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United States v. $229

United States District Court, D. Arizona

September 25, 2014

United States of America, Plaintiff,
v.
$229,850.00 in U.S. Currency, Defendant. Robert and Debra Osborne, Claimants

For United States of America, Plaintiff: Cynthia L Weisman, Stephen R Kotz, LEAD ATTORNEY, U.S. Attorneys Office - District of New Mexico, Albuquerque, NM.

For Robert C Osborne, Debra Osborne, Claimants: Richard B Jones, LEAD ATTORNEY, Law Office of Richard B Jones, Tucson, AZ.

Page 1172

ORDER

CHARLES R. PYLE, UNITED STATES MAGISTRATE JUDGE.

The Government filed this forfeiture action pursuant to 21 U.S.C. § 881(a)(6).

Page 1173

(Complaint (Doc. 1)). The Claimants in this case, Dr. Robert Osborne and his wife Debra Osborne seek dismissal pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim, arguing that the Complaint is untimely. (Doc. 9). The Magistrate Judge has jurisdiction over this matter pursuant to the parties' consent. See 28 U.S.C. § 636(c). The Osbornes' Motion to Dismiss came on for oral argument on July 29, 2014. ( See Transcript (Doc. 26)). For the following reasons, the Court converts the Motion to Dismiss to a motion for summary judgment and denies the motion.

Background

On May 9, 2013, pursuant to the execution of a search warrant by DEA, FBI, HHS, and IRS, a total of $229,850.00 in cash was seized from the master bedroom area of the Osbornes' residence. (Complaint, ¶ 11). The government alleges that the cash represents proceeds from Dr. Osborne's practice that was operating in violation of the Controlled Substances Act, 21 U.S.C. § § 846 and 841 and is subject to forfeiture pursuant to 21 U.S.C. § 881(a)(6). ( Id. at ¶ ¶ 13, 15). Neither Dr. Osborne nor his wife, who both reside at the residence, were arrested or incarcerated. ( Id at ¶ 14).

DISCUSSION

The Osbornes seek dismissal of this action on the ground that the Complaint is untimely filed by one day. The parties disagree about when the time for the government to file this action began to run: the Osbornes contend it should be when the Claim was received by the FBI mailroom in Phoenix, Arizona, on July 10, 2013, and the government contends it is when the claim was received by the appropriate official at the agency, here, the FBI Forfeiture Paralegal Specialist at the FBI field office in Phoenix, Arizona, who received the Claim on July 11, 2013.

Standard.

The government has attached affidavits with internal exhibits to its Response to the Motion to Dismiss. To consider the government's attachments, the Court must treat the motion to dismiss as a motion for summary judgment under Rule 56 and provide the parties with " a reasonable opportunity to present all the material that is pertinent to the motion." Fed.R.Civ.P. 12(d); see also San Pedro Hotel Co., Inc. v. City of Los Angeles, 159 F.3d 470, 477 (9th Cir. 1998) (represented party who submits matters outside the pleadings and invites consideration of same has sufficient notice that the court may use them to decide the motion thus requiring conversion to a motion for summary judgment). At oral argument, when the Court addressed the issue of conversion to a motion for summary judgment in light of the government's attachments, counsel for the Osbornes stated that: " It is undisputed that...the agency [received the claim]...on the 10th. My argument is that's the effective date. I am, at this point, not challenging that someone in that agency really did stamp it on the 11th; I mean that seems to be what these affidavits are saying. My position is, so what[?] It doesn't matter...." (Tr. at p.12). Counsel went on to state that discovery about " how the FBI procedures work...." is not necessary for the legal issue presently before the Court unless the Court decides otherwise. ( Id ).

Summary judgment is appropriate when there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The party seeking summary judgment " bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record]...which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548,

Page 1174

91 L.Ed.2d 265 (1986). The nonmoving party's evidence is presumed true and all inferences are to be drawn in the light most favorable to that party. Eisenberg v. Ins. Co. of North America, 815 F.2d 1285, 1289 (9th Cir. 1987).

Only disputes over facts that might affect the outcome of the suit will preclude the entry of summary judgment, and the disputed evidence must be " such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If the burden of persuasion at trial would be on the nonmoving party, the movant may carry its initial burden of production under Rule 56(c) by producing, " evidence negating an essential element of the nonmoving party's claim or defense," or by showing, after suitable discovery, that the " nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial." Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1105-1106 (9th Cir. 2000).

Timeliness.

The applicable forfeiture statute provides, in pertinent part that:

Any person claiming property seized in a nonjudicial civil forfeiture proceeding under a civil forfeiture statute may file a claim with the appropriate official after the seizure.

18 U.S.C. § 983(a)(2)(A) (emphasis added). " Not later than 90 days after a claim has been filed, the Government shall file a complaint for forfeiture...." 18 U.S.C. § 983(a)(3)(A). If the government does not timely file a complaint for forfeiture or return the property prior to expiration of the 90-day deadline, then the government " shall promptly release the property...and may not take any further action to effect the civil forfeiture of such property...." 18 U.S.C. § 983(a)(3)(B).

The facts are not in dispute. On May 9, 2013, the government seized the Defendant currency. On June 18, 2013, FBI Headquarters mailed Notice Letters to each of the Osbornes informing that the forfeiture was conducted pursuant to 21 U.S.C. § 881, 19 U.S.C. § 1602-1619, 18 U.S.C. § 983, and 28 C.F.R. Part 8. (Response (Doc. 16), Exh. 1A). The Notice Letters also informed that:

If you want to contest the seizure or forfeiture of the property in court, you must file a claim of ownership with the FBI by July 23, 2013. The claim is filed when it is received by the FBI Forfeiture Paralegal Specialist of the FBI Field Division mentioned below.[1]

(Id) (emphasis added). Through counsel, the Osbornes submitted a Claim dated July 9, 2013. (Response, Exh. 2A). The Osbornes sent the Claim by certified mail on July 9, 2014. (Id) In their Answer and Motion to Dismiss, the Osbornes assert that the Claim was received by the FBI on July 10, 2013. (Answer, (Doc. 7) p. 3[2] (citing tracking number); Motion p. 1 (citing Answer)). The ...


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