United States v. Real Prop. Located at 23965 E. Wagontrail Ave.

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UNITED STATES OF AMERICA, Plaintiff, v. 22. REAL PROPERTY LOCATED AT 23965 EAST WAGONTRAIL AVENUE, AURORA, COLORADO, Defendant.

Civil Action No. 19-cv-00257-WJM-STV

United States District Court, D. Colorado

September 28, 2023

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

SCOTT T. VARHOLAK UNITED STATES MAGISTRATE JUDGE

This matter is before the Court on Plaintiff's Motions for Summary Judgment [##335, 339] (“the Motions”). The Motions have been referred to this Court. [##341, 342] The Court has carefully considered the Motions and related briefing, the entire case file, and the applicable case law and has determined that oral argument would not materially assist in the disposition of the Motions. For the following reasons, the Court respectfully RECOMMENDS that the Motions be GRANTED.

I. BACKGROUND^[1]

Jia Bao Yao and Amy Chen (the “Claimants”) purchased Defendant Real Property located at 23965 East Wagontrail Avenue, Aurora, Colorado (the “Property”) in February 2014. [##335 at SOF1; 339 at SOF1] Claimants both hold title to the Property. [#339 at SOF1] On October 10, 2018, law enforcement officers knocked on the door of the Property, and when Claimant Yao opened the door, the officers smelled “fresh growing marijuana.” [#335 at SOF2] The officers at the door identified themselves as law enforcement. [#335 at SOF3] Claimant Yao walked the officers to his locked basement door and unlocked the door for them. [#335 at SOF7, SOF8] Claimant Yao signed a Consent to Search and Seize,^[2] which was witnessed by two others, and the Property was searched. [##335 at SOF11; 339 at SOF12] During the search, “officers discovered a marijuana grow in the basement of the Property that included 828 marijuana plants and 35 light/ballast combination units.” [##335 at SOF13; 339 at SOF13] The marijuana grow operation included the use of separate rooms for plants of different sizes, and it involved light systems, fan systems and a calendar for tracking the marijuana plants. [##335 at SOF14; 339 at SOF14] During the search, officers “also discovered a hole bored into the foundation wall. Xcel Energy personnel . . . advised investigators that electrical power at the Property was being illegally diverted.” [##335 at SOF15; 339 at SOF15] Claimant Yao was responsible for the marijuana being grown at the Property and he grew marijuana with the intent of making money. [##335 at SOF16, SOF17; 339 at SOF16, SOF17] Claimant Chen was also aware that Claimant Yao was growing marijuana at the Property. [#339 at SOF18, SOF19] Claimant Chen did not report the marijuana grow at the Property to any law enforcement agencies, and she did not tell Claimant Yao that he had to move out as a result of growing marijuana at the Property. [#339 at SOF20, SOF21] As of May 1, 2023, online sources value the Property at approximately $612,521-$615,600, and as of March 16, 2023, the outstanding mortgage principle balance was $123,315.91. [##335 at SOF29, SOF30; 339 at SOF22, SOF23]

On January 30, 2019, the Government initiated an in rem civil forfeiture action against the Property. [##1, 2] On July 25, 2021, the Claimants filed their Notices of Claim through which they asserted an ownership interest in the Property. [##72, 74] On October 26, 2021, the Claimants filed Answers to the Complaint. [##181, 182] On May 15, 2023, the Government brought Motions for Summary Judgment as to Claimant Yao's and Claimant Chen's Interest in the Property. [##335, 339] Claimants have responded to the Motions [##350, 351] and the Government has replied [##357, 359].

II. STANDARD OF REVIEW

Summary judgment is appropriate only if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., 41 F.3d 567, 569 (10th Cir. 1994). When the moving party does not bear the burden of persuasion at trial, the movant may satisfy its initial burden of making a prima facie demonstration of the absence of a genuine issue of material fact “simply by pointing out to the court a lack of evidence . . . on an essential element of the nonmovant's claim.” Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 67071 (10th Cir.1998). If the movant carries this initial burden, the burden then shifts to the nonmovant “to go beyond the pleadings and set forth specific facts that would be admissible in evidence in the event of trial.” Id. at 671 (quotation omitted).

“[A] ‘judge's function' at summary judgment is not ‘to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.'” Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury. See Anderson, 477 U.S. at 248-49; Stone v. Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000); Carey v. U.S. Postal Serv., 812 F.2d 621, 623 (10th Cir. 1987). A fact is “material” if it pertains to an element of a claim or defense; a factual dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.'” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289 (1968)).

III. ANALYSIS

The Government argues that it is entitled to summary judgment because Claimants do not dispute growing 828 marijuana plants in the basement of the Property, with the intent to make money, rendering the property subject to forfeiture under 21 U.S.C. § 881(a)(7). [##335; 339] Claimants argue that the Court should deny summary judgment because there is a material dispute of fact regarding whether the forfeiture of their home constitutes an “excessive fine” within the meaning of the Eighth Amendment.^[3] [##350 at 5-9; 351 at 6-10] The Court will address these arguments in turn.

A. Forfeiture

To prevail in an action under 21 U.S.C. § 881(a)(7), the government must prove by a preponderance of the evidence that the property is subject to forfeiture. 18 U.S.C. § 983(c)(1); see United States v. 2121 Celeste Rd. SW, 189 F.Supp.3d 1208, 1269 (D.N.M. 2016) (“This standard of proof requires that the government show that it is more likely than not that the property is subject to forfeiture.” (quotation omitted)). All real property is subject to forfeiture by the United States if it is “used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, a violation” of the federal drug laws punishable by more than one year imprisonment. 21 U.S.C. § 881(a)(7). Manufacturing, distributing, dispensing, or possessing with the intent to manufacture or distribute 100 or more marijuana plants, regardless of their weights, is prohibited and is punishable by a maximum penalty of forty years' incarceration and a fine of $5,000,000. 21 U.S.C. §§ 841(a)(1), (b)(1)(B)(vii). While Section 881(a)(7) refers to property used in violation of federal law, conduct that could support federal charges is sufficient to make real property forfeitable under Section 881(a)(7) even if no federal charges were ever filed. See United States v. Wagoner Cnty. Real Est., 278 F.3d 1091, 1100-01 (10th Cir. 2002) (forfeiture action under 21 U.S.C. § 881(a)(7) where Claimants were not charged with federal offense); United States v. One Parcel of Real Est. Located at 7715 Betsy Bruce Lane Summerfield, N.C. , 906 F.2d 110, 111-12 (4th Cir. 1990) (“In civil forfeiture cases, property is subject to forfeiture even if its owner is acquitted of-or never called to defend against-criminal charge.” (quotation omitted)). To establish that real property “facilitated” an illegal drug transaction, the Government must show that there was a substantial connection between the property and the offense. 18 U.S.C. § 983(c)(3). Once the government has made this showing, the burden shifts to the claimant to prove by a preponderance of the evidence that the factual predicates for forfeiture have not been met or by showing that the claimant is an innocent owner.^[4] United States v. One Parcel Prop. Located at Lot 85, Country Ridge, a Subdivision in City of Lenexa, Johnson Cnty., Kan., 894 F.Supp. 397, 403 (D. Kan. 1995); see also 18 U.S.C. § 983.

Here, Claimants do not dispute that Claimant Yao was cultivating over one hundred marijuana plants in the basement of the Property with the intent to distribute. [##350 at SOF13, SOF17; 351 at SOF13, 17] Furthermore, the Court finds there is a substantial connection between the Property and the offense where there was extensive use of the Property for the purpose of cultivating the marijuana plants, including a grow operation which spanned separate rooms, involved light systems, fan systems, and the illegal diversion of electrical power to support the operation. [##335 at SOF14, SOF15; 339 at SOF14, SOF15]. Thus, the property is subject to forfeiture under the plain language of 21 U.S.C. §§ 841(b)(1)(B)(vii), 881(a)(7) and 18 U.S.C. § 983(c)(3). See United States v. 6941 Morrison Drive, Denver, Colorado, 6 F.Supp.3d 1176, 1180 (D. Colo. 2013) (finding defendant property subject to forfeiture where the claimant did not dispute that he was cultivating over fifty marijuana plants in the basement of the property with the intent to distribute).

B. Excessive Fine

Claimants argue that the Court should...