such judicial review the seizing agency must postpone the administrative declaration of forfeiture 20 days in order to allow the petitioner to seek judicial review.

6. False statements made in an in forma pauperis petition will be considered for criminal prosecution under 18 U.S.C. 1001 and 1621.

In the event judicial review is sought of a decision to deny the waiver of bond request, the petitioner would proceed under 5 U.S.C. 705-706. A case typifying this sort of action can be found at Ysasi v. Rivkind, 856 F.2d 1520, 1526-15274 (Fed. Cir. 1988).