United States of America v. $65,020 United States Currency et al
Filing
27
MEMORANDUM OPINION AND ORDER by Magistrate Judge Karen B. Molzen denying 22 United States' Motion to Strike Julio Cesar Figueroa-Rivera's Verified Claim. (am)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
UNITED STATES OF AMERICA,
Plaintiff,
v.
CIV 17-0894 KBM/LF
$65,020 UNITED STATES CURRENCY,
2008 HONDA ACCORD
VIN: JHMCP26738C002908,
Defendant-in-rem.
and
JULIO CESAR FIGUEROA-RIVERA,
Claimant.
MEMORANDUM OPINION AND ORDER
THIS MATTER is before the Court on the United States’ Motion to Strike Julio
Cesar Figueroa-Rivera’s Verified Claim (Doc. 22), filed February 21, 2018. Pursuant to
28 U.S.C. § 636(c) and Fed. R. Civ. P. 73(b), the parties have consented to me serving
as the presiding judge and entering final judgment. See Docs. 13-15. Having considered
the record, submissions of counsel, and the relevant law, the Court finds that the motion
to strike is not well-taken and will be denied.
I.
BACKGROUND
On August 30, 2017, the United States filed a Verified Complaint for Forfeiture In
Rem, seeking forfeiture of $65,020.00 in United States Currency, as well as a 2008
Honda Accord, VIN JHMCP26738C002908, pursuant to 21 U.S.C. § 881(a)(6), (4).
Doc. 1 at 1. The allegations giving rise to the forfeiture action are set forth in the Verified
Complaint. See id. On March 23, 2016, Bernalillo County Sheriff’s Office (“BSCO”)
Deputy Leonard Armijo conducted a traffic stop of the subject Honda Accord, which was
traveling on Interstate 40, for an unsafe lane change and improper display of a
temporary registration plate. Id. at ¶ 7. The driver and sole occupant of the Honda
Accord was Julio Cesar Figueroa-Rivera (“Claimant”). Id. Upon visual inspection of the
vehicle’s exterior, Deputy Armijo noticed that the exhaust system was hanging well
below the normal limits. Id. at ¶ 10. After Figueroa-Rivera declined to consent to a
search of the vehicle, BCSO Deputy Pat Rael and his certified drug detection dog
conducted an open-air sniff, and the dog alerted positively for the odor of illegal drugs
near the rear of the vehicle. Id. at ¶ 12. Deputy Armijo inspected the rear underside of
the vehicle and discovered non-factory parts, tooling on the bolts, freshly cut metal, and
fresh paint. Id. at ¶ 13. A more thorough inspection of the vehicle at a public works
facility revealed two non-factory compartments containing six cellophane-wrapped and
rubber-banded bundles containing $65,020.00. Id. at ¶ 14.
Following commencement of this forfeiture action, Claimant filed a Verified Claim
to Property on October 24, 2017, asserting an ownership interest only in the currency
identified in the complaint, not the car. Doc. 7. More specifically, Claimant stated that he
is “the owner of sixty-five thousand and twenty dollars ($65,020.00) in U.S. Currency”
and that he “was in lawful possession of all of the U.S. Currency at the time of the
seizure.” Id. at 1. Additionally, on November 14, 2017, Claimant filed an Answer to
Plaintiff’s Verified Complaint for Forfeiture In Rem, in which he responded to a number
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of the government’s assertions by invoking the “right provided under the state and
federal constitutions to remain silent.” Doc. 9.
As permitted by Supplemental Rule G(6)(a) of the Supplemental Rules for
Admiralty or Maritime Claims and Asset Forfeiture Actions,1 the United States served
special interrogatories on Claimant in order to gather information bearing on his
standing to bring a claim to the currency seized from the Honda Accord. Doc. 22 at 6. In
response to each of the special interrogatories, Claimant Figueroa-Rivera asserted his
Fifth Amendment right not to incriminate himself. See Doc. 22-1. Thereafter, the United
States moved to strike Claimant’s verified claim and answer. Doc. 22.
II.
ANALYSIS
Supplemental Rule G provides a mechanism for the government to move to
strike a claim or answer in a civil forfeiture case. Specifically, Supplemental Rule G(8)(c)
authorizes the filing of such a motion at any time before trial for one of the following
reasons: 1) failure to comply with Supplemental Rule G(5), a provision that requires the
timely filing of a proper verified claim; 2) failure to comply with Supplemental Rule G(6),
a provision that requires a claimant to answer or object to special interrogatories from
the United States; or 3) because the claimant lacks standing. See Supp. R. G(8)(c)(i). A
motion to strike “may be presented as a motion for judgment on the pleadings or as a
motion to determine after a hearing or by summary judgment whether the claimant can
carry the burden of establishing standing by a preponderance of the evidence.” See
Supp. R. G(8)(c)(ii)(B).
1
Supplemental Rule G governs forfeiture actions in rem arising from a federal statute.
See Supp. R. G(1).
3
Under Tenth Circuit law, a claimant who has “asserted an ownership interest in
the res at issue and has provided some evidence tending to support the existence of
that ownership interest, . . . has standing to challenge the forfeiture.” United States v.
$148,840.00 in United States Currency, 521 F.3d 1268, 1276 (10th Cir. 2008).
Moreover, the unequivocal claim of ownership over the res coupled with undisputed
evidence that the res was taken from the claimant’s possession and control are together
sufficient to confer constitutional standing. See id. at 1276-78.
Here, the United States’ motion to strike is not presented as either a motion for
judgment on the pleadings or as a motion for summary judgment. Instead, it asks the
Court to exercise its discretion to strike Claimant’s verified claim based upon his refusal
to answer special interrogatories in favor of invoking his Fifth Amendment privilege.
Clarifying that “standing is not the issue before the Court,” the United States suggests
that Claimant’s assertion of his Fifth Amendment privilege justifies the striking of his
claim and answer. Doc. 22 at 2.
Supplemental Rule G(8) does not expressly permit the striking of a verified claim
and answer under the circumstances here; the United States seems to acknowledge as
much in its reply brief. Doc. 25 at 4 (“The Court is not considering a motion under
Supplemental Rule G(8).”). Although Supplemental Rule G(8) sanctions striking a claim
when a claimant fails to answer or object to special interrogatories pursuant to
Supplemental Rule G(6), Claimant was technically compliant with Supplemental Rule
G(6). That rule merely requires that a claimant’s “[a]nswers or objections to [special
interrogatories] be served within 21 days after the interrogatories are served.” Supp. R.
G(6)(b). Claimant provided his Fifth-Amendment assertions in response to the special
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interrogatories on November 29, 2017. See Doc. 22-1. In the Court’s view, Claimant
thereby provided timely objections to United States’ special interrogatories, in
compliance with Supplemental Rule G(6). Given such compliance, the United States
cannot rest its motion to strike upon procedural rules. It relies, instead, upon case law,
or perhaps more accurately on dicta, from the Tenth Circuit, as well as persuasive
authority from other courts.
First, the United States suggests that its motion comports with the “guidance”
provided by the Tenth Circuit in United States v. $148,840.00, 521 F.3d 1268 (10th Cir.
2008) for addressing a claimant’s use of the Fifth Amendment as an “offensive litigation
tool” in civil forfeiture cases. See Doc. 25 at 4. Although the government asserts that the
factual posture of this case is “virtually identical” to that in United States v. $148,840.00,
the primary issue there was whether the claimant had advanced sufficient jurisdictional
facts to support his constitutional standing. 521 F.3d at 1270. The Tenth Circuit
examined the determination by Honorable Martha Vazquez of this District that the
claimant lacked constitutional standing to challenge the forfeiture of currency discovered
in a cooler in the trunk of the vehicle he was driving. Id. at 1270-71. The claimant had
filed a verified claim opposing forfeiture, as well as an answer to the government’s
complaint, both of which asserted that he was the owner of the currency. Id. at 1272.
At his deposition, the claimant testified that he was the owner of the currency seized;
however, he invoked his Fifth Amendment privilege in response to more specific
questions about the currency and its source. Id.
Moving to strike his claim and answer, the government argued that because the
claimant had invoked his Fifth Amendment privilege in response to questions about his
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possession of the currency, he “should be barred from contesting the forfeiture action
on the ground that he failed to carry his burden of establishing constitutional standing.”
Id. While Judge Vazquez agreed, the Tenth Circuit did not. The Tenth Circuit held that
because the claimant asserted ownership of the currency, as opposed to possession on
behalf of another, “it was of no moment that he invoked his privilege against selfincrimination at his deposition when asked to explain his interest in detail.” Id. at 1275.
The court clarified that it was enough, for purposes of constitutional standing at the
summary judgment stage, that he claimed to own the money taken from his possession.
Id. at 1275.
Although there are factual similarities, as Claimant here also asserted ownership
of money seized from a vehicle he was driving, the court’s holding in United States v.
$148,840.00 does not resolve the issue presented in the government’s Motion to Strike.
Even so, the Tenth Circuit does offer some commentary bearing on the issues currently
before the Court. It projected that it would have been a “different case if the district court
had exercised its discretion to strike [the] claim of ownership to the currency in light of
[the claimant’s] repeated invocations of the Fifth Amendment privilege.” Id. at 1277. It
explained:
It is well established that in a civil case a district court may strike
conclusory testimony if the witness asserts the Fifth Amendment
privilege to avoid answering relevant questions, yet freely responds to
questions that are advantageous to his cause. This doctrine exists to
prevent a party from converting the Fifth Amendment privilege from its
intended use as a shield against compulsory self-incrimination into an
offensive sword.
Id. at 1277 (citations omitted).2
2
The Tenth Circuit in United States v. $148,840.00 noted that the government never moved to
strike the claimant’s deposition testimony wherein he asserted a claim of ownership to the
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Claimant concedes that courts do have discretion to strike testimony when a
witness converts the Fifth Amendment privilege into an offensive tool. See Doc. 23 at 3.
Nevertheless, he maintains that “[n]ot every failure to respond to [special]
interrogatories warrants an order striking the claim.” See id. (quoting Supp. R. G,
Advisory Committee Note Subsection 6). He asserts that the purpose of a motion to
strike in a civil forfeiture case is to “prevent false-claimants with no colorable claim to
the seized property from trolling the internet for forfeiture notices and intervening in
forfeiture proceedings.” Id. (citing United States v. Funds in the Amount of $574,840.00,
719 F.3d 648, 652-53 (7th Cir. 2003)). Because Claimant has asserted a colorable
claim of ownership and was in possession of the currency when it was seized, he insists
that his assertion of Fifth Amendment rights in response to special interrogatories does
not warrant striking his claim. But Claimant’s position oversimplifies the purposes of
motions to strike.
Notably, the Tenth Circuit’s “guidance” in United States v. $148,840.00 rested in
part upon the rationale of the First Circuit in United States v. Parcels of Land, 903 F.2d
36, 43 (1st Cir. 1990), a case on which the United States also relies. In Parcels of Land,
the district court granted a motion to strike the affidavit of a claimant after he invoked his
Fifth Amendment privilege in response to questions asked by the government at his
deposition related to his involvement in drug trafficking and to his sources of income.
Parcels of Land, 903 F.2d at 42-43. The First Circuit held that the district court “had
ample authority” to strike the claimant’s affidavit based upon the subsequent assertion
of Fifth Amendment rights. Id. at 43. It reasoned that just as it is permissible to strike the
seized currency. Id. at 1277. Consequently, it found that “the district court was squarely
presented with [the] claim of ownership when it considered the standing issue.” Id.
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direct testimony of a witness when she invokes the Fifth Amendment on crossexamination, it is permissible to strike the affidavit of a claimant who invokes the Fifth
Amendment when being deposed during the same proceeding. Id. at 43-44. The court
explained that “the power to strike is grounded in the principle that once a witness
testifies, she may not invoke the fifth amendment privilege so as to shield that testimony
from scrutiny. To allow her to do so would constitute a positive invitation to mutilate the
truth.” Id. at 43 (internal quotations and citations omitted). The United States draws
upon this rationale to assert that a verified claim, which it suggests contains testimonial
statements, is likewise subject to a motion to strike upon a claimant’s assertion of Fifth
Amendment rights.
The Court accepts the premise that verified claims, which are required to be
“signed by the claimant under penalty of perjury,” constitute a type of testimonial
evidence. See United States v. Funds in the Amount of $574,840, 719 F.3d at 653
(“[T]he claim that Rule G(5)(a)(i) requires of a claimant is not just a naked statement ‘I
want the dough.’ It must be signed under penalty of perjury and identify the claimant
and the nature of his interest. It is evidence.”) Additionally, the Court agrees with the
principle, alluded to in both United States v. $148,840.00 and Parcels of Land, that a
claimant may not use their Fifth Amendment right as an offensive sword. At the same
time, the Court is cognizant of its duty to protect and accommodate the Fifth
Amendment rights of claimants in civil forfeiture cases. See Parcels of Land, 903 F.2d
at 44 (noting that courts should use their discretion in civil forfeiture cases to
accommodate claimants’ Fifth Amendment interests). Moreover, the Court is troubled by
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a particular distinction in the present case: the government has moved to strike the
claim and answer, not merely offending discovery responses.
When a court strikes discovery responses, the claimant faces an evidentiary
hurdle in civil forfeiture litigation, which they may or may not be able to overcome. See
United States v. $148,840.00, 521 F.3d at 1273-74 (“[A] party who asserts the privilege
against self-incrimination must bear the consequence of a lack of evidence.”). On the
other hand, when a court strikes a verified claim and answer, the claimant is left without
any method to contest the forfeiture. See Funds in the Amount of $574,840, 719 F.3d at
653 (reasoning that “striking a claim is a decision on the merits . . . a determination that
[the claimant] has no interest in the property”); see also Supp. R. G(5) (providing that
the manner by which a person “may contest the forfeiture” is through the filing of a claim
and an answer). While verified claims are evidence, they are also more than that. They
are the proscribed manner by which a claimant contests the forfeiture of property.
Nevertheless, the United States maintains that “[c]ourts have struck verified
claims where claimants have asserted the Fifth Amendment in response to discovery
inquiries,” citing United States v. $133,420.00 in U.S. Currency, 672 F.3d 629, 641 (9th
Cir. 2012) and United States v. Amount of $174,000.00, No. 11C6698, 2012 WL
2562133 (N.D. Ill. June 28, 2018)). Doc. 22 at 7. The procedural posture and rationale
of the cases cited by the government warrant a closer look, however.
First, in United States v. $133,420.00, the claimant asserted various objections to
special interrogatories propounded by the government, including an objection that the
requests sought information in violation of his Fifth Amendment privilege. 672 F.3d at
636. Determining that the claimant had impermissibly used the Fifth Amendment
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privilege as a sword by claiming an ownership interest but refusing to respond to
“follow-up questions,” the district court struck the claimant’s discovery responses. Id. at
637. In a separate inquiry, the district court, and the Ninth Circuit on appeal, considered
whether the claimant could establish standing apart from any evidence of record other
than his verified claim. See id. at 637-40. The Ninth Circuit concluded that, although the
verified claim was admissible evidence that could be considered on the issue of
standing, the claimant’s statement therein that he had an “ownership and/or a
possessory interest” in the defendant property was equivocal and inadequate to create
a genuine issue of material fact regarding standing. Id. at 640 (emphasis added). The
Ninth Circuit stated its holding as follows: “[T]he district court did not err in striking [the
claimant’s] interrogatory response claiming ownership of the property, and because the
remaining evidence was inadequate to establish that [the claimant] had standing, we
affirm.” Id. at 634 (emphasis added).
In Funds in the Amount of $174,000.00, the government moved to strike the
claim pursuant to Supplemental Rule G(8)(c)(ii)(B), based upon the claimant’s failure to
carry the burden of showing that he had Article III standing.3 See Funds in the Amount
of $174,000, 2012 WL 2562133, at *1. The district court, relying upon United States v.
$148,840, ultimately granted the government’s motion to strike the claim, because the
claimant repeatedly asserted his Fifth Amendment privilege. See Funds in the Amount
of $174,000.00, 2012 WL 2562133, at *1-2. In this Court’s view, however, the district
judge misread the Tenth Circuit’s discussion of the Fifth Amendment privilege. As he
understood it, the Tenth Circuit was inviting district courts to strike verified claims based
3
Once again, in the present case the United States has insisted that its motion to strike does
not hinge on the standing issue.
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upon a claimant’s repeated invocation of the Fifth Amendment privilege. See id. at *1.
To the contrary, the Tenth Circuit merely suggested that a district court would have
discretion to strike a “claim of ownership” – in that case deposition testimony in which
the claimant asserted ownership – for the offensive use of the Fifth Amendment. See
United States v. $148,840, 521 F.3d at 1277.
Here, if the United States was requesting that Claimant’s discovery responses be
stricken in light of his invocation of the Fifth Amendment privilege in his answers to
special interrogatories, the Court would be more inclined to grant such relief. Instead,
the government asks the Court to exercise its discretion to strike the verified claim and
answer – the filings that constitute the only manner by which Claimant may contest
forfeiture of the seized currency. Balancing the United States’ interest in forfeiture
against a claimant’s privilege against self-incrimination, the Court ultimately concludes
that the interests weigh against striking the verified claim and answer based upon
Claimant’s invocation of his Fifth Amendment privilege.
Wherefore,
IT IS HEREBY ORDERED that the United States’ Motion to Strike Julio Cesar
Figueroa-Rivera’s Verified Claim (Doc. 22) is denied.
________________________________________
UNITED STATES MAGISTRATE JUDGE
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