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Langbord v. United States Dep't of the Treasury

July 28, 2009

ROY LANGBORD, ET AL., PLAINTIFFS,
v.
UNITED STATES DEPARTMENT OF THE TREASURY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Legrome D. Davis, J.

MEMORANDUM

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

This litigation arises out of a dispute between Plaintiffs and the United States Government over ten 1933 Double Eagle $20 gold coins. In August 2004, Plaintiffs Roy, Joan, and David Langbord, acting through their counsel Barry Berke ("Berke"), contacted the Chief Counsel for the United States Mint, Daniel Shaver ("Shaver"), and the Senior Legal Counsel for the United States Mint, Greg Weinman ("Weinman"), to inform them that they had discovered the Double Eagles in a family safety deposit box in Philadelphia. Plaintiffs assert that the coins had belonged to their late family member, Israel Switt ("Switt"), and passed to Plaintiffs following the deaths of Switt and his wife. According to Berke, he suggested to Shaver and Weinman that the parties discuss a "resolution similar to what was reached in the Fenton case," a mid-1990s case in which the Government initiated forfeiture proceedings against a 1933 Double Eagle. (Berke Dep. at 80:14-81:12, June 18, 2008.) In that case, the Government eventually decided to dismiss its claims, auction the coin, and divide the profits with the coin's holder.*fn1

Shaver and Weinman testified at their depositions that Berke indeed suggested reaching some sort of agreement and that they responded that they "would be willing to discuss the matter," (Shaver Dep. at 96:16-97:2, June 12, 2008), and that they were "amenable to a discussion" on that topic (Weinman Dep. at 34:2-35:2, June 13, 2008). At the conclusion of that meeting, Shaver indicated that the Government would authenticate the coins. (Shaver Dep. 89:14-90:4.) Berke agreed. On September 15, 2004, Berke visited the Secret Service's offices in Brooklyn, N.Y., and met with Shaver, Weinman, and several Secret Service agents to discuss the coins. In the course of that meeting, there was a discussion between Berke and one of the Secret Service agents about venue, and Berke responded that his clients were prepared to waive venue. On September 21, 2004, the day before Plaintiffs would transfer the coins to the Government, Berke sent Shaver a letter that stated, in relevant part:

I write on behalf of the Langbord family regarding their ownership of ten 1933 Double Eagle Coins ("the Coins.") At the request of the United States Mint, Roy Langbord will make the coins available to the government . . . based on our understanding that the government will test the Coins for authenticity and secure the Coins while we discuss a possible resolution of the issues relating to the Coins. This agreement to make available the Coins . . . is without prejudice to all of my clients' rights . . . We specifically reserve all rights and remedies with respect to the Coins. (Pls.' Mot. Summ. J. Due Process & Illegal Seizure, Ex. E.) On the morning of September 22, 2004, the day of the transfer, Berke again met with Shaver and Weinman. During that meeting, both Shaver and Weinman confirmed that they had received Berke's letter. Plaintiff Roy Langbord, accompanied by Berke, opened the safe deposit box and turned the coins over to the Government.

According to a December 6, 2004, internal memorandum written to the then-Assistant Secretary of Treasury, a number of representatives from the different government agencies involved in the matter met on December 3, 2004, to discuss "how to proceed with the case." (Id., Ex. G at 1.) The agencies represented included the United States Attorney's Office for the District of Columbia, the United States Secret Service, the Treasury Department, and the United States Mint. The memorandum explained that "[a]ll the agencies involved, with the exception of the US Mint, are in favor of pursuing forfeiture." (Id.) The document further stated that "[t]he US Mint asserts that the coins are government property" and that there was therefore no "need for forfeiture." (Id.)

In May 2005, the United States Mint ultimately determined that the coins were in fact authentic 1933 Double Eagles. At a meeting in Washington, D.C., in June 2005, Shaver and Weinman informed Berke that the authentication had been completed and advised him that the Government would not offer any monetary settlement to Plaintiffs. On July 25, 2005, Berke sent Shaver a letter urging him to reconsider his position and requesting the immediate return of the coins. On August 9, 2005, Shaver responded with a letter stating:

The United States Mint has no intention of seeking forfeiture of [the] ten Double Eagles because they already are, and always have been, property belonging to the United States; this makes forfeiture proceedings entirely unnecessary.

(Id., Ex. H.)

On September 9, 2005, Berke submitted a letter containing a "Seized Asset Claim" to Shaver and to the General Counsel of the Treasury Department, Arnold Havens ("Havens"). The Claim demanded either return of the coins or the initiation of a judicial forfeiture proceeding. Plaintiffs' Seized Asset Claim was allegedly based on the Civil Asset Forfeiture Reform Act of 2000 ("CAFRA"), 18 U.S.C. § 983. Shaver responded on December 5, 2005 stating:

[T]here has been no seizure of property; your client voluntarily surrendered to the United States property belonging to the United States. Therefore, there is no basis for a forfeiture action, and I have concluded that the documents you submitted do not constitute a cognizable claim under any law of the United States. (Id., Ex. J at 2.)

Plaintiffs then submitted a "claim for damage" to the Treasury Department, via Havens, for damages in the amount $40 million dollars based on the "government's unlawful seizure, forfeiture, and conversion of the 1933 Double Eagle Coins." (Id., Ex. K at 3.) Shaver responded on June 6, 2006, requesting, among other things, "[p]roof of ownership" of the coins. (Id., Ex. L.) Berke responded on June 29, 2006, that Plaintiffs were the owners of the coins "by virtue of their being the ultimate beneficiaries under the wills of Elizabeth and Israel Switt." (Id., Ex. M at 1.) Shaver sent a final letter on November 6, 2006, informing Berke that "the Director of the United States Mint conclude[d] that the Langbord family . . . provided no evidence to suggest that it ever held title to the property in question, and as such, denied your claim." (Id., Ex. O at 3.)

In December 2006, Plaintiffs instituted this civil action against the United States, the Department of the Treasury, the United States Mint, and numerous officials thereof, including Shaver, alleging causes of action for conversion, replevin, violations of CAFRA, violations of the Administrative Procedure Act ("APA"), and violations of Plaintiffs' Fourth and Fifth Amendment rights.

The parties have filed cross motions for summary judgment on Plaintiffs' CAFRA claim and on their Fourth and Fifth Amendment claims. Plaintiffs also move for summary judgment on their Administrative Procedure Act claim. Defendants move for summary judgment on Plaintiffs' replevin and conversion claims.

II. LEGAL STANDARD

In evaluating a motion for summary judgment, the court must consider whether "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). "An issue is genuine only if there is a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party, and a factual dispute is material only if it might affect the outcome of the suit under governing law." Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir. 2006) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Where the moving party has the burden of proof at trial, it has the burden at summary judgment "of supporting [his] motion[] with credible evidence . . . that would entitle [him] to a directed verdict if not controverted at trial." In re Bressman, 327 F.3d 229, 237 (3d Cir. 2003) (internal quotations omitted). In ruling on the motion, the court "may not weigh the evidence or make credibility determinations." Boyle v. City of Allegheny, 139 F.3d 386, 393 (3d Cir. 1998); see Anderson, 477 U.S. at 255. Furthermore, all reasonable inferences from the record are drawn in favor of the non-movant. See Anderson, 477 U.S. at 255; J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1531 (3d Cir. 1990), cert. denied, 499 U.S. 921 (1991). "This standard does not change when the issue is presented in the context of cross-motions for summary judgment." Appelmans v. Philadelphia, 826 F.2d 214, 216 (3d Cir. Pa. 1987)

III. ANALYSIS

A. Plaintiffs' CAFRA Claims

Plaintiffs claim that Defendants violated CAFRA, 18 U.S.C. § 983(a) ("§ 983(a)"), because they did not comply with the notice and claim procedures set forth in that statute.

The provisions of § 983(a) apply "in any non-judicial civil forfeiture proceeding under a civil forfeiture statute, with respect to which the Government is required to send written notice to interested parties." 18 U.S.C. § 983(a). A non-judicial civil forfeiture "is commenced when the Government sends notice of the forfeiture proceeding to potential claimants." Stefan D. Cassella, Asset Forfeiture Law in the United States 143 (2007). In fact, Plaintiffs concede that administrative forfeiture "consists of no more than notice by the Government that it intends to forfeit the property." (Pls.' Cross-Mot. Summ. J. CAFRA at 2 (citing Lopez v. United States, No. 96-1972, 2006 WL 2788999, at *10 (D.D.C. Sep. 26, 2006)). Here, it is undisputed that the Government never sent Plaintiffs such a notice. In fact, it is undisputed that the Government informed Plaintiffs that it believed that a forfeiture proceeding was "entirely unnecessary" and that it had "no intention of seeking the forfeiture of any 1933 Double Eagle." (Pls.' Mot. Summ. J. Due Process & Illegal Seizure, Ex. H.) Accordingly, we find that the Government never began an administrative forfeiture proceeding and therefore the requirements of § 983(a) do not apply.

Plaintiffs argue that we should nonetheless apply § 983(a) of CAFRA because, whether authorized by statute or not, the Government "in fact confiscated and forfeited the Coins nonjudicially." (Pls.' Cross Mot. Summ. J. CAFRA at 2.) Plaintiffs do not cite any authority for the proposition that, where the Government did not technically begin an administrative forfeiture, but acted as if it had in fact administratively forfeited the property, § 983(a) of CAFRA should apply.*fn2 The leading treatise on the subject, which both parties cite to support their positions, specifically explains that the provisions in § 983(a) of CAFRA apply only where a non-judicial forfeiture proceeding has been commenced under a civil forfeiture statute and do not apply "when the property is seized for some non-forfeiture purpose." Stefan D. Cassella, Asset Forfeiture Law in the United States 144 (2007); see DWB Holding Co. v. United States, 593 F. Supp. 2d 1271, 1272 (M.D. Fla. 2009) ("Although Plaintiff is correct that written notice is required within sixty (60) days after the date of seizure when there is a non-judicial civil forfeiture proceeding, 18 U.S.C. § 983(a)(1)(A)(I), Plaintiff is incorrect that such notice is required in this instance because the United States has not commenced non-judicial forfeiture proceedings."). As we mentioned above, the undisputed evidence here shows that the Government never intended to pursue a forfeiture process.

We find nothing in the language of CAFRA to indicate that § 983(a) is intended to govern "de facto" administrative forfeitures. In interpreting CAFRA, "our task is to give effect to the will of Congress, and where its will has been expressed in reasonably plain terms, that language must ordinarily be regarded as conclusive." Negonsott v. Samuels, 507 U.S. 99, 104 (1993).

The plain meaning of CAFRA's language therefore controls "unless the language is ambiguous or leads to absurd results." United States v. Carrell, 252 F.3d 1193, 1198 (11th Cir. 2001). Here, we find that the language is not ambiguous. CAFRA clearly indicates that the provisions of § 983(a) only apply "in any non-judicial civil forfeiture proceeding under a civil forfeiture statute." 18 U.S.C. § 983(a). Therefore, because § 983(a) governs only the procedures of an administrative forfeiture and because no such forfeiture was ever pursued by the Government, we find the section inapplicable in this case.*fn3 Accordingly, we will grant summary judgment in favor of Defendants on Plaintiffs' CAFRA claim.

Plaintiffs argue that this interpretation leads to an absurd result because it would cause the Langbords to lose all their rights to the property and would allow the Government to retain the coins simply because it chose not to begin a forfeiture action. That is not the case. Although we hold that ยง 983(a) does not apply to the present situation, as we will explain below, we also hold that due process requires that the Government begin a judicial forfeiture proceeding in a timely ...


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