United States of America v. $40,000.00 in U.S. Currency

Filing 19

ORDER: (1) Granting Plaintiff's Motion to Strike the Answer and Denying Without Prejudice Request for Entry of a Default Judgment (ECF No. 9 ); and (2) Striking Answer (ECF No. 7 ). Plaintiff may file a motion for entry of a default judgment against the Defendant no later than 8/31/2018. Signed by Judge Cynthia Bashant on 8/6/2018. (jdt) (Additional attachment(s) added on 8/6/2018: # 1 Stricken Document) (jdt).

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,
Plaintiff,

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v.
$40,000 IN U.S. CURRENCY,

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Defendant.

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Case No. 18-cv-00482-BAS-JLB
ORDER:
(1) GRANTING PLAINTIFF’S
MOTION TO STRIKE THE
ANSWER AND DENYING
WITHOUT PREJUDICE REQUEST
FOR ENTRY OF A DEFAULT
JUDGMENT
[ECF No. 9]

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AND

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(2) STRIKING ANSWER

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[ECF No. 7]

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I.

BACKGROUND

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On March 6, 2018, Plaintiff United States filed the Complaint in this case, alleging

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that the Defendant $40,000 in U.S. currency is money furnished or intended to be furnished

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in exchange for contraband and subject to forfeiture pursuant to 21 U.S.C. § 881(a)(6).

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(ECF No. 1.) The Complaint alleges that on November 2, 2017, federal law enforcement

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agents seized Defendant $40,000 in U.S. Currency at the San Diego International Airport

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after conducting a consensual search of a carry-on bag in Rodrigo Marquez’s (“Marquez”)
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possession. (Compl. ¶¶ 3, 6H, 8, 9, 17.) Within two days of filing of the Complaint,

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Plaintiff provided Rodrigo Marquez and his attorney, Todd J. Hilts, with a notice of judicial

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forfeiture proceedings (the “Notice”) and a copy of the Complaint. (ECF No. 9-2.) The

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Notice instructed that pursuant to Rule G(5) of the Supplemental Rules for Admiralty and

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Maritime Claims and Forfeiture Actions (“Supplemental Rules”), Marquez had to file a

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verified claim for the Defendant with the Clerk of this Court within 35 days after service

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of the Notice, or additional time as the Court may allow. (Id. at 1–2.) The Notice further

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instructed Marquez that he needed to file an answer to the Complaint or a Rule 12 motion

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within 21 days after the filing of the verified claim. (Id. at 2.)

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Upon the failure of any claimant to file a timely verified claim or answer to the

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Complaint, Plaintiff requested an entry of default on May 24, 2018, specifically against

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Rodrigo Marquez (“Marquez”) and all other potential claimants. (ECF No. 6.) In the hours

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following that request, Marquez filed an Answer to the Complaint through his attorney.

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(ECF No. 7.) The Clerk of the Court entered default against the Defendant on the following

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day. (ECF No. 8.)

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Before the Court is Plaintiff’s motion pursuant to Supplemental Rule G(8) to strike

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Marquez’s Answer and a motion for entry of a default judgment. (ECF No. 9.) Marquez

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has not opposed the motion. For the reasons herein, the Court grants Plaintiff’s motion to

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strike, denies without prejudice Plaintiff’s request for entry of a default judgment, and

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strikes Marquez’s Answer.

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II

ANALYSIS

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Pursuant to Rule G(5) of the Supplemental Rules, “a person who asserts an interest

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in the defendant property may contest the forfeiture by filing a claim in the court where the

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action is pending.” Rule G(5)(a)(i). The claim must identify the specific property claimed,

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identify the claimant and state the claimant's interest in the property, be signed by the

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claimant under penalty of perjury, and be served on the government attorney identified in

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the government’s notice of judicial proceedings. See Rule G(5)(a)(i)(A)–(D). Rule G(5)

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also identifies default time limits regarding when a claim must be filed. Relevant to the
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present motion, “[u]nless the court for good cause sets a different time, the claim must be

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filed by the time stated in a direct notice sent under Rule G(4)(b).” Rule G(5)(a)(ii)(A).

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Rule G(5) also establishes a time requirement for the claimant’s response to the complaint.

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“A claimant must serve and file an answer to the complaint or a motion under Rule 12

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within 21 days after filing the claim.” Rule G(5)(b).

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The Supplemental Rules contemplate some consequences for failure to follow the

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time requirements of Rule G(5). In relevant part, “the government may move to strike a

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claim or answer for failing to comply with Rule G(5)[.]” Rule G(8)(c)(i)(A). In its motion

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to strike, Plaintiff argues that Marquez’s Answer should be stricken because he has failed

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to file a verified claim. The Court agrees.

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Of the procedural requirements applicable to civil asset forfeiture actions, “[t]he

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most significant requirement is that the claimant must timely file a verified statement of

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interest[.]” U.S. v. $487,825.00 in U.S. Currency, 484 F.3d 662, 664 (3d Cir. 2007). This

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requirement serves two purposes. First, it ensures that claimants come forward as soon as

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possible so that the court “may hear all interested parties and resolve the dispute without

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delay.” United States v. $8,822,877.16 in U.S. Currency, 330 F.3d 141, 150 n.9 (3d Cir.

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2003); see also $487,825.00 in U.S. Currency, 484 F.3d at 664. Second, it decreases the

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likelihood of false claims by requiring claims be verified. 487, 825.00 in U.S. Currency,

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484 F.3d at 664. Because of the purposes underlying the time requirements for the filing

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of a verified claim, courts have “repeatedly emphasized that forfeiture claimants must

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strictly adhere to the filing requirements.” Id. at 665; see also United States v. 5145 N.

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Golden State Blvd., 135 F.3d 1312, 1316–17 (9th Cir. 1998).

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The Notice the government provided Marquez expressly set a 35 day time-limit for

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Marquez to file a verified claim in this Court. Marquez’s attorney received the Notice on

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March 8, 2018. (ECF No. 9-2 at 3–6.) Marquez was thus required to file a verified claim

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no later than April 12, 2018. Despite that deadline, Marquez has never filed a verified

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claim for the Defendant with this Court.1 The Answer filed by Marquez purports to contain

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a verification by Marquez under California state law. (ECF No. 7 at 5.) But the Answer

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“contains no description of [Marquez’s] interest in the property”—a requirement of Rule

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G(5)—and “[t]hus, there is no question that this document is not a verified statement.”

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$487,825.00, 484 F.3d at 665; see also Rule G(5)(a)(i)(A).

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Courts have “discretion to overlook the failure to conform to the requirements” of a

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forfeiture claim. United States v. Real Property at 2659 Roundhill Dr., Alamo, Cal., 194

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F.3d 1020, 1024 (9th Cir. 1999). Indeed, as the Court has observed, Rule G(5) permits a

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court to set the filing deadline of a verified claim to “different time for good cause.” Rule

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G(5)(a)(ii)(A). Courts may consider various factors in determining whether to excuse a

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claimant’s failure to comply with timing requirement, including: the claimant’s good faith

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attempts to comply with procedural requirements; the date upon which the claimant

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received notice of the pending forfeiture action; any requests by the claimant to amend the

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pleadings or for an extension of time; any reasons proffered by the claimant for the

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omission; and whether prejudice to the United States will result from excusing the

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claimant’s procedural errors. See United States v. $22,226.25 in Interbank FX Account No.

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xxx0172, 763 F. Supp. 2d 944, 948 (E.D. Tenn. 2011) (citation omitted).

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The Court, however, cannot find good cause to excuse the timing requirements in

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this case. First, Marquez has never requested additional time to file a verified claim, nor

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has he explained his failure to file a timely claim. Second, Marquez is not a pro se claimant

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who should be excused from strict compliance with these procedural requirements. See

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$22,226.25 in Interbank FX Account No. xxx0172, 763 F. Supp. 2d at 948 (explaining that

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Although the Complaint alleges that Marquez filed an administrative “Petition for
Remission or Mitigation of Forfeiture” with the Drug Enforcement Administration
(“DEA”) on December 18, 2017 (Compl. ¶ 18), that petition does not qualify as a verified
claim. “A petition for remission or mitigation of forfeiture is a petition for administrative
relief, not judicial relief.” United States v. $2,857.00, 754 F.2d 208, 214 (7th Cir.1984). It
is the filing of a verified claim with an appropriate court which advises that court of the
intent to seek judicial relief.
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“[i]n some circumstances . . . especially where claimants are proceeding pro se, courts may

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excuse” non-compliance (citation omitted)). Marquez is not pro se. In fact, the Notice is

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addressed to the same attorney who filed Marquez’s Answer and also filed Marquez’s

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administrative petition with the DEA. (Compare ECF No. 9-2 with ECF No. 7 (Answer)

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and ECF No. 9-3 (Marquez’s DEA petition).) Third, Marquez has not shown good faith

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attempts to comply with the procedural requirements. Even the untimely Answer Marquez

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filed some 77 days after receipt of the Notice and in the hours following the government’s

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request for default, fails to comply with Rule G(5)’s verified claim requirement. These

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circumstances underscore the need to strictly enforce the procedural requirements of Rule

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G(5). And the Court will do so here by granting Plaintiff’s motion to strike Marquez’s

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Answer.

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Plaintiff has also requested that the Court enter a default judgment against Marquez

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and any other potential claimants as a “sanction” for Marquez’s failure to comply with

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Rule G(5)(b). (ECF No. 9.) A court may enter a default judgment as a sanction for a

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party’s failure to obey a court order pursuant to Federal Rule of Civil Procedure 37,

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including in a civil asset forfeiture action. See United States v. Approximately $ 141,932.00

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in United States Currency, No. 04-cv-6743-LJO-TAG, 2008 WL 190878, at *8 (E.D. Cal.

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Jan. 18, 2008) (discussing standard for entry of default judgment as a sanction and applying

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standard to civil forfeiture case). However, Plaintiff does not explain how Marquez

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violated a court order through his failure to comply with the procedural rules in this case.

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The Court will not enter a default judgment as a sanction.

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Even so, Plaintiff will still have the opportunity to move for a default judgment

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against the Defendant in accordance with Federal Rule of Civil Procedure 55(b) in light of

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the striking of Marquez’s Answer. See, e.g., United States v. $3,275.00 in United States

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Currency, No. 12-cv-543-L(WVG), 2013 WL 1285141 (S.D. Cal. Mar. 27, 2013) (granting

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motion for default judgment in civil forfeiture action pursuant to Rule 55(b)). Any motion

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Plaintiff files should identify the appropriate default judgment standard, explain how the

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Complaint satisfies the requirements for a civil asset forfeiture action, and provide an
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appropriate default judgment order. Accordingly, the Court denies without prejudice

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Plaintiff’s request for the entry of a default judgment.

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III.

CONCLUSION & ORDER

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For the foregoing reasons, the Court: (1) GRANTS Plaintiff’s motion to strike (ECF

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No. 9), (2) STRIKES Marquez’s Answer (ECF No. 7); and (3) DENIES WITHOUT

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PREJUDICE Plaintiff’s request for entry of default judgment. Plaintiff may file a motion

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for entry of a default judgment against the Defendant no later than August 31, 2018.

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IT IS SO ORDERED.

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DATED: August 6, 2018

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