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United States v. $50

United States District Court, D. Arizona

June 15, 2016

United States of America, Plaintiff,
$50, 460.00 in United States Currency, Defendant.


          James A. Teilborg Senior United States District Judge

         Pending before the Court is Plaintiff United States of America’s motion for default judgment, against $50, 460.00 in United States Currency pursuant to Fed.R.Civ.P. 55 (b). (Doc. 10). No response has been filed. The Court will grant the motion.


         This case is a civil action in rem to forfeit money seized by law enforcement from Jamar Jackson. (Doc. 1). On February 24, 2016, the Clerk of the Court entered default as to the defendant property, Jackson, and all other persons or entities who may claim an interest in the defendant property. (Doc. 9). Plaintiff thereafter filed the pending motion for default judgment. (Doc. 10). At no point has Jackson, or any other entity or individual purporting to have an interest in the defendant property, responded to this action.

         Upon entry of default, the factual allegations of the Complaint, except those relating to the amount of damages, are taken as true. Yoo v. Arnold, 615 Fed.Appx. 868, 870 (9th Cir. 2015); Fair Housing of Marin. v. Combs, 285 F.3d 899, 906 (9th Cir. 2002); Televideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987). The Court thus accepts as true the well-pleaded facts contained in the Complaint. (Doc. 1).


         Fed. R. Civ. P. 55(a) establishes that “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules . . . the clerk shall enter the party’s default.” Once a default has been entered, and a defendant fails to appear to move to set aside the default, then the Court may enter a default judgment pursuant to Fed.R.Civ.P. 55(b)(2). The “general rule” with respect to default judgments is that they “are ordinarily disfavored, ” as “[c]ases should be decided upon their merits whenever reasonably possible.” Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986) (citing Pena v. Sequros La Comercial, S.A., 770 F.2d 811, 814 (9th Cir. 1985)). Nonetheless, “[g]ranting default judgment is within the court’s discretion.” EEOC v. Recession Proof United States LLC, No. 11-CV-01355-PHX-BSB, 2013 U.S. Dist. LEXIS 171524, at *8 (D. Ariz. Aug. 19, 2013).

         Plaintiff moves the Court to exercise its discretion and enter default judgment in its favor with respect to $50, 460.00 in United States Currency. In exercising this discretion, the Court is guided by consideration of the following factors: “(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.” Eitel, 782 F.2d at 1471-72 (citation omitted). The Court will address each of the applicable factors in turn.

         A. Possible Prejudice to Plaintiff

         The first Eitel factor weighs in favor of granting Plaintiff’s motion, as Plaintiff will be prejudiced if default judgment is not entered in its favor. As noted supra, at no point has Mr. Jackson-or any other individual or entity purporting to have an interest in the defendant property-responded to this action, and the record reflects that Plaintiff gave proper notice. (Docs. 6, 7). If the motion for default judgment is not granted, Plaintiff “will likely be without other recourse for recovery.” PepsiCo, Inc. v. Cal. Sec. Cans., 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002); see also United States v. $86, 496.00 in United States Currency, No. CV-07-1693-PHX-DGC, 2008 U.S. Dist. LEXIS 115052, at *4-5 (D. Ariz. July 1, 2008) (citation omitted).

         B. Merits of Plaintiff’s Forfeiture Claims

         The Court next considers the merits of Plaintiff’s substantive claim. “The procedures governing civil forfeiture actions are set forth in various forfeiture statutes, the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), 18 U.S.C. § 983, the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions (“Supplemental Rules”) and this District Court’s Local Rules, if any.” United States v. $50, 000 in United States Currency, No. CV-10-2004, 2011 U.S. Dist. LEXIS 63448, at *3 (D. Ariz. June 16, 2011). Under CAFRA, “the burden of proof is on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture.” 18 U.S.C. § 983(c)(1); United States v. $79, 010.00 in United States Currency, No. CV-10-0244-PHX-DGC, 2012 U.S. Dist. LEXIS 48148, at *3 (D. Ariz. April 4, 2012); see also United States v. $80, 180.00 in U.S. Currency, 303 F.3d 1182, 1184 (9th Cir. 2002) (“CAFRA transferred the burden of proof from the claimant to the government and required the government to establish forfeiture by a preponderance of the evidence rather than by the lower probable cause standard[.]”).

         In the instant matter, Plaintiff alleges that the defendant property was intended to be furnished in exchange for a “controlled substance in violation of Title II of the Controlled Substances Act, 21 U.S.C. § 801, et seq., ” and that the defendant property “constitutes or is derived from proceeds traceable to . . . the movement of the proceeds of trafficking in controlled substances . . . in violation of 18 U.S.C. § 1952.” (Doc. 1 at 15). Thus, based on violations of these two statutory provisions, the defendant property is subject to forfeiture under to 18 U.S.C. § 181(a)(1)(A), (C). Having reviewed Plaintiff’s Complaint-accepting the well-pleaded facts contained therein as true-the Court finds that Plaintiff has met its burden under CAFRA and demonstrated by a preponderance of the evidence that the defendant property is subject to forfeiture.

         The Complaint establishes that Jamar Jackson was initially approached by law enforcement at Philadelphia International Airport after purchasing a one-way ticket to travel to Phoenix the prior day. (Doc. 1 at 2-3). Plaintiff was carrying $50, 460.000 in United States Currency on his person. (Id. at 2). After being approached prior to boarding his flight in Philadelphia, Jackson told law enforcement that he had $30, 000 in his possession for the purpose of buying a vehicle in Phoenix, Arizona. (Id.). Jackson further claimed that his friend “Charles, ” in Phoenix, had identified ...

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