United States v. $30,800.00 In United States Currency

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UNITED STATES OF AMERICA, Plaintiff, v. $30,800.00 IN UNITED STATES CURRENCY, Defendant In Rem, v. ESTEBAN PEÑA-NUÑEZ, Claimant.

CIVIL No. 21-1527 (ADC)

United States District Court, D. Puerto Rico

March 29, 2023

OPINION AND ORDER

S/AIDA M. DELGADO-COLON, United States District Judge

Pending before the Court is the United States of America's (“Government”) motion to strike Esteban Pena-Nunez's (“claimant”) verified claim and counterclaim, filed on July 26, 2022. ECF No. 11. Claimant filed an opposition on August 11, 2022. ECF No. 13. For the following reasons, the Court GRANTS IN PART and DENIES IN PART the Government's motion.

I. Background

On November 3, 2021, the Government filed a verified complaint under 18 U.S.C. §§ 1956(a)(1)(B)(i), 981(a)(1)(A) and 982(a)(1), as well as 21 U.S.C. §§ 841(a)(1) and 881(a)(6), seeking forfeiture of $30,800.00 in U.S currency. ECF No. 1. The Government attached an unsworn declaration under penalty of perjury subscribed by Special Agent Michael Calegari of the Drug Enforcement Administration (“DEA”) providing the factual basis for the verified complaint. ECF No. 1-1. In the declaration, DEA Special Agent Calegari described in detail the events that lead agents to search the claimant's luggage upon his arrival to Luis Munoz Marin International Airport in Puerto Rico on May 14, 2021. In short, the agents discovered and seized $30,800.00 from claimant asserting that the monies constituted the proceeds of illegal drug trafficking and money laundering schemes. Id., at 3-6.

On April 13, 2022, the Government re-filed the verified complaint to include a page that was apparently omitted from the original filing. ECF No. 5.^[1]The Government did not re-file the DEA agent's unsworn declaration, but again incorporated the same, by reference, in its amended complaint. Id., at 3.

On May 6, 2022, claimant filed a verified claim through his attorney, in which he stated as follows:

Claimant, Esteban Pe[n]a Nu[n]ez, makes a claim on behalf of himself to the property in the verified complaint as follows $30,800.00 in United States currency and in support of such claim avers that he has a proprietary interest in the aforementioned property under the laws of the Commonwealth of Puerto Rico.

ECF No. 6-1.

On May 18, 2022, the Court issued a warrant of arrest in rem for the $30,800.00 pursuant to Rule G(3)(b)(i) of the Supplemental Rules for Admiralty and Maritime Claims and Asset Forfeiture Actions (“Supplemental Rules”). ECF No. 9. The next day, on May 19, 2022, claimant filed an answer to the amended verified complaint, whereby he denied the facts presented in the DEA agent's unsworn declaration “with the exception of having the amount of $30,800.00 seized from the claimant by agents.” ECF No. 10, at 2. Claimant also presented several affirmative defenses, including insufficient process, as he contends that he was “served with an incomplete complaint on/or about [April 7, 2022], after [it] having been filed on [November 3, 2021].” Id. Claimant also raised several other defenses, some of which appear to partially contest the version of events propounded by the Government. See, id., at 3 (“Claimant was coerced into opening his suitcase, no detection having actually been made by a Canine....”). Finally, claimant included a “counterclaim” against the Government for the amount of $100,000.00 due to the DEA agents' alleged “arbitrary[] racial[] profiling” during their interdiction of claimant at the airport. Id.

On July 26, 2022, the Government filed a motion to strike claimant's verified claim and his counterclaim. ECF No. 11. As to the verified claim, the Government argued that claimant failed to establish his statutory standing to contest the forfeiture complaint because he did not adequately establish ownership of the seized property and therefore failed to perfect his claim under Supplemental Rule G(5)(a)(i). Id., at 3-5. As to the counterclaim, the Government alleged that claimant cannot assert a claim against the Government in this in rem proceeding. Id., at 6-7. It also raised the argument that sovereign immunity bars the counterclaim; more specifically that claimant failed to meet his burden of identifying a statute through which the Government waived its sovereign immunity to suits such as his. Id., at 7-8.

Claimant filed a response in opposition on August 11, 2022. ECF No. 13. He argued that his verified claim is compliant with Supplemental Rule G(5)(a)(i) and relies on his own statements made during the May 14, 2021 search and included in the DEA agent's unsworn declaration incorporated to the verified complaint. Id., at 2. The claimant also refers to, and attached a copy of, an administrative non-judicial claim made through the U.S. Department of Justice on August 15, 2021, to allege that the Government had prior notice of claimant's ownership interest. ECF No. 13-1. Finally, out of an abundance of caution, claimant submitted an amended verified complaint which incorporates the following language: “The property claimed is $30,800.00 in United States currency, this money being mine as substantiated in the administrative claim filed with the DEA, which gave rise to this proceeding. This money is the product of my labor, unemployment benefits provided, and money given to me by my consensual partner.” ECF No. 13-4. Claimant remained silent as to whether his counterclaim was barred by the Government's sovereign immunity.

II. Legal Standard

A. Civil Forfeiture Actions

Civil forfeiture actions are generally governed by 18 U.S.C. § 983 and Rule G of the Supplemental Rules. Section 983 provides detailed procedures for the filing of both judicial and non-judicial forfeiture claims. As to the former, it specifically requires that the Government “file a complaint for forfeiture in the manner set forth in the Supplemental Rules….” 18 USC § 983(a)(3)(A). Supplemental Rule G(2) supplies the requirements for such complaints:

The complaint must:

(a) be verified;

(b) state the grounds for subject-matter jurisdiction, in rem jurisdiction over the defendant property, and venue;

(c) describe the property with reasonable particularity;

(d) if the property is tangible, state its location when any seizure occurred and-if different-its location when the action is filed;

(e) identify the statute under which the forfeiture action is brought; and

(f) state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial.

Supplemental Rule G(2).

On the other hand, section 893 also provides for the filing of judicial claims by third parties against the forfeiture complaint: “In any case in which the Government files. a complaint for forfeiture of property, any person claiming an interest in the seized property may file a claim asserting such person's interest in the property in the manner set forth in the Supplemental Rules..” 18 U.S.C. § 983(a)(4)(A). Moreover, the statute requires that “[a] person asserting an interest in seized property. file an answer to the Government's complaint for forfeiture..” 18 U.S.C. § 983(a)(4)(B).

Supplemental Rule G provides the requirements for a valid claim:

The claim must:

(A) Identify the specific property claimed;

(B) Identify the claimant and state the claimant's interest in the property;

(C) Be signed by the claimant under penalty of perjury; and

(D) Be served on the government attorney designated under Rule G(4)(a)(ii)(C) or (b)(ii)(D).

Supplemental Rule G(5)(a)(i). And as to the contents of the answer, the Rule simply requires that the answer be filed and served within 21 days after filing the claim. Supplemental Rule G(5)(b).

In proceedings under Supplemental Rule G, the Government “may move to strike a claim or answer [] for failing to comply with Rule G(5) or (6), or [] because the claimant lacks standing.” Supplemental Rule G(8)(c)(i). In deciding a motion to strike a claim, the Court “should strike a claim or answer only if satisfied that an opportunity should not be afforded to cure the defects” under Fed.R.Civ.P. 15. See, Advisory Committee Notes to Supplemental Rule G, Subdivision (1).

B. Standing in Civil Forfeiture Actions

“Standing is a threshold question in civil forfeiture cases.” United States v. Letter from Alexander Hamilton to Marquis de Lafayette Dated July 21, 1780, 15 F.4th 515, 520 (1st Cir. 2021), cert. denied sub nom. Boss v. United States, 142 S.Ct. 1230 (2022) (citing United States v. One-Sixth Share Of James J. Bulger In All Present And Future Proceeds Of Mass. Millions Lottery Ticket No. M246233, 326 F.3d 36, 40 (1st Cir. 2003)). A claimant must demonstrate that he or she possesses both statutory and constitutional standing. Id., at 521. Statutory standing is met “through compliance with the procedures and deadlines for filing a claim set out in Supplemental Rule G.” Id. Constitutional standing is met by demonstrating “a legal ownership or possessory interest that would support an injury in fact.” Id. “At the initial stage of intervention, the requirements for a claimant to demonstrate constitutional standing are very forgiving. In general, any colorable claim on the defendant property suffices.” One-Sixth Share, 326 F.3d at 41.Cir. 2003). Thus, “[a]n allegation of ownership, coupled with some evidence of ownership, is sufficient to establish constitutional standing to contest a forfeiture.” United States v. $8,440,190.00 in U.S. Currency, 719 F.3d 49, 58 (1st Cir. 2013) (citing United States v. U.S. Currency, $81,000, 189 F.3d 28, 35 (1st Cir. 1999)).

C. Amendments to Pleadings in Civil Forfeiture Proceedings

Rule G of the Supplemental Rules provides for the application of Supplemental Rules C and E, or the Federal Rules of Civil Procedure in...