United States v. Brown

2010 DNH 065P

• Court: District Court, D. New Hampshire
• Decided: April 9, 2010
• Docket: 06-CR-071-SM
• Status: Published

Opinion

United States v . Brown 06-CR-071-SM 04/09/10 P UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

United States of America, Government

v. Criminal N o . 06-cr-071-1-2-SM Opinion N o . 2010 DNH 065P Edward L. Brown and Elaine A . Brown, Defendants

In R e : Claim of Bernhard Bastian, Jr.

O R D E R

The issues presented in this ancillary forfeiture matter are

a bit convoluted, both legally and factually. The government

seeks to forfeit a number of firearms as substitute property

allegedly belonging to the defendant, Edward L. Brown. Bernhard

Bastian, Jr., contests the government’s forfeiture claims on

grounds that he holds legal title to the property at issue, and

that he acquired title before the government sought to forfeit

the property. Both parties have moved for summary judgment.

Background

Before he was indicted, Edward L. Brown, a defendant in the

underlying criminal tax-fraud and money-laundering case, owned a

number of firearms. As a condition of his release on bail, Brown

voluntarily surrendered those firearms and agreed both that the

firearms would be held by Riley’s Sport Shop, Inc., pending resolution of the charges, and that he would pay all storage

charges incurred. Brown was subsequently convicted of several

felonies, all unrelated to the surrendered firearms. (So, the

firearms at issue here do not constitute contraband and they are

not subject to forfeiture, except as substitute property.) Brown

was sentenced to over five years in prison (and later sentenced

on different charges, also unrelated to the surrendered firearms,

to over thirty years in prison). During the tax-fraud trial,

however, Brown absconded, mounting a stand-off at his home in

Plainfield, New Hampshire.

On April 2 1 , 2007, while a fugitive, Brown signed and

delivered a letter to the claimant, Bernhard Bastian, which

stated, in relevant part:

. . . in the event of my death or incarceration or in any circumstances which prohibit my repossessing my property (guns, ammunition, firearms or any other items held at Riley’s Sport Shop, Inc., at 1575 Hooksett Road, Hooksett, New Hampshire) all that property in its entirety is to be given to Bernhard Bastian, Weare, New Hampshire.

Deposition of Bastian, Ex. 2 , document 309, p . 1 6 .

Brown was taken into custody by the United States Marshal in

October of 2007, whereupon Bastian sought to acquire the stored

firearms. But Riley’s understandably declined to release the

property in the absence of a court order. The issue was brought

2 to the Magistrate Judge’s attention, and, on July 2 1 , 2008, the

Magistrate Judge issued an order (document n o . 276) with respect

to disposition of those firearms, stating:

The weapons surrendered by defendant, Edward Lewis Brown, as a bail condition are no longer held as a condition of bail (defendant violated bail and has been convicted and sentenced). They may be transferred by defendant to anyone who may legally possess them subject to any liens or charges by Riley’s Sport Shop, Inc., for their storage charges owed by defendant.

That order was docketed in this case and was served on both the

prosecutor, Assistant United States Attorney (“AUSA”) William E .

Morse, and upon AUSA Robert J. Rabuck, as well as Riley’s Sport

Shop. AUSA Rabuck generally represents the United States in this

district in matters involving asset forfeiture, and that was his

role here. Although on actual notice of the Magistrate Judge’s

order, the government did not file a motion to reconsider, did

not file an objection, and did not appeal the order to a district

judge.

Relying upon that order (though seemingly misconstruing i t ) ,

Riley’s transferred the firearms to Mrs. Bonnie Bastian (wife of

the claimant) on July 2 6 , 2008. The record suggests that Riley’s

construed the Magistrate Judge’s order as authorizing i t , acting

through its owner, Mr. Demicco, “to transfer the guns to anyone

[it] pleased.” Demicco recites in a supporting affidavit:

3 Although I considered the stated wishes of Mr. Brown as set forth in his letter, my decision to transfer the guns and related property to Bonnie Bastian was based upon a number of considerations other than Mr. Brown’s letter. It was my understanding that the decision was mine and mine alone.

The record, as developed by the parties, suggests that Riley’s

transferred the firearms at issue to Bonnie Bastian, rather than

the claimant, Bernhard, because Bonnie held a valid New Hampshire

driver’s license while Bernhard did not, and that fact made a

difference to Demicco. Bonnie Bastian then (seemingly)

transferred the firearms to Bernhard, who took possession, and

claims legal title to the property.

Nearly five months later, on December 9, 2008, the

government filed a motion to amend the previously entered final

order of forfeiture in this case to include forfeiture of the

firearms at issue, as substitute property (document n o . 2 9 2 ) .

The government did not disclose in its motion that the described

substitute property consisted of the very firearms that Brown

surrendered as a condition of his bail, that were previously held

by Riley’s, that had been ordered transferred by the Magistrate

Judge in July without government objection, and that had already

been delivered to Bastian.

Bastian’s opposition to the government’s forfeiture claim is

grounded, essentially, on his assertion of an interest in the

4 property superior to that of Brown when the substitute property

was subjected to forfeiture. 21 U.S.C. §§ 853(c) and ( n ) . The

government, on the other hand, contends that because Brown became

a convicted felon upon return of the jury’s guilty verdicts on

January 1 8 , 2007, he could not then, or at any time thereafter,

actually or constructively possess the firearms stored at Riley’s

(i.e., he could not exercise “dominion or control” over them).

Therefore, the government concludes, Brown also could no longer

divest himself of legal title to the firearms, because the

minimal act of transferring title, even to property in the

government’s exclusive possession, necessarily requires the

exercise of some “dominion or control,” which, in turn, would

constitute the crime of unlawful “possession,” prohibited by 18

U.S.C. § 922(g). The government argues that the sole source of

ownership rights that Bastian can claim is Brown’s April 2 1 ,

2007, letter, and, to the extent that letter purports to transfer

title, it is void.

Discussion

First, the Magistrate Judge’s order is controlling, and it

is much too late for the government to challenge that order now.

Whether the Magistrate Judge’s order is considered dispositive or

non-dispositive, the government had 10 days after being served

with a copy to object t o , or appeal i t . Fed. R. Civ. P. 72

(2007). Having failed to object to or appeal that order, the

5 government cannot now appeal i t . Sunview Condo. Ass’n v . Flexel

Int’l, 116 F.3d 962 (1st Cir. 1997). Moreover, the disposition

of property held as a condition of bail is a matter falling well

within the court’s jurisdiction, and no due process rights were

violated by the order’s provisions (the government had actual

notice and a full opportunity to be heard). No litigant,

including the government, is entitled to sleep on his or her

rights, seeking to enforce them only after they have been

voluntarily forfeited. See generally United Student Aid Funds,

Inc. v . Espinosa, ___ U.S. ___, 2010 WL 1027825 (March 2 3 , 2010).

Second, even if the government could now challenge the

Magistrate Judge’s order, the order was valid. The government

relies on several decisions from other circuits and districts

that seem to adopt the proposition that a convicted felon cannot

lawfully divest himself of mere legal title to firearms that he

can no longer lawfully possess, without thereby “constructively

possessing” those firearms.1 Those decisions stretch the concept

of “constructive possession,” as the term is used in the criminal

statute prohibiting possession by felons (18 U.S.C. § 922(g)),

much too far, in my view, essentially equating criminal

1 See, e.g., United States v . Abumayyaleh, 530 F.3d 641 (8th Cir. 2008); United States v . Felici, 208 F.3d 667 (8th Cir. 2000); United States v . Soto-Diarte, N o . 06-20142-03-JWL, 2009 WL 1639718 (D. Kan. June 1 1 , 2009); United States v . Oleson, N o . 01- CR-21-LRR, 2008 WL 2945458 (N.D. Iowa July 2 4 , 2008); United States v . Craig, 896 F. Supp. 85 (N.D.N.Y. 1995).

6 constructive possession with even the most minimal exercise of an

indicia of ownership — transferring legal title (and, ironically,

thereby divesting title to personal property that the owner may

not lawfully possess).

No precedent cited by the government holds that mere

continuing ownership of firearms following a felony conviction,

without more, amounts to constructive possession. And,

expectedly, there do not appear to be any reported § 922(g)

prosecutions based on such a theory (it is hard to imagine one

succeeding). The government certainly does not take that

position here, of course, because its forfeiture claim

presupposes Brown’s continuing ownership interest in the firearms

following his felony conviction and through the date the

preliminary forfeiture order was entered. It seems inconsistent

to contend on the one hand that continued ownership of firearms

does not amount to constructive possession, but, on the other

hand, terminating one’s ownership interest does.

The government’s main point here, however, is this: A

person who lawfully owns, say, a valuable gun collection just

before a jury returns an unrelated felony guilty verdict (e.g.,

for mail fraud) can, thereafter, no longer sell, give away, or

transfer legal title to that collection. But, strictly speaking,

the decisions relied upon by the government are not so clear —

7 they do generally accept that a defendant in such a predicament

cannot unilaterally direct or “dictate” the specific disposition

of owned firearms, but they do not, for example, hold that title

to the firearms cannot be conveyed, or that a court cannot order

an appropriate disposition of such firearms, for the benefit of

the defendant.

The Third Circuit’s unpublished and brief decision in United

States v . Roberts, 322 Fed. App’x 175, 176 (3rd Cir. 2009),

relied upon by the government, supports the notion that courts

may exercise equitable power to dispose of firearms owned by

felons, but it takes an additional, and questionable, step. In

Roberts, the Third Circuit affirmed a district court’s order

permitting the government to destroy firearms owned by a

convicted felon. Roberts is not controlling in this circuit, and

its conclusion with respect to disposition of the firearms is

unpersuasive on several grounds. For example, the ordered

destruction would seem to raise serious Takings Clause issues.

Firearms subject to neither lawful forfeiture nor confiscation as

contraband (as in this case) remain valuable tangible personal

property belonging to the convicted felon. I doubt the

government’s right to simply confiscate and destroy such valuable

property without first affording due process and payment of just

compensation, even if it is accepted that the felon-owner cannot

unilaterally transfer his ownership rights following a felony

8 conviction. In Cooper v . City of Greenwood, 904 F.2d 302 (5th

Cir. 1990), for example, the Fifth Circuit recognized that even

one convicted of illegally possessing firearms does not lose his

or her property interest in the firearms by virtue of the

conviction alone. That property interest cannot be simply taken

by the government without affording the property owner due

process of law.

In any event, in this case it is plain that Brown did not

unilaterally dispose of or “dictate” disposition of the firearms

at issue. Brown’s letter of April 21 purported to make a gift of

the firearms (and other property) to Bastian, in “any

circumstances which prohibit[ed]” his repossessing them.2 Brown

delivered his letter to Bastian, which evidenced his intent to

complete the gift, subject to the specified conditions arising.

Later, after Brown was taken into custody, Bastian sought

delivery of the firearms from Riley’s. Riley’s understandably

took the view that, absent a court order allowing their release,

custody of the firearms would remain with i t , and so the

Magistrate Judge issued the order described above. Given that

order, and Brown’s letter expressing his wishes, and that

2 Brown apparently did not recognize that those circumstances already existed, by virtue of his tax-fraud conviction. He seems to have contemplated just his own death or incarceration as triggering events.

9 Bastian’s wife had a New Hampshire driver’s license and was

otherwise lawfully entitled to possess the firearms, Riley’s

transferred the firearms to her, after collecting its storage

fees in kind. The record is not fully developed with respect to

the actual terms of the transfer to Mrs. Bastian, nor with

respect to her transfer to Mr. Bastian, but the government does

not challenge any aspect of those transactions. Its claim is

deliberately focused: Brown could not legally transfer title,

and (presumably) the Magistrate Judge could not order i t , so

Brown still holds title, and Bastian had no legal claim to

ownership of the firearms superior to Brown’s when the government

sought forfeiture.

Properly construed, in context, the Magistrate Judge’s order

of July 2 1 , effected the transfer of ownership of Brown’s

firearms. The firearms were safely locked away at Riley’s in

government custody. There was no possibility that Brown could,

in any realistic possessory sense, exercise dominion or control

over those firearms. And, even assuming that Brown’s April 21

letter (and occurrence of the anticipated conditions), did not,

alone, effect transfer of title, still, it is plain that Riley’s

would not, and did not, transfer the firearms to Mrs. Bastian

until after the court order issued. The Magistrate Judge’s

order, then, effected the transfer and validated the disposition

of Brown’s ownership interest, for Brown’s benefit.

10 While, literally, the Magistrate Judge’s order directed

Brown to transfer the firearms, read in context, the order can

only refer to the transfer of legal title from Brown to Bastian

and transfer of possession from Riley’s to Bastian (or whoever

Brown designated, so long as they could lawfully possess them).

Suggesting that Brown could not lawfully transfer title acting

unilaterally i s , of course, a very different thing from

suggesting that the court could not order disposition. And, even

accepting, for argument’s sake, that Brown could not unilaterally

direct or “dictate” disposition of the firearms, that fact

presented no bar to the court’s directing disposition in a manner

accommodating Brown’s wishes — that i s , there is no legal

principle that suggests that while a court can order the

disposition of firearms under these circumstances, a court cannot

order transfer of title or possession to a particular person if

the felon-owner actually prefers or approves of that disposition.

As a practical matter, in the end, that is precisely what

occurred. Brown preferred t o , and chose t o , give his property to

Bastian; the Magistrate Judge ordered ownership and possession

transferred to anyone who could lawfully possess the firearms, as

Brown desired; Riley’s released the property to Mrs. Bastian on

the authority of the court’s order (though Riley’s misunderstood

its import); and Bernhard Bastian took possession and legal title

in accordance with Brown’s gift (donative intent plus delivery)

11 of the property. On this record, then, Bastian’s claim to the

property is plainly superior to the government’s, because, by

December of 2008, when the government sought forfeiture of

Brown’s interest in the firearms, he no longer had an interest.

The firearms belonged to Bastian.

Someone has to be capable of legally transferring ownership

of the property if the owner cannot, as the government contends.

I reject the idea that firearms lawfully owned must, following

the owner’s unrelated felony conviction, sit wherever they may

b e , unalienable and wasting, not subject to forfeiture, not

subject to confiscation as contraband, and not subject to

disposition by the owner, or by anyone else, or by the court for

the owner’s benefit. I also reject the notion that such property

is subject to government confiscation and destruction in the

absence of due process or payment of just compensation.

Senior Judge Longstaff’s pragmatic solution to this problem

is the appropriate one: the court, exercising equitable powers,

may order the transfer of title to firearms lawfully owned by a

person later convicted of a felony (which are not subject to

forfeiture or confiscation as contraband) for the felon-owner’s

benefit. See United States v . Approximately 627 Firearms, 589

F. Supp. 2d 1129, 1140 (S.D. Iowa 2008) (quoting Cooper, 904 F.2d

at 306 (“We see no reason that a court . . . could not order a

12 sale for the account of a claimant who . . . legally could not

possess firearms, were forfeiture to be denied for any

reason.”)); United States v . Seifuddin, 820 F.2d 1074 (9th Cir.

1987) (convicted felons retain a non-possessory interest in

seized firearms). That approach precludes convicted felons from

constructively possessing firearms (to the extent that term can

be teased to include transferring mere legal title); it precludes

a convicted felon from unilaterally dictating or directing

disposition, as some courts have found objectionable; it avoids

serious constitutional issues arising under the Takings Clause;

and it fully protects the felon-owner’s legitimate property

interests in a manner consistent with applicable criminal law.

Conclusion

Claimant’s motion for summary judgment (document n o . 311) is

granted. The government’s motion for summary judgment (document

no. 309) is denied.

SO ORDERED.

April 9, 2010

13 cc: David S . Kessler, Esq. Craig S . Donais, Esq. Robert J. Rabuck, Esq. William E . Morse, Esq. Seth R. Aframe, Esq. Bjorn R. Lange, Esq. Glenn A . Perlow, Esq. U.S. Probation U.S. Marshal