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

Filing 26

FINDINGS and RECOMMENDATIONS That the Court Grant, in Full, Plaintiff's Ex Parte Motion for Default Judgment and Final Judgment of Forfeiture as to All Potential Claimants 9 & 25 , signed by Magistrate Judge Michael J. Seng on 3/21/17: 14-Day Objection Deadline. (Hellings, J)

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

FINDINGS AND RECOMMENDATIONS
THAT THE COURT GRANT, IN FULL,
PLAINTIFF’S EX PARTE MOTION FOR
DEFAULT JUDGMENT AND FINAL
JUDGMENT OF FORFEITURE AS TO
ALL POTENTIAL CLAIMANTS

Defendant.

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(ECF Nos. 9 & 25)

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FOURTEEN DAY OBJECTION
DEADLINE

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This matter comes before the Honorable Judge Michael J. Seng on Plaintiff United
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States’ ex parte motion for default judgment and final judgment of forfeiture. (ECF No. 9.) There

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was no appearance by or on behalf of any other person or entity claiming an interest in the
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Defendant Currency to oppose Plaintiff’s motion.

Plaintiff’s motion was referred to the

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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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This matter is taken under submission without oral argument pursuant to Local Rule
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230(g). For the reasons set forth below, the Court will recommend that Plaintiff’s motion be

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GRANTED in full.
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I.

Procedural History

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

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approximately $460,520.00 (hereafter “Defendant Currency”) from inside the seat of a white

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Lincoln Navigator sport utility vehicle during a traffic stop. (Compl. (ECF No. 1) at ¶¶ 6-7, 19-

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21.) Juan Plazola was the driver of the Navigator and Eduardo Maya-Perez was in the front

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passenger seat. (Id. ¶ 8.) During the stop, Plazola told detectives that the vehicle belonged to a

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woman named Marcia. (Id. ¶ 9.) Plazola, Maya-Perez, and the Navigator were released without

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incident. (Id. ¶ 20.)

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On December 15, 2015, Plaintiff filed the instant forfeiture action. (Compl. (ECF No. 1.))

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Direct notice was sent to Plazola and Maya-Perez only. (Mot. for Default J. (ECF No. 9) at 7-8.)

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On March 1, 2016, after Plazola and Maya-Perez failed to file claims, Plaintiff obtained a clerk’s

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default against them. (Clerk’s Entry of Default J. (ECF Nos. 7 & 8.))

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On March 11, 2016, Plaintiff filed an ex parte application for default judgment and final

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judgment of forfeiture against all potential claimants (hereafter “Motion for Default”) setting forth

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Plaintiff’s efforts to publish and provide notice of the complaint to potential claimants Plazola and

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Maya-Perez. (Mot. for Default J. at 17.)

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On April 26, 2016, this Court issued findings and recommendations (“F&R”)

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recommending the Motion for Default be granted in full. (F&R to Grant Mot. for Default J. (ECF

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No. 12.) at 10.) On May 26, 2016, the district court adopted in part the F&R, granting default

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judgment against potential claimants Plazola and Maya-Perez but ruling that it could not enter

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final judgment against all potential claimants because Plaintiff had failed to give direct notice to

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the registered owner and/or the purported owner of the vehicle, “Marcia.” (Order Adopting F&R

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in Part (ECF No. 13) at 2.) Plaintiff was thus granted additional time to notice the registered

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owner and/or “Marcia,” or otherwise explain why it was not necessary to serve direct notice on

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these individuals. (Id.)

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On June 8, 2016, direct notice was sent to Marcia Salcido, the registered owner of the

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vehicle. (Suppl. Br. in Supp. of Mot. for Default J. (ECF No. 25) at 3.) On January 20, 2017, after

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Ms. Salcido failed to file a claim, Plaintiff obtained a clerk’s entry of default as to Ms. Salcido.

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(Req. for Entry of Default (ECF No. 23); Clerk’s Entry of Default (ECF No. 24.)) On February 9,

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2017, Plaintiff filed the instant Supplemental Brief in support of its Motion for Default. (ECF No.

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25.)

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II.

Facts

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The facts pertaining to the traffic stop that led to the seizure of the Defendant Currency

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are stated in detail in both the complaint and Plaintiff’s initial Motion for Default. Those facts

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remain unchanged and will not be repeated herein. The following facts pertaining to potential

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claimant Marcia Salcido are taken from Plaintiff’s supplemental brief.

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After detectives located the Defendant Currency, Plazola told detectives that the

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Defendant Currency was not his, but was likely the property of the registered owner, “Marcia.”

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Plazola provided the detectives with Marcia’s telephone number. The detectives called the

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number and spoke to a woman who identified herself as “Marcia” and the owner of the

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Navigator. Marcia told detectives she had loaned the Navigator to Plazola. Marcia also stated

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that she did not have any weapons, narcotics, or large sums of money in the vehicle.

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According to the Fresno County Sheriff’s Office Incident Report from September 24,

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2015, the Navigator belonged to Marcia Salcido, residing at 16305 Ladysmith Street, Hacienda

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Heights, California, 91745. Ms. Salcido’s telephone number was the same number given to

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detectives by Plazola.

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On June 8, 2016, Plaintiff served Ms. Salcido with notice of the action and a copy of the

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complaint at the 16305 Ladysmith Street address. Notice was served by first class and certified

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mail no. 7012-3460-0001-6702-2559. Notice of the certified mail parcel was left at the address

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on June 13, 21, and 28, 2016 before the parcel was returned to the United States Attorney’s

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Office marked “Unclaimed.” Plaintiff also requested the United States Marshals Service (USMS)

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attempt personal service on Ms. Salcido at the 16305 Ladysmith Street address. On September

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22, 2016, the USMS went to the address, where they encountered Ms. Salcido’s daughter,

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Rosela Salcido. Rosela Salcido told the deputy marshal that Ms. Salcido was in Mexico and her

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return date was unknown.

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On November 21, 2016, a Task Force Officer with the United States Drug Enforcement

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Administration queried the California Department of Motor Vehicles (DMV) database regarding

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the Navigator. As of that date, the Navigator was still registered to Ms. Salcido. The address

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listed for Ms. Salcido, however, was 16703 Northam Street in La Puenta, California. On

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December 9, 2016 and December 10, 2016, a Task Force Officer with the United States Drug

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Enforcement Administration made several calls to Ms. Salcido at the telephone number

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provided by Plazola. On both days the telephone number had an automated message stating

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the phone was not accepting calls at that time.

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On December 22, 2016, the USMS attempted to personally serve Ms. Salcido at the

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16703 Northam Street address. Unable to find Ms. Salcido, the Marshals served a man who

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identified himself as Ms. Salcido’s brother-in-law. The man told the deputy marshal that Ms.

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Salcido has lived in Mexico for the past few years.

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To date, there have been no claims filed by or on behalf of Ms. Salcido to the Defendant

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Currency and the time for any person or entity to file a claim and answer has expired. Fed. R.

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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 the plaintiff's substantive claim; (3) the sufficiency of

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

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

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strong policy of favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th

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Cir. 1986).

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III.

Discussion
Merits of Plaintiff’s Claim and Sufficiency of the Verified Complaint

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A.

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The Court previously found that there was sufficient evidence to find the Defendant

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Currency was linked to narcotics trafficking. (F&R to Grant Mot. for Default J. at 6-10.) As that

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analysis has not changed, the Court will not reproduce that discussion herein.

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B.

Notice Requirement

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The Court previously found that Plaintiff had met the requirements for notice by

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publication pursuant to Local Rule 500(d) and Supplemental Rule G. (F&R to Grant Mot. for

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Default J. at 7-8.)

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As to whether Ms. Salcido was properly noticed: when the government knows the

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identity of the property owner or owners, the Due Process Clause of the Fifth Amendment

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requires “the Government to make a greater effort to give him notice than otherwise would be

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mandated.” United States v. Real Property, 135 F.3d 1312, 1315 (9th Cir. 1998). In such

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cases, the government must attempt to provide actual notice by means reasonably calculated

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under all circumstances to apprise the owner of the pendency of the forfeiture action.

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Dusenbery v. United States, 534 U.S. 161, 168 (2002). “Reasonable notice, however, requires

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only that the government attempt to provide actual notice; it does not require that the

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government demonstrate that it was successful in providing actual notice.” Mesa Valderrama v.

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United States, 417 F.3d 1189, 1197 (11th Cir. 2005); Real Property, 135 F.3d at 1316.

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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. The notice must contain the

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following information: the date when the notice is sent; a deadline for filing a claim that is at least

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35 days after the notice is sent; that an answer or a motion under Rule 12 must be filed no later

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than 21 days after the filing of the claim; and the name of the government attorney to be served

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with the claim and the answer. Id. Here, the government provided notice of the forfeiture action

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by mailing copies of the required documentation, via both certified and first class mail, to Ms.

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Salcido at her last known address. Plaintiff also attempted to personally serve Ms. Salcido at

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two separate California addresses. Each time, a person who claimed to be related to Ms.

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Salcido told the USMS that Ms. Salcido was in Mexico and they did not know when she would

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return. The Court thus finds a reasonable attempt at serving notice on Ms. Salcido 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. Notice publication ended on January

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29, 2016; all potential claimants had 30 days after that date to respond, but no one did. The

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purported direct notice to Ms. Salcido indicated that she had thirty-five days from the date of the

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notice to file a claim. While direct notice was not personally delivered to Ms. Salcido by a

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government representative, it was not for lack of government effort; it was delivered to her

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address of record and to individuals who likely had means of reaching her.

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time to file a claim having expired, pursuant to Rule 55(a) of the Federal Rules of Civil

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Procedure the Clerk of the Court properly entered default against Ms. Salcido.

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Failure to comply with the procedural

Accordingly, the

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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 potential

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claimants have already withdrawn their claims. Second, the government's claims appear to

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have merit, as discussed in their initial Motion for Default and this Court’s F&R. Third, the

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

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

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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 withdrawn their claims. Accordingly, there is no

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

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the motion be 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 Plaintiff noticed or

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attempted to notice all known potential claimants; that any and all other unknown potential

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

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of forfeiture.

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Therefore, IT IS RECOMMENDED as follows:

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That Marcia Salcido be held in default;

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

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granted in full;

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3.

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

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potential claimant Marcia Salcido, and all other unknown potential claimants, in the Defendant

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Currency;

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

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Defendant Currency 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).

Such a document should be captioned

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IT IS SO ORDERED.
Dated:

March 21, 2017

/s/

UNITED STATES MAGISTRATE JUDGE

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Michael J. Seng

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