United States of America v. $17,980.00 In United States Currency, in rem
Filing
41
OPINION AND ORDER. For the foregoing reasons, Claimant's Amended Motion for Leave to File Amended Claim 36 is DENIED. Plaintiff's Motion for Summary Judgment or to Strike Claim 31 is GRANTED and Claimant's Declaration of C laim 6 is STRICKEN. Because Claimant lacks standing to contest the forfeiture of the Defendant Currency, Claimant's Motion to Suppress All Evidence Obtained from Package Seized Per Search Warrant 30 is DENIED as moot. IT IS SO ORDERED. Signed on 09/30/2014 by Judge Malcolm F. Marsh. (pvh)
IN THE UNITED S'fA'l'ES DISTRICT COURT
FOR THE DISTRICT OF OREGON
UNITED STATES OF AMERICA,
3:12-cv-01463-MA
Plaintiff,
OPINION AND ORDER
v.
$17,980.00 IN UNITED STATES
CURRENCY, in rem,
Defendant.
S. AMANDA MARSHALL
United States Attorney
District of Oregon
ANNEMARIE SGARLATA
Assistant United States Attorney
1000 Southwest Third Avenue, Suite 600
Portland, Oregon 97204-2902
Attorneys for Plaintiff
BRIAN L. MICHAELS
259 East Fifth Avenue, Suite 300-D
Eugene, Oregon 97401
Attorney for Claimant Donna Dickson
MARSH, Judge
This civil forfeiture proceeding comes before the Court on
Plaintiff's Motion for Summary Judgment or to Strike Claim (#31)
1 - OPINION AND ORDER
and Claimant
Donna
Dickson's Amended Motion for
Amended Claim (#36).
Leave
to
File
For the reasons set forth below, the Court
denies Claimant's Motion to Amend and grants Plaintiff's Motion for
Summary Judgment or to Strike Claim.
FACTUAL BACKGROUND
The material facts are undisputed and taken from the parties'
submissions on summary judgment, the Declaration of Mark Cromwell
(#2)
submitted
along
with
Plaintiff's
Complaint,
and
the
Declaration of Claim (#6) filed by Claimant Donna Dickson.
On January 27, 2012, Officer Rob Havice of the Medford Police
Department
and
a
narcotics-detection
canine
were
inspecting
packages being offloaded from an airplane and sorted for delivery
via FedEx.
addressed
The narcotics-detection canine alerted to a package
to
Claimant.
detection canine,
Based on
the
alert
of
the
narcotics-
Officer Havice seized the box and obtained a
warrant to search the package.
Before opening the package, Detective Cromwell noted that it
was addressed to Claimant at an address on Jaynes Drive in Grants
Pass, Oregon.
listed as "G &
Detective Cromwell noted the shipper's address was
co.u
with an address in Astoria,
New York.
The
phone number associated with the sender's address was the same as
that listed for the recipient.
In addition, Det. Cromwell noticed
the exterior of the box was heavily taped with all of the edges and
seams covered by multiple layers of packing tape.
2 - OPINION AND ORDER
When Officer
Havice opened the box,
the officers found a second box with the
seams and edges heavily taped in a similar fashion.
Upon opening
the second box, the officers located the Defendant Currency sealed
inside several layers of vacuum-sealed plastic.
a
dish soap-like
substance with a
The officers found
heavy fragrance
between the
layers of vacuum-sealed plastic.
After
August
13,
September
Plaintiff
2012,
24,
instituted
Claimant
2012,
this
submitted a
asserting
a
forfeiture
proceeding
on
Declaration of Claim on
possessory
interest
in
the
When asked in her deposition to explain her
Defendant Currency.
possessory interest in the Defendant Currency, Claimant responded
"[i)t's my money."
Claimant's Dep. at 26.
Claimant invoked her
Fifth Amendment privilege against self-incrimination when asked to
explain "how it is [her] money," why she believes it is her money,
the
circumstances
surrounding
her
possessory
interest
in
the
currency, and under what circumstances she acquired an ownership
interest in her currency.
Claimant Dep. at 26, 34.
Claimant also
invoked her Fifth Amendment rights to avoid answering questions on
a wide variety of subjects, including whether she was expecting the
parcel,
whether she was familiar with the listed sender or the
sender's address, whether the Defendant Currency was ever in her
possession, whether anybody had asked her to receive a parcel on
their
behalf
in
the
past
ten
years,
and
whether
she
had any
documentation showing that the Defendant Currency belonged to her.
3 - OPINION AND ORDER
Claimant Dep. at 10-13, 26, 28, 34, 37, 41, 47.
In sum, aside from
testifying the Defendant Currency was her money, Claimant refused
to answer any questions about her relationship to the Defendant
Currency.
In her responses to Plaintiff's First Request for Production
Claimant asserted that she had no personal or business income tax
returns or wage or earnings statements for the last five years.
Claimant's Resp. to Pl.'s First Request for Prod. at 3.
Claimant
invoked, among other objections, her Fifth Amendment privilege to
avoid
responding
to
various
requests
concerning
documents, business records, and additional tax forms.
financial
Claimant's
Resp. to Pl.'s First Request for Prod. at 4-9.
On June 10,
2014,
after the parties litigated a Motion to
Dismiss and completed discovery,
Claimant moved to suppress all
evidence obtained from the package and Plaintiff moved to strike
the claim and,
in the alternative,
for summary judgment on the
grounds that Claimant lacked standing.
with her Response
(#35)
On July 14,
2014,
along
to Plaintiff's Motion to Strike or for
Summary Judgment, Claimant filed a Motion for Leave to File Amended
Claim
(#36)
Defendant
interest.
seeking
Currency
On
to
allege
instead
August
4,
of
2014,
an
her
ownership
previously
Plaintiff
interest
pled
submitted
in
the
possessory
its
Reply
Memorandum and a response opposing Claimant's Motion for Leave to
File Amended Claim.
The Court took Plaintiff's Motion for Summary
4 - OPINION AND ORDER
Judgment or to Strike Claim and Claimant's Motion for Leave to File
Amended
Claim
under
advisement,
withholding
consideration
of
Claimant's Motion to Suppress Evidence until after resolution of
the current Motions, if necessary.
DISCUSSION
I.
Claimant's Motion for Leave to File Amended Claim
When a party moves to amend a pleading outside the period for
amendment as a matter of course, "[t)he court should freely give
leave when justice so requires."
States v.
Cir.
$11,500.00 in U.S.
2013).
Factors
Fed. R. Civ. P. 15(a} (2}; United
Currency,
relevant
to
710 F.3d 1006,
whether
1013
amendment
shall
(9th
be
permitted are undue delay in filing the motion to amend and delay
or extension of the proceedings, prejudice to the non-moving party,
bad faith on the part of the moving party,
proposed amendment.
See $11,500.000 in U.S. Currency, 710 F.3d at
1009; AmerisourceBergen Corp.
946,
953
(9th
and futility of the
Cir.
2006);
v.
Dialysist West,
Lockheed
Martin
Inc.,
Corp.
v.
4 65 F. 3d
Network
Solutions, Inc., 194 F.3d 980, 986 (9th Cir. 1999); Acri v. Int'l
Ass'n of Machinists & Aerospace Workers, 781 F.2d 1393, 1398 (9th
Cir.
1986).
"[L) ate amendments to assert new theories are not
reviewed favorably when the facts and the theory have been known to
the party seeking amendment since the inception of the cause of
action."
Acri, 781 F.2d at 1398.
Ill
5 - OPINION AND ORDER
A.
Undue Delay in Filing the Motion to Amend
In evaluating undue delay, the court considers "'whether the
moving party knew or should have
raised
the
by
amendment
known the
in
and theories
original
the
facts
pleading.'"
AmerisourceBergen Corp., 465 F.3d at 953 (quoting Jackson v. Bank
of Hawaii, 902 F.2d 1385, 1388 (9th Cir. 1990)).
The Ninth Circuit
has "held that an eight-month delay between the time of obtaining
a relevant fact and seeking a leave to amend is unreasonable."
(citing Texaco,
1991)).
Inc.
A motion
v.
to
Ponsoldt,
amend
939
made
F.2d 794,
near
or
after
799
the
Id.
(9th Cir.
close
of
discovery necessitates reopening discovery and therefore delays the
proceedings.
Solomon v. N. Am. Life and Cas.
Ins. Co., 151 F.3d
1132, 1139 (9th Cir. 1998).
In this case, Claimant certainly knew the alleged facts - her
testimony that the Defendant Currency is "[her] money" - at the
time she filed her original claim.
Claimant Dep. at 26.
Moreover,
the difference between alleging an ownership interest and alleging
a possessory interest is a
fundamental concept at the pretrial
stages of civil forfeiture proceedings,
attorney
in
a
forfeiture
action
such that any competent
would
appreciate
the
well
established distinction between the interests and the significance
thereof.
704
F.3d
See,~'
1042,
United States v. $999,830.00 in U.S. Currency,
1042-43
(9th
Cir.
2012);
United
States
v.
$133,420.00 in U.S. Currency, 672 F.3d 629, 637-40 (9th Cir. 2012);
6 - OPINION AND ORDER
United States v. $100,348.00 in U.S. Currency, 354 F.3d 1110, 1119
(9th Cir. 2004).
Claimant has provided no reason for the nearly two-year delay
between the filing of her claim and her Motion for Leave to File
Amended Claim.
In light of the straightforward but significant
factual and legal nature of Claimant's proposed amendment, the twoyear delay between the filing of the original claim and the instant
motion to amend is manifestly unreasonable.
Moreover, considering
discovery has consumed a substantial portion of the two years of
the pendency of this proceeding, reopening discovery at this point
would
cause
Accordingly,
further
this
unreasonable
factor militates
delay
in
the
proceedings.
strongly toward denying the
Motion for Leave to Amend Claim.
B.
"A
Prejudice to Plaintiff
need
to
reopen
proceedings supports a .
motion to amend."
discovery
and
therefore
delay
the
finding of prejudice from a delayed
Lockheed Martin Corp., 194 F.3d at 986 (citing
Solomon, 151 F.3d at 1139).
The Ninth Circuit Court of Appeals has
affirmed a finding of prejudice when the amendment comes "at the
eleventh hour,
defendant's)
court.n
after discovery was virtually complete and
[the
motion for summary judgment was pending before the
Roberts v. Arizona Bd. of Regents, 661 F.2d 796, 798 (9th
Cir. 1981).
7 - OPINION AND ORDER
This case is even further along in the proceedings than that
which the Ninth Circuit found prejudicial in Roberts, as discovery
was complete and Plaintiff's Motion for Summary Judgment or to
Strike Claim was pending when Claimant moved to amend her claim.
Plaintiff asserts that it would have conducted additional discovery
on ·a variety of issues had Claimant pled an ownership interest
rather than a possessory interest.
Pl.'s Reply at 4.
Indeed, the
showing a claimant must make at summary judgment to sustain an
alleged ownership interest is different than that which a claimant
must make to demonstrate standing based on a possessory interest.
See $999,830 in U.S. Currency, 704 F.3d at 1042-43.
in full
below,
Claimant's refusal
As discussed
in discovery to provide any
explanation for her possessory interest in the Defendant Currency
is fatal to her claim as pled.
not
to
pursue
additional
Claimant's pleadings.
See id.
discovery
Thus, Plaintiff's decision
was
prudent
in
light
of
Claimant's proposed eleventh-hour amendment
would, at a minimum, force the Court to reopen discovery and would
therefore prejudice Plaintiff.
See Lockheed Martin Corp., 194 F.3d
at 986; Roberts, 661 F.2d at 798.
Claimant
a~gues,
however,
that Plaintiff was not prejudiced
because Claimant testified in her deposition that it was her money,
putting
Plaintiff
on
Claimant's Dep. at 26.
notice
of
Claimant's
ownership
That Plaintiff may have had some factual
notice of Claimant's allegation of ownership,
8 - OPINION AND ORDER
interest.
however,
does not
equate to notice that Claimant would plead an ownership interest,
especially in light of the fact that she had not done so for the
nearly two-year pendency of this action.
A party must be able to
rely on its opponent's pleadings in guiding discovery.
v. Renne, 84 F.3d 1172, 1177-78 (9th Cir. 1996)
See McHenry
(providing that an
affirmative pleading must "fully set [] forth who is being sued, for
what
relief,
discovery.") .
Claimant's
and
on what
theory,
with
enough detail
to guide
Thus, the fact that Plaintiff arguably had notice of
allegation
of
factual
ownership
of
the
Defendant
Currency does not mitigate the prejudice to Plaintiff in relying on
Claimant's
pleading
discovery.
To hold otherwise would force parties to conduct often
wasteful
discovery
of
on
a
possessory
myriad
unpled,
interest
but
while
arguably
conducting
factually-
plausible ciaims.
In sum, Plaintiff would be prejudiced by permitting Claimant
to change her standing theory at this late stage of the proceedings
because doing so would necessitate the reopening of discovery.
Accordingly, this factor militates toward denying Claimant's Motion
for Leave to Amend Claim.
C.
Bad Faith
Bad faith or gamesmanship on the part of the moving party is
another potential reason to deny a motion to amend a pleading.
$11,500.00 in U.S. Currency,
Corp.,
465 F.3d at 951.
9 - OPINION AND ORDER
See
710 F.3d at 1012; AmerisourceBergen
While the Court cannot be certain about
Claimant's subjective motivations for waiting almost two years to
amend her claim to plead an ownership interest,
legal
background
suggest
it
was
done
in
an
the factual and
effort
to
gain
a
tactical advantage.
As noted, the legal significance of the distinction between an
ownership
apparent
interest
to
and a
possessory
any competent
interest
forfeiture
would be
readily
Moreover,
attorney.
the
factual basis of Claimant's newly alleged ownership interest has
unquestionably been known to Claimant since before she filed her
original Claim.
Finally, Claimant has offered no explanation for
the delay in pleading her ownership interest.
In light of the differences in the standing theories and the
foreseeable differences in Plaintiff's discovery and litigation
strategy
based
on
ownership interest,
whether
Claimant
alleged
a
possessory
or
it is difficult to conceive of any purpose
other than gamesmanship behind Claimant's failure to plead her
ownership interest.
Thus, although the Court cannot be certain of
Claimant's subjective motivations, the considerable length of the
delay, Claimant's awareness of the facts underlying the amendment,
the straightforward legal significance of the change in standing
theory,
and
the
foreseeable
impact
on
Plaintiff's
discovery
strategy all suggest a tactical motivation for Claimant's eleventhhour change in her standing theory.
Thus, this factor weighs in
favor of denying Claimant's Motion for Leave to Amend Claim.
10 - OPINION AND ORDER
D.
Futility of Amendment
"'Futility of amendment can, by itself, justify the denial of
a motion for leave to amend.'"
Gonzalez v. Planned Parenthood of
Los Angeles, 759 F. 3d. 1112, 1116 (9th Cir. 2014) (quoting Bonin v.
Calderon, 59 F.3d 815, 845 (9th Cir. 1995)).
alleged
ownership
interest
would
be
Whether Claimant's
sufficient
to
establish
standing that would survive Plaintiff's Motion for Summary Judgment
is a close question.
In addition to the claimant's pleadings, "[a]
claimant asserting an ownership interest in the defendant property
. must also present
'some evidence of ownership'
beyond the
mere assertion in order to survive a motion for summary judgment."
$133,420.00
in U.S.
Currency,
672
F.3d at
639
(quoting United
States v. $81,000.00 in U.S. Currency, 189 F.3d 28,
1999)) .
35 (1st Cir.
"The fact that property was seized from the claimant's
possession, for example, may be sufficient evidence, when coupled
with a claim of ownership,
judgment stage."
The
ownership
only
to establish standing at the summary
Id.
evidence
interest
is:
in
1)
the
The
record
concerning
seized parcel
was
Claimant's
addressed
to
Claimant; and 2) Claimant's assertion at her deposition that the
Defendant Currency is "[her] money."
sufficient
to ·meet
even
the
low
described in $133, 420. 00 in U.S.
Whether this evidence
threshold
the
Ninth
is
Circuit
Currency is a close question.
Notably, however, in light of Claimant's very broad invocation of
11 - OPINION AND ORDER
her Fifth Amendment privileges to withhold testimony,
little Claimant could testify to at
trial.
See id.
1
there is
at
640-42
(providing that in a forfeiture proceeding, the court may strike
the
testimony
of
a
witness
who
previously
invoked
her
Fifth
Amendment privilege to prevent the "witness's improper use of the
Fifth Amendment privilege against self-incrimination as a sword as
well as a shield.").
As such, Claimant would very likely have to
rely on the testimony of others to present additional evidence at
trial. 2
Thus,
although the Court does not go so far as to find
Claimant's proposed amendment futile, this factor does not provide
a countervailing reason to negate the previous three factors.
In
sum,
Claimant' s
proposed amendment
to
the
Claim would
fundamentally change her theory of standing after the close of
discovery.
Claimant has provided no reason for the nearly two-year
delay in amendment despite having knowledge of all of the facts
underlying the amendment and a
straightforward legal landscape.
Finally, Claimant would be prejudiced and these proceedings would
1
Because the issue has not been presented, the Court
assumes without deciding that Claimant properly invoked her Fifth
'Amendment privilege.
2
This point underscores the prejudice to Plaintiff that
would be caused by the amendment of the Claim. Because, as
discussed below, Claimant has failed to carry her burden to
demonstrate standing through her alleged possessory interest,
deposing such potential witnesses would be unnecessary and
wasteful under Claimant's possessory interest theory of standing.
Under Claimant's proposed ownership theory, however, deposing
such witnesses would be a vital aspect of Plaintiff's discovery.
12 - OPINION AND ORDER.
be
unduly
extended
by
the
amendment
because
it
would
require
substantial additional discovery after its initial closure.
Accordingly, Claimant's Motion is precisely the sort of late
amendment "to assert new theories" that is not reviewed favorably
because "the facts and the theory have been known to the party
seeking amendment since the inception of the cause of action."
Acri, 781 F.2d at 1398.
for
Leave
See
Thus, the Court denies Claimant's Motion
to Amend Claim and Claimant must
proceed under
her
alleged possessory interest.
II.
Plaintiff's Motion to Strike or for Summary Judgment
Plaintiff moves to strike the Claim or, in the alternative,
for summary judgment on the ground that Claimant has failed to
establish a
sufficient possessory interest to confer standing.
"The elements of standing 'must be supported in the same way as any
other matter on which the plaintiff bears the burden of proof,
i.e.,
with
the manner and degree of
successive
stages
of
the
evidence
litigation.'"
required at
$133,420.00
in
the
U.S.
Currency, 672 F.3d at 638 (quoting Lujan v. Defenders of Wildlife,
504 U.S. 555, 561 (1992))
At
the
motion
possessory interest
to
strike
stage,
a
claimant
alleging
a
in the defendant property "must offer some
'factual allegations regarding how the claimant came to possess the
property,
property,
the
nature
of
the
claimant's
relationship
to
the
and/or the story behind the claimant's control of the
13 - OPINION AND ORDER
property.'"
Id.
(quoting United States v.
$515,060.42 in U.S.
Currency, 152 E'. 3d 491, 498 (6th Cir. 1998)).
possession will not be sufficient.'"
"'Mere unexplained
Id. {quoting United States v.
$191,910.00 in U.S. Currency, 16 E'.3d 1051, 1057 {9th Cir. 1994))
(emphasis in original).
See also $999,830.00 in U.S. Currency, 704
F.3d at 1042-43.
Claimant's factual allegations in her Claim read, in full:
Undersigned Declarant Donna Dickson has a possessory
interest in all the property seized, as referenced above.
When this property was seized there were no controlled
substances discovered, nor any criminal activity of any
sort.
There was no underlying basis to seize this
currency other than the fact it was currency.
Declaration
allegation
of
in
Claim
the
(#6)
Claim
at
1-2.
Thus,
concerning
the
the
nature
only
of
factual
Claimant's
possessory interest is that Claimant "has a possessory interest in
all
the
property
seized."
Such a
conclusory allegation
plainly fails to "offer some 'factual allegations regarding how the
claimant came to possess the property, the nature of the claimant's
relationship
claimant's
Currency,
to
the
property,
control of the
672
F. 3d at
638.
and/or
property.'"
Thus,
the
See
story
behind
$133,420.00
Claimant
fails
in
the
U.S.
to allege a
possessory interest sufficient to survive a motion to strike for
lack of standing.
Even considering Claimant's deposition testimony and the rest
of the record on summary judgment, Claimant falls well short of
carrying
her
burden
to
14 - OPINION AND ORDER
demonstrate
standing.
At
the
summary
judgment stage, "a claimant asserting a possessory interest must
provide some 'evidence supporting [her] assertion that [she] has a
lawful possessory interest in the money seized.'"
(quoting United States v.
298,
303
(5th Cir.
at
639
$321,470.00 in U.S. Currency, 874 F.2d
1989)).
"'Unexplained naked possession of a
does not rise to the level of the possessory
cash hoard
interest
Id.
requisite
for
standing
to
attack
proceeding' at the summary judgment stage."
the
Id.
forfeiture
(quoting United
States v. $42,500.00 in U.S. Currency, 283 F.3d 977, 983 (9th Cir.
2002)).
At summary judgment a claimant asserting a possessory
interest must offer evidence of an "explanation of how [she] came
to possess the money seized."
Id. at 640.
As noted, in addition to the brief factual allegations in the
Claim, the only relevant facts before the Court on summary judgment
are that Claimant was the addressee of the parcel and that she
testified ·that
Claimant
it
offered
was
no
"[her]
money."
explanation
of
Claimant's
how
she
possessory interest in the Defendant Currency.
came
Dep.
to
at
26.
have
her
In fact,
to the
contrary, Claimant invoked her Fifth Amendment privilege each of
the several times she was asked to explain her possessory interest.
Claimant's Dep.
at 26,
34,
47.
Thus,
because Claimant has not
provided any evidence of any "explanation of how
[she]
came to
possess the money seized," Claimant has failed to carry her burden
15 - OPINION AND ORDER
of demonstrating
standing at
the
summary
judgment
stage.
See
$133,420.00 in U.S. Currency, 672 F.3d at 640.
CONCLUSION
For the foregoing reasons, Claimant's Amended Motion for Leave
to File Amended Claim
(JU 6)
is DENIED.
Plaintiff's Motion for
Summary Judgment or to Strike Claim (jf31) is GRANTED and Claimant's
Declaration of Claim
standing
to
contest
(#6)
the
is STRICKEN.
forfeiture
of
Because Claimant lacks
the
Defendant
Currency,
Claimant's Motion to Suppress All Evidence Obtained from Package
Seized Per Search Warrant (#30) is DENIED as moot.
IT IS SO ORDERED.
DATED this ~C2 day of September, 2014.
&~41?1~
MalcolmF:Marsh
United States District Judge
16 - OPINION AND ORDER
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