United States v. Approximately $460,520.00 in U.S. Currency

Filing 12

FINDINGS and RECOMMENDATIONS that the Court Grant Plaintiff's Ex Parte 9 Motion for Default Judgment and Final Judgment of Forfeiture, signed by Magistrate Judge Michael J. Seng on 4/22/16. Referred to Judge Ishii; 14-Day Deadline. (Verduzco, M)

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IN THE UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,

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1:15-CV-01878-AWI-MJS

Plaintiff,

FINDINGS AND RECOMMENDATIONS
THAT THE COURT GRANT PLAINTIFF’S
EX PARTE MOTION FOR DEFAULT
JUDGMENT AND FINAL JUDGMENT OF
FORFEITURE

v.
APPROXIMATELY $460,520.00 IN U.S.
CURRENCY,

(ECF No. 9)
Defendant.
OBJECTIONS DUE WITHIN FOURTEEN
(14) DAYS

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/

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This matter came before the Honorable Judge Michael J. Seng on Plaintiff United States’

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ex parte motion for default judgment and final judgment of forfeiture. (ECF No. 9.) There was

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no appearance by or on behalf of any other person or entity claiming an interest in the

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defendant funds to oppose plaintiff’s motion.

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Magistrate Judge pursuant to 28 U.S.C. § 636(b) and Local Rule 302(c)(19) and is considered in

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accordance with Local Rule 540(d).

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Plaintiff’s motion has been referred to the

This matter was taken under submission without oral argument pursuant to Local Rule

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230(g) and the hearing set for this matter was vacated. (ECF No. 11.)

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forth below, the Court will recommend that Plaintiff’s motion be GRANTED.

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For the reasons set

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I.

RELEVANT FACTUAL BACKGROUND
This action arose out of a Verified Complaint for Forfeiture In Rem filed December 15,

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2015.

(ECF No. 1).

The complaint alleges that the Defendant funds are believed to be

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proceeds from controlled substance transactions.

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On September 24, 2015, detectives from the Fresno County Sheriff’s Department were

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traveling southbound on Interstate 5 when they observed a white Lincoln Navigator traveling too

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closely behind a tractor trailer. The Navigator was traveling at a rate of 60 miles per hour in

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moderate traffic, which presented a potential traffic hazard if the tractor trailer were to brake too

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suddenly. The detectives observed no traffic in the adjacent lane that would have prevented the

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Navigator from passing the tractor trailer.

After observing the Navigator travel too closely

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behind the tractor trailer for nearly a half mile, the detectives initiated a traffic stop. (ECF No. 1,

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p. 2, ll. 14-26.)

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Upon approaching the Navigator, the detectives observed two individuals seated inside,

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Juan Plazola in the driver’s seat and Eduardo Maya-Perez in the front passenger seat. Mr.

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Plazola was advised of the traffic stop in Spanish. His right hand was trembling as he gathered

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his license, registration, and proof of insurance for the detective. (ECF No. 1, p. 3, ll. 3-4.). The

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detective observed a key ring with a single key in the ignition of the Navigator and detected a

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strong odor of air freshener coming from the vehicle. (ECF No. 1, p. 3, ll. 5-6.) Based on the

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detective’s training and experience, he concluded that Mr. Plazola’s nervous behavior, the odor

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of air freshener, and the presence of only one key on the key ring were signs that he was

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engaged in criminal activity. (ECF No. 1, p. 3, ll. 25-27.) Drug traffickers commonly do not have

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any of their own keys on the key ring for the vehicle they are driving since the vehicles are used

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solely for trafficking drugs and the driver will not leave his personal keys on the same key ring.

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Furthermore, drug traffickers will use air fresheners to mask the scent of drugs from narcotic

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canines. (ECF No. 1, pp. 3-4, ll. 28, 1-8.) Upon being questioned, Mr. Plazola informed the

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detectives that the Navigator belonged to his friend Marcia and that he had borrowed the vehicle

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to drive to Los Angeles from Hayward to pick up his own car in Los Angeles, which was broken

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down. (ECF No. 1, p. 3, ll. 12-14.) Mr. Plazola said that he planned to spend the night in Los

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Angeles and then return home to Hayward the next day. (ECF No. 1, p. 3, ll. 14-16.) He told

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the detectives that there were no drugs, weapons, or large sums of money in the vehicle, and

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gave the detectives consent to search the Navigator. (ECF No. 1, p. 3, ll. 17-19.) Mr. Maya-

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Perez, who was questioned separately from Mr. Plazola, also stated that the pair were on their

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way to Los Angeles to pick up Mr. Plazola’s vehicle, and said there was no contraband inside

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the Navigator. (ECF No. 1, p. 3, ll. 20-24.) Mr. Maya-Perez also gave consent to search the

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vehicle. (ECF No. 1, p. 3, ll. 23-24.)

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An initial search of the Navigator turned up three car fresheners hanging from the

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steering column. (ECF No. 1, p. 4, ll. 5-6.) The detectives did not find any clothes or overnight

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bags. (ECF No. 1, p. 4, ll. 6-7.) A Narcotic Detection Canine named Kash then proceeded to

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sniff the exterior of the Navigator and gave a positive alert for narcotics near the rear cargo area

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of the vehicle. (ECF No. 1, p. 5, ll. 3-4.) A detective conducted a hand search of the vehicle

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and uncovered a black “Beats” pouch that contained four bundles of $100 bills in U.S. currency.

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(ECF No. 1, p. 5, ll. 9-15.) Based on the foregoing, Mr. Plazola, Mr. Maya-Perez, and the

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Navigator were transported to a different area so that detectives could safely conduct a more

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extensive search of the vehicle. (ECF No. 1, p. 5, ll. 20-23.)

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After relocating to a safer location, the detectives spoke with the owner of the Navigator

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over the phone, a woman named Marcia. She informed the detectives that she had loaned her

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vehicle to her friend Mr. Plazola and did not know of any weapons, drugs, or money in the car.

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(ECF No. 1, pp. 5-6, ll. 24-28, 1-5.)

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The detectives then searched the rear cargo area, pulling apart the upholstery of the

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back of the seats and uncovering a piece of particle board that detectives observed was

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secured by screws that did not appear to be manufacturer screws. (ECF No. 1, p. 6, ll. 12-13.)

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The detectives pried up the particle board and found several green cellophane packages. After

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pulling off the particle board covers on the backs of the second and third rows of seats, the

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detectives uncovered twenty bundles of U.S. currency within the empty spaces inside seats.

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(ECF No. 1, p. 6, ll. 6-20.)

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Both Mr. Plazola and Mr. Maya-Perez claimed they had no knowledge of the money

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hidden within the seats. The detectives advised Mr. Plazola and Mr. Maya-Perez that due to the

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circumstances under which the funds were found, the funds would be seized. A receipt for the

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currency was issued to Mr. Plazola, who stated that he understood, and signed the receipt.

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Both Mr. Plazola and Mr. Maya-Perez were provided with a Disclaimer of Currency form, written

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in Spanish, which both read and signed. Mr. Plazola, Mr. Maya-Perez, and the Navigator were

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released without further incident. (ECF No. 1, p. 6, ll. 21-28.)

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As the currency was hidden within the seats of the Navigator, packaged within vacuum-

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sealed bags, wrapped in carbon paper and cellophane, and drenched in a scented liquid

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substance, the detectives believed that the currency was the proceeds of controlled substance

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transactions. (ECF No. 1, p. 7, ll. 1-12.) As such, it is subject to forfeiture pursuant to 21 U.S.C.

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§ 881(a)(6).

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II.

PROCEDURAL HISTORY

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Based on the allegations in the complaint, the Court issued a Warrant for Arrest of

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Articles In Rem on December 30, 2015. (ECF No. 3.) The Warrant for the Arrest was executed

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on the Defendant funds on January 4, 2016. (ECF No. 4.) Public notice of the action and the

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arrest of the Defendant funds was published via the official government forfeiture site,

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www.forfeiture.gov, on December 31, 2015, for 30 consecutive days.

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consistent with Local Rule 500(d) via Supplemental Rule G(4)(a), and proof of such publication

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was filed with the Court on February 2, 2016. (ECF No. 5.)

This publication is

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In addition to providing notice by publication, on December 30, 2015, copies of the

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Complaint, Warrant for Arrest of Articles in Rem, Order Setting Mandatory Scheduling

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Conference, Notice of Availability of Voluntary Dispute Resolution, Notice of Availability of a

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Magistrate Judge, and Notice of Forfeiture letter dates December, 2015, were served on Mr.

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Plazola at his last known address of 25800 Industrial Blvd., Apt. 1210, Hayward, California,

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94545, by first class mail and certified mail no. 7012-3460-0001-6702-0944. The first class

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parcel was returned to the United States Attorney’s Office on February 25, 2016, marked as

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“Return to Sender” and “Unable to Forward.” The United States Postal Service left notice of the

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certified mail parcel on February 25 and 29, 2016, for the recipient Juan Plazola before the

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parcel was returned to the United States Attorney’s Office marked as “Return to Sender” and

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“Unable to Forward.” (ECF No. 9.)

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On December 30, 2015, Mr. Plazola was served with copies of the above-listed

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documents at an additional known address of 25455 Whitman Street, Apt. 25, Hayward,

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California, 94544-2454, by first class mail and certified mail no. 7012-3460-0001-0937. The

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Domestic Return Receipt (PS Form 3811) was signed by Gladys Espindola and received in the

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U.S. Attorney’s Office on January 4, 2016. (ECF No. 9.)

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On December 30, 2015, Mr. Maya-Perez was served with copies of the above-listed

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documents at his last known place of residence, 27132 Garden Road, Hayward, California,

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94544, by first class mail and certified mail no. 7012-3460-0001-6702-0920. The first class

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parcel was returned to the United States Attorney’s Office on February 22, 2016 marked as

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“Return to Sender” and “Unable to Forward.” The certified mail parcel was returned to and

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received by the United States Attorney’s Office on February 22, 2016, marked as “Return to

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Sender” and “Unable to Forward.” (ECF No. 9.)

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To date, there have been no claims filed by or on behalf of Juan Plazola or Eduardo

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Maya-Perez to the Defendant funds and the time for any person or entity to file a claim and

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answer has expired. Fed. R. Civ. P. Supp. R. G(4)(b)(i).

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III.

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LEGAL STANDARD
Under Federal Rule of Civil Procedure 55(b)(2), a party can apply to the district court for

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an entry of default judgment. Fed. R. Civ. P. 55(b)(2). Whether or not to grant default judgment

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lies within the discretion of the district court. Lau Ah Yew v. Dulles, 236 F.2d 415, 416 (9th Cir.

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1956). On a motion for default judgment, the factual allegations of the complaint relating to

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liability are taken as true. TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917-918 (9th

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Cir. 1987) (citing Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)).

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In the context of an in rem forfeiture action, a court considering default judgment should

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also consider the procedural requirements set forth by the Civil Asset Forfeiture Reform Act of

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2000, 18 U.S.C. § 983; the Supplemental Rules of Certain Admiralty and Maritime Claims

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(“Supplemental Rules”); and the court's Local Rules for Admiralty and in rem actions. United

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States v. Approximately 335 Counterfeit NFL Jerseys, No. 1:13-cv-341-AWI-GSA, 2014 WL

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2575446, at *5 (E.D. Cal. June 9, 2014) (referencing United States v. $191,910.00, 16 F.3d

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1051, 1069 (9th Cir. 1994) (explaining that, because civil forfeiture is a “harsh and oppressive

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procedure which is not favored by the courts,” the government carries the burden of

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demonstrating its strict adherence to procedural rules) (superseded by statute on other

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grounds)).

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The Supplemental Rules do not provide a procedure to seek default judgment in an

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action in rem, however Supplemental Rule A provides: “The Federal Rules of Civil Procedure

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also apply to the foregoing proceedings except to the extent that they are inconsistent with

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these Supplemental Rules.” When considering whether to enter default judgment under Federal

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Rule of Civil Procedure 55, Courts may consider the following factors: (1) the possibility of

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prejudice to the plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the

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complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning

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material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy of

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favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986).

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III.

DISCUSSION

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A.

Sufficiency of the Verified Complaint

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Pursuant to the Supplemental Rules, the government must file a verified complaint that

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states the grounds for jurisdiction and venue, describes the property being forfeited, identifies

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the statute under which the forfeiture action is brought, and includes sufficient factual detail to

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support a reasonable belief that the government will be able to meet its burden of proof at trial.

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Fed. R. Civ. P. Supp. R. G(2). With regard to the sufficiency of the factual detail of the verified

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complaint, the government is not required to show a relationship between the proceeds of a

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drug crime and a specific drug transaction. Rather, circumstantial evidence may support the

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forfeiture of the proceeds of a drug crime. United States v. $11,500.00 in United States

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Currency, In Rem, et al., 710 F.3d 1006, 1013 (9th Cir. 2013) (The government may meet its

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burden to show that property is subject to forfeiture with sufficiently strong circumstantial

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evidence linking the currency to drug trafficking generally); United States v. Currency, U.S.

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$42,500.00, 283 F.3d 977, 984 (9th Cir. 2002) (affirming government’s motion for summary

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judgment in light of substantial circumstantial evidence that currency was connected to drug

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trafficking, and where claimant refused to disclose the source of the currency or provide any

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other evidence that the source was legitimate).

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The verified complaint states the grounds for in rem subject matter jurisdiction and venue,

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describes the currency seized and the circumstances surrounding the seizure, and identifies the

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relevant statutes.

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circumstantial evidence that the Defendant fund were furnished or intended to be furnished in

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exchange for a controlled substance or listed chemical, and is subject to forfeiture pursuant to

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The government contends that the verified complaint establishes

21 U.S.C. § 881(a)(6).

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Here, taking the facts alleged in the Verified Complaint as true, there is more than

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sufficient circumstantial evidence linking the Defendant funds to drug trafficking in general. The

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money was found hidden inside of the seats. The money was tightly wrapped in plastic and

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carbon paper and drenched in scented liquid. A Narcotics Detection Canine made a positive

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alert as to the presence of narcotics in the vehicle. These facts provide a sufficient enough

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connection between the Defendant funds and illegal drug activity to support forfeiture.

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B.

Notice Requirement

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Subject to certain exceptions not present here, the Supplemental Rules also require

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that the government publish notice of the forfeiture in a manner that is reasonably calculated to

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notify potential claimants of the action. Fed. R. Civ. P. Supp. R. G(4)(a)(iv). The content of the

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notice must describe the property with reasonable particularity, state the times to file a claim and

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to answer the complaint, and identify the name of the government attorney to be served with the

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claim and answer. Fed. R. Civ. P. Supp. R. G(4)(a)(ii)(A)-(C). If the property is in the United

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States, notice must be published in a newspaper generally circulated in the district where the

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action is filed, where the property was seized, or where property that was not seized is located.

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Fed. R. Civ. P. Supp. R. G(4)(a)(iv)(A). In lieu of newspaper publication, the government may

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publish notice by posting on an official internet government forfeiture site for at least thirty

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consecutive days. Fed. R. Civ. P. Supp. R.G(4)(a)(iv)(C). Claims must be made within 30 days

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after the completion of the publication. Fed. R. Civ. P. Supp. R.G(5).
Here, publication occurred on the official internet government forfeiture site

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www.forfeiture.gov on December 31, 2015, for 30 consecutive days.

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Publication was filed with the Court on February 2, 2016.

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requirements for notice by publication pursuant to Local Rule 500(d) and Supplemental Rule G

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have been satisfied.

(ECF No. 5.)

A Declaration of
Accordingly, the

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When the government knows the identity of the property owner or owners, the Due

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Process Clause of the Fifth Amendment requires “the Government to make a greater effort to

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give him notice than otherwise would be mandated.” United States v. Real Property, 135 F.3d

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1312, 1315 (9th Cir. 1998). In such cases, the government must attempt to provide actual

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notice by means reasonably calculated under all circumstances to apprise the owner of the

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pendency of the forfeiture action.

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“Reasonable notice, however, requires only that the government attempt to provide actual

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notice; it does not require that the government demonstrate that it was successful in providing

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actual notice.” Mesa Valderrama v. United States, 417 F.3d 1189, 1197 (11th Cir. 2005); Real

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Property, 135 F.3d at 1316.

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Dusenbery v. United States, 534 U.S. 161, 168 (2002).

Supplemental Rule G(4)(b) mirrors this requirement, providing for notice to be sent by

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means reasonably calculated to reach the potential claimant.

Fed. R. Civ. P. Supp. R.

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G(4)(b)(i). The notice must contain the following information: the date when the notice is sent; a

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deadline for filing a claim that is at least 35 days after the notice is sent; that an answer or a

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motion under Rule 12 must be filed no later than 21 days after the filing of the claim; and the

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name of the government attorney to be served with the claim and the answer. Id. Here, the

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government provided notice of the forfeiture action by mailing copies of the required

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documentation, via both certified and first class mail, to Mr. Plazola and Mr. Maya-Perez at their

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last known addresses. Mr. Plazola was sent notice at an alternate address as well. Therefore,

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a reasonable attempt at serving notice on the potential claimants was made.

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C.

Failure to Timely Answer Claim

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Pursuant to the Supplemental Rules, any person who asserts an interest in or a right in

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a forfeiture action must file a claim with the Court within the time specified by the direct notice.

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Fed. R. Civ. P. Supp. G(4)(b)(ii)(B), (5)(a)(ii)(A).

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requirements for opposing the forfeiture precludes a person from establishing standing in the

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forfeiture proceeding. Real Property, 135 F.3d at 1317. Publication ended on January 29,

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2016; any potential claimants had until 30 days after that date to respond, but did not. While

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direct notice was not provided to the known potential claimants, it was not for lack of effort by

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the government. Accordingly, the time to file a claim has expired, and pursuant to Rule 55(a) of

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the Federal Rules of Civil Procedure, the Clerk of the Court properly entered defaults against

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Mr. Plazola and Mr. Maya-Perez.

Failure to comply with the procedural

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D.

Default Judgment Appropriate Under Rule 55

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The discretionary Eitel factors outlined above favor granting the government's motion

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for default judgment. First, the government would be prejudiced by the denial of its motion. It

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would have to spend additional time and effort litigating an action in which the claimants have

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made no claims. Second, the government's claims appear to have merit, as discussed above.

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Third, the government has adhered to the procedural requirements of a forfeiture action in rem.

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Fourth, the currency that was seized and subject to forfeiture is not of such substantial value as

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to warrant denial of the government's motion, particularly in light of the fact that no claimant has

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come forward to challenge the forfeiture. Fifth, there are no genuine disputed issues of material

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fact. Sixth, there is no evidence that the failure of any other claimants to answer is due to

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excusable neglect.

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practical, where, as here, claimants have made no claims. Accordingly, there is no impediment

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to default judgment sought by the government and the Court will recommend that the motion be

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granted.

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V.

Finally, although merits-based decisions are always preferred, it is not

CONCLUSION

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Plaintiff has shown that a complaint for forfeiture was filed; that potential claimants

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Plazola and Maya-Perez received notice of the forfeiture action; that any and all other unknown

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potential claimants have been served by publication; and that grounds exist for entry of a final

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judgment of forfeiture.

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Therefore, IT IS RECOMMENDED as follows:

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That Juan Plazola and Eduardo Maya-Perez be held in default;

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2.

That Plaintiff’s motion for default judgment and final judgment of forfeiture be

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granted;

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3.

That a judgment by default be entered against any right, title, or interest of

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potential claimants Juan Plazola and Eduardo Maya-Perez, and all other unknown potential

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claimants, in the Defendant funds;

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4.

That a final judgment be entered, forfeiting all right, title, and interest in the

Defendant funds to the United States of America, to be disposed of according to law; and
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That the Default Judgment and Final Judgment of Forfeiture lodged herein be

signed by the Honorable Anthony W. Ishii and filed by the Clerk of the Court.

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These findings and recommendations are submitted to District Court Judge Anthony W.

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Ishii pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 304. Within fourteen (14) days after

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being served with these Findings and Recommendation, any party may file written objections

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with the Court and serve a copy on all parties.

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“Objections to Magistrate Judge’s Findings and Recommendations.” Any reply to the objections

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shall be served and filed within ten (10) days after service of the objections. The District Judge

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will review these findings and recommendations pursuant to 28 U.S.C. § 636(b)(1)(C). The

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parties are advised that failure to file objections within the specific time may waive the right to

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appeal the District Judge’s order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

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IT IS SO ORDERED.

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Dated:

April 22, 2016

/s/

Michael J. Seng

UNITED STATES MAGISTRATE JUDGE

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Such a document should be captioned

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