United States v. All Assets & Equipment of West Side Building Corp.

188 F.3d 440, 1999 U.S. App. LEXIS 18406, 1999 WL 595652
CourtCourt of Appeals for the Seventh Circuit
DecidedAugust 6, 1999
DocketNo. 97-2164
StatusPublished
Cited by6 cases

This text of 188 F.3d 440 (United States v. All Assets & Equipment of West Side Building Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh 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. All Assets & Equipment of West Side Building Corp., 188 F.3d 440, 1999 U.S. App. LEXIS 18406, 1999 WL 595652 (7th Cir. 1999).

Opinion

KANNE, Circuit Judge.

Clara Penny and West Side Building Corporation (“claimants”) return to this Court challenging the forfeiture of their real and personal property. The government claimed that the property was the fruit of alleged narcotics distribution activities in which Penny and her family engaged and seized the property ex parte pursuant to 21 U.S.C. §§ 881(a)(5) and (6). During the first round of this case, the district court denied the claimants’ motion to reconsider its grant of summary judgment in favor of the United States. We affirmed this decision in part, but remanded it to the district court so that the court could determine if any exigent circumstances existed to justify the seizure of the [442]*442property without a hearing and, if not, the extent to which the personal property was subject to forfeiture on an ex parte basis and the amount of damages sustained to claimants due to the deprivation of both their real and personal property. See United States v. All Assets and Equip, of West Side Bldg. Corp., 58 F.3d 1181, 1193-94 (7th Cir.1995). Claimants now assert 'that the district court failed to follow our directions when it concluded that although exigent circumstances justifying an ex parte forfeiture did not exist, claimants did not sustain any damages beyond that of lost rent for which the government had already agreed to compensate them and awarded only one dollar in nominal damages. We disagree with claimants and affirm the district court’s decision.

The underlying facts of this case are sufficiently described in our previous consideration of this matter in West Side Bldg. Corp., 58 F.3d at 1183-86, and we see no need to repeat them here. In that earlier proceeding, we specifically stated:

On remand, the district court is directed to determine whether there were exigent circumstances justifying the seizure of claimants’ real property without an adversary hearing. If the district court determines that such exigent circumstances did not exist, it must determine the damages, if any, suffered by the claimants as a result of the deprivation of their real property from the date of the seizure to the date of the first adversary hearing. If the claimants persist in their contention that other seized property was not subject to forfeiture on an ex parte basis, the district court will evaluate that claim according to the methodology outlined in Good.

Id. at 1193-94.

On remand the district court first determined that no exigent circumstances existed to justify the seizure of the claimants’ real property. It concluded that due process entitled claimants to a hearing prior to the seizure of the personal property. Because they had not received such a hearing, the court found they might be entitled to receive damages. By this time, the government and claimants had reached a settlement regarding some of the damages. The government agreed to pay claimants more than $91,000 in lost rents that had accrued between the seizure and the hearing regarding the property. In addition to these rents, however, claimants also sought damages exceeding the lost rent caused by the deprivation of their real and personal property. The court, then, referred the matter to the magistrate judge for a report and recommendation regarding these potential damages.

The magistrate judge made three determinations. First, he concluded that the ex parte seizure of the personal property was justified because of the mobility of the items. In addition, he reported that claimants had failed to provide evidence of damages relating to the temporary loss and recommended that the district court deny the claim for illegal deprivation of the personal property. Second, the magistrate judge found that the agreement between the government and claimants resolved only the issue of damages with regard to lost rent, but did not constitute a waiver of claimants’ other claims, such as expenses accrued or lost income. Third, the magistrate judge concluded that even though claimants had not waived their claims to recover damages other than lost rent, the amount of damages sought was not supported by a valid claim. Thus, he recommended that the district court award no compensatory damages, but only nominal damages because claimants had been deprived of their constitutional right to procedural due process. The district court adopted the magistrate judge’s report and awarded only one dollar in nominal damages to claimants.

Claimants assert that the district court ignored the Supreme Court’s holding in United States v. James Daniel Good Real Property, 510 U.S. 43, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993), when it denied their claims for compensatory damages regard[443]*443ing their personal properties and damages arising out of the deprivation of real property beyond those associated with the lost rent. The government suggests this issue should be divided into two separate questions—(1) whether Good applies to personal property and (2) whether the district court erred in awarding nominal damages to claimants.1

We review the question of whether Good applies to personal property—a constitutional claim—de novo. See United States v. Kivschenbaum, 156 F.3d 784, 792 (7th Cir.1998). We will affirm a district court’s award of damages—a finding of fact—unless we find clear error. See Okaw Drainage Dist. v. National Distillers and Chem. Corp., 96 F.3d 1049, 1051 (7th Cir.1996).

First, we consider whether the Supreme Court’s holding in Good applies to personal property. In that case, the Supreme Court specifically held that:

the seizure of real property ... is not one of those extraordinary instances that justify the postponement of notice and hearing. Unless exigent circumstances are present, the Due Process Clause requires the Government to afford notice and a meaningful opportunity to be heard before seizing real property subject to civil forfeiture.

Good, 510 U.S. at 62, 114 S.Ct. 492 (footnote omitted) (emphasis added). As we noted during our initial consideration of this case, the Court also used language that “might suggest that the holding in Good will later spread its dominion to property other than realty.” West Side Bldg. Corp., 58 F.3d at 1192 (footnote omitted). The Court stated that it “ ‘tolerate[d] some exceptions to the general rule requiring predeprivation notice and hearing’ in extraordinary situations in which important governmental interests were at stake.” Id. (quoting Good, 510 U.S. at 53, 114 S.Ct. 492). Even though other circuits have stated that Good’s due process requirements apply only to seizures of real property, see, e.g., United States v. One Parcel of Real Property Described as Lot II, Berryhill Farm Estates, 128 F.3d 1386, 1392 (10th Cir.1997); United States v.

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No. 97-2164
188 F.3d 440 (Seventh Circuit, 1999)

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Bluebook (online)
188 F.3d 440, 1999 U.S. App. LEXIS 18406, 1999 WL 595652, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-all-assets-equipment-of-west-side-building-corp-ca7-1999.