Lucas v. United States of America et al

Filing 13

MEMORANDUM-DECISION and ORDER. Respondent's 5 Motion to Dismiss is GRANTED; and ORDERED that Lucas' petition 1 is DISMISSED; and ORDERED that the Clerk close this case. Signed by Chief Judge Gary L. Sharpe on 5/22/2014. (lah)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
________________________________
NICHOLAS M. LUCAS, as
Assignee of Justin Lucas,
Petitioner,

3:13-cv-855
(GLS/DEP)

v.
UNITED STATES OF AMERICA et
al.,
Respondents.
________________________________
APPEARANCES:
OF COUNSEL:
FOR THE PETITIONER:
Office of Wayne P. Smith
157 Barrett Street
Schenectady, NY 12305

WAYNE P. SMITH, ESQ.

FOR THE RESPONDENTS:
HON. RICHARD J. HARTUNIAN
United States Attorney
P.O. Box 7198
100 South Clinton Street
Syracuse, NY 13261-7198

GWENDOLYN E. CARROLL
Assistant U.S. Attorney

Gary L. Sharpe
Chief Judge
MEMORANDUM-DECISION AND ORDER
I. Introduction
Petitioner Nicholas M. Lucas, as assignee of Justin Lucas,

commenced this action against respondents the United States of America
and the Drug Enforcement Administration pursuant to 18 U.S.C. § 983(e),
seeking to set aside an administrative forfeiture of bail money. ( See
generally Pet., Dkt. No. 1.) Respondents moved to dismiss the petition
pursuant to Fed. R. Civ. P. 12(b)(1) and (6). (Dkt. No. 5.) For the reasons
that follow, the motion to dismiss is granted.
II. Background1
On January 13, 2011, Justin Lucas posted $50,000 bail with the
Otsego County Sheriff on behalf of his brother, Nicholas Lucas, who had
been arrested and arraigned on charges involving possession of marijuana.
(Pet. ¶¶ 3, 9.) Justin was given a bail receipt by the Otsego County
Sheriff’s Office, (Dkt. No. 1 at 8), but at some later date, was told by a
member of the Sheriff’s Office that the bail money had been seized by the
Drug Enforcement Administration (DEA), (Pet. ¶¶ 3, 8). The DEA then
commenced administrative forfeiture proceedings with respect to the
seized money, which were completed on June 21, 2011. (Id. ¶ 7; Dkt. No.
1 at 10-11, 13-14.) On July 25, 2011, Justin purported to assign his rights

1

The facts are drawn from Lucas’ petition and presented in the light
most favorable to him.
2

and interest in the bail money to Nicholas. (Pet. ¶ 10; Dkt. No. 1 at 33.)
Nicholas alleges that neither he nor Justin ever received notice of the
seizure or the administrative forfeiture proceedings commenced by
respondents. (Id. ¶¶ 5, 13.) Specifically, Nicholas asserts that the DEA,
“probably intentionally or negligently,” repeatedly attempted to send notice
of the forfeiture to incorrect addresses for both Nicholas and Justin Lucas.
(Id. ¶ 12.)
III. Standards of Review
The standards of review under Rules 12(b)(1) and 12(b)(6), which are
“substantively identical,” Lerner v. Fleet Bank, N.A., 318 F.3d 113, 128 (2d
Cir. 2003), are well settled and will not be repeated. For a full discussion of
those standards, the parties are referred to the court’s decisions in Unangst
v. Evans Law Associates, P.C., 798 F. Supp. 2d 409, 410 (N.D.N.Y. 2011),
and Ellis v. Cohen & Slamowitz, LLP, 701 F. Supp. 2d 215, 218 (N.D.N.Y.
2010), respectively.
IV. Discussion
Respondents have moved, pursuant to Rules 12(b)(1) and 12(b)(6) of
the Federal Rules of Civil Procedure, seeking dismissal of Nicholas’
petition because he has not demonstrated that he meets the statutory
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requirements of 18 U.S.C. § 983 to bring a motion to set aside the
forfeiture, and because he lacks Article III standing to maintain this action.
(Dkt. No. 5, Attach. 1 at 10-17.) Nicholas argues that he does in fact have
standing to bring this action, both under constitutional principles and
pursuant to the applicable statutory framework. 2 (Dkt. No. 7, Attach. 1 at 721.) For the reasons that follow, respondents’ motion to dismiss is granted.
“In every federal case, the party bringing the suit must establish
standing to prosecute the action” under Article III of the Constitution. Elk
Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11 (2004), abrogated on
other grounds by Lexmark Int’l, Inc. v. Static Control Components, Inc., 134
2

The court notes that Nicholas spends the bulk of his response to
respondents’ motion to dismiss arguing the merits of the underlying
forfeiture, and whether the initial seizure of the money was supported by
sufficient evidence. (See generally Dkt. No. 7, Attach. 1.) However, to the
extent Nicholas argues that the forfeiture was improper because it was not
established that the money constituted drug proceeds, that issue is not
properly before the court at this time. Once forfeiture has occurred, the
sole remedy is that provided under 18 U.S.C. § 983(e) to challenge
whether the DEA followed the proper procedural safeguards in forfeiting
the property—that is, whether it provided adequate notice and an
opportunity to be heard. See, e.g., Mesa Valderrama v. United States,
417 F.3d 1189, 1196 (11th Cir. 2005); Boero v. Drug Enforcement Admin.,
111 F.3d 301, 304-05 (2d Cir. 1997); United States v. Pickett, No. 07-CR117, 2011 WL 3876974, at *2 (E.D.N.Y. Sept. 1, 2011) (declining to
consider objections to completed forfeiture alleging lack of probable
cause).
4

S. Ct. 1377 (2014). Article III standing requires that the following three
elements be satisfactorily pled: (1) “an injury in fact” that is “concrete and
particularized” and “actual or imminent, not conjectural or hypothetical”; (2)
“a causal connection between the injury and the conduct complained of”;
and (3) a likelihood “that the injury will be redressed by a favorable
decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)
(internal quotation marks and citations omitted). Ordinarily, “a litigant ‘must
assert his own legal rights and interests, and cannot rest his claim to relief
on the legal rights or interests of third parties.’” Bano v. Union Carbide
Corp., 361 F.3d 696, 715 (2d Cir. 2004) (quoting Valley Forge Christian
Coll. v. Ams. United for Separation of Church & State, Inc., 454 U.S. 464,
474 (1982)). However, “[a] plaintiff may assert the . . . claims of a third
party if the plaintiff can demonstrate: (1) injury to the plaintiff, (2) a close
relationship between the plaintiff and the third party that would cause
plaintiff to be an effective advocate for the third party’s rights, and (3) ‘some
hindrance to the third party’s ability to protect his or her own interests.’”
Camacho v. Brandon, 317 F.3d 153, 159 (2d Cir. 2003) (quoting Campbell
v. Louisiana, 523 U.S. 392, 397 (1998)).
As relevant here, courts have recognized that a party seeking to
5

challenge the government’s forfeiture of money or property used in
violation of federal law must first demonstrate an interest in the seized item
sufficient to satisfy the court of its standing to contest the forfeiture. See
DSI Assocs. LLC v. United States, 496 F.3d 175, 184 (2d Cir. 2007);
United States v. One 1945 Douglas C-54 (DC-4) Aircraft, Serial No. 22186,
604 F.2d 27, 28-29 (8th Cir. 1979); United States v. Fifteen Thousand Five
Hundred Dollars ($15,500.00) United States Currency, 558 F.2d 1359,
1360 (9th Cir. 1977); United States v. Huggins, 607 F. Supp. 2d 660, 66465 (D. Del. 2009) (“To demonstrate a colorable ownership or possessory
interest, and satisfy the Article III standing requirement, an individual must
show that he independently exercised some dominion or control over the
property.”). Where, as here, the party challenging forfeiture is not the
person in possession of the property at the time it was seized, but instead
purports to be an assignee of that person, the requirements for establishing
standing are twofold. First, the “claimant must show that the assignment
was valid, i.e. that it effectively conveyed to the assignee an interest in the
subject property.” United States v. Dupree, 919 F. Supp. 2d 254, 266
(E.D.N.Y. 2013) (internal quotation marks and citation omitted). Similarly,
since it is well established that an assignee takes only the interest of its
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assignor, a claimant must also demonstrate that the assignor “held a valid
ownership interest in the seized property at the time of the assignment.”
United States v. Three Hundred Sixty Four Thousand Nine Hundred Sixty
Dollars ($364,960.00) in U.S. Currency, 661 F.2d 319, 326-27 (5th Cir.
1981).
Here, as the government points out at the outset of its motion, (Dkt.
No. 5, Attach. 1 at 10-12), the purported assignment of “all right, title or
interest” in the $50,000 made by Justin to Nicholas, (Dkt. No. 1 at 33), did
not actually convey any interest, as “[a]ll right, title, and interest in [the]
property . . . vest[ed] in the United States upon commission of the act
giving rise to forfeiture,” 21 U.S.C. § 881(h), namely Nicholas’ drug activity.
Here, the funds at issue were seized on January 13, 2011, (Pet. ¶ 7), and
declared administratively forfeited on May 19, 2011, (Dkt. No. 1 at 10),
while the latest date Nicholas alleges with respect to the forfeiture is a “last
disposition date” of June 21, 2011, (Pet. ¶ 7). Because the assignment did
not occur until over a month later, on July 25, 2011, (Dkt. No. 1 at 33), the
purported assignment did not actually convey any possessory or ownership
interest in the money to Nicholas; the forfeiture had already been
completed, and therefore Justin had no interest to assign to Nicholas, as all
7

right, title, and interest in the money had vested in the United States. See
21 U.S.C. § 881(h). Therefore, Nicholas lacks standing to maintain this
claim on behalf of Justin. 3 See DSI Assocs., 496 F.3d at 184; United
States v. Stokes, 191 F. App’x 441, 444 (7th Cir. 2006); Three Hundred
Sixty Four Thousand Nine Hundred Sixty Dollars ($364,960.00) in U.S.
Currency, 661 F.2d at 326-27.
Further, the language of the statute precludes any argument that
Nicholas would be able to maintain this action on his own behalf, and he
does not argue as much in response to the government’s motion. The
relevant statute states that “[a]ny person entitled to written notice in any
nonjudicial civil forfeiture proceeding . . . may file a motion to set aside a
declaration of forfeiture with respect to that person’s interest in the

3

The government further argues, (Dkt. No. 5, Attach. 1 at 10-12),
that, even if Nicholas did acquire any rights or interest in the subject
property by way of the purported assignment, he would ultimately have to
demonstrate compliance with the prerequisites of 18 U.S.C.
§ 983(d)(3)(A), for “property interest[s] acquired after the conduct giving
rise to the forfeiture has taken place,” which would require Nicholas to
show that he was a “bona fide purchaser . . . for value . . . ; and . . . did not
know and was reasonably without cause to believe that the property was
subject to forfeiture.” Although analysis of this argument is unnecessary
given the court’s conclusion above that Nicholas lacks standing, the court
notes that there are no allegations in the petition that Nicholas gave
anything of value for the alleged rights he acquired via the assignment.
8

property.” 18 U.S.C. § 983(e)(1). However, the only parties entitled to
notice of administrative civil forfeitures are those “who appear[ ] to have an
interest in the seized article.” 19 U.S.C. § 1607(a). Here, it is undisputed
that at the time of the seizure and subsequent forfeiture, Nicholas had no
legal interest in the money at issue, and Nicholas does not allege
otherwise—rather, he acquired his rights and interest, if any, by way of the
assignment, at least one month after the forfeiture had occurred. (Pet. ¶
10.) Accordingly, the relevant statutory provision would not provide
Nicholas, on his own behalf, with an avenue for relief, and, as further
discussed above, because Nicholas lacks standing to maintain this action,
the government’s motion to dismiss is granted.
V. Conclusion
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that respondents’ motion to dismiss (Dkt. No. 5) is
GRANTED; and it is further
ORDERED that Lucas’ petition (Dkt. No. 1) is DISMISSED; and it is
further
ORDERED that the Clerk close this case; and it is further
ORDERED that the Clerk provide a copy of this Memorandum9

Decision and Order to the parties.
IT IS SO ORDERED.
May 22, 2014
Albany, New York

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