United States v. 408 Peyton Road, S.W.

162 F.3d 644
CourtCourt of Appeals for the Eleventh Circuit
DecidedDecember 8, 1998
DocketNo. 95-8330
StatusPublished
Cited by5 cases

This text of 162 F.3d 644 (United States v. 408 Peyton Road, S.W.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. 408 Peyton Road, S.W., 162 F.3d 644 (11th Cir. 1998).

Opinions

BLACK, Circuit Judge:

At issue in the present appeal is whether predeprivation notice and a hearing must be provided when the Government executes a seizure warrant against real property, but chooses not to assert physical control. We hold that the Due Process Clause of the Fifth Amendment mandates provision of such pre-deprivation procedures even when the seizure of real property is not physically intrusive. We further hold that in a ease such as this one, where the Government has failed to provide predeprivation notice and a hearing but the property is found to be subject to forfeiture after the process due has been afforded, the proper remedy is as follows: The Government should return any rents received or other proceeds realized from the property during the period of illegal seizure.

I. BACKGROUND

On April 14,1993, the Government secured an ex parte warrant authorizing the seizure of 408 Peyton Road, S.W.,1 property in which Appellant Robert Richardson held an interest. The warrant application maintained that Appellant Richardson had financed the acquisition and development of the defendant property through drug-trafficking activities. In support of these contentions, it was stated that Richardson’s reported income was insufficient to sustain his real estate acquisition and development activities and that Richardson had engaged in a series of suspect financial transactions relative to the property. The evidence persuaded a United States Magistrate Judge that probable cause existed to believe the property was involved in or traceable to money laundering proscribed by 18 U.S.C. § 1956. The seizure warrant was executed by posting it on the property. No other action was taken pursuant to the warrant.

On April 28,1993, the Government instituted this civil forfeiture proceeding against the defendant property pursuant to 18 U.S.C. § 981. Upon the filing of the verified complaint, the Clerk of Court issued a warrant directing the United States Marshal “to arrest and take into custody” the defendant property. On the same date, the Government filed a notice of lis pendens in the real property records of the Superior Court of Fulton County, Georgia.2 On June 3, 1993, a Deputy United States Marshal executed the federal arrest warrant by posting a copy on the defendant property. As the dwelling on the property was occupied, the Government elected not to assert immediate physical eon-[646]*646trol over the premises. The record establishes that the Government neither posted warning signs on the property nor changed the locks.

On July 2, 1993, Appellant Richardson claimed an ownership interest in the defendant property. On May 5, 1994, Appellant Richardson filed a motion to dismiss, arguing that the Government’s failure to provide pre-seizure notice and a hearing deprived him of property without due process, in violation of the Fifth Amendment. In an order issued on July 11, 1994, the district court rejected Richardson’s due process claim. Meanwhile, the Government had filed a motion for summary judgment of forfeiture. By order dated February 10, 1995, the district court granted the Government’s motion for summary judgment and ordered the defendant property forfeited to the United States. Appellant Richardson filed a timely notice of appeal.

On May 15, 1997, a panel of this Court concluded that the Government violated Richardson’s due process rights and reversed the district court’s order granting summary judgment. Based on Circuit precedent, the panel remanded with instructions to dismiss the complaint without prejudice. On January 23, 1998, this Court sua sponte vacated the panel opinion to reconsider en banc the appropriate remedy for such a due process violation. Following oral argument, the Court asked for supplemental briefing on whether the execution of an arrest warrant for real property without prior notice and the opportunity to be heard violates the Fifth Amendment due process clause when the Government refrains from taking physical possession or otherwise exercising dominion and control over the property.

II. DISCUSSION

A. Due Process Requirements Applicable to the Seizure of Real Property

In United States v. James Daniel Good Real Property, 510 U.S. 43, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993), the Supreme Court addressed whether the Fifth Amendment Due Process Clause prohibits the Government in a civil forfeiture case from seizing real property without first affording the owner notice and an opportunity to be heard. In Good, the Government filed an in rem action seeking forfeiture under 21 U.S.C. § 881(a)(7). Id. at 47, 114 S.Ct. at 497. The district court clerk then issued an arrest warrant commanding the United States Marshal “to arrest and attach the said property and to detain the same in your custody.”3 Ten days later, in an ex parte proceeding, a United States Magistrate Judge issued a seizure warrant commanding the marshal “to seize the property specified, servicing this warrant and make the seizure and leave a copy of this warrant.”4 At the time the marshal executed the seizure warrant, Good was leasing the property to tenants. Id. at 47, 114 S.Ct. at 498. The Government allowed the tenants to remain on the property subject to an occupancy agreement that directed payments to the United States Marshal. Id.

In concluding that the Government violated Good’s Fifth Amendment due process rights, the Supreme Court noted that, as a general matter, the Government must provide notice and a hearing prior to depriving an individual of property. Id. at 48, 114 S.Ct. at 498. The Constitution tolerates exceptions to that general rule only in those “extraordinary situations where some valid governmental interest is at stake that justifies postponing the hearing until after the event.” Id. at 53, 114 S.Ct. at 501 (internal quotations and citations omitted). The Supreme Court identified the three-part inquiry set forth in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), as the appropriate analytical framework for determining whether seizure of real property for purposes of civil forfeiture justifies such an exception. Good, 510 U.S. at 53, 114 S.Ct. [647]*647at 501. The Mathews analysis requires consideration of (1) “the private interest affected by the official action,” (2) “the risk of an erroneous deprivation of that interest through the procedures used, as well as the probable value of additional safeguards,” and (3) “the Government’s interest, including the administrative burden that additional procedural requirements would impose.” Id. at 53, 114 S.Ct. at 501 (citing Mathews v. Eldridge, 424 U.S. at 335, 96 S.Ct. at 903).

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United States v. 408 Peyton Road
162 F.3d 644 (Eleventh Circuit, 1998)

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Bluebook (online)
162 F.3d 644, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-408-peyton-road-sw-ca11-1998.