United States of America v. $304,980.00 in United States Currency et al

Filing 43

ORDER denying 33 Motion for Summary Judgment: For the reasons thoroughly explained in the attached Order, the Court DENIES the Government's summary judgment motion. The final pretrial conference and bench trial remain set March 22, 2013 (10 a.m.) and April 8, 2013 (9:00 a.m.), respectively. Signed by Judge Michael J. Reagan on 3/1/13. (soh )

IN THE UNITED STATES DISTRIC COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
UNITED STATES OF AMERICA,
Plaintiff,
vs.
$304,980 in U.S. CURRENCY,
ONE 2006 PETERBILT SEMI
TRACTOR-TRAILER (Model 379),
and ONE 2004 GREAT DANE
REFRIGERATED SEMI TRAILER
(Model SE),
Defendants.

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Case No. 12-cv-0044-MJR-SCW

MEMORANDUM AND ORDER
REAGAN, District Judge:
A.

Introduction

By verified complaint filed in this Court, the United States of America (“the
Government”) seeks the civil forfeiture of $304,980 in United States currency plus a
tractor-trailer with its attachments and components, all of which was seized during an
August 2011 traffic stop on Interstate 70 in Madison County, Illinois (within this Judicial
District). Two Claimants contest the forfeiture – (1) Randy Davis, the 55-year old truck
driver who was the sole occupant of the tractor-trailer when it was stopped on I-70; and
(2) Randy’s wife, Delores Davis. The Davises claim that they lawfully own the tractortrailer and the money found inside the sleeping compartment of the truck. The Davises
filed a verified answer with their claims on February 2, 2012.

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Discovery proceeded, motions were filed and ruled on -- including a motion to
suppress evidence (on which a full evidentiary hearing was conducted) and a motion
for summary judgment, judgment on the pleadings, or to strike. Bench trial is set to
commence on April 8, 2013, following a March 22, 2013 final pretrial conference.
Now before the Court is the Government’s January 15, 2013 motion for summary
judgment (Doc. 33), which ripened with the filing of the Davises’ response on February
14, 2013 (Doc. 42). For the reasons explained below, the Court denies the motion.
B.

Summary of Key Facts and Allegations

Having thoroughly delineated the facts in the January 3, 2013 Order denying
suppression and summary judgment/judgment on the pleadings (Doc. 31), the
undersigned Judge need only briefly summarize the key points here.
On August 26, 2011, two DEA Task Force Officers (Kevin Thebeau and Derek
Hoelscher) were working a drug interdiction detail along I-70. They conducted a traffic
stop of a blue 2006 Peterbilt tractor-trailer which they observed following another
vehicle too closely. The officers issued a warning citation and engaged in conversation
with the driver (Randy Davis), advising him that they were looking for large quantities
of illegal drugs or U.S. currency. Ultimately, the officers secured consent to search the
vehicle. In the sleeping compartment, in an unlocked bin under the plywood board that
supported the mattress, the officers discovered over $304,000 in United States currency.
The currency was rubber-banded together inside “Ziplock” freezer bags. Photos of the
currency, as packaged, were provided with prior briefs in this case (see, e.g., attachments
to the Declaration of DEA Special Agent Michael Rehg, Doc. 34-16 through 34-18).
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Randy Davis was taken into custody and later released. The tractor-trailer and
currency were seized. According to the declarations of Officer Hoelscher and a third
DEA Task Force Officer, Christopher Singleton (Docs. 34-3, 34-11), a K-9 sniff
performed at the scene (by Officer Dean Bastilla of the Granite City, Illinois Police
Department and his K-9 partner, Am) resulted in a positive alert for the odor of illegal
narcotics on the currency, and a K-9 sniff conducted at the DEA’s office in Fairview
Heights, Illinois (by Singleton and his canine partner, Paco, this time using a series of
five identical paper bags on the floor, one with the evidence seized from the Peterbilt,
another with freshly-purchased Ziplock baggies of the same type used to package the
seized currency, and three completely empty) resulted in a positive alert for the odor of
narcotics on only the bag with the seized currency.
The Government alleges that the currency was furnished or intended to be
furnished in exchange for a controlled substance, or proceeds traceable to such an
exchange, or property used to facilitate a violation of 21 U.S.C. 801, et seq., and thus
subject to forfeiture under 21 U.S.C. 881(a)(6). The Government alleges that the tractortrailer is a conveyance used or intended to be used to transport, or to facilitate the
transportation, sale, receipt, possession or concealment of a controlled substance,
rendering the tractor-trailer forfeitable under 21 U.S.C. 881(a)(4).1

On joint motion of the parties, the Court authorized the
interlocutory sale of the tractor-trailer, with the proceeds being held by
the United States Marshal as a substitute res pending final disposition of
this matter (see Docs. 35, 36).
1

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Randy Davis does not face criminal charges arising from the traffic stop and
discovery of the currency. He is not a named defendant in any criminal proceeding.
Rather, he is a claimant in this civil proceeding; the res is the named Defendant. This
Court previously held that the Davises had standing to challenge the seizure of the res,
that the traffic stop was proper, and that Randy Davis consented to the search that led
to the discovery of the currency.
C.

Summary of Standards Applicable to Civil Forfeiture Actions

“Under the forfeiture provisions of the Comprehensive Drug Abuse Prevention
& Control Act of 1970, 21 U.S.C. 881, property used to commit a violation of the Act,
including proceeds traceable to drug trafficking, are forfeitable.”
$506,231 in U.S. Currency, 125 F.3d 442, 451 (7th Cir. 1997).

United States v.

As the party seeking

forfeiture, the government bears an initial burden to show that property is subject to
forfeiture.

The government may use direct evidence, circumstantial evidence and

hearsay evidence to show a nexus between the seized property and illegal activity. Id.
After this showing is made, the “ultimate burden shifts to the claimant” to prove that
the property is not subject to forfeiture by demonstrating that the property was not used
in connection with any illegal activity. Id., citing United States v. All Assets and
Equipment of West Side Bldg Corp., 58 F.3d 1181, 1187 (7th Cir. 1995), cert. denied, 516
U.S. 1042 (1996).
In its January 2013 motion denying the Davises’ suppression motion, the Court
explained that unlike criminal forfeitures, civil forfeitures operate in rem against the
property itself, under the theory that the property is guilty of the wrongdoing; the
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property owner’s culpability is not considered in determining whether the property
should be forfeited, and a conviction of the owner is irrelevant in a civil forfeiture
proceeding. See Doc. 31, p. 10; U.S. v. Ursery, 518 U.S. 267, 275 (1996) (In in rem
forfeitures, the property is considered the wrongdoer and proceeded against, as if it
were conscious instead of inanimate).
If the case goes to trial, the government bears the burden of establishing by a
preponderance of the evidence that the property is subject to forfeiture. And if the
government’s theory is that the property was used to commit or facilitate the
commission of a criminal offense, the government must establish that there was a
substantial connection between the property and the offense.

As the Seventh Circuit

explained when analyzing the civil forfeiture provision of the Controlled Substances
Act, 21 U.S.C. 881(a)(6):
Civil forfeiture standards are now subject to the Civil Asset Forfeiture
Reform Act of 2000 (“CAFRA”), 18 U.S.C. § 983(c)(1). CAFRA heightens
the government's evidentiary burden in civil forfeitures - the government
must demonstrate by a preponderance of the evidence that the property
sought is subject to forfeiture. See id….
Furthermore, § 983(c)(3) provides that “if the Government's theory of
forfeiture is that the property was used to commit or facilitate the
commission of a criminal offense, or was involved in the commission of a
criminal offense, the Government shall establish that there was a
substantial connection between the property and the offense.” Id.
United States v. Funds in Amount of Thirty Thousand Six Hundred Seventy Dollars,
403 F.3d 448, 454 (7th Cir. 2005). With that background, the Court turns to the pending
motion.

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D.

Analysis

Federal Rule of Civil Procedure 56 governs motions for summary judgment.
Summary judgment should be granted if “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Anderson v. Donahoe, 699 F.3d 989, 994 (7th Cir. 2012), citing FED. R. CIV. P. 56(a).
In assessing a summary judgment motion, the district court views all facts in the
light most favorable to – and draws all reasonable inferences in favor of -- the
nonmovants. Anderson, 699 F.3d at 994, citing Ault v. Speicher, 634 F.3d 942, 945 (7th
Cir. 2011). Accord Righi v. SMC Corp., 632 F.3d 404, 408 (7th Cir. 2011); Delapaz v.
Richardson, 634 F.3d 895, 899 (7th Cir. 2011); Spivey v. Adaptive Marketing, LLC, 622
F.3d 816, 822 (7th Cir. 2010); Reget v. City of La Crosse, 595 F.3d 691, 695 (7th Cir. 2010).
Once the movant challenges the factual support and legal soundness of the plaintiff’s
claim, the plaintiff acquires the burden of demonstrating that a genuine fact issue
remains for trial. Marcatante v. City of Chicago, 657 F.3d 433, 440 (7th Cir. 2011), citing
Boumehdi v. Plastag Holdings, LLC, 489 F.3d 781, 787 (7th Cir. 2007).
A genuine issue of material fact remains “if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.” Serednyj v. Beverly Healthcare,
LLC, 656 F.3d 540, 547, citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
In other words, to survive summary judgment, the nonmovant must produce
admissible evidence on which a rational trier of fact could find in his favor. Maclin v.
SBC Ameritech, 520 F.3d 781, 786 (7th Cir. 2008).

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In ruling on a summary judgment motion, this Court can consider any evidence
that would be admissible at trial. “The evidence need not be admissible in form (for
example, affidavits are not normally admissible at trial), but it must be admissible in
content.” Harney v. City of Chicago, 702 F.3d 916, 922 (7th Cir. 2012). For example,
under Rule 56(c), a district court “may consider answers to interrogatories when
reviewing a motion for summary judgment so long as the content of those
interrogatories would be admissible at trial.” Johnson v. Holder, 700 F.3d 979, 982 (7th
Cir. 2012), quoting Hardrick v. City of Bolingbrook, 522 F.3d 758, 761 (7th Cir. 2008).
In the case at bar, the Government argues that the evidence in the record (taken
together with a permissible inference it urges this Court to draw) warrants the grant of
summary judgment.

As to the evidence showing the forfeitability of the res, the

Governments points to the declarations under penalty of perjury made by several DEA
Task Force Officers and Special Agents (e.g., Hoelscher, Singleton and Rehg) and the
Davises’ discovery responses. The motion asserts that this evidence, taken with the
Davises’ “blanket invocation” of the Fifth Amendment to the United States Constitution
(Doc. 34, p. 2), leaves no material fact issue and entitles the Government to judgment as
a matter of law. For the reasons explained below, the Court rejects the Government’s
argument.
It bears note that there was an early set of discovery propounded by the
Government and answered by the Davises through counsel, after which (on motion of
the Davises), discovery was stayed pending resolution of the suppression motion. Once
suppression was denied, discovery resumed.
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The Government’s requests for admission of fact contained 210 requests (an
identical set of these 210 requests for Randy Davis and Delores Davis). The Davises did
not invoke the Fifth Amendment in the first round of discovery responses. Rather, they
responded with broadly-worded answers.

For instance, when asked to provide

specifics as to the source of the seized currency and when they obtained it, the Davises
responded “WAGES/SAVINGS” and “BIRTH TO CURRENT” (see Doc. 21, pp. 6-8 and
attachments thereto). The Davises then secured a stay of discovery herein, a stay which
expired when the undersigned ruled on the suppression motion.
When discovery resumed in January 2013, the Davises invoked their rights under
the Fifth Amendment (see Docs. 34-1, 34-2).

The Davises refused to answer any

interrogatories or requests to admit, and they advised the Government that they would
similarly refuse to answer any questions if deposed (see Doc. 34-1). Conceding that
Randy and Delores Davis have the “undisputable right to assert the Fifth Amendment”
herein (Doc. 34, p. 2), the Government urges the Court to apply the rule that an adverse
inference arises from the Davises’ invocation.
The Fifth Amendment to the United States Constitution protects individuals
from compelled self-incrimination in criminal cases. U.S. CONST. amend. V. The “core
protection” afforded by this clause is a prohibition against compelling a criminal
defendant to testify against himself at trial. United States v. Patane, 542 U.S. 630, 53738 (2004). Clearly, though, the caselaw recognizes the assertion of the Fifth Amendment
self-incrimination privilege in non-criminal cases and contexts. See, e.g., Chavez v.
Martinez, 538 U.S. 760, 770 (2003); McKune v. Lile, 536 U.S. 24, 54 (2002), citing
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Lefkowitz v. Turley, 414 U.S. 70, 77 (1973) (privilege extends to official questions put
to an individual in proceedings, civil or criminal, formal or informal, where the
answers might incriminate him in future criminal proceedings).
The Fifth Amendment also may be invoked by claimants in civil forfeiture
proceedings, although not without consequences, for example, if the Fifth Amendment
is used as a sword instead of a shield. See, e.g., United States v. $133,420 in U.S.
Currency, 672 F.3d 629, 641-44 (9th Cir. 2012); United States v. $148,840 in U.S. Currency,
521 F.3d 1268, 1277 (10th Cir. 2008). Here, the Government asks the Court to recognize
another consequence of reliance on the privilege against self-incrimination – an adverse
inference may be drawn in certain civil actions from the invocation of the Fifth
Amendment.
The United States Court of Appeals for the Second Circuit has explained:
A defendant in a civil proceeding who invokes the Fifth Amendment as a
result of an overlapping criminal investigation or proceeding “risk[s] the
adverse inference arising from [his or her] assertion of the privilege.”...
The Supreme Court has explained “that the Fifth Amendment does not
forbid adverse inferences against parties to civil actions when they
refuse to testify in response to probative evidence offered against
them.” Baxter v. Palmigiano, 425 U.S. 308, 318 … (1976); see also Keating v.
Office of Thrift Supervision, 45 F.3d 322, 326 (9th Cir. 1995) (observing that it
is “permissible” for the trier of fact to draw such adverse inferences).
“[A] party who asserts the privilege against self-incrimination must
bear the consequence of lack of evidence, and the claim of privilege will
not prevent an adverse finding or even summary judgment if the litigant
does not present sufficient evidence to satisfy the usual evidentiary
burdens in the litigation.” 4003–4005 5th Ave., 55 F.3d [78] at 83 [2nd Cir.
1995]…; see also LiButti v. United States, 178 F.3d 114, 120 (2d Cir. 1999)
(noting that it is permissible to give an adverse inference “significant
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weight,” as “silence when one would be expected to speak is a powerful
persuader”).
Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 97-98 (2nd Cir. 2012)
(emphasis added).2
Eighteen years ago, the Seventh Circuit Court of Appeals declared: “The rule
that adverse inferences may be drawn from Fifth Amendment silence in civil
proceedings has been widely recognized by the circuit courts of appeals, including our
own, in the two decades since Baxter [v. Palmigiano, 425 U.S. 308 (1976)] was decided.”
LaSalle Bank Lake View v. Seguban, 54 F.3d 387, 390 (7th Cir. 1995). See also In re High
Fructose Corn Syrup Antitrust Litigation, 295 F.3d 651, 663 (7th Cir. 2002) (citing Baxter
for the proposition that the general rule is that an adverse inference may be drawn
from a witness’ refusal to answer questions in a civil case). The Seventh Circuit has
interpreted Baxter to mean that “the negative inference against a witness who invokes
the Fifth Amendment in a civil case is permissive, not required.” Evans v. City of
Chicago, 513 F.3d 735, 740-41 (7th Cir. 2008).
In the case sub judice, the Government is understandably frustrated by being
denied depositions and meaningful discovery via the Claimants’ assertion of their
privilege against self-incrimination.

The Davises’ blanket invocation of the Fifth

Amendment as soon as the stay on discovery was lifted -- when they likely would be
pressed to explain how, within years of declaring bankruptcy, they could amass over
The Government argues that this inference is especially appropriate
when, as here, “there is no indication that there is a parallel criminal
proceeding currently pending” against Claimants/the Davises (Doc. 34, p.
3).
2

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$300,000 in cash and why it was packaged as it was, etc. -- give rises to an inference that
answers to such questions would not have been favorable to the Davises.

But the

adverse inference from an assertion of Fifth Amendment privilege is not sufficient,
standing alone, to warrant judgment in favor of the Government. See LaSalle, 54 F.3d
at 391-92.
The Court has carefully considered the other indicia of forfeitability of the res,
submitted by the Government in support of summary judgment, including (1) the
amount of cash involved, (2) the concealment of the currency, (3) the positive alert by
two drug-detecting canines, (4) the packaging of the currency, (5) the route traveled by
Randy Davis, (6) Randy Davis’ prior “record” of hauling drugs, and (7) the
inconsistency of the logbooks and documents found in the cab during the traffic stop.
Some of these factors may be persuasive (e.g., expert testimony regarding the packaging
of the cash as typical of money involved in drug transactions), whereas others are less
so (e.g., the mere fact there is a large amount of cash proves nothing). See $506,231 in
U.S. Currency, 125 F.3d at 454 (“We reiterate that the government may not seize
money, even half a million dollars, based on its bare assumption that most people do
not have huge sums of money lying about, and if they do, they must be involved in
narcotics trafficking or some other sinister activity. Moreover, the government may
not require explanations for the existence of large quantities of money absent its
ability to establish a valid narcotics-nexus.”).
Additionally, “a well-trained dog’s alert establishes a fair probability … that
either drugs or evidence of a drug crime … will be found,” Florida v. Harris, -- S.Ct. --,
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2013 WL 598440, *5 n.3 (Feb. 19, 2103), and more recent caselaw and scientific data
weaken the Davises’ argument based on the once-popular theory that a significantly
large percentage of U.S. currency in general circulation is “tainted” with narcotics,
rendering drug dog alerts inherently unreliable. See, e.g., Thirty Thousand Six Hundred
Seventy Dollars, 403 F.3d at 455-56, 459-60 (“We therefore conclude that the empirical
information provided in this case indicates that dog alerts to currency should be
entitled to probative weight”). But potential problems exist here as to one of the two
alerts, and concerns arise as to the apparent failure to corroborate the K-9 alerts with
any lab analysis of the seized bills for narcotics residue.
In sum, issues of material fact remain, and the Government has not shown that it
is entitled to judgment as a matter of law.

Stated another way, viewing all facts and

reasonable inferences in the light most favorable to the Davises, a rational trier of fact
could find in the Davises’ favor. Of course, that summary judgment standard does not
apply at trial.
E.

Conclusion

Genuine issues of material fact remain which are “best resolved by the trier of
fact” and preclude summary judgment. Pagel v. TIN Inc., 695 F.3d 622, 628 (7th Cir.
2012). Accordingly, the Court DENIES the summary judgment motion (Doc. 33).
IT IS SO ORDERED.
DATED March 1, 2013.
s/ Michael J. Reagan
Michael J. Reagan
United States District Judge
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