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In re Seizure of 2007 GMC Sierra SLE Truck

United States District Court, D. South Carolina, Florence Division

July 25, 2014


For In the Matter of the Seizure of 2007 GMC Sierra SLE VIN2GTEK13C1715, In Re: Bobby George Frederick, LEAD ATTORNEY, Bobby Frederick Law Office, Myrtle Beach, SC; Matthew Sherrod Swilley, LEAD ATTORNEY, Frederick Defense Firm, Myrtle Beach, SC.

For USA, Respondent: Stanley D Ragsdale, U.S. Attorneys Office, Columbia, SC.

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R. Bryan Harwell, United States District Judge.

On May 13, 2013, Petitioner Jazmine Cruz (" Petitioner" ),[1] by and through her counsel, filed the above captioned action petitioning this Court to set aside and cease the administrative forfeiture proceedings concerning a 2007 GMC Sierra SLE, VIN # 2GTEK13C1715 (" the GMC truck" ),[2] which was seized by the Drug Enforcement Administration (" DEA" ). See Pet., ECF No. 1. The petition also requests that the matter be litigated in

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this Court, the United States District Court, pursuant to 18 U.S.C. § 983 et al. See id. The matter is before the Court on Respondent United States of America's (" Respondent" or " the Government" ) motion for dismissal and/or summary judgment. See Mot., ECF No. 5. For the reasons set forth below, the Court grants Respondent's motion.

Factual and Procedural Background

Unless otherwise noted, the parties generally agree on the factual and procedural history of this matter. This case involves the DEA's administrative forfeiture of a 2007 GMC Sierra SLE truck, VIN: 2GTEK13C1715311701. The detailed background is set forth in both the petition and the declaration of Vicki Rashid, Forfeiture Counsel with DEA Headquarters, which was attached as Exhibit 1 to Respondent's motion. See Aff. of Vicki Rashid, ECF No. 5-1.

Petitioner asserts that Diego De Jesus Cruz-Gutierrez (" Cruz-Gutierrez" ) was arrested on charges of conspiracy to possess with intent to distribute heroin on July 12, 2012. See ECF No. 1 at 1. Petitioner states that she is married and cohabitated with Cruz-Gutierrez at the time of his arrest. See id. Petitioner claims that on July 12, 2012, the DEA seized various assets shortly after apprehending Cruz-Gutierrez and taking him into custody. Petitioner asserts that the DEA seized automobiles, including the GMC truck, and several thousand dollars' worth of currency belonging to Cruz-Gutierrez. Id. Petitioner claims, however, that the GMC truck belonged to her and was titled to her. See id. Petitioner provided a copy of the Certificate of Title, which shows her as the titleholder. ECF No. 1-1 at 1. She asserts that she was not charged in any indictment and was not involved with the criminal activity. See ECF No. 1 at 2. She argues that the Government has not alleged that the GMC truck was used to facilitate the commission of a criminal offense, or that there was a substantial connection between the car and any criminal offense. See id. The Government did not address these factual assertions in its motion or exhibits, aside from a statement in forfeiture counsel's affidavit acknowledging that the GMC truck was in fact seized on July 12, 2012 from the residence of Jazmine Cruz. See ECF No. 5-1 at ¶ 4(a). The government does not object to Petitioner's factual assertions though.

On August 30, 2013, the DEA mailed a written notice of seizure to Petitioner. See ECF No. 1 at 2; ECF No. 5-1 at ¶ 4(b). The seizure notice specified that, in order to contest the forfeiture in the United States District Court, a verified claim must be filed with forfeiture counsel for the DEA by October 4, 2012. See ECF No. 1 at 2; Notice of Seizure, ECF No. 5-1 at 9. The Notice of Seizure specified that the filing date of the claim would be deemed the date on which the DEA physically received the claim or petition. See ECF No. 5-1 at 9. In particular the Notice stated as follows:

If you wish to contest the forfeiture of the asset, you must comply with the procedures set forth herein. Your failure to do so will result in the termination of your interest in the asset, and may preclude your contesting the forfeiture of the asset in any judicial proceeding . . . . All submissions must be filed with the [DEA] Forfeiture Counsel . . . . A PETITION, CLAIM, OR OTHER CORRESPONDENCE SHALL BE DEEMED FILED WITH THE FORFEITURE COUNSEL, ASSET FORFEITURE SECTION, WHEN RECEIVED BY THE DEA AT EITHER OF THE ADDRESSES NOTED ABOVE. SUBMISSIONS BY FACSIMILE OR

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Id. (emphasis in original).

Therefore, as clearly set forth in the Notice and as required by statute, see 18 U.S.C. § 983(a)(2), in order to contest the forfeiture and seek a referral for judicial forfeiture, Petitioner had to file a claim with the DEA by October 4, 2012. Id. Petitioner asserts that she mailed a verified claim to the DEA on October 1, 2012. See ECF No. 1 at ¶ 10; Verified Claim, ECF No. 5-1 at 24-30 (cover letter dated October 1, 2012). Petitioner also mailed a " Petition for Remission" and " Petition to Return for Hardship" along with the verified claim. See id.

Forfeiture counsel for the DEA responded on November 1, 2012, explaining that the verified claim was being returned because it was received by forfeiture counsel " after the last day to file, which was October 4, 2012." See ECF No. 1 at 2; Letter, ECF No. 5-1 at 31-32. Forfeiture counsel testified in her affidavit that the DEA did not receive the verified claim until October 9, 2012. ECF No. 5-1 at ¶ 4(i). Forfeiture counsel attached a copy of the verified claim to her affidavit which had a stamp indicating that it was " received" by the Asset Forfeiture Section on October 10, 2012 at 2:22 p.m.[3] See ECF No. 5-1 at 24-30. Petitioner does not specifically dispute this evidence, aside from noting that the DEA " claims" that the verified claim was not received by the October 4, 2012 date. See Pet.'s Resp., ECF No. 6 at 1.

In its November 1, 2012 letter, the DEA explained that Petitioner's verified claim was rejected because it was not timely. See ECF No. 5-1 at 31. The letter also explained that the request for release of the property due to hardship could not be given consideration because a valid claim was not timely submitted. Id. The letter then noted that the petition for remission was being returned for clarification because the subject line referenced a different asset number than the 2007 GMC Sierra SLE. Id. The asset number listed on the petition for remission was 12-DEA-569225, which the DEA averred was the asset number for a 2009 Chevrolet Silverado LT. Id. Finally, the letter explained that, although a proper petition for remission and/or mitigation was not filed along with the claim, the DEA would, as a matter of discretion, give Petitioner twenty days from the receipt of the letter to file a proper petition. Id. The letter explained that any petition must declare under penalty of perjury that the information contained therein was true and correct. See id.

On November 14, 2012, the DEA forfeited the vehicle because a properly executed claim had not been received, and the time limit for filing claims had expired.[4] See Rashid Aff., ECF No. 5-1 at ¶ 4(k); Declaration of Forfeiture, ECF No. 5-1 at 40. On January 15, 2013, the DEA received what it construed as a Petition for Remission or Mitigation of Forfeiture (Petitioner titled it a " Petition to Return Property Pursuant to Rule 41(g)" ), which was dated December 6, 2012, on behalf of Jazmine Cruz.[5] See Rashid Aff., ECF No. 5-1 at

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¶ 4(l). On January 31, 2013, the DEA sent counsel for Petitioner a letter indicating that the Petition for Remission or Mitigation of Forfeiture was being returned as defective because it was submitted by an attorney without Petitioner's statement as required by 28 C.F.R. § 9.3(e)(2) and 9.9(g). See ECF No. 5-1 at ¶ 4(m). Nevertheless, the letter explained that, as a matter of discretion, the DEA would allow Petitioner thirty days to correct the deficiency and file a valid petition. See Letter, ECF No. 5-1 at 57. See id. The DEA re-sent the letter dated January 31, 2013 on April 25, 2013. See Rashid Aff., ECF No. 5-1 at ¶ 4(m). Neither party indicates whether Petitioner ever submitted a proper petition.[6]

On May 13, 2013, Petitioner initiated this action by filing a petition requesting the Court set aside the administrative forfeiture, and that the matter proceed as a judicial forfeiture action under 18 U.S.C. § 983 et al. In response, Respondent filed a motion for dismissal and/or summary judgment. Respondent asserts the following three arguments in support of its motion: (1) dismissal is warranted pursuant to Rule 12(b)(5) of the Federal Rules of Civil Procedure (" FRCP" ) because the Attorney General has not been properly served; (2) dismissal is warranted pursuant to Rule 12(b)(1) because 18 U.S.C. § 983 does not provide the Court with jurisdiction to hear Petitioner's claims; and (3) dismissal and/or summary judgment is warranted because Petitioner has failed to state a claim upon which relief may be granted. ECF No. 5 at 3.


I. Service of Process

Although typically the Court is first " obligated to satisfy [it]self[] of subject-matter jurisdiction," United States v. Urutyan, 564 F.3d 679, 684 (4th Cir. 2009), the

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Court will address Respondent's argument regarding service of process first. This is only because Respondent indicated this argument would be withdrawn if Petitioner filed proper proof of service upon the Attorney General.

Rule 4(i)(1) of the FRCP requires that, to properly serve the United States via certified mail, the summons and complaint must be mailed via certified mail to both the Attorney General of the United States at Washington, D.C. and to the civil process clerk at the United States Attorney's office. Fed.R.Civ.P. 4(i)(1). Respondent argued that dismissal was warranted because Petitioner provided no proof that the Attorney General has been served with this action. In response to Respondent's motion, Petitioner filed a Certified Mail Receipt indicating that the Department of Justice was served via certified mail in Washington, D.C. See Receipt, ECF No. 6-1. This document appears to show proper service of the pleadings upon the Attorney General. Respondent did not contest this in its reply to Petitioner's response. Accordingly, the Court finds that this ground has been withdrawn.

II. Subject-Matter Jurisdiction

Respondent's next argument asserts that the Court lacks subject matter jurisdiction to entertain this petition. Motions brought pursuant to Rule 12(b)(1) challenge whether the district court has jurisdiction over the action. See Fed.R.Civ.P. 12(b)(1). A court may dismiss a case for lack of subject matter jurisdiction on any of the following bases: " '(1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.'" Bucksport Water Sys., Inc. v. Weaver Eng'g, Inc., No. 4:13-cv-02503-RBH, 2013 WL 5914410, at *2 (D.S.C. Oct. 31, 2013) (quoting Norman v. Owens, No. 5:12-cv-01158-RBH, 2013 WL 4042038, at *3 (D.S.C. Aug.7, 2013)); see also Johnson v. United States, 534 F.3d 958, 962 (8th Cir. 2008)). Generally, challenges to jurisdiction under Rule 12(b)(1) may be raised in one of two ways: as a facial attack or as a factual attack. See Lutfi v. United States, 527 F.App'x 236, 241 (4th Cir. 2013).

A facial attack questions whether the allegations in the complaint are sufficient to sustain the court's jurisdiction. Id. Thus, " [i]n a facial challenge, the plaintiff is afforded the same procedural protections as he would be accorded when faced with a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure." Id. Therefore, " all alleged facts are taken as true and the motion will be denied if the complaint alleges facts that, if proven, would be sufficient to sustain jurisdiction." Id.

A factual attack, on the other hand, challenges the truthfulness of the jurisdictional allegations in the complaint. Id. " In a factual challenge, a trial court 'may then go beyond the allegations of the complaint and in an evidentiary hearing determine if there are facts to support the jurisdictional allegations.'" Id. (quoting Kerns v. United States, 585 F.3d 187, 193-94 (4th Cir. 2009)). In a factual challenge, the court is to " regard the pleadings' allegations as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment." Richmond, F. & P. R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991) (citing Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). The district court should apply the standard applicable to a motion for summary judgment, under

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which the non-moving party must set forth specific facts beyond the pleadings to show that a genuine issue of material fact exists. Id. ; see also Trentacosta v. Frontier Pac. Aircraft Indus., 813 F.2d 1553, 1559 (9th Cir. 1987). However, where the jurisdictional facts are intertwined with the facts central to the merits of the dispute, the entire factual dispute is appropriately resolved only by a proceeding on the merits. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982).

Petitioner asserts that 18 U.S.C. § 983 provides jurisdiction for the Court to entertain this action.[7] Respondent, however, argues that there is no jurisdictional basis because Petitioner seeks a review of the merits of an administrative forfeiture claim. " Most judicial challenges to an administrative forfeiture are foreclosed by the plaintiff's failure to use the mechanism provided in the forfeiture statute and regulations." United States v. Campbell, 3 F.App'x 381, 383 (6th Cir. 2001). If a petitioner fails to timely file a claim and waives " its opportunity for judicial forfeiture proceedings during the administrative process," the petitioner " may not . . . attempt to correct its choice of remedy in federal court." Malladi Drugs & Pharms., Ltd. v. Tandy, 552 F.3d 885, 889, 384 U.S.App.D.C. 232 (D.C. Cir. 2009).

The Fourth Circuit has recognized that § 983(e) allows a petitioner to challenge a forfeiture " if he did not know or have reason to know of the seizure within sufficient time to file a timely claim." United States v. Martins, 475 F.App'x 873, 874 (4th Cir. 2012). More specifically, the Fourth Circuit has explained that federal courts have general federal question jurisdiction to entertain an equitable cause of action challenging an administrative forfeiture which was based on inadequate notice. United States v. Minor, 228 F.3d 352, 357 (4th Cir. 2000); see also United States v. Pierce, No. 4:03-474-24-CWH, 2007 WL 1202556, at *1 (D.S.C. Apr. 23, 2007) (" Because the defendant did not contest the administrative forfeiture by timely filing a claim for the currency, the Court only has jurisdiction to determine whether the defendant received adequate notice of the seizure." ); City of Concord v. Robinson, 914 F.Supp.2d 696, 705 (M.D.N.C. 2012) (" [W]ith the exception of notice issues, federal courts have no jurisdiction to hear claims that a completed administrative forfeiture violated the property owner's constitutional rights." ).[8]

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The Court agrees with Respondent's facial attack, and concludes that it lacks jurisdiction to hear this action.[9] In the petition, Petitioner argues that the Court should review this forfeiture because the claim was due on October 4, 2012, and counsel for Petitioner mailed a verified claim on October 1, 2012. See ECF No. 1 at 2. Petitioner acknowledges that the notice stated that a verified claim must be filed with the DEA's forfeiture counsel by October 4, 2012. See id. Petitioner attached the Notice to her Petition, which contained the language about a claim being deemed " filed" when received by the DEA. See Notice, ECF No. 1-2. Nevertheless, Petitioner argues that it was reasonable to assume that the verified claim would be timely, and that the DEA would not suffer any prejudice in litigating this action. The DEA, however, claimed that the Petition was untimely because it was received after the October 4, 2012 deadline. See Letter, ECF No. 1-6.

Petitioner does not argue that she did not receive notice of the seizure, or that the DEA did not follow proper procedures in giving her notice of the seizure. Accordingly, based on the authority cited above, the Court finds that it lacks jurisdiction to entertain this action. Cf. Martins, 475 F.App'x at 874 (" Martins acknowledges that he had sufficient notice of the administrative forfeiture action. Accordingly, we affirm the district court's order denying the motion to set aside the forfeiture." ). The Fourth Circuit has clearly stated that the district court can hear an equitable cause of action challenging an administrative forfeiture which was based on inadequate notice. See Minor, 228 F.3d at 357. However, the Court lacks jurisdiction to hear a general challenge to a completed administrative forfeiture. See Robinson, 914 F.Supp.2d at 705. Therefore, the Court finds that dismissal is warranted for lack of subject matter jurisdiction.[10]

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IT IS THEREFORE ORDERED that Petitioner's motion for dismissal is GRANTED for lack of subject matter jurisdiction. Petitioner's petition is DISMISSED with prejudice.


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