Federal Insurance v. United States

11 Cl. Ct. 569, 55 U.S.L.W. 2415, 1987 U.S. Claims LEXIS 13
CourtUnited States Court of Claims
DecidedJanuary 23, 1987
DocketNo. 501-85C
StatusPublished
Cited by3 cases

This text of 11 Cl. Ct. 569 (Federal Insurance v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Insurance v. United States, 11 Cl. Ct. 569, 55 U.S.L.W. 2415, 1987 U.S. Claims LEXIS 13 (cc 1987).

Opinion

OPINION

WIESE, Judge.

This case concerns approximately $1 million in cash, which represents the partial recovery of money stolen from an armored car company. Plaintiffs, insurance companies who claim the money by virtue of assignments of ownership rights, contend that the Government’s retention of this money for purposes of an ongoing criminal investigation constitutes a taking of property and a denial of due process under the Fifth Amendment. The Government has moved to dismiss the complaint on several grounds. Plaintiffs oppose the motion and move for summary judgment. Briefs have been filed, and argument was heard on December 22, 1986. The court now grants defendant’s motion to dismiss and denies plaintiffs’ motion for summary judgment.

FACTS

On December 12, 1982, an audacious gang of thieves stole more than $10 million by staging a fake robbery of a Sentry Armored Courier Corporation warehouse in the Bronx, New York City. Plaintiffs in this suit are the insurance companies who compensated Sentry customers for their [570]*570losses and took assignments of the customers’ ownership rights.

Between February and June 1983, federal authorities recovered $960,319 of the stolen money in searches conducted at four separate locations. On the basis of this and other evidence, five conspirators were convicted in connection with the heist. Although the last of these convictions was affirmed by the Second Circuit Court of Appeals in October 1985, the whereabouts of the balance of the stolen money remains the subject of an ongoing investigation by law enforcement authorities.

In May 1983, and at various other times thereafter, plaintiffs requested the United States Attorney for the Southern District of New York to return the recovered money to them and to use some alternative means of preserving the money’s evidentiary value. The United States Attorney has refused these requests, contending that the particular manner in which the bills are packaged is of critical importance in tracing the rest of the stolen cash.

Asserting that they have lost some $200,-000 in interest during the time the money has remained in the Government’s custody, plaintiffs have brought suit here alleging a taking of property for which just compensation is due and a violation of the due process clause of the Fifth Amendment. They seek the return of the money or its equivalent, plus interest.

DISCUSSION

This case raises the novel question of whether, under certain circumstances, the Government can effect a taking by holding the property of an innocent bystander as evidence in a criminal investigation. As a general rule, a citizen has a public duty to provide evidence, and “this obligation persists no matter how financially burdensome it may be.” Hurtado v. United States, 410 U.S. 578, 589, 93 S.Ct. 1157, 1164, 35 L.Ed.2d 508 (1973). As the Supreme Court has stated, “The personal sacrifice involved is a part of the necessary contribution of the individual to the welfare of the public.” Id. (citation omitted). Therefore, the Court held in Hurtado that a material witness in a federal criminal trial was not entitled to compensation under the takings clause of the Fifth Amendment for the period he remained incarcerated (in lieu of bail) in order to assure his presence at the trial. Id.

Similarly, one circuit has held flatly that the takings clause “is not implicated by the legal seizure of property pursuant to a criminal investigation.” Dickens v. Lewis, 750 F.2d 1251, 1255 (5th Cir.1984); see also King v. United States, 292 F.Supp. 767, 773 (D.Colo.1968) (retention of firearms for purpose of Warren Commission investigation into assassination- of President Kennedy was not a taking, but “mere custody” of the property).

It is not necessary at this time, however, to address whether the extended holding of valuable property for evidentiary purposes can, in some circumstances, impose burdens on the rightful owner so onerous that “ ‘justice and fairness’ require that they be borne by the public as a whole.” Kirby Forest Industries, Inc. v. United States, 467 U.S. 1, 14, 104 S.Ct. 2187, 2196, 81 L.Ed.2d 1 (1984); Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554 (1960). As the Supreme Court has repeatedly noted, determining when Government action rises to the level of a taking requires an ad hoc inquiry into such factors as the character of the action, its economic impact and the extent of its interference with reasonable, investment-backed expectations. Kaiser Aetna v. United States, 444 U.S. 164, 179, 100 S.Ct. 383, 392, 62 L.Ed.2d 332 (1979); Penn Central Transportation Co. v. New York City, 438 U.S. 104, 122, 98 S.Ct. 2646, 2658, 57 L.Ed.2d 631 (1978); see also Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435 n. 12, 102 S.Ct. 3164, 3176 n. 12, 73 L.Ed.2d 868 (1982) (temporary invasion of property rights is subject to “complex balancing process”).

These factors cannot be balanced, however, until the Government takes a “final, definitive position” establishing the magnitude of its intrusion on property rights. Williamson County Regional Planning [571]*571Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, 105 S.Ct. 3108, 3119, 87 L.Ed.2d 126 (1985). The reason for this finality requirement is that during administrative review “a mutually acceptable solution might well be reached with regard to individual properties, thereby obviating any need to address the constitutional questions.” Id. at 3117 (quoting Hodel v. Virginia Surface Mining & Reclamation Ass’n, 452 U.S. 264, 297, 101 S.Ct. 2352, 2371, 69 L.Ed.2d 1 (1981)). Therefore a taking claim based upon zoning regulations that are subject to variance procedures is not ripe until the plaintiff seeks a variance before the zoning commission. Williamson County, 105 S.Ct. at 3119-21. Similarly, a plaintiff must actually be denied a permit before he may assert that regulations respecting the use of his land constitute a taking. United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 106 S.Ct. 455, 459, 88 L.Ed.2d 419 (1985); see also Agins v. City of Tiburon, 447 U.S. 255, 260, 100 S.Ct. 2138, 2141, 65 L.Ed.2d 106 (1980); Penn Central, 438 U.S. at 136-37, 98 S.Ct. at 2665.

In this case, the United States Attorney is not the final authority on the use of property for evidentiary purposes.

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11 Cl. Ct. 569, 55 U.S.L.W. 2415, 1987 U.S. Claims LEXIS 13, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-insurance-v-united-states-cc-1987.