Walteros v. United States of America, Drug Enforcement Administration

Filing 11

ORDER on Motion to Dismiss and Referral to Magistrate Judge for Evidentiary Hearing. Signed by Judge Robert N. Scola, Jr on 1/23/2018. (kpe)

United States District Court
for the
Southern District of Florida
Jose Walteros, Plaintiff,
v.
United States of America Drug
Enforcement Administration,
Defendant.

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) Civil Action No. 17-23641-Civ-Scola
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Order on Motion to Dismiss and Referral to Magistrate Judge for
Evidentiary Hearing
This matter is before the Court on the Defendant’s motion to dismiss the
Complaint/Motion/Petition to Set Aside DEA Administrative Forfeiture
(“Complaint”) for insufficient service of process and failure to state a claim
upon which relief may be granted (ECF No. 7). For the reasons set forth below,
the Court grants in part and denies in part the Defendant’s motion (ECF No.
7).
1. Background
The Complaint alleges that the United States Drug Enforcement
Administration (“DEA”) seized $212,430 in U.S. currency from Plaintiff Jose
Walteros without a warrant on July 2, 2016, in the parking area of the
Parisian/Geneva Hotel & Suites (the “Parisian”) in Miami Beach, Florida.
(Compl. ¶¶ 1, 3, ECF No. 1.) At the time, Walteros did not know that the men
who seized the money were DEA agents. (See id. ¶¶ 1, 2-5.) The Plaintiff alleges
that he told the agents that he and his family would be staying at the Parisian
for several days, and that the agents did not provide him with business cards
or a receipt for the seizure. (Id. ¶¶ 2-3.) After Walteros returned to Colombia, he
hired a private investigator in Florida to find out who had taken his money,
and the investigator eventually discovered that the money had been seized by
the DEA. (Id. ¶¶ 4-5.)
Sometime thereafter, Walteros hired counsel to assist him in recovering
the money from the DEA. (Id. ¶ 6.) On January 23, 2017, Walteros’s counsel
sent the DEA a verified claim requesting return of the money and judicial
review. (Id. ¶ 7.) A month later, the DEA responded, stating that the time to file
a verified claim requesting judicial review had expired. (Id. ¶ 8.) After Walteros’s
counsel submitted a verified claim and requested judicial review on two more

occasions and sent a Freedom of Information Act (“FOIA”) request to the DEA,
the DEA notified Walteros’s counsel on June 7, 2017 that it had
administratively forfeited the property on May 2, 2017. (Id. ¶¶ 9-12.)
On October 4, 2017, Walteros filed this action, requesting that the Court
set aside the administrative forfeiture. Walteros also requests that the Court
order the DEA to return the money to Walteros pursuant to Federal Rule of
Criminal Procedure 41(g) and prohibit the DEA from pursuing a forfeiture
action against the property at any time in the future.
2. Legal Standard
A. Insufficient Service of Process
Under Federal Rule of Civil Procedure 12(b)(5), a defendant may move to
dismiss for insufficient service. “[W]hen service of process is challenged, the
party on whose behalf service is made has the burden of establishing its
validity.” Familia de Boom v. Arosa Mercantil, S.A., 629 F.2d 1134, 1139 (5th
Cir. 1980)1; see also Andujar v. All Coast Transporters, Inc., No. 12–62091,
2013 WL 2404059, at *2 (S.D. Fla. May 31, 2013) (Cohn, J.); but see Fru Veg
Mktg., Inc. v. Vegfruitworld Corp., 896 F. Supp. 2d 1175, 1182 (S.D. Fla. 2012)
(Ungaro, J.) (finding that the defendant has the initial burden “of challenging
the sufficiency of service and ‘must describe with specificity how the service of
process failed to meet the procedural requirements of Fed. R. Civ. P. 4,” before
the burden shifts to the plaintiff to establish a prima facie case for valid
service); Hollander v. Wolf, No. 09–80587–CIV, 2009 WL 3336012, at *3 (S.D.
Fla. Oct. 14, 2009) (Ryskamp, J.) (same).
B. Failure to State a Claim
Federal Rule of Civil Procedure 8(a) requires “a short and plain statement
of the claims” that “will give the defendant fair notice of what the plaintiff's
claim is and the ground upon which it rests.” Fed. R. Civ. P. 8(a). The Supreme
Court has held that “[w]hile a complaint attacked by a Rule 12(b)(6) motion to
dismiss does not need detailed factual allegations, a plaintiff's obligation to
provide the ‘grounds' of his ‘entitlement to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will
not do. Factual allegations must be enough to raise a right to relief above the

1Decisions

of the former Fifth Circuit issued before October 1, 1981, are binding
precedent in the Eleventh Circuit. See Bonner v. City of Prichard, 661 F.2d 1206, 1209
(11th Cir.1981) (en banc).

speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(internal citations omitted).
“To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quotations and citations omitted).
“A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. Thus, “only a complaint that states a plausible
claim for relief survives a motion to dismiss.” Id. at 1950. When considering a
motion to dismiss, the Court must accept all of the plaintiff's allegations as
true in determining whether a plaintiff has stated a claim for which relief could
be granted. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). For purposes of
Rule 12(b)(6), a court generally may not look beyond the pleadings, which
includes any information attached to a complaint. U.S. ex. Rel. Osheroff v.
Humana, Inc., 776 F.3d 805, 811 (11th Cir. 2015) (internal citations omitted).
3. Analysis
A. Insufficient Service of Process
Pursuant to Federal Rule of Civil Procedure 4(i)(A), the Plaintiff must
serve the DEA by:
(i)

Delivering a copy of the summons and the complaint to
the United States attorney for the district where the action
is brought, or to an assistant United States attorney or
clerical employee whom the United States attorney
designates in a writing filed with the court clerk, or

(ii)

Sending a copy of the summons and complaint by
registered or certified mail to the civil-process clerk at the
United States attorney's office and sending a copy of each
by registered or certified mail to the Attorney General of
the United States at Washington, D.C.

In addition, pursuant to Rule 4(i)(2), the Plaintiff must send a copy of the
summons and complaint by registered or certified mail to the agency.
The DEA acknowledges that the civil-process clerk at the United States
Attorney’s Office for the Southern District of Florida received a copy of the
summons and complaint by certified mail. (Mot. 6.) However, the DEA asserts
that “it does not appear” that the DEA and the Attorney General were served.
(Id.) Somewhat inconsistently, the DEA next asserts that “[w]hile it is possible

that such service has been made, no proof of service . . . has been made to the
Court.”
The Court notes that the DEA filed its motion on December 9, 2017, and
the Plaintiff had until January 2, 2018 to effect service. On December 13,
2017, the Plaintiff filed proof of service (ECF No. 9). The proof of service
consists of certified mail receipts that show that the Plaintiff served the
Attorney General and Merri Hawkins, a senior attorney at the DEA’s
headquarters, on October 10, 2017. (Id.) Thus, the Plaintiff’s response to the
Defendant’s motion argues that the DEA was properly served. (Resp., ECF No.
10.) The DEA did not file a reply, or otherwise dispute the proof of service filed
by the Plaintiff. Therefore, the Court finds that the Plaintiff has properly served
the Defendant.
B. Failure to State a Claim
The Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”) requires the
Government to send written notice to interested parties in any nonjudicial civil
forfeiture proceeding. 18 U.S.C. § 983(a)(1)(A)(i). The notice must be sent no
more than 60 days after the date of the seizure of property. Id. The “notice
must be reasonably calculated, under all circumstances, to apprise interested
parties of the pendency of [an] action and afford them an opportunity to
present their objections.” Valderrama v. United States, 326 F. Supp. 2d 1333,
1338-39 (S.D. Fla. 2004) (King, J.) aff'd sub nom. Mesa Valderrama v. United
States, 417 F.3d 1189 (11th Cir. 2005) (quoting Larry Dean Dusenbery v.
United States, 534 U.S. 161, 168 (2002)) (internal quotations and citations
omitted). If an interested party does not receive notice, the party
may file a motion to set aside a declaration of forfeiture with
respect to that person’s interest in the property, which motion
shall be granted if –
(A)
The Government knew, or reasonably should have
known, of the moving party’s interest and failed to take
reasonable steps to provide such party with notice; and
(B)
The moving party did not know or have reason to know
of the seizure within sufficient time to file a timely claim.
18 U.S.C. § 983(e)(1).
The DEA argues that the Complaint fails to establish both of the required
elements. First, the DEA argues that the Plaintiff cannot establish that he did
not know of the seizure because the Complaint alleges that he was present at
the time of the seizure. The DEA relies on two cases in support of this position.

In Miller v. Drug Enforcement Administration, the Sixth Circuit noted that
“[u]nder the plain language of the statute, it is irrelevant whether Plaintiff had
actual notice of the forfeiture proceedings . . . It is only notice of the seizure that
is controlling.” 566 Fed. Appx. 395, 397 n. 2 (6th Cir. 2014) (emphasis in
original). However, the plaintiff in Miller knew that his property was in the
possession of a local police department, and was informed that the DEA would
attempt to seize the property. Id. at 396. In addition, the DEA sent written
notice of the seizure to the plaintiff by certified mail when it did in fact seize the
property. Id.
In Johnson v. U.S., No. 1:03-CV-00281-LJM, 2004 WL 2538649 (S.D.
Ind. Oct. 22, 2004), a law enforcement task force comprised of multiple
agencies executed a search warrant at the plaintiff’s residence and seized 95
separate items of personal property. The plaintiff was present during the
seizure and was later charged with three felony counts. Id. at *1. The plaintiff
attempted to challenge the seizure of his property, but claimed that he had
difficulty doing so because the items that were seized were held in different
locations. Id. The court held that the plaintiff failed to show that he did not
have reason to know of the seizure, noting that only one federal agency was
involved in executing the warrant and seizing the property, and holding that it
is knowledge of the seizure itself, not knowledge of which agency is in
possession of the property after the seizure, that matters. Id. at *4. In addition,
at least one court within the Eleventh Circuit has denied a motion to set aside
an administrative forfeiture where a plaintiff had “actual knowledge of the
DEA’s participation and actual knowledge of the seizure of the currency by law
enforcement officers.” VanHorn v. Drug Enforcement Admin., 677 F.Supp.2d
1299, 1311 (M.D. Fla. 2009).
The Court notes that all of the opinions discussed above were issued
after evidentiary hearings were held. In each of the cases, the plaintiffs knew
that law enforcement officers had seized their property. By contrast, here, the
Complaint acknowledges that Walteros was present at the time of the seizure,
but alleges that Walteros had to hire a private investigator to determine who
took his money and why. Moreover, the letters from Walteros’s counsel to the
DEA that are attached to the Complaint allege that the money was seized “by
unidentified individuals in civilian clothing,” and that “civilian dressed
individuals approached Claimant Walteros . . . did not identify themselves . . .
and thereafter took his property without providing any receipts, business
cards, or identification.” (Compl. 26, 39.) Thus, contrary to the cases discussed
above, the allegations in the Complaint are sufficient to draw a reasonable
inference that the Plaintiff did not know that it was law enforcement officers
who took his money. The DEA disputes the allegations in the Complaint

concerning Walteros’s knowledge, but the Court must accept the allegations as
true for purposes of a motion to dismiss. Hishon, 467 U.S. at 73.
Next, the DEA argues that it took reasonable steps to provide the Plaintiff
with notice of the seizure, relying on various assertions of fact concerning its
attempts to provide notice. (Resp. 3-5, 11-2.) Once again, the Court notes that
it must accept the Plaintiff’s allegations as true for purposes of a motion to
dismiss. Hishon, 467 U.S. at 73. The Complaint alleges that the DEA sent a
written notice of the seizure to the Deauville Hotel, despite the fact that DEA
agents knew that the Plaintiff was no longer staying there and had moved to
the Parisian. (Mot. 6.) Thus, the allegations in the Complaint are sufficient to
draw an inference that the DEA failed to take reasonable steps to provide
Walteros with notice.
Finally, the DEA argues that the Court does not have jurisdiction over
the Plaintiff’s request for injunctive relief under Federal Rule of Criminal
Procedure 41(g) because a motion to set aside an administrative forfeiture
under 18 U.S.C. § 1983(e) is the only remedy available once administrative
forfeiture has been completed. (Mot. 13-15.) Rule 41(g) provides that “[a] person
aggrieved by an unlawful search and seizure of property or by the deprivation
of property may move for the property’s return.” However, 18 U.S.C. §
1983(e)(5) provides that “[a] motion filed under this subsection shall be the
exclusive remedy for seeking to set aside a declaration of forfeiture,” and the
Eleventh Circuit has held that Rule 41(g) “applies only to criminal proceedings
and is expressly inapplicable to forfeiture of property in violation of a statute of
the United States.” Matter of Sixty Seven Thousand Four Hundred Seventy
Dollars ($67,470.00), 901 F.2d 1540, 1544 n.4 (11th Cir. 1990) (citations
omitted); see also U.S. v. Eubanks, 169 F.3d 672, 674 (11th Cir. 1999)
(citations omitted) (“A rule 41(e)2 motion is unavailable, however, when
property is retained pursuant to civil forfeiture instead of for use as evidence.”).
Therefore, the DEA is correct that the Court does not have jurisdiction over the
Plaintiff’s request for injunctive relief under Rule 41(g).
4. Conclusion
Accordingly, the Court grants in part and denies in part the DEA’s
motion to dismiss. The Court denies the DEA’s motion to dismiss for
insufficient service of process, and denies the DEA’s request to dismiss the
Plaintiff’s claim under 18 U.S.C. § 1983(e). However, the Court grants the
DEA’s request to dismiss the Plaintiff’s claims under Federal Rule of Criminal
Jurisdiction 41(g), and dismisses those claims for lack of jurisdiction.
2

Rule 41(g) was previously Rule 41(e).

The Court refers this matter to United States Magistrate Judge Edwin G.
Torres to conduct an evidentiary hearing and for a report and
recommendations on the merits of the Plaintiff’s Complaint/Motion/Petition to
Set Aside DEA Administrative Forfeiture and Motion for Return of Property,
consistent with 28 U.S.C. § 636(b)(1)(B), Federal Rule of Civil Procedure 72,
and Rule 1(d) of the Local Magistrate Judge Rules.
Done and ordered in chambers, at Miami, Florida, on January 23, 2018.
________________________________
Robert N. Scola, Jr.
United States District Judge