United States v. 1982 Sanger 24' Spectra Boat

738 F.2d 1043, 39 Fed. R. Serv. 2d 939, 1984 U.S. App. LEXIS 20190

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 25, 1984
• Docket: Nos. 83-1810 to 83-1812
• Status: Published

Opinions

FERGUSON, Circuit Judge:

The claimants’ motions for rehearing in these three cases are granted. The memorandum disposition filed on December 23, 1983 is vacated. Pursuant to that disposition this panel sua sponte determined that it lacked jurisdiction over the appeal. The panel was in error. We now determine that this court does have jurisdiction and that the district court committed reversible error in dismissing the claims as it did.

FACTS

On February 17, 1983 the United States filed complaints for forfeiture against (1) a 1982 Sanger 24-foot Spectra boat, (2) a 1980 Lincoln Continental, and (3) a 1982 Excalibur. The forfeitures were sought pursuant to 21 U.S.C. §§ 841(a)(1) and 881(a)(6), which subject the proceeds of narcotics purchases or sales to seizure and forfeiture by the Drug Enforcement Administration.

Claimants of the property, Manuel Baker and Betty Jean Fowler, answered the complaints for forfeiture on March 3, 1983. The claimants declined to make any statements regarding ownership interests in the property on the grounds that such statements might tend to incriminate them with respect to criminal charges presently pending against them and to a pending Internal Revenue Service criminal investigation. In their verified claims filed concurrently with their answer to the complaint, the claimants similarly declined, on fifth amendment grounds, to make any statement regarding ownership interests in the seized property.

On March 18, 1983, the government moved to strike the answers and the claims on the ground that the claimants had no standing because they did not assert any ownership interest in the properties. On the same day, without allowing the claimants to respond to the government’s motion to strike and without notice of its action, the district court granted the motion and struck the answers and claims. The court entered an order on March 18, 1983 that the properties be forfeited to the United States. The claimants filed notices of appeal that same day.

However, on March 23, 1983, the claimants filed notices “for rehearing and stay of execution, condemnation and forfeiture.” On April 6, 1983, after the government filed a response, the court dismissed the claimants’ motion. The court also ordered that its previous order granting judgment in favor of the government be stayed pending disposition of the claimants’ appeal. The court ordered the United States Marshal to maintain care, custody and control of the property pending disposition of the appeal and not to release the property to any agency of the government without an order of the court.

The claimants did not appeal from that order.

When this panel heard the appeal, the government did not contend that an effective notice of appeal had not been filed. However this panel held sua sponte that the motion filed after the notices of appeal was a motion under Fed.R.Civ.P. 59(e) to alter or amend the judgment, although not treated as such. Pursuant to Fed.R.App.P. 4(a)(4), when a party makes a Rule 59 motion, a notice of appeal filed before the disposition of such motion shall have no effect and therefore this court lacked jurisdiction to act. Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 103 S.Ct. 400, 74 L.Ed.2d 225 (1982). Unlike a Rule 59(e) motion, a Rule 60 motion does not affect the validity of a previously filed notice of appeal. See Fed.R.App.P. 4(a)(4); Fed.R.Civ.P. 60; Miller v. Transamerican Press, Inc., 709 F.2d 524, 527 (9th Cir.1983).

We now hold that we erred in finding that the claimants’ motion was filed pursuant to Rule 59. The claimants’ petitions for rehearing and the government’s response thereto convince us that the motion should have been considered as a motion made pursuant to Fed.R.Civ.P. 60, Relief from Judgment or Order. The district court, when it denied the motion, apparently treated it as a Rule 60 motion by assuming that the notice of appeal was still valid and by ordering the United States Marshal to maintain custody of the property until the appeal was decided.¹ Moreover, the government, by raising no challenge to our jurisdiction, demonstrated its belief that the motion was a Rule 60 motion and that this court had jurisdiction over the appeal.

The moving party’s label for its motion is not controlling. Rather, the court will construe it, however styled, to be the type proper for relief requested. Miller, 709 F.2d at 527. The claimants argue that their postjudgment motion is properly characterized as a Rule 60 motion because it challenged the validity of the judgment on the ground that the court failed to provide notice. Prior to entering judgment, the court struck the answers and claims without notice, without permitting the claimants to reply to the government’s motions, and without allowing them an opportunity to amend their complaint. Rule 60(b) provides that a court may relieve a party from a final judgment when “(4) the judgment is void: ... or (6) [for] any other reason justifying relief from the operation of the judgment.” We must therefore determine whether the district court, in striking the answers and claims without permitting the claimants to reply to the government’s motion, committed an act upon which a Rule 60(b) motion can be based. The district court in granting the government’s motion to strike the answers and claims acted contrary to Rule 16(c) of the Rules of Practice of the United States Court for the District of Nevada, which provides as follows:

Responsive Memorandum

An opposing party, unless otherwise ordered by the court, shall have fifteen days after service of the moving party’s points and authorities within which to serve and file a memorandum of points and authorities in opposition to the motion.

Rule 16(c) allows for exemptions as “ordered by the court.” However we find no reason in the record for the court’s failure to follow its own rule.

Although failure to follow a local rule may not rise to the level of a due process violation, nonetheless when the effect is conclusively to dispose of a claim, failure to provide notice is a serious procedural irregularity which in this case justifies relief from the judgment under Rule 60(b). See e.g., Dredge Corp. v. Penny, 338 F.2d 456, 462 & n. 14 (9th Cir.1964). In Dredge Corp. this court held that a district court committed reversible error when it followed a local rule that allowed the court to preclude a party from requesting oral argument on a motion for summary judgment or to deny such a request by a party opposing the motion. The motion to strike and the forfeiture order in this case were as dispositive of the appellants’ claim as the summary judgment was in Dredge Corp. Likewise, in the context of entry of a default judgment, this court has stated that the failure to provide required notice is “a serious procedural irregularity that usually justifies setting aside a default judgment.” Wilson v. Moore & Assoc., Inc., 564 F.2d 366, 369 (9th Cir.1977). We hold that dismissing the claim without notice and without allowing the claimants an opportunity to amend constitutes extraordinary circumstances entitling the claimants to relief from judgment.

We now examine whether allowing amendment of the claim would have been a futile act. The district court issued its order to strike the answers and claims and declare the properties forfeited solely because the claimants failed to allege ownership of the property and therefore lacked standing.

The court was in error if the basis for its ruling was that only the owner of property may be a claimant. In United States v. Fifteen Thousand Five Hundred Dollars ($15,500) in U.S. Currency, 558 F.2d 1359, 1360 (9th Cir.1977) we held that “[a] ‘claimant’ is one who claims to own the article or merchandise or to have an interest therein.” In United States v. Jacobsen, — U.S. -, 104 S.Ct. 1652, 80 L.Ed.2d 85 (1984), the Court stated that under the fourth amendment a seizure of property occurs “when there is some meaningful interference with an individual’s possessory interest in that property.” Id. at 1656. It is not necessary therefore that a claimant under the forfeiture statute allege ownership. A lesser property interest such as possession creates standing. The claimants should be permitted to amend their answers and claims to allege the specific property interest they have in the properties.

The remaining contentions of the claimants are answered in the companion case of Baker v. United States, 722 F.2d 517 (9th Cir.1983). The fifth amendment does not prevent us from demanding that the claimants allege a specific property interest in the forfeited property.

REVERSED AND REMANDED.

1 . A question remains whether the district court had jurisdiction to rule on the Rule 60 motion after a notice of appeal had been filed. Compare Miller, 709 F.2d at 527 (court affirmed district court’s denial of Rule 60(b) motion filed after the notice of appeal without questioning district court’s jurisdiction to hear that motion) with Killeen v. Travelers Ins. Co., 721 F.2d 87, 90 n. 7 (3rd Cir.1983) (notice of appeal divested the district court of jurisdiction, and therefore the district court could not properly decide the Rule 60(b) motion). We do not need to decide this question, however. If the district court had jurisdiction, it abused its discretion in denying the motion; if it lacked jurisdiction, its decision is without effect. We reverse the underlying judgment on the basis of the property interest issue raised on appeal.