The opinion of the court was delivered by: Legrome D. Davis, J.
This case concerns the rightful ownership of ten (10) gold coins minted by the United States Government here in Philadelphia almost eighty years ago. The coins in dispute, produced by the Philadelphia Mint in 1933, are $20 gold pieces known as "Double Eagles." Famed sculptor Augustus Saint-Gaudens designed the Double Eagles at the behest of President Theodore Roosevelt, and the coins are still considered among the most beautiful ever crafted by our country.
According to the Government, no 1933 Double Eagles were ever lawfully issued to the public; the vast majority were melted down and formed into gold bars following the Gold Reserve Act of 1934. Nevertheless, some managed to escape the Mint. In the 1940s, the Secret Service traced the leak to George McCann, a Philadelphia Mint cashier, and Israel Switt, a coin dealer and the proprietor of a local antique store.
In 2002, the only '33 Double Eagle then known to exist, a coin once possessed by King Farouk of Egypt, sold at auction for over $7 million dollars. According to Joan, Roy, and David Langbord, the Claimants in this matter, they then discovered in August of 2003 ten (10) more of these precious coins buried at the bottom of a family safe deposit box. Joan Langbord is Joan Switt Langbord, the daughter of Israel Switt. Roy and David are his grandsons. The Langbords eventually notified the Government of their find, and this litigation followed. In essence, both parties want the coins.
Following a lengthy trial, a jury unanimously found that the disputed 1933 Double Eagles were forfeit to the United States Government. In the instant motions, the Claimants challenge this verdict and at the same time contend that the verdict mooted a related declaratory judgment claim, which the Government brought to quiet title to the coins. The motions are now ripe for disposition.
As explained herein, we deny the Claimants' motions in their entirety. We also declare that the coins in question were not lawfully removed from the United States Mint and, as a matter of law, remain the property of the United States.
II. Factual Background and Procedural History*fn1
A. The Disappearance of the Double Eagles, Placed in Historical Context When Franklin D. Roosevelt took office on March 4, 1933, four years after the 1929 stock market crash ushered in the Great Depression, the nation was in dire straits. (Tr. 209, at 38-70). Between 1930 and 1933, about five thousand (5,000) banks went out of business, and many depositors lost everything. (Id.). Amid this crisis, people began to lose faith in paper currency. They ran to the banks in droves, demanding their money in gold -- something tangible with an intrinsic value that might survive through troubled times. (Id.).
Within twenty-four hours of taking office, Roosevelt proclaimed a "bank holiday," which effectively closed every bank in the country and banned the payout of gold coins.*fn2 (Tr. 209, at 43-45). This first "bank holiday" lasted for four (4) days, from March 6 through March 9, 1933. (Id.; Tr. 209, at 52, 55; Tr. 212, at 112). With his proclamation, Roosevelt hoped to stop gold hoarding and stem the tide of gold -- our nation's wealth -- that had been rushing out of the country's banks. (Tr. 209, at 43-45). The President went so far as to threaten to make people's names public if they failed to return their gold.*fn3 (Id.). As expected, gold started flowing back into the country's coffers; returning one's gold was viewed as an act of patriotism. (Tr. 209, 43-47, 62). All of this was front page news around the nation, including in Philadelphia. (Tr. 209, at 56-57, 62). Subsequent proclamations and orders tightened the government's control on gold well beyond March 9th. (Tr. 209, at 46-50; Tr. 212, at 119).
Nonetheless, the Philadelphia Mint continued producing coins,
including the 1933 Double Eagles that are the subject of this suit.
(Tr. 209, at 77). In fact, the '33 Double Eagles were made only at the
Philadelphia Mint; no other Mint struck these coins.*fn4
(Tr. 208, at 144). In layman's terms, a "Double Eagle" is a
$20 gold coin. And $20 was a lot of money back in 1933.*fn5
All told, the Philadelphia Mint created 445,500 1933 Double Eagle gold
coins. (Tr. 208, at 133-34; G-337). Because gold was a "sacred
material" and represented the wealth of America, the
Mint kept meticulous records on its gold coins. (Tr. 208, at 134).
And, according to the Government's primary expert David
Tripp,*fn6 many of the Mint's records from the
relevant time frame still exist in their entirety today.*fn7
(Tr. 208, at 162-75).
Much of the trial testimony focused on the Philadelphia Mint cashier and the records he kept. The Mint cashier is, for all practical purposes, the "gatekeeper" of the coins. (Tr. 208, at 132). He is the last stop, so to speak, before the Mint's coins go out into the real world. (Id.). In 1933, the Philadelphia Mint cashier was a Mr. Powell, and his assistant was a Mr. Ott. During this period of time, someone in the cashier's office--presumably Powell and/or Ott--tracked the movement of coins, including 1933 Double Eagles, into and out of the office. They did so using two complementary documents - the "cashier's daily settlement" and the "cashier's daily statement." (Tr. 208, 162-75, 181, 196-98).
The daily settlement reflects the cashier's end-of-day accounting of the money in his control. (Tr. 208, at 196-98). Important to this case, the daily settlement is segregated into three (3) categories of coins: one for the current year's production, i.e., 1933 Double Eagles; one for prior years' coins; and one for circulated coins (for example, coins that had been in commerce but later came back to the Mint as worn). (Id.). The daily settlement is a handwritten,*fn8 unsigned document.*fn9 (Tr. 213, at 165, 179). The daily statements, on the other hand, are typed and signed, but they do not reflect the dates of the coins. (Tr. 213, at 165; 214, at 21-22). In addition to tracking gold coins, the cashier's records tracked such minutiae as a three (3) cent payout to a customer who evidently received his money in the form of two (2) 1932 pennies and one (1) 1933 penny. (Tr. 209, at 9-25). As should be apparent, the records are exquisitely detailed.
Relying primarily on the cashier's daily settlements and statements, Tripp reconstructed the day-to-day movement of the 1933 Double Eagles. (Tr. 209, at 26-36).*fn10 Using these two documents in tandem, along with other Mint records,*fn11 Tripp figuratively followed the coins around the Mint every day from January of 1933 through November of 1934. (Id.; Tr. 209, at 113-17). By doing so, Tripp accounted for each and every one of the 445,500 1933 Double Eagles and showed that not a single '33 Double Eagle was issued to the public. (Tr. 210, at 39).
Specifically, the 445,500 1933 Double Eagles were delivered to the cashier in ten (10) installments, the first on March 15, 1933 and the last on May 19, 1933.*fn12 (Tr. 210, at 34-40, 69-71). And remember, Roosevelt's first "bank holiday" forbidding the payout of gold coins took effect on March 6th, nine (9) days before the first shipment of '33 Double Eagles to the Philadelphia Mint cashier. (Tr. 209, at 100-03). What's more, the Mint did not continue shipping gold coins to the Federal Reserve Banks after March 6th. (Tr. 209, at 103-05).
The vast majority of the '33 Double Eagles--445,000 to be exact--were subsequently sealed in a basement vault on June 27, 1933. (Tr. 210, at 40-42, 69-71). The remaining 500 coins were in the cashier's control at one point or another. Of these 500, 446 were reserved and put into a locked pyx box for the annual assay.*fn13 (Tr. 210, at 43-51, 69-71). Of these 446, nine (9) were actually destroyed in the annual assay, which took place between February 14 and 15, 1934. (Id.). The other 437 coins were returned from the assay to the Mint's basement vaults on February 20, 1934. (Id.). Twenty (20) of the '33 Double Eagles were also destroyed between March and May of 1933 in conjunction with the so-called special assays. (Tr. 210, at 51-55, 69-71; see also G-337). That left thirty-four (34) coins in the cashier's office. However, records reflect that all these coins were moved to a basement vault on February 2, 1934.*fn14 (Tr. 210, at 55-56, 69-71). Several months later, in October of 1934, the Mint sent two (2) '33 Double Eagles to the Smithsonian. The Smithsonian confirmed receipt of the coins, which remain there to this day. (Tr. 210, at 60-64, 69-71).
So, as of October of 1934, the Mint's basement vaults housed 445,469
1933 Double Eagles--the 445,000 originally sealed in the vault, plus
the 437 returned from the annual assay, plus the 34 returned from the
cashier, minus the 2 sent to the Smithsonian. (See G-337). The other
29 coins had been destroyed during the various assays. (Id.). Finally,
pursuant to the Gold Reserve Act of 1934,*fn15 the
Mints were authorized to begin melting their general stock of gold
coin as of August 4, 1934. (Tr. 209, at 95-97). That included, of
course, the '33 Double Eagles held in the Philadelphia Mint's vault.
The Mints started melting gold shortly thereafter, and the entire
process took about two-and-a-half years to complete.*fn16
(Id.). Because Tripp could account
for all of the '33 Double Eagles and none were ever authorized for
release, Tripp concluded that no '33 Double Eagles--including the
coins in this case--could have been obtained through legitimate means.
(Tr. 208, at 119-22; Tr. 211, at 149-52).
Wayne Geisser, the Government's other expert witness and a forensic accountant, corroborated Tripp's analysis and conclusions. (Tr. 217, at 38-39). Like Tripp, Geisser determined that the cashier's records from 1933 and 1934 were reliable. In particular, Geisser found a "seamless" connection between the records of the coining department, to the "coins executed log," to the cashier. (Tr. 217, at 100-01). And like Tripp, Geisser found it possible to track all the 1933 Double Eagles and conclude that none had been issued by the cashier to the public. (Tr. 217, at 66-76). In Geisser's words, there is a "closed circle" to account for each of the coins (from the coining department, to the cashier, to the vault); all of the components balance out perfectly. (Tr. 217, at 86-89, 102; G-337). Even the Claimants' own expert conceded that the cashier's daily settlement and the cashier's daily statement "absolutely line up" from a mathematical standpoint. (Tr. 221, at 46-47).
The Claimants attacked the Government's case on several fronts. First,
the Claimants constructed a "window of opportunity" spanning March and
April of 1933 during which the Philadelphia Mint cashier might have
dispensed 1933 Double Eagles to the public. As noted supra,
Roosevelt's first "bank holiday" banned the payout of gold coins as of
March 6, 1933, and subsequent orders extended this restriction.
However, a March 6th letter from the Treasury to the Director of the
Mint reflected that the President's ban did not prohibit the deposit
of gold and the
usual payment therefor.*fn17 (Tr. 209, at 80).
Additionally, on March 7th--the very next day--Assistant Treasury
Secretary Douglas sent a telegram to the Mints authorizing them to
issue gold coin or bars in exchange for gold bullion.*fn18
(Tr. 209, at 88-91; Tr. 212, at 105). Some of the Mint's
subsequent responses to customers' inquiries reflected the Mint's
understanding that gold-for-gold exchanges were permitted, even
post-March 6th, while other correspondence suggested that no gold
could be issued pursuant to the President's ban. (Tr. 209, at 83; Tr.
212, at 17-50; Tr. 219, at 18-24). In other words, the Mint arguably
gave mixed signals in response to requests for gold during this time
period. Tripp testified to his belief that these gold-for-gold
exchanges were limited to industrial purposes, but he admitted that
the March 7th telegram does not explicitly contain such a limitation.
(Tr. 209, at 91; Tr. 212, at 18; Tr. 213, at 44-47, 51-52,
56). In contrast, Claimants' expert Roger Burdette found no
"industrial purposes only" condition on the aforementioned
gold-for-gold exchanges. (Tr. 219, at 23).
On March 15, 1933, about a week after the March 7th telegram purporting to authorize gold-for-gold transactions at the Philadelphia Mint, the first group of 1933 Double Eagles was delivered to the cashier. (Tr. 209, at 100-03). Thus, as of March 15th, the cashier had a bag of several hundred 1933 Double Eagles in his office.*fn19 (Tr. 212, at 21; Tr. 213, at 91-99). In Claimants' eyes, this opened the "window of opportunity" for the '33 Double Eagles to leave the Mint legitimately.*fn20
This window, if it existed, definitively shut early the next month. On April 5, 1933, Roosevelt, losing patience with people who insisted on hoarding gold, issued another proclamation ordering the holdouts to return their gold by a specific date.*fn21 (Tr. 209, at 47-48). On April 12th, Assistant Treasury Secretary Douglas informed the Mint that issuing gold coin or bars in exchange for gold bullion was not authorized under the President's April 5th order, and that gold may only be issued under permit authorized by the Secretary of the Treasury. (Tr. 209, at 94-95). The records confirm that post-April 12th, the Philadelphia Mint paid out no gold coins at all, even for industrial purposes. (Id.). Not even power players with friends in high places, so to speak, could get their hands on a '33 Double Eagle.*fn22 (Tr. 210, at 93-117, 137-66; Tr. 214, at 109-12).
In the end, Tripp admitted on cross examination that there was a small
"window of opportunity" during which gold coin was authorized to be
released from the Philadelphia Mint. (Tr. 212, at 20). And many gold
coins did, in fact, leave the Mint during this period of time. (Tr.
209, at 92-93; Tr. 210, at 87-92; Tr. 213, at 17, 29-30).*fn23
But as Tripp correctly noted, the Mint records reflect that
no 1933 Double Eagles were part of those transactions.*fn24
(Tr. 209, at 92-93; Tr. 210, at 87-92). Geisser also
concluded that the gold coins that left the Mint after the March 6th
proclamation were not 1933 Double Eagles. (Tr. 217, at 38-39, 95).
Even Claimants' expert Joseph Nelson admitted that he saw no evidence
of a 1933 Double Eagle ever being released by the cashier. (Tr. 221,
at 52). In other words, hypothetically speaking, perhaps '33 Double
Eagles could have left the Mint and reached the public legitimately,
through authorized channels, but Mint records reflect that none
actually did.*fn25 In fact, in all of Tripp's research
over the past
decade, he did not come across any evidence that 1933 Double Eagles
were distributed by the Government to anyone, and Tripp never saw any
document in which the Treasurer authorized the cashier to issue a '33
Double Eagle. (Tr. 216, at 30-33).
Tripp also acknowledged that, during the so-called "window of opportunity," the requests for gold coin, as reflected on the Mint's deposit sheets, do not match the actual payouts, as recorded on the cashier's daily statement and settlement. (Tr. 213, at 36). Stated differently, Mint records reveal that customers asked for more gold than the Mint actually paid out during the relevant time frame. But Tripp explained this discrepancy by pointing out that the Mint may have paid customers in something other than gold coins (a check, for example), even though the customers specifically asked for gold. (Id.; Tr. 216, at 44). The Mint's regulations support Tripp's interpretation.*fn26
To buttress their "window of opportunity" theory, Claimants attempted to undermine the reliability of the Mint's records, in particular the cashier's daily settlement and statement. For example, the Mint cashier apparently breached protocol by taking all of the '33 Double Eagle assay coins out of a single bag instead of taking samples from each delivery. (Tr. 210, at 72-75; Tr. 213, at 99-112; Tr. 219, at 54-56). But Tripp testified that the cashier's shortcut did not change his analysis and ultimate conclusion because the records account for each '33 Double Eagle, even the ones improperly selected by the cashier for assay. (Tr. 210, at 75). Claimants also stressed that the cashier's records were not externally audited as often as Mint regulations required. (Tr. 221, at 29-32). For example, the first recorded audit in 2003 took place in November. (Id.; Tr. 214, at 75-76; Tr. 217, at 171, 179-83). But audit or not, the numbers and arithmetic on the cashier's settlement and statement match-up perfectly, which Claimants' expert conceded is a plus when it comes to reliability. (Tr. 221, at 46-47). In addition, Mint records reflect that only four (4) 1933 Eagles*fn27 --not Double Eagles--left the Mint through authorized channels, but approximately twenty (20) to thirty (30) of these coins trade in today's coin marketplace. (Tr. 214, at 103-04; Tr. 219, at 57). But this does not necessarily mean that the Mint kept shoddy records. It could also reflect that the '33 Eagles left through the back door. (Tr. 214, at 105-06).
The parties also hotly contested the issue of the cashier's "unclassified counter cash." "Unclassified counter cash" was essentially a cash register. The cashier tracked this money separate and apart from his other holdings. And as its name suggests, this particular pot of money was not broken-down by denomination and year in the cashier's records. During his deposition, Tripp stated that this counter cash could have included gold coins. (Tr. 213, at 67-70). But upon further reflection, Tripp changed course. Because the Mint had always treated gold as a class apart, and the cashier's daily settlements and statements had special categories for gold coins, Tripp determined that the cashier would not have put gold coins in his unclassified counter cash. (Tr. 213, at 63-64). Mint records support this conclusion, but inferentially.*fn28
What's more, even if counter cash could have included gold coins, the jury saw no evidence that the cashier did in fact mingle the very valuable $20 1933 Double Eagle coins with the pennies in his figurative cash register.*fn29 (Tr. 217, at 101).
Finally, Claimants' expert Roger Burdette posited a theory that forty-three (43) 1933 Double Eagles were taken from production before the '33 Double Eagles were counted, and these 43 coins were mixed-in with the '32 Double Eagles, perhaps in the cashier's office. (Tr. 219, at 31-45). Burdette formulated his theory by reading between the lines of a 1945 memo revealing a discussion between Philadelphia Mint officials. (Id.). The memo concerned 458.1 ounces of extra gold coins that the Mint mutilated at the end of 1932. (Id.). Burdette testified that the Mint turned this 458.1 ounces of mutilated gold into 43 unaccounted for '33 Double Eagles in order to make-up for 43 damaged '32 Double Eagles. (Id.). However, the memo does not actually say this. (Tr. 220, at 24-28, 35). The memo does not even say "forty-three coins," but rather says "forty-three pieces." (Tr. 219, at 41). While "pieces" could mean "coins" to those in the industry, such an interpretation would make little sense in the context of the memo. Specifically, "forty-three pieces" was given as an answer to the question, "how many pieces does this 458.1 ounces represent?" (Id.). A Double Eagle weighs just over an ounce, so 458.1 ounces would represent over four-hundred (400) coins, not just 43. (Tr. 219, at 83, 90-93).
The Government also cast doubt on Burdette's credibility. For example, in February of 2009, in reference to this litigation, Burdette posted the following message on a coin collectors' online forum: "I can muster all the hearsay, innuendo, assumption, gossip, rumor, illusion and insinuation you want to obfuscate the facts. And I can do it at only 300 dollars an hour, too."*fn30
(Tr. 219, at 82). Burdette also admitted to calling the Government's actions in this case a "witch hunt." (Tr. 220, at 61).
At bottom, the Mint records reflect that no '33 Double Eagles lawfully left the Mint and found their way into the public's hands through legitimate channels. As both Tripp and Geisser opined, the records account for the movement of each and every one of these coins from birth (coining) to death (melting).
B. The Secret Service Investigation
Despite what the records say, we know that a number of '33 Double Eagles escaped from the Mint. After all, ten (10) of these coins ended-up in Joan Switt Langbord's safe deposit box on 6th and Chestnut. Although the existence of these particular ten (10) coins came to light only recently, the Government has been tracking down '33 Double Eagles for decades.
In 1944, a columnist for the New York Herald Tribune named Ernest Kehr noticed that Stack's, a New York City auction house, was advertising a coin collection said to include a '33 Double Eagle. (Tr. 210, at 171-81). Curious, Kehr wrote to the Government hoping to ascertain the rarity of this coin. The Treasury Department responded that no Double Eagles for 1933 had been received in the Treasurer's office, so consequently none were paid out. (Tr. 210, at 181). Kehr's inquiry sparked a Secret Service investigation that would ultimately generate a huge case file on the '33 Double Eagles. (Tr. 210, at 181-86).
According to Tripp, the Secret Service focused on determining (1) whether the '33 Double Eagles were genuine or counterfeit; (2) if genuine, how the coins had gotten out of the Philadelphia Mint; (3) who had possession of the Double Eagle(s); and (4) the source of the coins. (Tr. 211, at 14). After much digging, the Secret Service concluded that the '33 Double Eagles were genuine; the coins left the Mint through unauthorized channels; the "inside source" of the coins was George McCann,*fn31 the cashier of the Philadelphia Mint from 1934 to 1940; and the sole "outside source" was Israel Switt, Joan Langbord's father and Roy and David Langbord's grandfather.*fn32 (Tr. 211, at 14-15). Tripp independently reviewed the Secret Service file and came to the same conclusions. (Tr. 211, at 15).
To start, the Secret Service seized the coin up for auction at Stack's. Stack's gave the agents the name of another man, Max Berenstein, who worked a few blocks away and also had a '33 Double Eagle. The Secret Service seized that coin as well. (Tr. 211, at 15-16; Tr. 214, at 136-37). They then took the coins to the New York Assay Office, which examined them and found them to be genuine '33 Double Eagles. (Id.).
Next, to determine whether the '33 Double Eagles left the Mint through authorized channels, the Secret Service contacted the United States Treasury and reviewed the Philadelphia Mint's records--many of the same records that Tripp and Geisser analyzed. (Tr. 211, at 16-27). In the end, the Secret Service opined that the evidence "indicates rather conclusively that no [1933 Double Eagles] were legally circulated with the exception of the two . . . forwarded by the Cashier of the Philadelphia Mint to the Curator of the Smithsonian Institute as of October 2, 1934." (Tr. 211, at 98).
To find the source of the coins, the Secret Service conducted many
interviews of coin dealers and collectors. In one such interview,
Philadelphia coin dealer James Macallister told the Secret Service
that, starting in February of 1937, he had purchased five (5) 1933
Double Eagles, all from Israel Switt, for $500 apiece.*fn33
(Tr. 211, at 27-63). This was a huge sum of money
1937.*fn34 To put it in perspective, consider that the
top ten highest prices realized at auction during the 1930s for any
American coin ranged from $650 to $1,250. (Tr. 211, at 30-31). So,
Switt was charging--and getting-- top-dollar for four-year-old
Macallister also told the Secret Service that Switt had been arrested
in 1934 carrying a bag of approximately $2,000 in gold coins through
Philadelphia. (Tr. 211, at 36-45). As a result, Switt was questioned
regarding a potential violation of the 1934 Gold Reserve Act. During
the civil case that followed, Switt admitted he knew about the Gold
Reserve Act and forfeited all the coins to the Government.*fn35
When the Secret Service interviewed Switt, he claimed he first started buying '33 Double Eagles in February of 1937, and that he had sold nine (9) of the coins: five (5) to Macallister, two (2) to Ira Reed; and two (2) to Abe Kosoff, all coin dealers. (Tr. 211, at 45-51). According to Switt, he could not specifically remember where he obtained the coins, but he acquired them in different collections he purchased at various times. In addition, Switt told agents that he did not know George McCann and had never obtained gold coins from or through a U.S. Mint employee in Philadelphia or elsewhere.*fn36 (Id.). Switt also changed his story about the circumstances surrounding his 1934 arrest. In particular, Switt had originally claimed to own the coins he was hauling through the city. Ten years later, Switt said he had been transporting the coins on behalf of someone else. ...