United States of America v. 5294 Bandy Road

Filing 35

MEMORANDUM DECISION AND ORDER, Claimant Nathan Schumacher's Motion for Summary Judgment (Dkt. 19 ) is GRANTED IN PART AND DENIED IN PART. Plaintiff's Motion to Strike Claim of Nathan Schumacher and for Summary Judgment (Dkt. 28 ) is GRAN TED IN PART AND DENIED IN PART. ( Telephonic Status Conference set for 11/12/2014 02:00 PM in Telephonic Hearing - Boise Courtroom 6 before Judge Candy W. Dale.) Signed by Judge Candy W. Dale. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jp)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

UNITED STATES OF AMERICA,
Case No. 2:12-cv-00296-CWD
Plaintiff,
MEMORANDUM DECISION AND
ORDER

v.
Real Property located at 5294 BANDY
ROAD, PRIEST RIVER, BONNER
COUNTY, IDAHO, and all fixtures,
improvements, and appurtenances
thereon (Owner of Record: Nathan A.
Schumacher),
Defendant,
NATHAN SCHUMACHER and DANE
SCHUMACHER,
Claimants.

This is a civil asset forfeiture action under 21 U.S.C. § 881 and 18 U.S.C. § 983.
The Government of the United States of America brings this action in rem against real
property located at 5295 Bandy Road in Priest River, Idaho, and all fixtures,
improvements, and appurtenances to it (the Property). Dane Schumacher resided at the
Property from 2005 until 2012, when he was arrested on, and later pled guilty to, state
felony drug charges related to an indoor marijuana growing operation at the Property.
MEMORANDUM DECISION AND ORDER - 1

Dane’s son, Nathan Schumacher, has held legal title to the Property since 2006. Both
Dane and Nathan Schumacher claim interests in the Property, and Nathan seeks dismissal
of the forfeiture action. 1
Before the Court are the parties’ cross-motions for summary judgment. In a
motion filed on March 10, 2014, (Dkt. 19), Nathan asserts two grounds for dismissal of
the United States’ forfeiture action against the Property. First, he argues his ownership
interest in the Property is not forfeitable because he is an “innocent owner” as defined in
18 U.S.C. § 983(d). In the alternative, he claims forfeiture of the Property would be in
violation of the Excessive Fines Clause of the Eighth Amendment to the Constitution of
the United States.
The Government filed its Motion to Strike the Claim of Nathan Schumacher and
for Summary Judgment, (Dkt. 28), on August 4, 2014, pursuant to Rule G(8)(c) of the
Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions
(Supplemental Rules). Relying on Nathan’s statement of undisputed facts (Dkt. 19-2), the
Government claims Nathan lacks standing to challenge the forfeiture and does not meet
the statutory definition of an “innocent owner” because, despite holding legal title to the
Property, Nathan did not exercise dominion and control over it. Additionally, the
Government requests summary judgment of forfeiture, arguing Nathan’s Eighth
Amendment analysis is premature until the forfeiture judgment issues.

1

For clarity, the Court will refer to the Schumachers by their first names or will use “son”
to refer to Nathan and “father” to refer to Dane.
MEMORANDUM DECISION AND ORDER - 2

A hearing on these matters was held on October 22, 2014, at which time the Court
took all pending motions under advisement. After carefully considering the record, the
arguments of the parties, and applicable law, the Court will grant in part and deny in part
both motions.
BACKGROUND
1.

Undisputed facts
In July of 2005, Marsha Hester conveyed the Property by warranty deed to Dane,

following Dane’s purchase of the Property for approximately $65,000. At the time of
purchase, the Property was undeveloped, but Dane later erected a dwelling on it.
In December of 2005, while the dwelling was still under construction, Dane
suffered a heart attack and underwent triple-bypass surgery. After his heart surgery, Dane
executed a quitclaim deed transferring the Property to his son, Nathan, on June 6, 2006.
(N. Schumacher Stmnt. of Facts, Ex. A, Dkt. 19-3 at 2.) The quitclaim deed was recorded
the same day. (Id.) According to the Schumachers, Dane conveyed the property to Nathan
as an estate planning measure and in anticipation of further health problems. (D.
Schumacher Aff. ¶ 9, Dkt. 19-3 at 5; N. Schumacher Aff. ¶ 3, Dkt. 19-3 at 10.) Dane
continued to reside in the dwelling on the Property while Nathan continued to reside on
his farm in Rathdrum, Idaho.
Nathan has paid all property taxes for the Property after execution of the 2006
quitclaim deed. (Tax Records, Dkt. 30-1 at 2-9.) Additionally, Nathan held and paid
premiums on an insurance policy covering the Property, the correspondence for which is
mailed to Nathan’s residence in Rathdrum. Nathan also stored farm equipment on the
MEMORANDUM DECISION AND ORDER - 3

Property and paid for improvements, maintenance, and repairs to the Property. Dane, on
the other hand, lived on the Property rent free, kept his vehicle and all his personal
belongings on the Property, and paid for the utilities.
Dane at some point in time operated a marijuana growing operation concealed in
two rooms beneath the living quarters in the dwelling on the Property. Dane kept the
grow area locked at all times and possessed the only key. (D. Schumacher Aff. ¶ 12, Dkt.
19-3 at 6.) Although the parties dispute when Dane began growing marijuana at the
Property, utility records indicate that power usage at the Property rose from 304 kilowatt
hours per month (KWH/month) to 2,483 KWH/month in November of 2008 and
remained above 2,000 KWH/month through June of 2012. (Wiseman Aff. ¶ 11, Dkt. 1-1
at 5.) This level of power usage is high for a single-occupant dwelling and is unusual in
that it did not significantly vary with the seasons. (Id.)
In March of 2012, the Idaho State Police began investigating a suspected
marijuana growing operation on the Property. On June 12, 2012, Idaho State Police
detectives and officers from the Bonner County Sheriff’s Office served a search warrant
on Dane’s residence at the Property. The search revealed an active indoor marijuana
grow, consisting of 65 plants in various stages of growth, packing materials, scales, and
various other drug paraphernalia. Dane was arrested by Idaho authorities and charged by
information with one felony count of manufacturing marijuana and one felony count of
possessing marijuana with intent to distribute in the First Judicial District of the State of
Idaho, in and for the County of Bonner. In April of 2013, Dane plead guilty to both
counts. In June of that year, Dane received a withheld judgment and a withheld sentence
MEMORANDUM DECISION AND ORDER - 4

pending successful completion of three years of supervised probation and payment of
$500 in restitution and $270 in fees and costs.
2.

Procedural history
The Government initiated this lawsuit on June 12, 2012, by filing a Verified

Complaint In Rem against the Property, alleging the Property is subject to forfeiture
under 21 U.S.C. § 881(a)(6)—as proceeds traceable to a drug exchange—and under
§ 881(a)(7)—as property used in connection with a drug offense. (Dkt. 1.) Pursuant to 18
U.S.C. § 985(c), the United States posted a Notice of Forfeiture on the Property on July
26, 2012. (Dkt. 2.) On August 22, 2012, Nathan filed a Verified Statement of Interest,
claiming sole ownership of the Property by virtue of the June 6, 2006 quitclaim deed.
(Dkt. 3.) Dane received notice of this forfeiture action on August 22, 2012, and filed a
Verified Statement of Interest in the Property on September 5, 2012.
On September 25, 2012, the Schumachers moved to stay further proceedings,
pending resolution of the criminal charges against Dane. (Dkt 14.) In response, the
Government argued against a stay at least until it could serve and receive responses to
special interrogatories pertaining to ownership of the Property. The Court denied the
motion to stay in an Order dated January 11, 2013. Thereafter, acting under Supplemental
Rule G(6), the Government served special interrogatories and requests for production of
documents on Dane and Nathan. In April of 2013, the Schumachers served their
respective answers to the special interrogatories and produced certain documents to the
Government. (D. Schumacher Ans., Dkt. 19-3 at 13–21; N. Schumacher Ans., Dkt. 19-3

MEMORANDUM DECISION AND ORDER - 5

at 29–37.) The Government did not request additional discovery or seek clarification of
any of the Schumachers’ answers to the special interrogatories.
There was no apparent action in the case for almost one year. On March 7, 2014,
the Court ordered the parties to participate in a judicially supervised settlement
conference before the Honorable Richard Tallman. Nathan filed his motion for summary
judgment three days later. (Dkt. 19.) Nathan’s motion argues the case should be
dismissed because Nathan is an “innocent owner” under 18 U.S.C. § 983(d) and because
the forfeiture would be constitutionally excessive, but it does not challenge the Property’s
forfeitability under §§ 881(a)(6) or (7). Thereafter, on March 24, the Government
withdrew from the settlement conference, explaining that it would be more appropriate to
respond to Nathan’s motion for summary judgment. (Dkt. 20.) The Government filed a
response on April 24, claiming disputed issues of fact preclude summary judgment in
favor of Nathan. (Dkt. 24.) Nathan replied on May 12, 2014, (Dkt. 25), and, one week
later, the Court set the matter for an August 19 hearing.
On August 4, 2014, the Government requested that the hearing be continued,
based on scheduling conflicts of both counsel, and also filed its Motion to Strike Claim of
Nathan Schumacher and for Summary Judgment of Forfeiture. (Dkt. 28.) In its motion,
the Government asserts Nathan lacks both standing and the dominion and control over
the Property necessary to establish the innocent owner defense. The Court reset the
hearing on Nathan’s motion for October 22, 2014. Meanwhile, on August 28, 2014,
Nathan filed a response in opposition to the United States’ motion to strike, arguing the
undisputed facts establish both his standing to contest the forfeiture and his dominion and
MEMORANDUM DECISION AND ORDER - 6

control over the Property. The Government did not file a reply brief. However, on
October 17, 2014, the Government filed a “Pre-hearing Memorandum of Recent Cases
[sic],” citing a single case—United States v. 2007 Honda Civic EX Sedan, 13-CV-483JDP, 2014 WL 4211203 (W.D. Wis. Aug. 25, 2014). 2 As requested by the Government,
(Dkt. 28-1 at 17), the Court heard argument on all pending motions during the October
22, 2014 hearing.
All parties have given their express written consent to proceed before the
undersigned United States Magistrate Judge. (Dkt. 11.) Accordingly, the Court now
addresses the parties’ cross-motions for summary judgment.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 56 “is silent as to how the court must analyze
simultaneous cross-motions for summary judgment.” Fair Hous. Council of Riverside
County, Inc. v. Riverside Two, 249 F.3d 1132, 1135 (9th Cir. 2001). However, the United
States Court of Appeals for the Ninth Circuit has held that “when parties submit crossmotions for summary judgment, each motion must be considered on its own merits.” Id.
at 1136 (citing William W. Schwarzer, et al., The Analysis and Decision of Summary
Judgment Motions, 139 F.R.D. 441, 499 (Feb. 1992)) (internal quotations and alterations
omitted). Although the Court must decide each party’s motion on an individual basis and

2

This case holds that a claimant who does not qualify as an “owner” for purposes of the
innocent owner defense cannot assert an Eighth Amendment challenge to a civil forfeiture. 2007
Honda Civic, 2014 WL 4211203, at *5. However, cases decided in the Western District of
Wisconsin are not binding on this Court. And, as the Court’s analyses of the innocent owner and
Eighth Amendment issues will show, 2007 Honda Civic is not relevant to the Court’s decisions
on the instant motions.
MEMORANDUM DECISION AND ORDER - 7

in accord with Rule 56 standards, the decision must be made in light of the evidence
offered to support both motions. Id. (quoting Charles Alan Wright, Arthur R. Miller &
Mary Kay Kane, Federal Practice and Procedure § 2720, at 335-36 (3d ed. 1998)).
Therefore, when cross-motions for summary judgment are filed, each motion must be
“considered with all reasonable inferences favoring the nonmoving party.” Baldwin v.
Trailer Inns, Inc., 266 F.3d 1104, 1117 (9th Cir. 2001).
One of the principal purposes of summary judgment “is to isolate and dispose of
factually unsupported claims . . . .” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24
(1986). It is “not a disfavored procedural shortcut,” but is instead the “principal tool[ ] by
which factually insufficient claims or defenses [can] be isolated and prevented from
going to trial with the attendant unwarranted consumption of public and private
resources.” Id. at 327. “[T]he mere existence of some alleged factual dispute between
the parties will not defeat an otherwise properly supported motion for summary
judgment; the requirement is that there be no genuine issue of material fact.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986).
The evidence must be viewed in the light most favorable to the non-moving party,
and the Court must not make credibility findings. Id. at 255. Direct testimony of the nonmovant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d 1152,
1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt unreasonable
inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d 1205, 1208 (9th
Cir. 1988).

MEMORANDUM DECISION AND ORDER - 8

The moving party bears the initial burden of demonstrating the absence of a
genuine issue of material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001)
(en banc). To carry this burden, the moving party need not introduce any affirmative
evidence (such as affidavits or deposition excerpts) but may simply point out the absence
of evidence to support the nonmoving party’s case. Fairbank v. Wunderman Cato
Johnson, 212 F.3d 528, 532 (9th Cir.2000).
This shifts the burden to the non-moving party to produce evidence sufficient to
support a jury verdict in his favor. Id. at 256-57. The non-moving party must go beyond
the pleadings and show “by her affidavits, or by the depositions, answers to
interrogatories, or admissions on file” that a genuine issue of material fact exists.
Celotex, 477 U.S. at 324.
However, the Court is “not required to comb through the record to find some
reason to deny a motion for summary judgment.” Carmen v. San Francisco Unified Sch.
Dist., 237 F.3d 1026, 1029 (9th Cir.2001) (quoting Forsberg v. Pac. Nw. Bell Tel. Co.,
840 F.2d 1409, 1418 (9th Cir. 1988)). Instead, the “party opposing summary judgment
must direct [the Court’s] attention to specific triable facts.” S. Cal. Gas Co. v. City of
Santa Ana, 336 F.3d 885, 889 (9th Cir. 2003). Statements in a brief, unsupported by the
record, cannot be used to create an issue of fact. Barnes v. Indep. Auto. Dealers, 64 F.3d
1389, 1396 n.3 (9th Cir. 1995).
DISCUSSION
When a claimant seeks dismissal of a civil forfeiture action, standing is the
threshold question. Supp. R. G(8)(c)(ii)(A). The Court may consider the merits of the
MEMORANDUM DECISION AND ORDER - 9

claimant’s motion to dismiss the forfeiture action only if the claimant has standing. Id.
For that reason, the Court will address both Article III and statutory standing before
addressing whether the property is forfeitable, whether Nathan qualifies as an innocent
owner, and whether the forfeiture should be considered excessive under the Eighth
Amendment.
1.

Nathan has standing to challenge the forfeiture
A.

Article III Standing

To have Article III standing to challenge an in rem civil forfeiture, a claimant must
establish an injury in fact, a causal connection between the injury and the conduct
complained of, and that it is likely the injury will be redressed by a favorable decision.
United States v. $133,420 in U.S. Currency, 672 F.3d 629, 637 (9th Cir. 2012). At the
summary judgment stage, a civil forfeiture claimant can meet this burden by producing
“some evidence of ownership.” Id. at 638. But the burden is “not a heavy one; the
claimant need demonstrate only a colorable interest in the property, for example, by
showing actual possession, control, title, or financial stake.” United States v. 5208 Los
Franciscos Way, 385 F.3d 1187, 1191 (9th Cir. 2004); see also United States v. One
Lincoln Navigator 1998, 328 F.3d 1011, 1013 (8th Cir. 2003) (finding “bare legal title”
sufficient to establish Article III standing). In this case, Idaho law determines whether
Nathan has an ownership interest in the Property. 5208 Los Franciscos Way, 385 F.3d at
1191; see also United States v. Ranch Located in Young, Ariz., 50 F.3d 630, 632 (9th Cir.
1995) (“In drug forfeiture actions, ownership is determined by state law”).

MEMORANDUM DECISION AND ORDER - 10

The Government cites United States v. Nava for the proposition that “possession
of mere legal title by one who does not exercise dominion and control over the property
is insufficient even to establish standing to challenge a forfeiture.” 404 F.3d 1119, 1130
n.6 (9th Cir. 2004). However, Nava addressed an in personam criminal forfeiture
proceeding under 21 U.S.C. § 853. This case, by contrast, is an in rem proceeding
governed by 18 U.S.C. § 983. Cases like this one involve “two separate inquiries [into
ownership]: (1) whether a claimant has sufficient ownership interest in the defendant
property to confer Article III standing and (2) whether the claimant is an ‘innocent
owner’ under 18 U.S.C. § 983(d).” 5208 Los Franciscos Way, 385 F.3d at 1191 n.3
(citing One Lincoln Navigator, 328 F.3d at 1014). Given this distinction and the
principles outlined above, bare legal title is sufficient to establish a colorable interest in
the defendant property for Article III purposes but may be insufficient for the purpose of
establishing the innocent owner defense under 18 U.S.C. § 983(d).
Under Idaho law, “a quitclaim deed conveys whatever interest the grantors possess
at the time of the conveyance[, including] legal title.” Luce v. Marble, 127 P.3d 167, 173
(Idaho 2005). “Idaho law presumes that the holder of title to the property is the legal
owner of that property.” Id. Further, a recorded conveyance serves as constructive notice
of its contents from the time of recordation. Idaho Code § 55-811.
Here, there is no dispute that Dane owned the Property in its entirety when he
conveyed “all of [his] right, title, and interest” in the Property to Nathan by quitclaim
deed on June 6, 2006. (N. Schumacher Stmnt. of Facts, Ex. A, Dkt. 19-3 at 2.) The
Schumachers’ uncontradicted testimony is that Dane quitclaimed the Property to Nathan
MEMORANDUM DECISION AND ORDER - 11

as an estate planning measure following Dane’s heart attack in late 2005 and triplebypass surgery in early 2006. (D. Schumacher Aff. ¶ 9, Dkt. 19-3 at 5; N. Schumacher
Aff. ¶ 3, Dkt. 19-3 at 10.) The deed was recorded immediately, giving the Government
constructive notice of Nathan’s title to the Property. Moreover, the Government readily
found notice of the transfer before filing this action. (Wiseman Aff. ¶ 8, Dkt. 1-1 at 4)
(“A search of Bonner County Records showed that the property at 5294 Bandy Road is
owned by Nathan Allen Schumacher.”). These undisputed facts give rise to the
presumption that Nathan is the owner of the Property. See Luce, 127 P.3d at 173.
Faced with Nathan’s showing, the Government correctly notes that the quitclaim
deed would be void if it was a fraudulent conveyance. See Idaho Code §§ 55-901 through
55-921 (Idaho Uniform Fraudulent Transfer Act); see also 5208 Los Franciscos Way,
385 F.3d 1187 (affirming summary judgment based on unopposed showing of fraudulent
conveyance under the California Uniform Fraudulent Transfer Act). The existence of a
fraudulent conveyance is a question of fact. Idaho Code § 55-908. And the party
challenging the conveyance has the burden of proving the fraud. Mohar v. McLelland
Lumber Co., 501 P.2d 722, 727 (Idaho 1972).
Here, the Government does not acknowledge these basic principles, nor does it
apply Idaho law to the record. Instead, it vaguely alludes to two liens on the Property—
apparently related to medical services rendered to Dane in 2005 and 2006—and recites
the facts of a case applying California law, United States v. Beretta, C 07-02930 SI, 2008
WL 4862509 (N.D. Cal. Nov. 11, 2008). (Dkt. 24 at 6-8.) Missing from this cursory
argument is any discussion of specific triable facts in this record or the implications of
MEMORANDUM DECISION AND ORDER - 12

those facts in light of Idaho law. Moreover, the Government admitted in its summary
judgment brief, and during oral argument, that Nathan holds “mere legal title.” (Dkt. 28-1
at 12.)
As discussed above, the Ninth Circuit has held that title alone is sufficient to meet
the undemanding test for Article III standing in a civil forfeiture action. 5208 Los
Franciscos Way, 385 F.3d at 1191. Nathan presented evidence that Dane conveyed the
Property to him in 2006 by quitclaim deed. The Government’s conclusory suggestion that
the deed could be fraudulent is insufficient to raise a genuine dispute of material fact, for
Nathan rebuts the suggestion with a specific application of Idaho law. (Dkt. 25 at 5–7.)
Therefore, undisputed facts establish Nathan’s Article III standing to challenge the
forfeiture.
B.

Statutory Standing

To establish statutory standing in a civil forfeiture action, the claimant must
comply with the procedural requirements of 18 U.S.C. § 983(a)(4) as well as those in the
Supplemental Rules. United States v. Various Coins, No. 3:11-cv-387, 2013 WL
1183312, *5 (D. Or. Mar. 21, 2013), subsequent determination, 2014 WL 1309340 (D.
Or. Mar. 31, 2014). The Government claims Nathan lacks statutory standing, but its
argument conflates the concept of statutory standing with the “owner” element of
Nathan’s innocent owner defense under 18 U.S.C. § 983(d)(6). Under the modern
statutory framework, these are distinct inquiries. United States v. $133,420 in U.S.
Currency, No. CV-09-8096, 2010 WL 1433427, *4 (D.Ariz. Apr. 9, 2010) (rejecting
argument that claimant must be an “owner” under 19 U.S.C. § 983(d)(6) to have statutory
MEMORANDUM DECISION AND ORDER - 13

standing), aff'd, 672 F.3d 629 (9th Cir. 2012). Thus, the Government’s argument that
Nathan is merely a nominee and not an “owner” goes to the merits of Nathan’s innocent
owner defense, not the threshold question of statutory standing. See One Lincoln
Navigator, 328 F.3d at 1015. The Government does not challenge Nathan’s compliance
with the applicable claim procedures.
2.

The Property is forfeitable under 21 U.S.C. § 881(a)(7)
The Government has the burden of proving the Property is subject to forfeiture by

a preponderance of the evidence. 18 U.S.C. § 983(c)(1). The Government must “establish
that there was a substantial connection between the property and the offense” the
Property facilitated or was used to commit. Id. § 983(c)(3). Here, the Government claims
the Property is subject to forfeiture under 21 U.S.C. §§ 881(a)(6) and (7), which provide:
(a) Subject property
The following shall be subject to forfeiture to the United States and no
property right shall exist in them:
***
(6) All . . . things of value furnished or intended to be furnished by any
person in exchange for a controlled substance . . . in violation of this
subchapter[, 21 U.S.C. §§ 801–904,] [and] all proceeds traceable to such an
exchange, and all moneys, negotiable instruments, and securities used or
intended to be used to facilitate any violation of this subchapter[, 21 U.S.C.
§§ 801–904,].
(7) All real property, including any right, title, and interest (including any
leasehold interest) in the whole of any lot or tract of land and any
appurtenances or improvements, which is used, or intended to be used, in
any manner or part, to commit, or to facilitate the commission of, a
violation of this subchapter[, 21 U.S.C. §§ 801–904,] punishable by more
than one year’s imprisonment.

MEMORANDUM DECISION AND ORDER - 14

Summary judgment on forfeitability is appropriate if there is no genuine dispute of
material fact as to whether the Property constitutes proceeds of a controlled substance
exchange or whether the Property was used commit a federal drug crime.
The Government presents no evidence to show the Property is forfeitable as
proceeds of a controlled substance exchange under § 881(a)(6). Nor does Nathan
challenge this theory of forfeiture in his motion for summary judgment. Given the
parties’ lack of attention to this theory, neither party is entitled to summary judgment on
the issue.
But there is no dispute that the Property is subject to forfeiture under § 881(a)(7).
The record establishes the Property was used to manufacture marijuana. Indeed, Dane
Schumacher plead guilty to manufacturing marijuana with intent to deliver and
possessing marijuana with intent to deliver, both felonies under Idaho Code § 372732(a)(1). (Sentencing Disposition for D. Schumacher, Dkt. 19-3 at 49-51.) Such
conduct would, if charged under federal law, constitute a violation of 21 U.S.C. § 841
punishable by more than one year of imprisonment. And there is no dispute that the
Property was substantially connected to Dane’s criminal offenses. 3 Thus, the undisputed
facts establish the Property is forfeitable under § 881(a)(7).

3

No federal criminal charges were brought against Dane or Nathan. Nathan notes this fact
in his opposition to the Government’s motion, (Dkt. 30 at 7 n.2), but does not argue the forfeiture
is improper on this basis. Moreover, the Court is satisfied that it has subject matter jurisdiction
over this action, considering the many cases where property involved in state-law offenses has
been forfeited under federal law. E.g., United States v. 6380 Little Canyon Rd., 59 F.3d 974 (9th
Cir. 1995) (addressing forfeiture of property used in connection with California drug crimes
under 21 U.S.C. § 881(a)(7)), abrogated on other grounds by United States v. Bajakajian, 524
U.S. 321(1998).
MEMORANDUM DECISION AND ORDER - 15

3.

Nathan is entitled to summary judgment on the “owner” element but not the
“innocent” element of his innocent owner defense
Once forfeitability is established, the burden shifts to the claimant to prove he is

an “innocent owner” under 18 U.S.C. § 983(d). “An innocent owner's interest in property
shall not be forfeited under any civil forfeiture statute.” Id. § 983(d)(1). This provision is
part of the uniform innocent owner defense created by the Civil Asset Forfeiture Reform
Act of 2000 (CAFRA). Pub. L. 106-185, § 2(a), 114 Stat. 202 (2000). The Ninth Circuit
explained:
With this [uniform innocent owner defense], Congress ensured that
modern-day forfeiture differs from historical forfeiture, since the Supreme
Court had earlier noted a “long and unbroken line of cases” which had
previously held that, under certain historical forfeiture provisions, “an
owner's interest in property may be forfeited by reason of the use to which
the property is put even though the owner did not know that it was to be put
to such use.” Bennis v. Michigan, 516 U.S. 442, 446 . . . (1996). Under
CAFRA, this type of forfeiture is no longer permitted.
United States v. Ferro, 681 F.3d 1105, 1112 (9th Cir. 2012). To successfully assert the
defense, the claimant must prove by a preponderance of the evidence that he is both
innocent and an owner under within the meaning of § 983(d). Ferro, 681 F.3d at 1109.
The parties dispute both elements of the defense.
A.

Ownership

As defined in the relevant portion of 18 U.S.C. § 983(d)(6), the term “owner”:
(A) means a person with an ownership interest in the specific property
sought to be forfeited, including a leasehold, lien, mortgage, recorded
security interest, or valid assignment of an ownership interest; and
(B) does not include—
***
MEMORANDUM DECISION AND ORDER - 16

(iii) a nominee who exercises no dominion or control over the
property.
The parties’ dispute centers on § 983(d)(6)(B)(iii). The Government contends Nathan is
merely a nominee, lacking the dominion and control necessary to qualify as an owner
under the statute. Nathan argues he holds legal title to the Property and exercises
dominion and control over the Property similar to that of a landlord.
The existence of an ownership interest for purposes of § 983(d)(6)(A) is a question
of state law, but federal law determines whether a claimant is a “nominee who exercises
no dominion and control” under § 983(d)(6)(B)(iii). One Lincoln Navigator, 328 F.3d at
1015. As the record owner of the Property, Nathan has an ownership interest in the
Property. While the terms “nominee” and “dominion and control” are not defined in the
statute, federal case law on the subject “tends to focus on the degree, quality, and
genuineness of claimant’s dominion and control over the defendant property.” Various
Coins, 2013 WL 1183312, *9. In these cases, the courts typically look beyond formal
legal title to determine whether the claimant exercises “some dominion and control.”
United States v. One 1990 Beechcraft Aircraft, 619 F.3d 1275, 1278 (11th Cir. 2010)
(emphasizing “a claimant must be more than a ‘nominee with no dominion and
control’”). This requirement “ensures that claimants at least have some actual connection
to the property in question; they cannot be only bare title holders.” Id. at 1279.
The Eleventh Circuit’s decision in 1990 Beechcraft is instructive. There, the
Government brought a civil asset forfeiture action against an aircraft used to smuggle
cocaine from Venezuela into the United States. The legal title holder, International
MEMORANDUM DECISION AND ORDER - 17

Aviation, LLC, asserted the innocent owner defense, arguing “it exercised some
dominion and control when it signed the aircraft's ownership documents, held title to the
aircraft, signed the aircraft's lease, reviewed the flight logs of the airplane, and supervised
the repairs of the aircraft while it was leased.” Id. The Eleventh Circuit noted that these
tasks would have established dominion and control if performed by International
Aviation. Id. But, because the district court found that all of the tasks were actually
performed by the owner of the company leasing the plane—who held a 75% stake in
International and happened to be the father of International’s sole employee—the
Eleventh Circuit affirmed the finding that International was merely a nominee. Id.
Here, by contrast, there is no genuine dispute that Nathan displayed indicia of
dominion and control beyond holding legal title to the Property. He has paid taxes on the
Property since 2006. He holds an insurance policy on the Property and paid for insurance,
improvements, maintenance, and repairs at the Property. The Government acknowledges
that Nathan stored farm equipment on the Property. These indicia demonstrate a more
substantial connection to the Property than the paper ownership and supervisory tasks the
Eleventh Circuit cited as sufficient evidence of “some dominion and control” in 1990
Beechcraft. 619 F.3d at 1279. And, unlike that case, the Government presents no
evidence that someone other than Nathan actually performed the tasks evidencing
dominion and control.
Rather, the Government presents evidence that Dane had more dominion and
control over the Property than Nathan. Specifically the Government notes:

MEMORANDUM DECISION AND ORDER - 18

(1) [Nathan] has never occupied the Property . . .; (2) [Dane] and not
[Nathan] lives at the Property and has done so without interruption from the
day the grow-operation building was built, exercising full physical
possession and control; (3) [Nathan]’s minimal contacts with the Property
are all with [Dane]’s permission; (4) [Nathan] lacks access to the Property
without [Dane]’s permission; (5) [Nathan] admits that he did not control
what occurred at the Property (or else he would have been criminally liable
for it), (6) [Nathan] admits that his father locked off significant parts of the
property, and he was thereby denied any form of dominion or control over
the most critical part of it: the part which was being used in violation of
federal drug laws; and (7) [Nathan] has stated he was unaware of the
primary economic use of the property, which soley [sic] benefitted his
father, i.e., the large marijuana grow operation that occupied much of the
residence.
(Dkt. 28-1 at 13–14.) Most of these points are not in dispute. With respect to the third
and fourth points, however, the Government cites no evidence, aside from Dane’s
possession of the only key to the grow rooms, to substantiate its assertion that Nathan
needed his father’s permission access the Property. Dane’s exclusive control of the grow
rooms does not necessarily mean Nathan needed Dane’s permission to access the rest of
the Property. Therefore, the Court will not accept the Government’s third and fourth
assertions as undisputed facts.
As Nathan argues, the Government’s showing is suggestive of an informal
landlord-tenant relationship between son and father. Indeed, a lease operates to give the
tenant rights to possession and physical control of the leasehold. See generally Johnson v.
K-Mart Corp., 882 P.2d 971 (Idaho 1994). It is not uncommon for a tenant to pay utilities
on, store belongings at, and have the right to restrict third-party access to the leasehold. It
is also not surprising that a son would allow his father to live on the son’s property
without the legal and financial formalities of a lease between strangers. Even if the
MEMORANDUM DECISION AND ORDER - 19

undisputed evidence is viewed in the light most favorable to the Government, it does not
establish Nathan utterly lacked dominion and control over the Property.
The governing statute withholds the innocent owner defense only from “a nominee
who exercises no dominion and control over the property.” 18 U.S.C. § 983(d)(6)(B)(iii)
(emphasis added). The Government contends Dane’s continuous residence and illicit
activities at the Property demonstrate that Nathan had no dominion and control over the
Property—notwithstanding Nathan’s payments for a variety of the ownership expenses.
In support, the Government cites a string of cases and, without further discussion, asserts
“[t]his case is fundamentally the same.” (Dkt. 28-1 at 16.) It is not the same.
The only Ninth Circuit case in the Government’s list is United States v. Vacant
Land Located at 10th Street and Challenger Way, 15 F.3d 128 (9th Cir. 1993). Although
this case predates the uniform innocent owner defense now codified at 18 U.S.C.
§ 983(d), it directly addresses the issue of nominal ownership. In Challenger Way, the
claimant produced no evidence that he actually made payments, and the evidence showed
he could not even access the vacant lot in question because a third party possessed the
only keys. 15 F.3d at 130–31. Given this lack of evidence, the Ninth Circuit found “[n]ot
a jot or tittle of dominion and control” and concluded the claimant was a strawman for
the true owner. Id. at 130. Here, it is undisputed that Nathan actually made tax and other
payments on the Property and had some right of access, as evidenced by his storage of
farm equipment on the Property.
The Government’s cited cases from outside the Ninth Circuit are also
distinguishable. In each of the three cases, the timing of the transfer to the claimants was
MEMORANDUM DECISION AND ORDER - 20

suspect and the claimants did not pay any ownership expenses for the defendant
properties. See United States v. 500 Delaware St., 113 F.3d 310, 311 (2d Cir. 1997)
(finding nominal ownership where the post-arrest transfer was admittedly intended “to
avoid forfeiture” and where grantor continued to make all payments and repairs on the
property); United States v. 2930 Greenleaf St., 920 F. Supp. 639, 640–641 (E.D. Pa.
1996) (finding transfer conveyed no interest to claimant because it occurred after
Government initiated forfeiture proceedings and recorded a lis pendens); United States v.
Certain Real Property Located at River Rd., 839 F. Supp. 1, 2–3 (D. Me. 1993) (finding a
sham transfer where drug trafficker transferred ownership after notice of criminal
investigation and trafficker continued to live, maintain, and pay all expenses on the
defendant property). Unlike these cases, the record before the Court establishes that Idaho
authorities began investigating Dane’s drug trafficking activities in 2012—approximately
six years after Dane quitclaimed the Property to Nathan. In addition, the Government’s
evidence supports the inference that Dane began growing marijuana on the Property years
after the transfer—in November of 2008, when the power usage spiked and thereafter
remained suspiciously high. 4 Moreover, the Government does not present evidence to
rebut the Schumacher’s sworn statements that, following a heart attack and triple-bypass
4

Although the Government asserts Dane began growing marijuana on the Property before
he quitclaimed the Property to Nathan in June of 2006, it presents no evidence to support this
assertion. The only evidence of when the grow started appears in the affidavit of DEA Special
Agent Jon Wiseman, filed in support of the Government’s Verified Complaint. Wiseman
discusses suspiciously high power usage at the Property, implying that Dane began growing
marijuana on the Property in November of 2008. (Wiseman Aff. ¶ 11, Dkt. 1-1 at 5.) Therefore,
the Court finds no genuine dispute as to whether Nathan’s interest in the Property predates
Dane’s marijuana grow.
MEMORANDUM DECISION AND ORDER - 21

surgery, Dane executed the 2006 quitclaim deed to avoid probate. Thus, Nathan’s
payment of expenses for the Property, as well as the timing of and stated reason for the
transfer in 2006, underscore that this case is fundamentally different from those cited by
the Government.
To preclude summary judgment for Nathan on the issue of ownership, the
Government must show a genuine—as opposed to purported—dispute of material fact
suggesting that Nathan has no dominion and control over the Property. Anderson, 477
U.S. at 247–48. As discussed above, the uncontroverted evidence establishes that Nathan
not only holds legal title to the Property but also performed tasks indicative of true
ownership. The plain terms of § 983(d)(6)(B)(iii) make clear that the innocent owner
defense is unavailable if the claimant completely lacks dominion and control over the
Property. On this record, the Court cannot conclude Nathan had no dominion and control
over the Property. Rather, the undisputed facts establish that Nathan had sufficient
dominion and control to qualify as an owner under the statute.
B.

Innocence

The summary judgment record indicates Nathan became the Property’s owner in
June of 2006 and that Dane’s marijuana cultivation began in November of 2008. Where,
as here, the claimant’s ownership interest predates the conduct giving rise to forfeiture,
the claimant can establish his innocence in one of two ways. The claimant is innocent if a
preponderance of the evidence demonstrates he either “(i) did not know of the conduct
giving rise to the forfeiture; or (ii) upon learning of the conduct giving rise to the
forfeiture, did all that reasonably could be expected under the circumstances to terminate
MEMORANDUM DECISION AND ORDER - 22

such use of the property.” 18 U.S.C. § 983(d)(2)(A). “The innocent owner defense does
not apply, however, where the owner was willfully blind” to the activity giving rise to
forfeiture. United States v. 3814 Nw. Thurman St., 164 F.3d 1191, 1196 (9th Cir. 1999),
superseded by statute on other grounds as stated in Ferro, 681 F.3d at 1111–12.
Nathan’s testimony is that he “in no way knew that the property was being used
for a marijuana growing operation.” (N. Schumacher Aff. ¶ 4, Dkt. 19-3.) On the other
hand, the Government presents circumstantial evidence that Nathan was willfully blind to
the illegal activity on the Property. The Government cites, for example, the Affidavit of
Idaho State Police Detective Charles Greear, which notes the marijuana odor at the
Property was so strong at the time of the June 12, 2012 raid that “it would be impossible
for anyone not to notice.” (Greear Aff. ¶ 2, Dkt. 24-1 at 3.) Greear also explains that
video surveillance footage of the Property shows Nathan entering the dwelling on the
Property and staying inside for at least 15 minutes. (Id.)
While these facts support the inference that Nathan knew about, or was willfully
blind to, his father’s illicit activities, there is more than a scintilla of evidence to suggest
Dane effectively concealed the marijuana grow. See Anderson, 477 U.S. at 252 (“The
mere existence of a scintilla of evidence in support of the plaintiff's position will be
insufficient; there must be evidence on which the jury could reasonably find for the
plaintiff.”) For instance, Dane explained that a visitor would have to enter the hidden
grow rooms to know of their existence and that he kept the only key. (D. Schumacher
Aff. ¶¶ 10-11, Dkt. 19-3 at 6.) Consistent with Dane’s account, Dave Morgan, Dane’s
neighbor and a former law enforcement officer with experience investigating marijuana
MEMORANDUM DECISION AND ORDER - 23

growing operations, stated that he visited the Property three to five times per month since
the summer of 2005 but never knew Dane was growing marijuana there. (Morgan Aff.,
Dkt. 19-3 at 54.) Further, Detective Greear reported that Dane would allow the grow
rooms to “air out” if he expected visitors to the Property. (Greear Aff. ¶ 2, Dkt. 24-1 at
3.)
This record could support a reasonable jury finding either way. Given this
conflicting evidence, the Court finds there are genuine issues of material fact bearing on
Nathan’s innocence. Thus, neither party is entitled to summary judgment on the
innocence element of Nathan’s innocent owner defense. Supplemental Rule G(9)
authorizes, and Nathan has requested, a jury trial in this matter. Accordingly, the issue of
innocence is for a jury to decide.
4.

Nathan’s Eighth Amendment challenge is premature
In the alternative to his innocent owner defense, Nathan contends forfeiture of his

interest in the Property would violate the Excessive Fines Clause of the Eighth
Amendment. 5 A “claimant” with standing to challenge a forfeiture may “petition the
Court to determine whether the forfeiture was constitutionally excessive.” 18 U.S.C.
§ 983(g)(1). This analysis requires a comparison of the “forfeiture to the gravity of the
offense giving rise to the forfeiture.” Id. § 983(g)(2). The claimant must prove the

5

The Eighth Amendment provides: “Excessive bail shall not be required, nor excessive
fines imposed, nor cruel and unusual punishments inflicted.” U.S. Const. amend. VIII.

MEMORANDUM DECISION AND ORDER - 24

forfeiture is “grossly disproportional by a preponderance of the evidence at a hearing
conducted by the court without a jury.” Id. § 983(g)(3).
If the Court finds the claimant has met this burden, it must “reduce or eliminate
the forfeiture as necessary to avoid a violation of the Excessive Fines Clause of the
Eighth Amendment of the Constitution.” Id. § 983(g)(4); see also United States v.
Bajakajian, 524 U.S. 321, 331 n.6 (1998) (noting “a modern statutory forfeiture is a
‘fine’ for Eighth Amendment purposes if it constitutes a punishment even in part”). The
Ninth Circuit has held that every non-contraband civil forfeiture proceeding under 18
U.S.C. § 983 is at least in part punitive and therefore subject to excessiveness review.
Ferro, 681 F.3d 1105, 1114.
Supplemental Rule G(8)(e) allows a claimant to seek summary judgment on the
Eighth Amendment issue in certain circumstances. Specifically, the claimant must plead
the defense, and the parties must “have had the opportunity to conduct civil discovery on
the defense.” Supp. R. G(8)(e)(i)–(ii). Here, Nathan pleaded the defense, and the parties
have had more than one year to conduct discovery. But, as the Government notes, courts
often defer the excessive fines analysis until the case is resolved on the merits in the
Government’s favor. See, e.g., Ferro, 681 F.3d at 1109-10 (noting the district ordered
forfeiture before considering excessiveness).
Nathan argues excessiveness should be considered the leading issue because this
case involves an indivisible parcel of real property. In support, he cites the 2006 Advisory
Committee Notes for Supplemental Rule G(8)(e), which explain “it may be convenient to
resolve the issue [of excessiveness] by summary judgment before trial on the forfeiture
MEMORANDUM DECISION AND ORDER - 25

issues.” This statement is somewhat persuasive, considering that Supplemental Rule G
was adopted to “bring together the central procedures that govern civil forfeiture
actions.” Supp. R. G 2006 Advisory Committee Notes. Nevertheless, Nathan does not
cite—and the Court has not found—a case in which the court decided the constitutional
issue before the forfeiture issues.
Perhaps more significantly, accepting Nathan’s argument would result in the Court
deciding the constitutional question ahead of a jury’s determination of the statutory
innocent owner defense. “The Supreme Court has long held that courts should interpret
statutes in a manner that avoids deciding substantial constitutional questions.” Kim Ho
Ma v. Ashcroft, 257 F.3d 1095, 1106 (9th Cir. 2001). The constitutional issue here is no
doubt a substantial one. Indeed, the Ninth Circuit has held that the excessiveness analysis
necessarily includes a constitutional dimension. Ferro, 681 F.3d at 1117 (“But even if the
government is correct that the statutory inquiry for excessiveness under § 983(g)(3) is
limited to consideration of the conduct giving rise to the forfeiture, it is here where we
must break from the terms of the statute and proceed directly to the Eighth Amendment
analysis.”). That is because the Constitution requires consideration of the claimant’s
culpability even if § 983(g) only requires consideration of the conduct giving rise to the
forfeiture. Id.
At this stage in the proceeding, the Court is without the benefit of the jury’s
findings on whether Nathan knew of, or was willfully blind to, his father’s criminal
activities on the Property. Those findings would directly relate to Nathan’s culpability
and are thus an essential prerequisite to any constitutional inquiry.
MEMORANDUM DECISION AND ORDER - 26

Because this case may be resolved on a statutory basis, the Court finds an Eighth
Amendment analysis premature at this juncture. The jury’s findings on the issue of
Nathan’s innocence may obviate the need for a constitutional analysis. And, if the
constitutional analysis becomes necessary, the Court will have the benefit of the record
developed at trial.
CONCLUSION
Based on the foregoing, the Court finds that neither party is entitled to summary
judgment on a dispositive issue. Although Nathan established standing to challenge the
forfeiture and his ownership of the Property under 18 U.S.C. § 983(d)(6), there are
genuine issues of material fact as to his innocence under § 983(d)(2)(A). This factual
dispute, combined with the considerations discussed above, renders premature a decision
on Nathan’s Eighth Amendment defense. And, while the Government established the
Property is forfeitable under 21 U.S.C. § 881(a)(7), it presented insufficient evidence to
warrant summary judgment on forfeitability under § 881(a)(6). Therefore, this case will
proceed to a jury trial pursuant to Nathan’s request for the same.

MEMORANDUM DECISION AND ORDER - 27

ORDER
NOW THEREFORE IT IS HEREBY ORDERED:
1) Claimant Nathan Schumacher’s Motion for Summary Judgment (Dkt. 19) is
GRANTED IN PART AND DENIED IN PART.
2) Plaintiff’s Motion to Strike Claim of Nathan Schumacher and for Summary
Judgment (Dkt. 28) is GRANTED IN PART AND DENIED IN PART.
3) The Court will hold a Telephonic Status Conference on November 12,
2014, at 2 p.m. Mountain Time, at which time the parties should be
prepared to discuss a trial date and related deadlines.

October 31, 2014

MEMORANDUM DECISION AND ORDER - 28