USCA1 Opinion
March 10, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 92-2001
JORGE SARIT AND DENNIE ESPAILLAT,
Plaintiffs, Appellees,
v.
U.S. DRUG ENFORCEMENT ADMINISTRATION, ET AL.,
Defendants, Appellants.
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ERRATA SHEET
The opinion of this court issued on February 23, 1993, is
amended as follows:
Page 8, line 6 from the bottom: "statue" should read
"statute".
February 23, 1993
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 92-2001
JORGE SARIT AND DENNIE ESPAILLAT,
Plaintiffs, Appellants,
v.
U.S. DRUG ENFORCEMENT ADMINISTRATION, ET AL.,
Defendants, Appellees.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Raymond J. Pettine, Senior U.S. District Judge]
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Before
Torruella, Circuit Judge,
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Bownes, Senior Circuit Judge,
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Cyr, Circuit Judge.
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David N. Cicilline for appellants.
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Rachel V. Lee, Trial Attorney, Civil Division, United States
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Department of Justice, with whom Stuart M. Gerson, Assistant Attorney
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General, United States Department of Justice, Helene M. Goldberg,
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Director, Torts Branch, Civil Division, United States Department of
Justice, Michael P. Iannotti, Assistant United States Attorney for the
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District of Rhode Island and Lincoln C. Almond, United States Attorney
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for the District of Rhode Island were on brief, for appellees.
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February 23, 1993
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BOWNES, Senior Circuit Judge. This case involves
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plaintiffs-appellants' attempts to recover $41,448.00 in U.S.
currency, which was seized by the United States Drug
Enforcement Administration ("DEA") and has now been
forfeited. In their civil action under 28 U.S.C. 1331
against the DEA and its agents, plaintiffs appeal two rulings
by the district court. First, plaintiffs challenge the
court's grant of partial summary judgment for the defendants
upon its finding that plaintiffs had received
constitutionally adequate notice of the administrative
forfeiture proceeding. Second, plaintiffs challenge the
court's dismissal of the case on the basis that, once it
granted partial summary judgment on the Fifth Amendment
notice claim, it no longer had jurisdiction to hear
plaintiffs' Fourth Amendment claim. We affirm the decision
of the district court.
I.
I.
Background
Background
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The procedural background of this case is important
and we rehearse it in detail, proceeding chronologically.
On July 28, 1989, DEA agents seized $41,448.00 from the
plaintiffs' then-residence located at 114 Alvin Street in
Providence, Rhode Island. The attendant search was conducted
without a warrant. On August 21, 1989, plaintiffs' counsel
filed a motion pursuant to Fed. R. Crim. P. 41(e),1 seeking
return of the currency. On September 1, Assistant U.S.
Attorney Michael Iannotti objected to this motion and filed a
memorandum of law which has played a focal role in the
arguments before this court. In that memorandum, he informed
plaintiffs and the district court that the currency was being
held for administrative forfeiture pursuant to Title 21
U.S.C. 881(d) and Title 19 U.S.C. 1607. The memorandum
provided the seizure number that had been assigned to the
currency. The memorandum also stated that "a notice [would]
be sent to all those who may have an interest in the
currency," and that "publication [would] commence within the
next two months." The Assistant U.S. Attorney averred that
the assignment of a seizure number would permit the
plaintiffs "at any time, without waiting for the DEA to take
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any further action, to file a claim and cost bond with the
DEA thus causing the DEA to refer the matter to the U.S.
Attorney for the initiation of judicial forfeiture
proceedings" (emphasis in original).
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1 Fed. R. Crim. P. 41(e), Motion for Return of Property,
provides in pertinent part:
A person aggrieved by an unlawful search and
seizure or by the deprivation of property may move
the district court for the district in which the
property was seized for the return of the property
on the ground that such person is entitled to
lawful possession of the property.
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On or about September 19, the DEA sent notice of
the administrative forfeiture proceeding by certified mail to
114 Alvin Street, where the currency had been seized. The
notice contained required information, not included in the
memorandum, concerning procedures to be followed, deadlines
to be met, and the right of a petitioner to proceed in forma
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pauperis in lieu of the posting of a cost bond. This notice
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was subsequently returned to the DEA "unclaimed." The DEA
made no further attempts to notify the plaintiffs or their
counsel of the pending forfeiture other than by publication.
On September 21, following a conference with the
court pursuant to the 41(e) motion, plaintiffs sent a letter
to the DEA advising it of their intention to file a claim
under the Federal Tort Claims Act. The first publication
notice, marking the beginning of the twenty-day period after
which plaintiffs' right to file a claim and to post a cost
bond would expire, appeared in the newspaper USA Today, on
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September 27. On October 13, the district court denied the
plaintiffs' 41(e) motion on equitable grounds, deferring to
the administrative forfeiture proceedings. The plaintiffs'
right to file a claim with the DEA expired on October 17. On
November 2, the administrative forfeiture was decreed and
entered.
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On November 8, the plaintiffs, having procured
money to post a cost bond, filed a formal claim with the DEA.
Plaintiffs also moved for reconsideration of their 41(e)
motion. On December 21, defendants objected to the motion
for reconsideration and included, in their accompanying
memorandum, the information that the currency had already
been administratively forfeited. The court denied
plaintiffs' motion as moot because the forfeiture had been
completed. After learning that their property had been
forfeited, plaintiffs filed a motion to vacate the forfeiture
on December 29, which motion was dismissed by the court for
lack of jurisdiction. Underscoring its awareness that
plaintiffs had been trying to resolve this matter for several
months, the court advised plaintiffs in its order that the
proper method for collateral attack was a civil rights action
under Title 28 U.S.C. 1331.
Thereafter, plaintiffs filed a civil rights action
against the DEA and its agents alleging violations of their
rights under the Fifth Amendment, claiming insufficient
notice of the administrative proceeding, and under the Fourth
Amendment, claiming that the currency was seized in the
course of a warrantless, non-consensual search. The
district court initially denied defendants' motions to
dismiss and for summary judgment, finding that the plaintiffs
had stated a valid cause of action under 28 U.S.C. 1331, by
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pleading violations of the Fourth and Fifth Amendments, and
that sovereign immunity was waived under the Administrative
Procedures Act, 5 U.S.C. 701 et seq. The court found
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summary judgment inappropriate because of a dispute regarding
consent in the Fourth Amendment claim, and the need for more
evidence on the issue of adequate notice underlying the Fifth
Amendment claim.
Both parties later filed motions for partial
summary judgment on the issue of the adequacy of notice. The
district court, on July 15, 1991, granted partial summary
judgment for the defendants on the notice issue, finding it
constitutionally sufficient that the government had sent
notice to the address from which the currency had been
seized. The court buttressed its conclusion with the fact
that plaintiffs had received the Assistant U.S. Attorney's
September 1 memorandum putting them on notice that a
forfeiture proceeding would ensue.
Trial on the Fourth Amendment issue began on March
11. The defendants moved to dismiss the case for lack of
jurisdiction. The plaintiffs moved for reconsideration of
the court's grant of partial summary judgment on the notice
issue. Upon deciding not to alter its grant of summary
judgment, the court dismissed the case for lack of
jurisdiction finding that, because the notice issue had been
resolved against plaintiffs, they thereby lost the waiver of
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sovereign immunity that had allowed the court to entertain
the case in the first instance.
II.
II.
Discussion
Discussion
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A. Notice/Due Process
A. Notice/Due Process
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We begin by addressing plaintiffs' claim that
defendants failed adequately to notify them of the
administrative forfeiture proceeding. Because the district
court granted defendants' motion for summary judgment on this
issue, our review is plenary, and we construe all factual
inferences in favor of plaintiffs. See Damaris Rivera-Ruiz
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v. Leonardo Gonzalez-Rivera, No. 92-1558, slip. op. at 2 (1st
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Cir. Jan. 5, 1993) (citing E.H. Ashley & Co. v. Wells Fargo
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Alarm Servs., 907 F.2d 1274, 1277 (1st Cir. 1990)).
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Notice of impending forfeiture proceedings involving
seizures valued at $500,000 or less is governed by Title 19
U.S.C. 1607, which provides in pertinent part:
[T]he appropriate customs officer shall cause a
notice of the seizure of such articles and the
intention to forfeit and sell or otherwise dispose
of the same according to law to be published for at
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least three successive weeks in such manner as the
Secretary of the Treasury may direct. Written
notice of seizure together with information on the
applicable procedures shall be sent to each party
who appears to have an interest in the seized
article.
The regulations interpreting the publication requirement
provide for publication in "a newspaper of general
circulation in the judicial district in which the processing
for forfeiture is brought." 21 C.F.R. 1316.75(a) (1992).
The publication notice must do the following:
(1) Describe the property seized and show the motor
and serial numbers, if any; (2) state the time,
cause, and place of seizure; and (3) state that any
person desiring to claim the property may, within
20 days from the date of first publication of the
notice, file with the custodian or DEA Asset
Forfeiture Section a claim to the property and a
bond with satisfactory sureties in the sum of
$5,000 or ten percent of the value of the claimed
property whichever is lower, but not less than
$250.
21 C.F.R. 1316.75(b) (1992).
There is no dispute that defendants sent notice
with all required information to plaintiffs' last known
address, the address from which the currency was seized.
There is also no dispute that defendants issued proper notice
by publication. Thus, defendants met the requirements of the
statute.
Plaintiffs contend that defendants failed to
satisfy the notice requirements of the Due Process Clause of
the Fifth Amendment. Relying upon the Supreme Court's
opinion in Mullane v. Central Hanover Bank & Trust Co., 339
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U.S. 306, 314 (1950), plaintiffs argue that the notice in
this case was not "reasonably calculated, under all the
circumstances, to apprise interested parties of the pendency
of the action and afford them an opportunity to present their
objections." Plaintiffs do not facially challenge the notice
provisions in the statute, but draw our attention to special
"circumstances" affecting the question of whether the DEA's
notice was so "reasonably calculated." See id.
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It is plaintiffs' position that the DEA was fully
aware of their interest in the seized currency, given their
pursuit of their 41(e) motion, and their letter to the DEA
informing the DEA that they intended to take action under the
FTCA. Plaintiffs point out that the DEA also was aware of
their representation by counsel and of their counsel's
identity and address.2 Once the DEA received an indication
that the notice had been returned "unclaimed," plaintiffs
assert, it would have been simple to ascertain from counsel
their current address, as would it have been to notify their
counsel directly of the pending forfeiture. Cf. Robinson v.
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Hanrahan, 409 U.S. 38, 40 (1972) (per curiam) (citing Mullane
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for the proposition that notice by publication was
insufficient where plaintiffs' names and addresses were known
or "easily ascertainable").
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2 Plaintiffs treat the government, the U.S. Attorney for
Rhode Island and the DEA in Washington, as a single entity.
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We find that the DEA acted reasonably on the
information it had when notice was sent by mailing notice to
the address from which the property was seized. We need
determine only whether the DEA's duty changed in the light of
its subsequent discovery that the mailed notice had been
ineffective. Given plaintiffs' vigorous (although tardy)
pursuit of their claim, the fact that the government had been
involved in ongoing court action on the very issue of the
seizure of plaintiffs' currency, the government's awareness
of plaintiffs' representation by counsel, and the frowned
upon treatment of forfeitures, the call is a close one. See
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generally United States v. One 1936 Model Ford V-8 Deluxe
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Coach, 307 U.S. 219, 226 (1939) ("Forfeitures are not
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favored; they should be enforced only when within both letter
and spirit of the law."). Nevertheless, Mullane counsels us
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to consider all of the circumstances, and we find in this
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case other pertinent factors, including the government's
memorandum and the conduct of plaintiffs' counsel, which
compel us to uphold the finding of the district court. For
the reasons that follow, we hold that defendants met the
minimum threshold requirements of due process.
1. Mullane and its Progeny
1. Mullane and its Progeny
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We note at the onset that while Mullane clearly
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contemplates inquiry into the "peculiarities" and the
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"practicalities" of a given case, it has not generally been
interpreted to require a party to make additional attempts
beyond notice that is legally satisfactory at the time it is
sent. See Mullane, 339 U.S. at 314-15. The Court has read
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an implicit bad faith standard into the notice inquiry,
overturning notice even where formal procedures were followed
if the notifying party knew or had reason to know that notice
would be ineffective. See, e.g., Robinson v. Hanrahan, 409
___ ____ ________ ________
U.S. 37 (1972) (per curiam) (in forfeiture action, notice
mailed to interested party's home address was inadequate
where government knew party was incarcerated awaiting trial,
and where party remained in custody throughout forfeiture
proceedings and did not receive notice until his release);
Covey v. Town of Somers, 351 U.S. 141 (1956) (in foreclosure
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action, notice by publication, mailing and posting was
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inadequate where individual involved was known by the town to
be mentally disabled and under the protection of a guardian).
Knowledge of the likely effectiveness of the notice is
measured from the moment at which the notice was sent.
Virtually all of the cases relied upon by
plaintiffs share the feature--missing from this case--that
the government knew at the time the notice was sent that the
notice was likely to be ineffective.3 See Fisher v.
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3 Only in one case cited by plaintiffs did the court
require the DEA, absent any evidence of bad faith, to make
additional attempts to notify the defendant when notice was
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Stutman, Nos. 85-3133-MA, 85-4307-MA, 1987 U.S. Dist. LEXIS
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10682, at *6-7 (D. Mass. Nov. 6, 1987)(DEA sent notice of
forfeiture to invalid address when they had correct address
in their possession); Gutt v. United States, 641 F. Supp.
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603, 606 (W.D. Va. 1986) (DEA mailed notice to Gutt's hotel
with knowledge that he no longer resided there and failed to
apprise attorney who specifically had requested to be
informed in writing); Cepulonis v. United States, 543 F.
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Supp. 451, 452 (E.D.N.Y. 1982) (DEA sent notice to party's
home address when party was incarcerated); cf. Vance v.
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United States, 676 F.2d 183, 187 (5th Cir. 1982) (notice by
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publication inadequate where government knew business
claimant was engaged in and claimant's address); Jaekel v.
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United States, 304 F. Supp. 993, 999 (S.D.N.Y. 1969)
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(government could not rest on publication notice where it
knew claimant's name and address).
Thus, courts are reluctant under Mullane to extend
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a notifying party's duty beyond initial satisfactory notice.
Only exceptional circumstances would compel us to so extend
the DEA's duty, absent indication that it knew or should have
known that the notice would be ineffective.
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returned unclaimed. See Montgomery v. Scott, 802 F. Supp.
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930 (W.D.N.Y. 1992). Interestingly, the court relied upon
the fact that the plaintiff was being prosecuted in a
criminal action and that the DEA could have reached him
through that vehicle. Unlike the case before us, in
Montgomery, the claimant had no actual notice whatsoever of
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the pendency of the forfeiture proceeding.
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2. Circumstances Affecting the Adequacy of the Notice
2. Circumstances Affecting the Adequacy of the Notice
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Rather than uncovering exceptional circumstances
compelling us to find that the government had a duty over and
above reasonable and technical satisfaction of the statutory
requirements, we find that the damage done by the ineffective
notice could and ought to have been stemmed by plaintiffs'
counsel. The Assistant U.S. Attorney's memorandum to the
district court objecting to plaintiffs' Rule 41(e) motion put
counsel on notice that a forfeiture proceeding would ensue.
Even though, as counsel for plaintiffs argued, the memorandum
did not specify an exact time of publication, and thus
counsel lacked a precise indication of the date from which
the twenty-day period would run, he certainly had sufficient
general notice of the risk that the property would be
forfeited within the coming months if action were not
taken.4 The statute covering forfeitures (cited in the
memorandum) and the regulations interpreting it, were
available to counsel. The regulations plainly explain the
consequence of forfeiture in twenty days. Counsel had only
to look to these sources.
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4 The Assistant U.S. Attorney's memorandum was filed on
September 1, 1989. The DEA could have published notice,
thereby beginning the twenty-day period during which
plaintiffs could challenge the forfeiture, any time after
that date. Plaintiffs' did not file a formal claim with the
DEA until November 8, more than two months later.
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We also do not credit plaintiffs' argument that the
Assistant U.S. Attorney's reference to the plaintiffs'
ability to initiate action "at any time," caused confusion,
in effect sanctioning plaintiffs' delay. Although the
memorandum might well have confused plaintiffs had it gone to
them directly, it ought not to have confused their counsel.
Counsel is charged with knowledge of the law, and that
knowledge is imputed to plaintiffs. Moreover, in the context
in which the phrase appeared, we do not find that the
statement, "at any time," was deliberately misleading. The
statement was part of the government's argument that the
court should decline to exercise its equitable powers under
Rule 41(e), because of the availability of the at-law remedy
provided by the forfeiture statute and regulations. The
argument pointed out the plaintiffs' ability to move under
Rule 41(e) more quickly than the government could process an
administrative forfeiture. The U.S. Attorney was making the
point that no undue delay would be caused plaintiffs, who
could go ahead and challenge the administrative proceeding
without waiting, should the court decide to defer to that
proceeding.
In addition to putting counsel on notice of the
forfeiture, the memorandum contained a seizure number, which
counsel could have used to ascertain the status of the
action, and to obtain from the DEA the anticipated date of
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publication notice. Although the duty of providing notice
lies plainly with the government, once the plaintiffs and
their counsel were aware that notice of the forfeiture would
be sent in the ensuing two months, they could have notified
the DEA of their own change of address--they were in the
better position as far as that information was concerned.
Plaintiffs' explanation for their delay in posting
the cost bond and thereby challenging the forfeiture was
their difficulty in coming up with the funds to do so. It is
unfortunate that plaintiffs did not receive the notice mailed
by the DEA which plainly explains the right of a poor and
needy claimant to proceed in forma pauperis in lieu of
__ _____ ________
posting the cost bond. Once again, however, plaintiffs were
represented by counsel; counsel is charged with knowledge of
his clients' rights to proceed in forma pauperis, and
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counsel's knowledge is imputed to his clients.
We are not entirely unsympathetic to plaintiffs'
argument that the circumstances affecting notice were altered
by the government's ongoing involvement with plaintiffs in
litigation over the return of the seized property and by
plaintiffs' persistent pursuit of their rights. No doubt the
government could have ascertained from plaintiffs' attorney
their current address. We are also troubled by the DEA's
choice of publication notice in USA Today, which we do not
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consider a particularly effective notice vehicle for
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Providence, Rhode Island. The regulations, however, require
only a publication "of general circulation in the judicial
district in which the . . . forfeiture is brought," and we
find no violation of due process in this regard. 21 C.F.R.
1316.75(a). The government's conduct simply did not rise to
a violation of the due process clause of the Fifth Amendment.
B. Dismissal for Lack of Jurisdiction
B. Dismissal for Lack of Jurisdiction
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We next review the district court's dismissal of
the case on the basis that it lost jurisdiction to hear the
remaining Fourth Amendment claim once the notice issue was
resolved against plaintiffs. This issue poses a pure
question of law. Therefore, our standard of review is
plenary. See Liberty Mutual Ins. Co. v. Commercial Union
___ ________________________ _________________
Ins. Co., 978 F.2d 750, 757 (1st Cir. 1992).
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Because the plaintiffs' Fourth Amendment claim is
directed at the DEA, an agency of the United States, this
issue involves the United States' waiver of its sovereign
immunity. Only an express waiver of sovereign immunity will
give a court jurisdiction to hear a claim against the United
States. Lehman v. Nakshian, 453 U.S. 156, 161 (1981). The
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Administrative Procedures Act, 5 U.S.C. 702, provides such
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a waiver for certain forms of equitable relief.5 That
waiver is, however, limited by APA, 5 U.S.C. 701.
Specifically relevant to this case is 701(a)(1), which
limits waiver where "statutes preclude judicial review." The
issue presented is whether the forfeiture statute and the
regulations implementing it, by providing an avenue for
judicial relief, constitute a statute precluding review
within the meaning of 701(a)(1).
The district court originally obtained jurisdiction
over this case due to plaintiffs' claim that constitutionally
deficient notice prevented them, in the first instance, from
meeting the deadlines necessary to pursue judicial relief as
provided by the forfeiture statute and regulations. Whereas
most challenges to forfeiture would be foreclosed by a
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5 Administrative Procedures Act, 5 U.S.C. 702, provides
in pertinent part:
A person suffering legal wrong because of agency
action, or adversely affected or aggrieved by
agency action within the meaning of a relevant
statute, is entitled to judicial review thereof.
An action in a court of the United States seeking
relief other than money damages and stating a claim
that an agency or an officer or employee thereof
acted or failed to act in an official capacity or
under color of legal authority shall not be
dismissed nor relief therein be denied on the
ground that it is against the United States . . .
Nothing herein (1) affects other limitations on
judicial review or the power or duty of the court
to dismiss any action or deny relief on any other
appropriate legal or equitable ground; or (2)
confers authority to grant relief if any other
statute that grants consent to suit expressly or
impliedly forbids the relief which is sought.
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plaintiffs' failure to utilize the mechanism for obtaining
judicial relief provided in the forfeiture statute and
regulations, courts have entertained challenges to the
adequacy of notice, reasoning that the mechanism is not
available to a plaintiff who is not properly notified of the
pending forfeiture. See, e.g., Marshall Leasing, Inc. v.
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United States, 893 F.2d 1096, 1102-03 (9th Cir. 1990); Willis
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v. United States, 787 F.2d 1089, 1092-93 (7th Cir. 1986).
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Once the district court found, as have we, that
notice was constitutionally sufficient, it further determined
that 701(a)(1) applied to deny the court jurisdiction over
the remainder of the case. The court found that plaintiffs
had had the means available under the forfeiture statute to
take the case to a judicial forum, and that they had failed
to do so. See Sarit v. Drug Enforcement Admin., 796 F. Supp.
___ _____ _______________________
55, 59 (D.R.I. 1992) ("The forfeiture statute `clearly makes
available to a claimant invoking the remedy an appropriate
forum in which to test the legality of the contested
seizure.'" (citation omitted)). Concluding that the
forfeiture statute was a "statute" which "preclude[d] review"
under 701(a)(1), because the statutory scheme provided an
avenue for judicial relief, the district court dismissed the
case.
The Supreme Court has held that in assessing
whether Congress intends to preclude judicial review, the
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intention need not be found in the express language of the
statute, but should be determined from the structure of the
statutory scheme and from its objectives. See Block v.
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Community Nutrition Inst., 467 U.S. 340, 345 (1984). The
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district court correctly interpreted 701(a)(1) to find that
the forfeiture statute precluded judicial review in this
case.
Plaintiffs ask us to extend the exception for
constitutionally deficient notice to hear the merits of their
Fifth Amendment claim. It is their position that, even if
the notice was constitutionally adequate, it still was not
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effective. In practical terms, plaintiffs claim, they had no
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knowledge of the deadlines for filing a cost bond. Absent a
legal defect in the notice, however, we cannot correct any
residual ineffectiveness if such there be, by extending
jurisdiction where Congress has spoken otherwise. Once
again, we are sympathetic with plaintiffs' frustrated
attempts to obtain a hearing on the merits. We are, however,
bound by the rule of law and the adversary process. We
cannot come in, deus ex machina, and save a claim where
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notice is constitutionally sufficient and any failures in its
effectiveness should have been corrected by plaintiffs'
counsel.
C. Equitable Jurisdiction
C. Equitable Jurisdiction
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Plaintiffs' final request is that we reach their
Fourth Amendment claim by invoking our powers of equitable
jurisdiction. The government, in its brief, argued that the
issue was not raised below. At oral argument, attorney for
plaintiffs claimed that the issue had been briefed for the
district court. We find, however, no evidence in the record
that this issue had been raised before the district court.
We are, therefore, precluded from entertaining it on appeal.
See United States v. Curzi, 867 F.2d 36, 44 (1st Cir. 1989);
___ _____________ _____
Johnston v. Holiday Inns, Inc., 595 F.2d 890, 894 (1st Cir.
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1979).
The decision of the district court is affirmed.
affirmed
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