9th Circuit Appellate Court Rejects Government’s Argument That Claimants Who Deny Currency Ownership To The Police Concede Article III Standing To Challenge Attempted Forfeitures

Thursday, September 6th, 2012

Scott Alexander Meiner, Americans for Forfeiture Reform

Michael Simard prevailed on a civil asset forfeiture and Article III case or controversy standing question before the United States Court of Appeals for the Ninth Circuit. The federal government argued, among other things, that a possessor of currency who denied knowledge of, or interest in, possessed currency, at the scene of an investigatory stop and seizure, conceded Article III case or controversy standing to subsequently claim ownership and/or possessor interest in the currency. For purposes of ownership interest, at this point, the appellate court saw otherwise. The appellate court reversed the district court and found (while implicitly rejecting the government’s position in regards to ownership interest):

” The district court erred in granting the motion to strike by applying the standard of proof for a claimant asserting a possessory, rather than an ownership, interest in property. In a civil forfeiture proceeding, “[a]t the motion to dismiss stage, a claimant’s unequivocal assertion of an ownership interest in the property is sufficient by itself to establish standing.” USA v. Michael Simard, et al., No. 11-15528 (9th Cir. Aug. 27, 2012)(unpublished).

Parties seeking to claim property facing federal in rem (against the thing) forfeiture actions carry the burden of establishing their own constitutional standing at all stages of litigation. Without Article III case or controversy standing, federal courts lack jurisdiction to hear the claim.

The government’s argument, if successful, threatened to further escalate incentivization of coercive seizure tactics while reducing access to the courts-eliminating it for some. Many parties who suffered currency seizures would effectively be left with no option but to petition the agency for remission or mitigation-a plea for the agency and agents (who often havefinancial and professional incentives to say no) to be merciful.

Mr. Simard and his attorneys, Ronald N Richards and Louis Palazzo, deserve congratulations on their victory. The matter has been remanded to the district court where the matter will be further litigated. Among possible issues to be discussed in further litigation include the government’s contentions:

  • Asking for a consent to search on the pretense of a “current threat assessment and homeland security issues” is not coercive [It should be noted that Simard is Canadian. The U.S. Government’s role in sending Canadian Maher Arar to his native Syria for a year of torture is better known in Canada than it is in the U.S.]
  • Simard’s vehicle being ”cluttered with several snacks” [while on a road trip] was indicative of a courier smuggling drugs or drug proceeds.
  • The use of a rental car was indicative of a courier smuggling drugs or drug proceeds.
  • The presence of an ”atlas on the front right passenger seat” was indicative of a courier smuggling drugs or drug proceeds.
  • The presence of a “black backpack on the right front floor board [which] would hold insufficient clothing for the road trip” was indicative of a courier smuggling drugs or drug proceeds. [This was was prior to officers finding further luggage-presumably in his trunk where a good number of people keep luggage.]
  • The presence of multiple duplicate electronic devices was indicative of a courier smuggling drugs or drug proceeds.
  • Simard was no longer detained after officers told him that he could go but then came back and starting asking more questions, secured a signature to consent to search his rental, and seized the currency in his possession.
  • That a positive canine sniff on bulk currency was (and is) a reliable indicator of recent exposure to illegal controlled substances and thus a reliable indicator that the currency was either intended to be used to purchase illegal drugs or constitutes proceeds of illegal drug sales.
Addendum: Scott Greenfield (Simple Justice) notes in the comments:

The importance of this ruling is that the denial at the time of seizure (“It’s not mine; I’ve never seen that money before.”) no longer binds the claimant in a subsequent forfeiture proceeding. This is good, though it doesn’t make the claimant look either truthful or innocent, but that can’ be helped as he’s already denied ownership. At least it gets him into the game.

As for the factors mentioned, the burden to the government is probable cause, and it’s based on the totality of circumstances. It’s typical in a forfeiture proceeding to break down the circumstances into small bites to create the sense of a substantial number of factors that support probable cause. The claimant’s response would be that he was on a road trip, like millions of people innocently enjoy regularly every year, negating many of the circumstances.

The problem, obviously, is that millions of people on innocent road trips don’t have bulk currency in the car. The burden shifts to the claimant, after the government has proven probable cause, to prove that the currency was legitimately owned and possessed for lawful purposes. While the win on standing is a good decision, whether Simard can prevail on his claim is another matter…

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18 Responses to “9th Circuit Appellate Court Rejects Government’s Argument That Claimants Who Deny Currency Ownership To The Police Concede Article III Standing To Challenge Attempted Forfeitures”

  1. #1 |  Bergman | 

    Wow. I’ve seen cops themselves do more than half the things that they claim indicate a drug courier. Often all of them in the same patrol car.

    Officers often have snacks in the car with them, regardless of what regulations may or may not say.

    Police often have a reference road map for navigation purposes, especially when new on the job.

    Police often have a briefcase or messenger bag to hold paperwork, forms, etc. The most common places for it are the passenger side on the floor or in the passenger seat. It is usually black.

    A modern police car is festooned with electronic devices.

    Aside from currency fresh from the Treasury, ALL currency has traces of narcotics on it, sufficient for a drug sniffing dog to alert on it. I’d wager dollars to doughnuts that a police dog would alert on most officer’s wallets, with a neutral handler.

  2. #2 |  Burgers Allday | 

    Oh, hi, Eapen.

    Hmmm, Simard said that he didn’t own the million dollars because if he said that he did own the million dollars then he would be sent to Syria like Mr. Arar was?

    My prediction: this case may well end up hurting the asset forfeiture reform movement more than it helps it. I hope my prediction is wrong, but Simard seems guilty as sin based only on your blog post and the non-precedential 9th Circuit decision. Based on this limited information, Simard seems like the type of guy that lawmakers had in mind when they wrote and pitched the asset forfeiture law.

  3. #3 |  Scott Alexander Meiner | 

    #2 | Burgers Allday: My prediction: this case may well end up hurting the asset forfeiture reform movement more than it helps it. I hope my prediction is wrong, but Simard seems guilty as sin based only on your blog post and the non-precedential 9th Circuit decision. Based on this limited information, Simard seems like the type of guy that lawmakers had in mind when they wrote and pitched the asset forfeiture law.

    Perhaps. It is early in the litigation. The case could easily go back to an appellate court on another issue. And, it easy enough for policy makers to seize on such occurrences to craft draconian policy.

    The opinion seemed notable to me because (1) the appellate did not rule otherwise on this question and (2) because of the danger that the appellate court would rule otherwise-especially if the appellate court agreed with the prosecution (and district court) and then recommended the opinion for publication. That danger seemed real (to me) given February’s published opinion US v. $133,420.00 in United States Currency, 10-16727 (9th Cir. Feb. 21, 2012).

    IMO, judicial acceptance of the government’s position would predict a new dramatic escalation of civil forfeitures and coerced consents.

  4. #4 |  shg | 

    Lawyers would not use the phrase “Article III case or controversy standing,” but merely standing. It refers to an individual claimant’s right to challenge the in rem forfeiture proceeding by alleging either an ownership or possessory interest. In other words, whoever gets to put the government to the test (minimal though it may be) has to be a person legally entitled to the money. Standing applies to all civil actions, state and federal. Article III is the part of the U.S. Constitution that authorizes the existence and jurisdiction of federal courts.

    The importance of this ruling is that the denial at the time of seizure (“It’s not mine; I’ve never seen that money before.”) no longer binds the claimant in a subsequent forfeiture proceeding. This is good, though it doesn’t make the claimant look either truthful or innocent, but that can’ be helped as he’s already denied ownership. At least it gets him into the game.

    As for the factors mentioned, the burden to the government is probable cause, and it’s based on the totality of circumstances. It’s typical in a forfeiture proceeding to break down the circumstances into small bites to create the sense of a substantial number of factors that support probable cause. The claimant’s response would be that he was on a road trip, like millions of people innocently enjoy regularly every year, negating many of the circumstances.

    The problem, obviously, is that millions of people on innocent road trips don’t have bulk currency in the car. The burden shifts to the claimant, after the government has proven probable cause, to prove that the currency was legitimately owned and possessed for lawful purposes. While the win on standing is a good decision, whether Simard can prevail on his claim is another matter. And, as Burgers suggests, Simard may well be exactly the sort of case where forfeiture is intended.

    Federal in rem forfeiture is terrible law, but it remains importnat to describe it accurately and understand its components, as it is the law.

  5. #5 |  croaker | 

    What it proves is that cops are theives, and the only difference between a police department and a street gang is major medical.

  6. #6 |  egd | 

    Allowing a claimant to waive standing during a traffic stop is simply bad law. Kudos to the 9th circuit for getting it right.

    While the claimant’s comments will certainly be used as evidence that he isn’t the lawful owner of the property, to so disenfranchise someone at a mere traffic stop is unquestionably abusive.

    I wonder if the court would hold police comments during a stop to the same standard?

  7. #7 |  En Passant | 

    #4 | croaker wrote September 6th, 2012 at 8:07 am:

    What it proves is that cops are theives, and the only difference between a police department and a street gang is major medical.

    And spiffy uniforms with funny hats.

    Don’t forget attitude, either. Street gangs don’t usually kill puppies just for fun.

  8. #8 |  Yizmo Gizmo | 

    Henry Hyde was supposed to have made headway in this
    area (Forfeiture Abuse, also known as Theft). That was Federal sezures, right? They never got around to the other kind, or what?

  9. #9 |  Boyd Durkin | 

    I matched all of those bullet points and I am almost never a drug courier. Police dogs will easily sniff “positive” on my Tercel because…well because police dogs are full of shit.

    The only one I wouldn’t match is the one where he consented to search his rental.

    and the only difference between a police department and a street gang is major medical.

    Gangs aren’t blown nearly as often by politicians.

  10. #10 |  MattJ | 

    This seems like it’s very important, but it’s written in lawyer-ese, so I only understand about 20% of it.

    … he had a million bucks in his rental car and he said somthing similar to “That’s not mine, officer – I don’t know how that got there”?

    So is the actual case here to decide whether the police keep it? And if they can’t, who does – the guy who said it wasn’t his money? Or will the money be held (presumably by the police) until someone comes forward to claim it?

  11. #11 |  En Passant | 

    #9 | MattJ wrote September 6th, 2012 at 9:57 am:

    … he had a million bucks in his rental car and he said somthing similar to “That’s not mine, officer – I don’t know how that got there”?

    So is the actual case here to decide whether the police keep it?

    Yes and No. The case reported above was on appeal from the claim case. It decided he had standing to bring the claim, ie: whether the courts recognize him as the party who can bring a claim for the money to court. The 9th CCA ruled that he can make the claim, ie: that his claim case can stay in court.

  12. #12 |  Burgers Allday | 

    Lawyers would not use the phrase “Article III case or controversy standing,” but merely standing.

    I may not drive a geezermobile, but I am going to disagree with this criticism of the phrasing Eapen quotes. Lujan states:

    “Though some of [standing doctrine’s] elements express merely prudential considerations that are part of judicial self-government, the core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III.”

    In light of this, the phrase “Article III case-or-controversy standing” seems like a fair descriptor. I would have preferred the more-concise phrase “Article III standing,” but I am not going to throw down my bar card and call trump on that fine of a point.

  13. #13 |  shg | 

    It wasn’t a criticism, nor a subject of debate. It’s merely how lawyers refer to standing, so if someone reading this was to have a discussion with a lawyer, judge or person otherwise familiar with the concept, they aren’t thought peculiar for using an odd phrase.

  14. #14 |  Eapen Thampy | 

    Burgers,
    Scott Greenfield is right on this one…it is a peculiar and slightly cumbersome phrase.

  15. #15 |  Burgers Allday | 

    Right, the correct tem would have been “Constitutional standing” or “Article III standing.” As it turs out, the court opted for the latter term. Simply saying “standing” doesn’t really cut it because, as we all remember from 1L, second semester Civ. Pro., this could be confused with the distinct concept of prudential standing. In this case, SHG is suggesting simplifying the justice just a tad too much.

  16. #16 |  Bill Wells | 

    Don’t celebrate too soon…..

    This was on a motion to dismiss. Usually, a motion to dismiss is made at an early stage in the proceedings, where the court is required to assume that every allegation made by the plaintiff in his complaint is true. If so: The mere claim to ownership in the complaint would suffice to defeat the motion to dismiss. At a later stage in the proceedings (say, on a motion for summary judgment), it may well turn out that the plaintiff is unable to adequately support his allegation; the case would then be tossed for lack of standing. At most, this is merely a slap on the wrist to the district court for failing to follow the proper procedure when deciding a motion to dismiss.

  17. #17 |  J-Ho | 

    @ #7

    “Don’t forget attitude, either. Street gangs don’t usually kill puppies just for fun.”

    Uhhh… Yeah they do.

    As far as the phrasing (i.e. “Article III case or controversy standing” vs “standing” or “Article III standing”), I’m not a lawyer and this article soared completely over my head until I read shg’s comment and realized the author was being a little pedantic. Not a big deal if you’re reading a legal blog, but it’s not what you’d expect to see at The Agitator.

  18. #18 |  Burgers Allday | 

    @17: yeah, I would have written it much differently myself and probably avoided the word “standing” altogether.

    Guy had a million dollars cash in his car. When stopped by police he denied that the million dollars was his. Now that the money is going to be forfeited to the government, guy decides that the million dollars really is his. Government argues that his initial denial of ownership prevents him from even bringing a legal claim to get the money due to certain Constitutional restrictions on who may bring a claim in a court case. The Appeals Court has now decided that he can bring his claim, despite his initial denial of ownership of the money, but he probably won’t win because of his initial denial of ownership of the money. Maybe he will say he had amnesia that day. This Appeals Court decision at least gets his lawyer in the door of the courthouse and gives his counsel an opportunity to tell whatever b.s. story they have cooked up to get the million back.

    That what you were looking for?

    I am not saying that I can’t kick Eapen’s heinderparts when it comes to blogging legal cases in terms laypeople can understand. I do that almost every day! I was just saying that SHG’s particular criticism is a bit misplaced here.

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