USA v. Sam Drogane
OPINION and JUDGMENT filed: The judgment of the district court is AFFIRMED. Decision for publication. R. Guy Cole, Jr. (AUTHORING) and Bernice Bouie Donald, Circuit Judges; Algenon L. Marbley, U.S. District Judge for the Southern District of Ohio, sitting by designation. [12-6043, 12-6144]
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 13a0253p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee, Nos. 12-6043/6144
Appeal from the United States District Court
for the Eastern District of Kentucky at Covington.
No. 2:08-cr-00051-1—David L. Bunning, District Judge.
Argued: July 25, 2013
Decided and Filed: August 27, 2013
Before: COLE and DONALD, Circuit Judges; MARBLEY, District Judge.*
ARGUED: Steven D. Jaeger, THE JAEGER FIRM PLLC, Erlanger, Kentucky, for
Appellant. Candace G. Hill, UNITED STATES ATTORNEY’S OFFICE, Louisville,
Kentucky, for Appellee. ON BRIEF: Steven D. Jaeger, THE JAEGER FIRM PLLC,
Erlanger, Kentucky, for Appellant. Candace G. Hill, UNITED STATES ATTORNEY’S
OFFICE, Louisville, Kentucky, for Appellee.
COLE, Circuit Judge. This case arises from a longstanding dispute between Sam
Droganes and the United States Government. Droganes is a fireworks dealer in northern
Kentucky. In 2007, agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives
The Honorable Algenon L. Marbley, United States District Judge for the Southern District of
Ohio, sitting by designation.
United States v. Droganes
(ATF) raided his business on suspicions that he was illegally selling “display” fireworks.
The agents seized more than 800,000 pounds of merchandise, only a portion of which
proved to be contraband. In 2009, Droganes pleaded guilty to distributing explosives
without a license and agreed to forfeit the seized items “that [were] determined by ATF
to be display fireworks.” The government then tendered a proposed forfeiture order
encompassing all such fireworks, which the district court eventually accepted. Droganes
objected to both the breadth of the order and the classification standard the government
used to sort the fireworks. Droganes also sought monetary sanctions against the
government for allegedly failing to return the seized legal fireworks in a timely manner
or to reimburse him for them. The district court rejected all of his claims. We affirm.
Certain acts involving “explosive materials” are prohibited by statute, including
“dealing” them without a license, 18 U.S.C. § 842(a)(1), “transporting” them without a
license, id. § 842(a)(3)(A), and “distributing” them to other unlicensed persons, id.
§ 842(a)(3)(B). What constitutes an “explosive material,” in turn, is defined by federal
regulations. See 27 C.F.R. §§ 555.11, .23. The list includes “display fireworks,” which
are “[l]arge fireworks designed primarily to produce visible or audible effects by
combustion, deflagration, or detonation.” Id. § 555.11; see Notice of List of Explosive
Materials, 71 Fed. Reg. 56555-02 (Sept. 27, 2006). Display fireworks are not the same
thing as “consumer fireworks,” which are “small firework device[s] designed to produce
visible effects by combustion.” 27 C.F.R. § 555.11. The former are more powerful and
therefore subject to a number of additional restrictions, each with corresponding
The Department of Transportation (DOT), American
Pyrotechnics Association (APA), and United States Consumer Product Safety
Commission (CPSC) all prescribe standards that are applicable to display fireworks in
Sam Droganes sells consumer fireworks to the public in northern Kentucky
through Premium Fireworks, a company he owns and operates. In June 2007, an
undercover investigation led by ATF and CPSC confirmed suspicions that he was also
United States v. Droganes
selling display fireworks without a license. ATF subsequently obtained a number of
search warrants and seizure warrants for various locations associated with Premium
Fireworks and Droganes personally. The execution of these warrants ultimately yielded
over 800,000 pounds of fireworks either in or destined to become part of Droganes’s
stock—some but not all of which were display fireworks. The fact that many of the
fireworks were mislabeled contributed to initial confusion over which ones were lawful
and which ones were not. ATF arranged for all of the seized fireworks to be shipped to
a former ammunition depot in Nebraska for storage and sorting, a process that has taken
In July 2008, a federal grand jury indicted Droganes on six counts. Five of those
counts related to his unlicensed activities with display fireworks. See 18 U.S.C.
§ 842(a)(1), (a)(3)(A), (a)(3)(B). The sixth count sought forfeiture of twelve specific
items in addition to all of the seized display fireworks. See id. § 844(c)(1). But testing
and separating the display fireworks from the consumer fireworks for the purposes of
forfeiture was no small task. Following the indictment, ATF received a report from a
government contractor describing the results of initial testing performed on samples from
450 seized fireworks. After disassembling, measuring, and weighing each sample, the
contractor classified 187 of them as display fireworks. Further testing performed on
521 additional samples revealed 340 more display fireworks. However, the government
later discovered that the contractor had mistakenly used the APA’s less-stringent
standard to classify the samples and accordingly reassessed the raw testing data using
the standard prescribed by 27 C.F.R. § 555.11. A complete inventory eventually
produced three lists: a “Green List” containing all of the seized consumer fireworks, a
“Red List” containing all of the seized display fireworks, and an “Orange List”
containing the remaining seized fireworks of uncertain classification. All told, the Red
List totaled 862 items that ATF deemed illegal fireworks subject to forfeiture.
While the inventory was still in progress, Droganes moved for the return of his
consumer fireworks under Federal Rule of Criminal Procedure 41(g). This proved to be
a problematic request. After more than a year in storage, ATF agents noted that many
United States v. Droganes
of the fireworks had deteriorated into a potentially unsafe condition. One agent even
expressed doubt that the consumer fireworks could be shipped back to Droganes without
running afoul of DOT safety regulations. Notwithstanding these concerns, the district
court ordered the government to complete its testing by March 11, 2009, at which time
the court instructed the government to provide Droganes with “a list of legal [consumer]
fireworks” and a “timetable for [their] return.” On the deadline, Droganes received a
letter from the United States Attorney with the required list attached. The letter also
relayed the government’s concerns about shipping the listed items and proposed to pay
him the wholesale price of the unreturned consumer fireworks instead. However, the
parties were unable to agree on an amount, and the government now contends it could
not pay Droganes in any event.
In July 2009, Droganes pleaded guilty to one count of distributing explosives
without a license, see 18 U.S.C. § 842(a)(3)(B), and agreed to forfeit the “items listed
in Count Six of the Superseding Indictment that have been determined by ATF to be
display fireworks.” Droganes further agreed to waive “the right to appeal and the right
to attack collaterally the guilty plea, conviction, and any sentence that is within the
Guideline range as finally determined by the Court.” The district court sentenced
Droganes to four months in prison and four months of home confinement.
sentencing, the district court also accepted the government’s proposed preliminary order
of forfeiture for the 862 items on the Red List. Droganes objected on several grounds,
including that the proposed order was “void for vagueness” and that he had anticipated
“further discussions [with the government] to define the classification of the fireworks.”
Before the district court could rule, Droganes also moved for sanctions against the
government based on its “refus[al] to return the consumer fireworks and refus[al] to
reimburse Mr. Droganes for them.” He sought monetary penalties in an amount equal
to “the retail value” of the consumer fireworks and “attorney fees and expenses” incurred
in his efforts to secure their return. The government responded by moving for the
destruction of all the seized fireworks, citing the exorbitant cost of storage.
United States v. Droganes
In August 2012, the district court addressed all three outstanding motions at once.
The government at that point submitted an amended Orange List classifying all
previously unclassified fireworks as either consumer or display. Regarding forfeiture,
the court held that Droganes was bound by the terms of the forfeiture provision in his
plea agreement, which expressly contemplated that ATF would determine which items
were subject to it. The court also held that the government had carried its burden to
“prove by a preponderance of the evidence that the fireworks on the Red List and those
identified as [display] fireworks on the recently amended Orange List are, in fact,
[display] fireworks subject to forfeiture.” It rejected Droganes’s contention that ATF’s
determination was based on improper methods and classification. Accordingly, the court
entered a preliminary judgment of forfeiture against Droganes for 944 items. Regarding
sanctions, the court held that sovereign immunity barred it from assessing a monetary
penalty against the government. But that did not stop it from admonishing the
government for engaging in bad-faith conduct in its dealings with Droganes. Lastly, the
court denied the government’s motion for destruction of property as moot. Following
the court’s ruling, ATF returned to Droganes some 272,000 pounds of consumer
Droganes now appeals from the district court’s amended judgment ordering
forfeiture of those fireworks identified in the Red List and the amended Orange List. He
also appeals on the issue of whether sovereign immunity deprived the district court of
subject matter jurisdiction to impose monetary sanctions against the government.
Finally, he raises two new constitutional arguments not pursued below. We address each
Droganes’s principal argument is that the district court erred in ordering
forfeiture of all the items deemed display fireworks by ATF. He says the “district court
incorrectly determined that the testing methods used by the government were proper,”
resulting in an overly broad order. In addressing this argument, we review the district
court’s factual findings for clear error and its conclusion that such facts “are sufficient
United States v. Droganes
to constitute a proper criminal forfeiture” de novo. United States v. O’Dell, 247 F.3d
655, 679 (6th Cir. 2001).
As a preliminary matter, the government contends that Droganes’s argument
should not get off the ground because he has waived it. We agree in part. It is wellestablished that a criminal defendant can waive his appeal rights in at least two different
ways. One way is by express appellate-waiver in a plea agreement. United States v.
Calderon, 388 F.3d 197, 199 (6th Cir. 2004) (noting that a criminal defendant “may
waive any right, even a constitutional right, by means of a plea agreement”). With
limited exceptions, we will enforce such a waiver if the defendant entered into it
knowingly and voluntarily, and if the scope of the waiver extends to the issues raised on
appeal. See United States v. Caruthers, 458 F.3d 459, 470 (6th Cir. 2006). Another way
is by failing to file specific objections to a magistrate judge’s report and recommendation
before pursuing those objections on appeal. Cowherd v. Million, 380 F.3d 909, 912 (6th
Cir. 2004) (en banc); United States v. Walters, 638 F.2d 947, 949-50 (6th Cir. 1981); see
Thomas v. Arn, 474 U.S. 140, 147-48 (1985). In both instances, the consequence is that
we will not consider the merits of the waived issues.
The first question is whether the appellate-waiver provision in Drogranes’s plea
agreement covers his challenge to the forfeiture order, as the government claims. In that
provision, Droganes waived “the right to appeal and the right to attack collaterally the
guilty plea, conviction, and any sentence that is within the Guideline range as finally
determined by the Court.” It is true enough that a forfeiture order is properly viewed as
“an element of [a defendant’s] sentence.” See Libretti v. United States, 516 U.S. 29, 3839 (1995).
On its own, that would suggest the appellate-waiver applies here.
Nonetheless, a closer look at what actually transpired in the run-up to the plea agreement
points in the opposite direction. For one thing, Droganes neither knowingly nor
voluntarily waived his right to appeal the forfeiture order. See Caruthers, 458 F.3d at
470. During the rearraignment colloquy, Droganes’s attorney specifically stated his
understanding that the issue of “the number and value of any [returnable consumer]
United States v. Droganes
fireworks” would “remain open” after entering into the plea agreement. The district
court offered confirmation, noting (perhaps incorrectly) that the issue was “not part of
the criminal case.” The district court again intimated that the issue remained unresolved
at sentencing. For another thing, the express terms of the appellate-waiver provision are
silent regarding the issue raised here. And it is at least ambiguous whether the “any
sentence” language in the provision extends to a corresponding forfeiture order.
Because “[p]lea agreements are to be interpreted strictly, with ambiguities construed
against the government,” United States v. Jones, 569 F.3d 569, 572 (6th Cir. 2009), we
decline to apply the appellate-waiver provision in this instance.
The second question, then, is whether Droganes waived his specific argument
when he failed properly to object to the magistrate judge’s report and recommendation.
We answer in the affirmative. The magistrate judge found that the government used an
appropriate standard (27 C.F.R. § 555.11) to classify the seized fireworks. Likewise, the
magistrate judge found that the government had “established by a preponderance of the
evidence that the fireworks contained on the Red List . . . [were] subject to forfeiture,”
demonstrating at least implicit approval of the testing methods used to generate the list.
The magistrate judge concluded with a warning that “[p]oorly drafted objections, general
objections or objections that require a judge’s interpretation [would] be afforded no
effect and [would be] insufficient to preserve the right of appeal.” But this warning
seems to have been lost on Droganes. He only lodged one relevant objection at the time:
that he ought to have an opportunity to conduct his own testing of fireworks on the Red
List before the district court entered a final order. On appeal, however, Droganes
attempts to recycle his since-abandoned argument that the government used an incorrect
classification standard and testing methods. The problem is that this very same issue
was taken up and decided in the magistrate judge’s report and recommendation.
Because Droganes failed to lodge his objections the first time around, he has waived his
right to pursue them on appeal. See Cowherd, 380 F.3d at 912.
United States v. Droganes
Some uncertainty remains, however, as to whether this waiver extends to the
amended Orange List, which did not exist at the time of the magistrate judge’s report and
recommendation. For this reason, we still proceed to the merits.
The gist of Droganes’s argument is that the forfeiture order is drawn too broadly
based on unreliable testing methods and a too-stringent classification process. We
review the district court’s factual findings on this point for clear error. See O’Dell, 247
F.3d at 679.
Before entering a preliminary order of forfeiture, a district court “must determine
what property is subject to forfeiture under the applicable statute,” Fed. R. Crim. P.
32.2(b)(1)(A), which in this case is 18 U.S.C. § 844. “The court’s determination may
be based on evidence already in the record, including any written plea agreement, and
on any additional evidence or information submitted by the parties and accepted by the
court as relevant and reliable.” Fed. R. Crim. P. 32.2(b)(1)(B). Ultimately, it is the
government’s burden to “prove forfeiture by a preponderance of the evidence.” United
States v. Jones, 502 F.3d 388, 391 (6th Cir. 2007).
The district court did not err in accepting ATF’s determination that 944 items
seized from Droganes were subject to forfeiture. First, the alternative testing methods
and classification standards that Droganes champions are neither relevant in this context,
nor likely to produce more reliable results. The APA standard does not purport to
provide guidance on the criminal provisions at issue here, nor does it prescribe specific
testing methods for quantifying a firework’s explosive components. While the DOT
standard at least prescribes procedures and testing criteria, it does not speak in terms of
“display” and “consumer” fireworks and it merely references the APA standard at key
points. The CPSC testing method, for its part, is similarly ill-suited for distinguishing
between consumer and display fireworks for purposes of 27 C.F.R. § 555.11—using it
here would not produce helpful results regardless of their reliability. Most importantly,
Droganes offers no hard proof that the testing protocol ATF actually used produced
unreliable results. His abstract criticisms of 27 C.F.R. § 555.11 are largely non-
United States v. Droganes
responsive to the question of whether the district court relied upon sufficient evidence
in determining what of his property was subject to forfeiture. Fed. R. Crim. P.
32.2(b)(1)(A); see Jones, 502 F.3d at 391.
Second, the forfeiture provision in Droganes’s plea agreement forecloses his
specific argument. He agreed to forfeit “any and all interest in the items . . . that have
been determined by ATF to be display fireworks . . . .” In other words, he prospectively
accepted ATF’s unilateral classification decisions in exchange for the dropping of
certain charges against him. Droganes cannot now simply renounce this part of the
agreement because he dislikes the consequences. Courts will enforce a forfeiture
provision found in a plea agreement so long as the defendant agreed to forfeit his assets
“knowingly and voluntarily.” See Libretti, 516 U.S. at 41-42. There is little question
that Droganes did so here—apart from whether or not he intended to preserve his general
appeal rights. The district court even asked Droganes at his rearraignment whether he
understood that “if something is determined [by ATF] to have been a display
firework, . . . that this plea agreement requires that you forfeit . . . any interest you have
in those items,” to which Droganes responded, “Yes, sir, I do.” That is both knowing
and voluntary. Thus, the district court’s determination of forfeiture was consistent with
Droganes’s “written plea agreement.” Fed. R. Crim. P. 32.2(b)(1)(B).
Droganes next argues that the district court erred in denying his motion for
compensatory sanctions against the government. While the court found that the
government engaged in otherwise-sanctionable conduct for failing to fully comply with
court orders and repeatedly delaying the return of Droganes’s consumer fireworks, the
court nonetheless held that sovereign immunity barred it from imposing any monetary
penalty. The question on appeal is whether a waiver or other means of overriding
sovereign immunity exist in this case. Because this is purely a question of law, our
review is de novo. See Premo v. United States, 599 F.3d 540, 544 (6th Cir. 2010).
We begin by way of background. Droganes requested that the district court
impose sanctions on the government to compensate him for, among other things, the
United States v. Droganes
value of his unreturned consumer fireworks following an unsuccessful Criminal Rule
41(g) motion to the same effect. He cited Civil Rule 11 as a basis for the proposed
sanctions—though it is plainly inapplicable in a criminal proceeding. He also cited the
district court’s inherent authority, which is generally considered one of a number of
implied powers that belong to the federal courts as a necessary incident to their judicial
duty. United States v. Hudson, 11 U.S. (7 Cranch) 32, 34 (1812). These powers “allow
the courts to formulate procedures for their cases, including a mechanism to control the
lawyers before them.” United States v. Aleo, 681 F.3d 290, 306 (6th Cir. 2012) (Sutton,
J., concurring) (describing the “inherent power to sanction” in civil cases). Droganes
seems to assume on appeal that the inherent authority to sanction parties remains as
robust in criminal proceedings as it is in civil proceedings. We accept this proposition
for purposes of deciding the instant case, but note that it is very much up for debate.1
Even so, the compensatory sanctions sought here implicate sovereign immunity
concerns. Sovereign immunity is the familiar principle that the government cannot be
sued except by the consent of Congress. See, e.g., United States v. Testan, 424 U.S. 392,
399 (1976); United States v. Michel, 282 U.S. 656, 659 (1931). A corollary of this
principle is that monetary claims potentially disruptive of the public fisc are similarly
barred absent Congress’s consent. See United States v. Horn, 29 F.3d 754, 761 (1st Cir.
1994); see also Aaron Tang, Double Immunity, 65 Stan. L. Rev. 279, 292-94 (2013)
(describing immunity from monetary judgment as “the second layer of sovereign
immunity”). Though neither the primary principle nor its corollary spring from certain
origins, see Horn, 29 F.3d at 761, both are firmly entrenched in modern law. That is not
to say sovereign immunity is absolute. Congress can waive it, but only by an
unequivocal expression in statutory text. Lane v. Pena, 518 U.S. 187, 192 (1996). Such
a waiver will not arise by implication, nor by incident of a “statute’s legislative history”
At least one recent opinion expressed doubt that a lower federal court ever has the power “to use
[its] inherent authority, as opposed to the contempt power established by statute (18 U.S.C. § 401) and
implemented by rule (Fed. R. Crim. P. 42), to punish” bad-faith conduct by a party in a criminal case.
Aleo, 681 F.3d at 306 (Sutton, J., concurring); see also id. at 305 n.13 (“It may be questionable whether
the inherent authority to sanction even exists in a criminal case such as this one. An argument can be made
that Federal Rule of Criminal Procedure 42, covering criminal contempt, is the sole mechanism for
punishing bad-faith conduct in criminal cases.”). Because we conclude that Droganes’s claim is barred
by sovereign immunity, we need not reach this question.
United States v. Droganes
without sufficient clarity in the text itself. Id. Droganes fails to identify one here, and
we can find no obvious candidate. Neither 18 U.S.C. § 401, the statute conferring broad
contempt power upon district courts, nor Criminal Rule 42, the procedural rule
implementing that power, is sufficiently clear and unequivocal. But see 18 U.S.C.
§ 3006A, Statutory Notes (allowing the assessment of costs against the government for
bad-faith prosecutions). Droganes’s argument fails for two reasons in the absence of a
Droganes cannot accomplish by a motion for sanctions what he could not
accomplish by his earlier, ultimately unsuccessful Criminal Rule 41(g) motion. That
rule provides criminal defendants with a means to seek the return of property seized by
federal agents. Fed. R. Crim. P. 41(g) (“A person aggrieved by an unlawful search and
seizure of property or by the deprivation of property may move for the property’s
return.”). It does not say what happens when the property in dispute, as here, has been
lost or destroyed. Ordonez v. United States, 680 F.3d 1135, 1137-38 (9th Cir. 2012).
Nor does it expressly authorize a defendant to sue the government for compensation in
such circumstances. Id. at 1138, 1140 (holding that “Rule 41(g) contains no express and
unequivocal waiver of the government’s sovereign immunity”). For this reason, at least
nine circuits “have held that sovereign immunity bars an award of money damages
against the government on a Rule 41(g) motion where the property cannot be returned.”
Id. at 1138 & n.2 (collecting cases). Because Droganes’s motion for sanctions is
indistinguishable in substance, it suffers the same fate. Having failed to win an order for
the return of his consumer fireworks, Droganes sought monetary relief in an amount
equal to their “retail value.” The appropriate way to do so would have been to file under
the Federal Tort Claims Act, 28 U.S.C. § 1346, which constitutes a limited waiver of
sovereign immunity for lost or destroyed property claims. We will not endorse an end
run on these principles and procedures. Accord McBride v. Coleman, 955 F.2d 571, 576
(8th Cir. 1992) (“It does strike us as being a dubious proposition that by filing a
contempt motion a claimant can be positioned to recover an unlimited amount of
compensatory damages from the United States without being bound by the strictures
of . . . the Federal Tort Claims Act . . . .”).
United States v. Droganes
Droganes then resorts to arguing that the district court’s inherent authority to
sanction simply trumps the government’s sovereign immunity. This argument is
problematic in multiple respects. First, as discussed above, it is hardly clear that a
district court has any such authority in the criminal context. See Aleo, 681 F.3d at 305
n.13; id. at 306 (Sutton, J., concurring). Second, most circuits faced with similar
arguments have suggested that the government’s sovereign immunity wins when it
comes head-to-head with a lower court’s inherent authority. See, e.g., United States v.
Horn, 29 F.3d 754, 761-66 (1st Cir. 1994); Coleman v. Espy, 986 F.2d 1184, 1191-92
(8th Cir. 1993); Barry v. Bowen, 884 F.2d 442, 444 (9th Cir. 1989). We see no good
reason to chart a different course at this time.
None of this is to say that courts are powerless to control the government when
it refuses to play by the rules. Congress has already authorized sanctions against the
government in criminal cases where the decision to prosecute is “vexatious, frivolous,
or in bad faith.” 18 U.S.C. § 3006A, Statutory Notes. And it has effected an even
broader waiver of sovereign immunity in civil cases. Other circuits have held that the
Equal Access to Justice Act, 28 U.S.C. § 2412, authorized sanctions against the
government for misconduct under Civil Rule 11. See, e.g., Adamson v. Bowen, 855 F.2d
668, 670-71 (10th Cir. 1988). Both of these mechanisms remain in place to protect the
integrity of the judicial process and deter litigation abuses committed by the government.
See also Horn, 29 F.3d at 766 (listing a number of “other weapons in [the courts’]
armamentarium”). Unfortunately for Droganes, neither waiver applies in this case.
Nor does our holding condone what the government has done here. Like the
district court, we are disturbed by the seemingly interminable delays in testing the seized
fireworks, many of which the government knew not to be display fireworks. We are also
disturbed by the government’s doublespeak regarding the condition of the consumer
fireworks and its ability to return them to Droganes. While we ultimately affirm the
denial of his motion for sanctions for the reasons given, we acknowledge that Droganes
deserved better treatment from his party-opponent.
United States v. Droganes
Finally, Droganes asserts two new constitutional arguments for the first time on
appeal. He claims that the government violated the Fifth Amendment’s proscription
against taking private property without just compensation when it refused to return the
seized consumer fireworks. He also claims that the forfeiture order is so broad as to
violate the Eighth Amendment’s prohibition on excessive fines. The government
responds that both arguments are waived.
It is well established that “‘the failure to present an issue to the district court
forfeits the right to have the argument addressed on appeal,’” Vance v. Wade, 546 F.3d
774, 781 (6th Cir. 2008) (quoting Armstrong v. City of Melvindale, 432 F.3d 695, 699700 (6th Cir. 2006)), except in limited circumstances not relevant here, see Wagenknecht
v. United States, 533 F.3d 412, 418 (6th Cir. 2008). There can be no doubt that
Droganes failed to present his constitutional arguments to the district court in this
instance—he admits as much. While such failure would normally constitute a waiver,
in the sentencing context, we have held that the appropriate penalty is plain-error review
rather than no review at all. See United States v. Hart, 635 F.3d 850, 858 (6th Cir. 2011)
(holding that several constitutional challenges to the defendant’s sentence not raised in
the district court were subject to plain-error review). Thus, we may still grant relief if
Droganes can show that the district court made a “plain” error that “affects [his]
substantial rights.” Fed. R. Crim. P. 52(b). This he cannot do.
We address the Fifth Amendment argument first. Droganes fails to recognize
that the law distinguishes between a taking for public use under the government’s power
of eminent domain, which is civil in nature, and the forfeiture of property under the
government’s police power, which is criminal in nature. See AmeriSource v. United
States, 525 F.3d 1149, 1152-57 (Fed. Cir. 2008). While the former is subject to the Fifth
Amendment, the latter is not because “the [g]overnment’s seizure and retention of
property under its police power does not constitute a ‘public use.’” Innovair Aviation
Ltd. v. United States, 632 F.3d 1336, 1341 (Fed. Cir. 2011) (citing AmeriSource,
525 F.3d at 1152-57). This rule does not admit of any exceptions. Therefore, as the
United States v. Droganes
government correctly concludes, the Fifth Amendment is not implicated here.
Droganes’s only response is a citation to a thirty-year-old case from the Tenth Circuit.
See Lowther v. United States, 480 F.2d 1031 (10th Cir. 1973). But that case—a civil one
involving a person acquitted of all crimes—is fully consistent with the view that the
Fifth Amendment does not apply to police seizures in criminal cases.
His Eighth Amendment argument fares no better. It is true that criminal
forfeitures are subject to the Excessive Fines Clause of the Eighth Amendment. See
Austin v. United States, 509 U.S. 602, 610 (1993). Where the government seeks to
punish the defendant by an in personam criminal forfeiture, as opposed to initiating a
civil in rem proceeding, the contours of the defendant’s Eighth Amendment rights are
defined by the “proportionality” test.2 United States v. Bajakajian, 524 U.S. 321, 334
(1998) (explaining that “[t]he amount of the forfeiture must bear some relationship to the
gravity of the offense that it is designed to punish”). A forfeiture order is considered
unconstitutional “if it is grossly disproportional to the gravity of a defendant’s offense.”
Id.; see United States v. Carpenter, 317 F.3d 618, 626 (6th Cir. 2003).
Droganes presents no real evidence in support of his claim. The record does not
show that the value of the forfeited property—all of the items on the Red List and the
amended Orange List—is “grossly disproportional to the gravity of” distributing
explosives without a license, which carries a maximum statutory fine of $250,000, see
18 U.S.C. §§ 842(a), 844. In fact, the record shows nothing at all on this score.
Drogranes engages in some fanciful math based on the government’s assertion that the
storage costs (totaling approximately $6.5 million) “exceed[ed] [fifty percent] of the
value of the [seized] property.” But all that assertion proves is that the seized property
could be worth as much as $13 million, not that it actually is; it could just as easily be
Droganes goes on at length about the “instrumentality test” in his principal brief. But this
discussion misses the mark for two reasons. First, the instrumentality test simply does not apply to an in
personam criminal forfeiture. See Bajakajian, 524 U.S. at 333-34. Second, Droganes is arguing a point
that no one is contesting—specifically, that the seized consumer fireworks do not bear a sufficient nexus
to the offense for which he is being punished. The government only seeks forfeiture of the display
fireworks seized from Droganes, and he fails to explain how this amounts to a violation of his
constitutional rights. It appears Droganes’s argument is little more than an attempt to constitutionalize his
objections to the district court’s adverse classification determination.
United States v. Droganes
worth $1. A successful Eighth Amendment argument requires better evidence of
disproportionality. In any event, Droganes lacks a sufficient property interest in the
display fireworks subject to the forfeiture order because those items are contraband, and
individuals have no property interest in contraband. See Ziffrin, Inc. v. Reeves, 308 U.S.
132, 140 (1939).
For the foregoing reasons, we affirm.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?