UNITED STATES OF AMERICA v. $48,880, More or Less, In United States Currency
ORDER REJECTING REPORT AND RECOMMENDATIONS for 19 Report and Recommendations DENYING 12 Motion to Strike filed by UNITED STATES OF AMERICA. The Court declines to adopt the Report and Recommendation of the Magistrate Judge and DENIES WITHOUT PREJUDICE Plaintiffs Motion to Strike Josephs Answer (Dkt. 12). Signed by Judge Robert Pitman. (jgb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
UNITED STATES OF AMERICA,
$48,880, MORE OR LESS, IN
UNITED STATES CURRENCY,
Before the Court is the Report and Recommendation of United States Magistrate Judge
Jeffrey C. Manske. (Dkt. 19). The case was referred to Judge Manske for a Report and
Recommendation on the merits pursuant to 28 U.S.C. § 636(b), Rule 72 of the Federal Rules of Civil
Procedure, and Rule 1(d) of Appendix C of the Local Rules of the United States District Court for
the Western District of Texas, as amended. The United States moved to strike the answer and
supplement filed by Ephrain Joseph on January 6, 2017. (Dkt. 12). On January 20, 2017, Ephrain
Joseph filed a response to the motion to strike, which included several attachments. (Dkt. 14). On
March 10, 2017, the Magistrate Judge filed his Report and Recommendation on the motion to strike,
recommending that the motion be granted. (Dkt. 19). To date, no objections have been filed.
Because the Report and Recommendation filed by the Magistrate Judge ignores the response
filed by Ephrain Joseph, the Court declines to adopt it. Instead, based on its review of the motion to
strike, the response, the relevant case law, and the record in this case, the Court issues the following
Plaintiff United States of America filed a verified complaint for forfeiture of $48,880.00
(“the Respondent Property”), more or less, in United States Currency, on December 11, 2017,
pursuant to 18 U.S.C. § 981(a)(1) and 21 U.S.C. § 881(a)(6). (Compl., Dkt. 1, at 1). The complaint
alleges that the Respondent Property was seized by the United States Postal Inspection Service
(“USPIS”) on June 23, 2015, as part of an investigation into the importation of high-grade marijuana
to the Killeen, Texas area. (Compl., Dkt. 1, at 3–7).
Beginning on April 26, 2016, a notice of complaint of forfeiture was published on a
government website (www.forfeiture.gov) for 30 days. (Decl. of Pub., Dkt. 7). In addition, the
government “served” Ephrain Joseph and his common law wife, Erin Dizer, “with direct notice of
[the] civil forfeiture action” on June 15, 2016. (Mot. to Strike, Dkt. 12, at 2 (citing Dkt. 9)).
On July 5, 2016, Joseph submitted an “Answer to Verified Complaint for Forfeiture,” where
he admitted or denied the factual allegations set out in the Verified Complaint for Forfeiture. (Ans.,
Dkt. 8). He supplemented this answer on July 14, 2016, correcting the case number listed in the case
caption included at the beginning of his prior answer. (Supp. Ans., Dkt. 10).
On January 6, 2017, the government filed a motion to strike Joseph’s answers, arguing that
his answers should be struck because he failed to file a verified claim pursuant to Rule G of the
Supplemental Rules of the Federal Rules of Civil Procedure. (Mot. to Strike, Dkt. 12, at 1–3). It
argues that because Joseph was served with notice on June 15, 2016, any claim he wished to file was
due by July 20, 2016, but that no claim had been filed. (Mot. to Strike, Dkt. 12, at 3–4). The
government attaches three letters it sent to Joseph in support of its motion. (Mot. to Strike, Dkt. 12,
Exs. A–C). The first two, sent in mid-July and mid-August, explained the requirements of Rule G
and indicated that “the United States will move to strike [Joseph’s] answer for failure to file the
required claim.” (Mot. to Strike, Dkt. 12-1, Ex. A). The third letter, sent October 6, 2017, returned
Joseph’s mailing, explaining that “[Joseph’s] latest submission fails because it has not been filed with
the Court and does not set out the items required by the applicable court rule.” (Mot. to Strike, Dkt.
12-3, Ex. C). The government did not provide the Court with a copy of the mailing that it returned
to Joseph, nor did it provide more information about the mailing’s contents, but presumably his
mailing was an attempt by Joseph to serve a claim for the Respondent Property on the appropriate
government attorney. (See Mot. to Strike, Dkt. 12-3, Ex. C). In addition to its argument that Joseph’s
answer must be struck under Rule G, the government also argues that, because Joseph failed to
submit a timely, proper claim, he has no statutory standing to contest the forfeiture. (See Mot. to
Strike, Dkt. 12, at 5–6).
On January 20, 2017, Joseph responded pro se to the government’s motion, attaching “an
original claim,” a “previous claim,” filed on or about June 16, 2016, a “complaint” filed on or about
July 7, 2016, and “[n]umerous W-2 and bank statements which establish the source” of the
Respondent Property. (Resp., Dkt. 14, at 1). 1 The “original claim” states, “I, Ephrain Joseph, state
under penalty of perjury that I am the owner of defendant: $48,880, more or less, in United States
currency.” (Resp., Dkt. 14-1, at 1). It is dated January 19, 2017, and is signed by Joseph, who it
identifies as “claimant.” (Resp., Dkt. 14-1, at 1). The “previous claim” is a document entitled “Claim
of Ownership,” which is addressed to the USPIS’s Asset Forfeiture Unit and states, among other
things, that Joseph is the owner of the Respondent Property. (Resp., Dkt. 14-1, at 2). It is dated June
16, 2016. (Resp., Dkt. 14-1, at 3). The “complaint” is similar to the “previous claim,” but includes a
case caption at the top. (Resp., Dkt. 14-1, at 4). It states that it is “In the United States Court of
Federal Claims,” but lists the case number for this action, 6:15-cv-0364. (Resp., Dkt. 14-1, at 4). It is
The District Court Clerk’s office filed the attachments under seal because some of them included the personal
information of Joseph, including his social security number and banking information. (See Resp., Dkt. 14-1, at 6–23).
dated as signed by Joseph on July 7, 2016. (Resp., Dkt. 14-1, at 4). 2 The final attachments are various
W-2s for Joseph from 2009 through 2013, and bank statements for an account of Joseph’s at the
Bank of America from 2013 and 2014. (Resp., Dkt. 14-1, at 6–23). The government did not reply to
On March 10, 2017, the Magistrate Judge entered his Report and Recommendation. It
recommended that the government’s motion to strike be granted and that Joseph’s answer be struck
from the record. (Report & Recommendation, Dkt. 19, at 6). It used a test from the Eleventh Circuit
to consider whether a court should, in its discretion, allow a late claim under Rule G. (Id. at 4–6). In
applying that test to this case, however, the report ignored Joseph’s response to the government’s
motion to strike—it specifically stated that “as of the signing of this report, Joseph has failed to file
any claim as to the [Respondent Property],” without considering whether Joseph’s January 20, 2017
response included a claim. (Id. at 3). In addition, it did not address the possible relevance of that
filing to the test it employed. (See id. at 4–6).
The Report and Recommendation explained that the parties had fourteen days in which to
file objections to findings and recommendations it contained. (Id. at 7). No objections were filed.
II. LEGAL STANDARD
A. Review of a Magistrate Judge’s Report and Recommendation
Any party may contest the Magistrate Judge’s findings and recommendations by filing
written objections within fourteen days of being served with a copy of the Memorandum and
Recommendation. 28 U.S.C. § 636(b)(1)(C). The objections must specifically identify those findings
or recommendations that the party wishes to have the district court consider. Thomas v. Arn, 474
U.S. 140, 151 (1985). The Court must conduct a de novo review of any of the Magistrate Judge’s
A Pacer search reveals that Joseph did in fact start an action in the U.S. Court of Federal Claims on July 11, 2016, see
Joseph v. United States, 1:16-cv-0821-SGB (Fed. Cl.), although the initial complaint is under seal and currently inaccessible
to this Court, see id. The Court of Federal Claims dismissed Joseph’s action on February 21, 2017, after it concluded that
it did not have jurisdiction to hear Plaintiff’s claims. Id.
conclusions to which a party has specifically objected. See 28 U.S.C. § 636(b)(1)(C) (“A judge of the
court shall make a de novo determination of those portions of the report or specified proposed
findings or recommendations to which objection is made.”). On the other hand, findings to which
no specific objections are made do not require de novo review; the Court need only determine
whether the Memorandum and Recommendation is clearly erroneous or contrary to law. United
States v. Wilson, 864 F.2d 1219, 1221 (5th Cir. 1989).
B. Motion to Strike
Pleading requirements for Forfeiture Actions in Rem are governed by Rule G of the
Supplemental Rules of the Federal Rules of Civil Procedure. See generally Fed. Supp. R. Civ. P. G.
Rule G(5) governs responsive pleadings. It provides that:
A person who asserts an interest in the defendant property may contest the
forfeiture by filing a claim in the court where the action is pending. The claim
(A) identify the specific property claimed;
(B) identify the claimant and state the claimant’s interest in the property;
(C) be signed by the claimant under penalty of perjury; and
(D) be served on the [designated] government attorney . . . .
Fed. Supp. R. Civ. P. G(5)(a). If direct notice is sent to a potential claimant, the claim must be filed
by the deadline within the notice, which must be “at least 35 days after the notice is sent.” Fed.
Supp. R. Civ. P. G(5)(a)(ii)(A); Fed. Supp. R. Civ. P. G(4)(b)(ii).
“[T]he government may move to strike a claim or answer . . . for failure to comply with Rule
G(5).” Fed. Supp. R. Civ. P. G(8)(c)(i)(A). To the extent the failure is substantive, the Advisory
Committee Notes regarding Rule G indicates that the parties should be provided the same
opportunity to cure defects afforded to parties under Rule 15. Fed. Supp. R. Civ. P. G, advisory
comm. notes sub. 8 (“As with other pleadings, the court should strike a claim or answer only if
satisfied that an opportunity should not be afforded to cure the defects under Rule 15.”); see also
United States v. ADT Sec. Servs., Inc., 522 F. App’x 480, 490 (11th Cir. 2013). To the extent that failure
is based on the timing of the filing, however, “the court may, for good cause, extend the time . . . on
motion made after the time has expired if the party failed to act because of excusable neglect.” Fed.
R. Civ. P. 6(b)(1)(B); 3 see also Fed. Supp. R. Civ. P. G(5)(a)(ii) (“Unless the court for good cause sets
a different time . . . .”).
District courts “enjoy broad discretion to grant or deny an extension,” as the “‘excusable
neglect’ standard is ‘intended and has proven to be quite elastic in its application.’” Salts v. Epps, 676
F.3d 468, 474 (5th Cir. 2012) (quoting Wright & Miller, Federal Practice and Procedure § 1165).
Relevant factors to the determination of “excusable neglect” include: “(1) ‘the possibility of
prejudice to the other parties,’ (2) ‘the length of the applicant’s delay and its impact on the
proceeding,’ (3) ‘the reason for the delay and whether it was within the control of the movant,’ and
(4) ‘whether the movant has acted in good faith.’” Id. (quoting Wright & Miller, Federal Practice and
Procedure § 1165); see also Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 162 n.8 (5th Cir. 2006).
In specifically considering whether discretion should be exercised to extend the time allowed to file a
claim in a civil forfeiture action, courts have considered various factors, including “the time the
claimant became aware of the seizure, whether the Government encouraged the delay, the reasons
proffered for the delay, whether the claimant had advised the court and the Government of his
interest in defendant before the claim deadline, whether the Government would be prejudiced by
allowing the late filing, the sufficiency of the answer in meeting the basic requirements of a verified
Rule A of the Supplemental Rules of Civil Procedure provides that “The Federal Rules of Civil Procedure also apply to
the foregoing proceedings,” including forfeiture actions in rem arising from a federal statute, “except to the extent that
they are inconsistent with these Supplemental Rules.” Fed. Supp. R. Civ. P. A(2). Rule G similarly provides “[t]o the
extent that this rule does not address an issue . . . the Federal Rules of Civil Procedure also apply.” Fed. Supp. R. Civ. P.
G(1). The Court concludes that Rule 6 is applicable to Supplemental Rule G’s deadlines for the filing of a claim because
Rule G does not address the issue, and Rule G is not inconsistent with Rule 6. See United States v. $229,590.00 in U.S.
Currency Seized from a Safe, No. 3:12-CV-0893-D, 2013 WL 625742, at *2 (N.D. Tex. Feb. 20, 2013) (applying Rule 6 to
issue of whether deadline for answer filed under Rule G should be extended); United States v. $417,143.48, Four Hundred
Seventeen Thousand, One Hundred Forty-Three Dollars & Forty-Eight Cents, No. 15-3967, 2017 WL 946720, at *1 (2d Cir. Mar.
8, 2017) (applying Rule 6’s “excusable neglect” standard and suggesting that Rule G is silent on the issue); United States v.
Ford 250 Pickup 1990, VIN # 1FTHX26M1LKA69552, 980 F.2d 1242, 1245 (8th Cir. 1992) (“In order to avoid the strict
requirements of Rule C(6) [(Rule G(5)’s predecessor)], the party attempting the untimely filing must show excusable
neglect . . . .”).
claim, and whether the claimant timely petitioned for an enlargement of time.” United States v.
$125,938.62, 370 F.3d 1325, 1329 (11th Cir. 2004).
“[T]he government may [also] move to strike a claim or answer . . . because the claimant
lacks standing.” Fed. Supp. R. Civ. P. G(8)(c)(i)(B). To establish statutory standing in a forfeiture
case, a claimant must comply with the procedural requirements set forth in Rule G, including by
filing a claim. United States v. $487,825.000 in U.S. Currency, 484 F.3d 662, 664 (3d Cir. 2007) (applying
the previous version of Rule G).
Here, because no objections to the Report and Recommendation of the Magistrate Judge
have been filed, the Court reviews the Report and Recommendation only for clear errors or
recommendations that are contrary to law. The Court concludes that it was clear error for the
Magistrate Judge not to consider Joseph’s response to the government’s motion to strike, and thus
declines to adopt the Report and Recommendation.
Before the Court considers whether it should extend the filing deadline for a claim by Joseph
in this action, it will consider whether Joseph did, in his response to the government’s motion to
strike, file a claim sufficient under Rule G on January 20, 2017. First, Joseph’s claim identifies the
specific property he claims—the $48,880 in United States currency at issue in this action. See Fed.
Supp. R. Civ. P. G(5)(a)(i)(A). Second, it identifies Ephrain Joseph as the “[c]laimant,” and states
that he is the owner of the Respondent Property. See Fed. Supp. R. Civ. P. G(5)(a)(i)(B); cf. United
States v. $38,570 U.S. Currency, 950 F.2d 1108, 1113 (5th Cir. 1992) (holding that a statement by the
claimant that he was the owner of the seized property was sufficient to confer standing where the
government had indicated in its complaint that the claimant had a relationship with the property).
Third, it is signed by Joseph and states that the claim is made “under penalty of perjury.” See Fed.
Supp. R. Civ. P. G(5)(a)(i)(C). Fourth and finally, it states that it was served on U.S. Attorney, Daniel
M. Castillo, who is the lead attorney in this action, on January 19, 2017. See Fed. Supp. R. Civ. P.
G(5)(a)(i)(D). 4 The Court therefore concludes that Joseph’s “original claim” meets the requirements
of Rule G.
The Court will therefore turn to the issue of whether the Court should, in its discretion,
accept the late filing of Joseph’s claim. For the purposes of this issue, the Court will construe
Joseph’s response to the government’s motion to strike his answer as a motion to extend the time to
file his claim pursuant to Federal Rule of Civil Procedure 6(b)(1), see Erickson v. Pardus, 551 U.S. 89,
94 (2007) (“A document filed pro se is ‘to be liberally construed.’”), and consider whether his failure
to timely file a claim is due to excusable neglect.
A. Possibility of Prejudice to Other Parties
Under the first factor, the Court considers the possibility of prejudice to the government
that would be created if the late filing were allowed. The Court concludes that any possibility of
prejudice is minimal. First, the government knew that Joseph was a potential claimant, which is why
it sent him direct notice of the action. See Fed. Supp. R. Civ. P. G(b)(i) (“The government must send
notice of the action and a copy of the complaint to any person who reasonably appears to be a
potential claimant on the facts known to the government . . . .”). Second, the government knew or
should have known that Joseph was attempting to file a claim for the Respondent Property because
he filed an answer and supplement to his answer. These filings were made on July 5 and July 14,
2016, well before Joseph’s deadline for filing a claim in the action had passed on July 21, 2016. In
contrast, Joseph’s failure to file a timely claim will likely extend the length of time required for this
action somewhat (although the Court notes that the government has not moved this action forward
Without any information suggesting otherwise, and because the government attorney should have otherwise received
notice of the filing through the Court’s electronic filing system, the Court assumes that the government consents to
Joseph’s service. To the extent the government wishes to object to the service of Joseph’s response, it should file a
motion with the Court requesting appropriate relief.
quickly itself), and create some additional costs, including the costs of preparing the motion to strike
and the letters informing Joseph about how a claim could be filed.
B. Length and Impact of Applicant’s Delay
Under the second factor, the Court considers the length of Joseph’s delay and its impact on
the proceeding. As previously noted, Joseph’s deadline for filing a claim in the action was July 21,
2016, and his claim was filed six months later, on January 20, 2017. The Court concludes the impact
of this delay was small. The delay did not interfere with other deadlines, and no judgment or default
judgment was entered. In other words, the delayed filing—should it be accepted—will put the case
in the same position it would have been had the claim been timely filed, albeit several months later.
C. Reasons for Delay
Under the third factor, the Court considers the reasons for the delay and whether they were
in Joseph’s control. “Of the nonexclusive factors, this one is ‘perhaps the most important single
factor.’” $229,590.00 in U.S. Currency Seized from a Safe, 2013 WL 625742, at *5. Here, although
Joseph does not directly explain his reasons for his delayed filing, there is substantial evidence that
Joseph’s delay was due to his genuine misunderstanding about how to properly file a claim, despite
repeated attempts to do so. First, in his response to the government’s motion to strike, Joseph
attaches a document he labels a “previous claim.” While this document was never filed with the
Court, and there is no suggestion that it was served on the appropriate government attorney, it is
entitled a “Claim of Ownership,” and complies with some of the requirements of Rule G. It is
signed “subject to the penalty of perjury,” it specifically identifies the Respondent Property by
amount, seizure number, and asset ID, and it claims that Joseph is the owner of the property. (Resp.,
Dkt. 14-1, at 2). Further, it is dated June 16, 2016, more than a month before Joseph’s deadline for
filing a claim was reached. (Resp., Dkt. 14-1, at 3). Joseph addressed the claim to the USPIS Asset
Forfeiture Unit, at the address provided on USPIS’s website for Asset Forfeiture claims. See U.S.
Postal Inspection Service, Asset Forfeiture, Legal Notices,
AssetForfeiture.aspx (last visited April 13, 2017). This document strongly suggests that Joseph was
trying to file a claim but misunderstood that he needed to do so in this Court rather than with
USPIS. Given that the Respondent Property was first seized by USPIS, this misunderstanding is an
understandable one for a pro se litigant.
Next, Joseph also attached to his response a very similar document, entitled a “Complaint,”
and labeled it for the Court of Federal Claims. Notably the case caption on this document includes
the case number for this action, although it was not filed with this Court. Instead, it was likely filed
with the Court of Federal Claims. See supra n.1. Again, this document suggests that Joseph was trying
to file a claim, but misunderstood how to do so.
Further, there is some evidence that Joseph thought he had filed a sufficient claim before the
deadline and thus failed to correct his previous attempted claims. In forfeiture actions, answer
deadlines are triggered by the filing of a claim. See Fed. Supp. R. Civ. P. G(5)(b) (“A claimant must
serve and file an answer to the complaint or a motion under Rule 12 within 21 days after filing the
claim.”). Joseph submitted his answer—the answer the government now seeks to strike—on July 5,
2016. (Ans., Dkt. 8). Had the document Joseph labeled his “previous claim” been filed with this
Court and served on the designated government attorney the day it was signed, his answer would
have been due on or before July 7, 2016. That Joseph filed his answer two days before that date
suggests that he may have believed he had properly filed a claim, warranting the filing of an answer.
This mistaken belief may have prevented Joseph from filing a claim that met the requirements
outlined in Rule G sooner.
Later, after Joseph received letters from the government stating that it would move to strike
his answer because he had failed to file a claim, Joseph sent some correspondence to the
government. Based on the government’s response, which explained that Joseph’s “latest submission
fails because it has not been filed with the Court and does not set out the items required by the
applicable court rule,” (Mot. to Strike, Dkt. 12-3, Ex. C), this correspondence appears to be another
attempt by Joseph to file a claim. In light of Joseph’s repeated attempts to file a claim for the
Respondent Property, the Court concludes that his delay is understandable and excusable for a pro
D. Whether the Movant Has Acted in Good Faith
Finally, the Court must consider whether Joseph acted in good faith in making a delayed
filing. Here, as the Court previously explained, the record strongly suggests that Joseph’s delay was
caused by a genuine misunderstanding about how to file a claim, and that he may have initially
misunderstood that he had not yet filed a proper claim. The Court therefore concludes that Joseph
acted in good faith.
Considering each of these factors together, the Court concludes that there is good cause to
extend the time for Joseph’s claim to be filed under Rule G, and extends the time for the filing of
Joseph’s claim to January 20, 2017, the date on which Joseph filed his response including an original
claim. In light of the Court’s conclusion that Joseph has filed a claim pursuant to Rule G, the Court
also finds that Plaintiff has standing to assert his claim. See 18 U.S.C. § 983(a)(4)(A).
The Court declines to adopt the Report and Recommendation of the Magistrate Judge and
DENIES WITHOUT PREJUDICE Plaintiff’s Motion to Strike Joseph’s Answer (Dkt. 12).
SIGNED on April 26, 2017.
UNITED STATES DISTRICT JUDGE
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