United States v. One 1975 Pontiac Lemans, Vehicle I.D. No. 2f37m56101227, Appeal of Irma Zullo

621 F.2d 444, 1980 U.S. App. LEXIS 17672

• Court: Court of Appeals for the First Circuit
• Decided: May 9, 1980
• Docket: 79-1275
• Status: Published

Opinions

LEVIN H. CAMPBELL, Circuit Judge.

The United States instituted an action in rem in the district court, 470 F.Supp. 1243, seeking the forfeiture of claimant Irma Zullo’s automobile under the provisions of 26 U.S.C. § 7302. The district court, finding that the car had been used in violation of the internal revenue laws and had been properly seized, without a warrant, by agents of the Treasury Department, denied Zullo’s claim for return of the car and ordered that it be forfeit to the government. On appeal, Zullo argues that: (1) the car was not subject to forfeiture because there was no finding of claimant Zullo’s intent to violate the internal revenue laws, (2) the statute under which the seizure was effected requires a warrant for such seizures, (3) the agent who seized the car lacked probable cause to believe it had been used in violation of the internal revenue laws, and (4) the warrantless seizure of the car was not justified by exigent circumstances.

The district court tried this action on facts stipulated by the parties, which may be summarized as follows. From early June 1975 through January 1976, Thomas J. Connelly, Special Agent of the Bureau of Alcohol, Tobacco and Firearms, worked undercover investigating violations of the wagering laws in the Chelsea, Massachusetts area. During this period, Connelly observed Charles Zullo, claimant’s husband, collecting wagering slips and money from a barmaid in the Chelsea restaurant, placed wagers with and collected winnings from Zullo, and carried on a conversation with Zullo in which he told Connelly that he had “been in the booking business for forty years.” On October 14, 1975, Zullo told Connelly that he had traded his old car for a 1975 Pontiac Lemans Grand Am. On several occasions thereafter, Connelly either placed bets with Zullo while he was seated in the 1975 Pontiac or observed Zullo using the Pontiac to drive away from one of his betting transactions with wagers and wagering records in his possession.

On February 5, 1976, Connelly advised Special Agent Joseph V. Leone of the Bureau of Alcohol, Tobacco and Firearms that Zullo had used a 1975 Pontiac Lemans, white with red top, Massachusetts registration 4T6319 (“the Pontiac”), on October 23 and November 6, 1975, to transport wagering paraphernalia and related money, and that on December 2, 1975, Zullo had accepted a wager while sitting in the car. On February 5, 1976 a federal magistrate issued a warrant to search the person of Charles Zullo for “gambling records and wagering paraphernalia,” and on February 6,1976, the warrant was executed. Also on February 6, 1976, Agent Leone, acting pursuant to sections 7302 and 7321 of the Internal Revenue Code, 26 U.S.C. §§ 7302, 7321,¹ seized the Pontiac without a warrant from a public street in Chelsea, Massachusetts. The Pontiac is registered to the claimant, Irma Zullo, who denies any knowledge of the car’s use in connection with illegal gambling.

I.

Claimant urges us to hold that since the district court made no findings that she had intentionally used the Pontiac in violation of the internal revenue laws, the government was not entitled to forfeiture under section 7302. This argument runs counter to the common law theory of forfeiture. See Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 680-84, 94 S.Ct. 2080, 2090-92, 40 L.Ed.2d 452 (1974). The central concept has been that property subject to forfeiture is, in effect, “guilty” and hence deserving of confiscation.² United States v. United States Coin & Currency, 401 U.S. 715, 719-20, 91 S.Ct. 1041, 1043-44, 28 L.Ed.2d 434 (1971). Courts applying the various federal forfeiture statutes³ have “almost uniformly” rejected innocence of the property’s owner as a defense to a government forfeiture action. Calero-Toledo, supra, 416 U.S. at 683, 94 S.Ct. at 2091; see, e. g., Van Oster v. Kansas, 272 U.S. 465, 467, 47 S.Ct. 133, 134, 71 L.Ed. 354 (1926); United States v. $6,700, 615 F.2d 1 (1st Cir. 1980).

Section 7302 has been applied in light of this traditional view of forfeiture. In in-

terbartolo v. United States, 303 F.2d 34, 37 (1st Cir. 1962), we stated that “the thrust of Section 7302 is directed not at the individual but at property utilized to violate the pertinent revenue laws.” More recently, the Fifth Circuit has held that the only requisite intent in a section 7302 forfeiture action is that “the property in question had been intentionally used [by someone] as an ‘active aid’ in the violation of the internal revenue laws.” United States v. One 1968 Ford Ltd., 425 F.2d 1084, 1085 (5th Cir. 1970). Here the evidence indicates that claimant’s Pontiac had been intentionally used by her husband as an “active aid” to an illegal bookmaking operation.

It is true that in United States v. United States Coin & Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434, the Court stated, with reference to 26 U.S.C. §§ 7302, 7321,

“When the forfeiture statutes are viewed in their entirety, it is manifest that they are intended to impose a penalty only upon those who are significantly involved in a criminal enterprise.”

Id., 721-22, 91 S.Ct. at 1044. The Court reached this result in light of 26 U.S.C. § 7327 which, it noted, establishes a remission and mitigation procedure that “permits the innocent owner to prove to the Secretary of the Treasury that the ‘forfeiture was incurred without willful negligence or without any intention on the part of the petitioner ... to violate the law . . . .’ 19 U.S.C. § 1618.”⁴ Id., 721, 91 S.Ct. 1044. Coin & Currency, however, is of no avail to claimant. The possibility that claimant may be able to prevail in an administrative remission proceeding on her contention that her car was used without any intention on her part to violate the internal revenue laws does not entitle her to bypass her administrative remedy and to interpose her contention as a defense to a forfeiture proceeding. See United States v. One Clipper Bow Ketch Nisku, 548 F.2d 8, 12 (1st Cir. 1977) (administrative remission procedure is sole mechanism for affording leniency from forfeiture). We do not read Coin & Currency, which was addressed to the entirely different question whether a fifth amendment privilege against self-incrimination could be asserted in a forfeiture proceeding, as signalling a departure from the settled rule that a property owner’s innocence is generally no defense to a forfeiture action.

It may be that forfeiture statutes cannot be constitutionally applied to one who alleges and proves “not only that he was uninvolved in and unaware of the wrongful activity, but also that he had done all that reasonably could be expected to prevent the proscribed use of his property.” Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 689-90, 94 S.Ct. 2080, 2095, 40 L.Ed.2d 452 (1974); United States v. $6,700, 615 F.2d 1 (1st Cir. 1980). The district court, applying Calero-Toledo, noted that claimant had failed to allege she “did all that [she] reasonably could to avoid having [her] property put to an unlawful use.” Claimant alleged only that she did not know of the use of the Pontiac in conjunction with her husband’s bookmaking operation, not that she was unaware of his personal involvement in this criminal activity. The stipulated facts suggest that such unawareness is unlikely given her husband’s assertion that he had been in the business for forty years. Moreover, claimant’s ownership of the Pontiac is not necessarily dispositive even if she were totally oblivious to her husband’s actions, since the stipulated record contains statements by Zullo to Agent Connelly that “he” had traded his earlier Chevrolet for the vehicle in question, and that the earlier vehicle, at least, was kept “in his wife’s name so the cops can’t take it.” See United States v. One 1954 Mercury 2-Door Sedan, 128 F.Supp. 891, 895 (D.Va.1955). We conclude claimant failed to meet the Calero-Toledo standard in both her allegations and proof.

II.

Claimant also asserts that the government is not entitled to forfeiture because agent Leone’s warrantless seizure of the Pontiac violated the provisions of section 7302 stating that “[a] search warrant may issue as provided in chapter 205 of title 18 of the United States Code and the Federal Rules of Criminal Procedure for the seizure of such property. . . .” She argues that since a forfeiture provision such as this is penal in nature, and therefore should be strictly construed, we should read this language as permitting seizures only on authority of a warrant issued on probable cause, “absent applicable exigent circumstances” that would justify a warrantless seizure.

Although it is true that forfeiture statutes such as this one are in one sense correctly regarded as penal, see United States v. United States Coin & Currency, 401 U.S. at 718, 91 S.Ct. 1041, 1043, 28 L.Ed.2d 434; Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746 (1886), “[statutes to prevent fraud on the revenue are construed less narrowly, even though a forfeiture results, than penal statutes and others involving forfeitures.” United States v. Ryan, 284 U.S. 167, 172, 52 S.Ct. 65, 67, 76 L.Ed. 224 (1931); see United States v. Windle, 158 F.2d 196, 199 (8th Cir. 1946). Literally, the statute merely permits the use of a search warrant to effectuate a seizure, and we find nothing in either this specific language or the statutory scheme as a whole that reflects any congressional intent to require a warrant for the execution of section 7302 seizures.⁵

Nor are we moved to adopt claimant’s reading by any constitutional difficulties that such warrantless seizures might present. It is true that the canons of statutory construction demand that we construe statutes to avoid raising questions of their constitutionality where such a reading is “fairly possible.” NLRB v. The Catholic Bishop of Chicago, 440 U.S. 490, 499, 506-13, 99 S.Ct. 1313, 1318, 1322-25, 59 L.Ed.2d 53 (1979); International Association of Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961). In Berkowitz v. United States, 340 F.2d 168 (1st Cir. 1965), however, two members of the panel rejected a narrow construction of section 7302, declining to read the statute “to make it say what to us it quite obviously does not.” Id. at 173-74 (Aldrich, C. J., concurring). Mindful that our task is one of construction, not amendment of this statute, NLRB v. The Catholic Bishop of Chicago, supra, 440 U.S. at 506, 99 S.Ct. at 1322 (Brennan, J., dissenting), we cannot hold that the statute sets up a requirement of a judicially authorized warrant.

III.

Claimant also argues that the seizure of the Pontiac was unconstitutional because agent Leone did not possess probable cause to believe that the car was subject to forfeiture under 26 U.S.C. § 7302.

Claimant concedes that agent Connelly, who had conducted the investigation of Charles Zullo, had sufficient probable cause to seize the Pontiac. But she argues that Connelly did not convey a sufficiently detailed account of his observations to his superiors to provide an adequate basis for any other agent to effect the seizure. In particular, she says that the information on which agent Leone acted was both too stale and too conclusory and imprecise. We do not feel compelled to scrutinize the extent of agent Leone’s knowledge, since the cases that have addressed this question have consistently held that the existence of probable cause is to be evaluated on the basis of the collective information of the law enforcement officers engaged in a particular investigation. See United States v. Ashley, 569 F.2d 975, 983 (5th Cir.), cert. denied, 439 U.S. 853, 99 S.Ct. 163, 58 L.Ed.2d 159 (1978); White v. United States, 448 F.2d 250, 254 (8th Cir. 1971), cert. denied, 405 U.S. 926, 92 S.Ct. 974, 30 L.Ed.2d 798 (1972); United States v. Imbruglia, 397 F.Supp. 1206, 1212 n. 3 (D.Mass.1975), aff’d, 564 F.2d 87 (1st Cir. 1977).

IV.

We turn finally to claimant’s argument that warrantless seizure of the vehicle, absent exigent circumstances, violated the fourth amendment. The government responds that it acted under a well-recognized exception to the fourth amendment warrant requirement which allows the seizure of forfeit automobiles without warrant. A panel of this circuit recently upheld such an exception in a case where the seizing officers had probable cause to believe that all the conditions imposing the forfeiture had been met. United States v. Pappas, 600 F.2d 300 (D.C.), vacated for rehearing en banc and decided on other grounds in United States v. Pappas, 613 F.2d 324 (1st Cir. 1979). See also Interbartolo v. United States, 303 F.2d 34 (1st Cir. 1962). The panel declined to read the exception as limited solely to exigent circumstances in which no warrant could be secured in time reliably to effect a forfeiture. Cf. United States v. One 1972 Chevrolet Nova, 560 F.2d 464, 468 n. 2 (1st Cir. 1977). Under the rationale of the panel decision in Pappas, appellant’s contentions as to the constitutional necessity for a warrant here would fail.⁶

We adhere to the position taken by the panel in Pappas, 600 F.2d 300 for the reasons stated therein which, because they have already been published, we do not now restate in full but rather incorporate by reference as forming a part of this opinion. As the panel emphasized in Pappas, seizure of an automobile for forfeiture purposes has long been a recognized exception to the warrant requirement. In his dissent in Cady v. Dombrowski, 413 U.S. 433, 93 S.Ct. 2523, 37 L.Ed.2d 706 (1973), writing for Justices Douglas, Stewart and Marshall, as well as himself, Justice Brennan referred to the “exception to the warrant requirement . which sustains a search in connection with the seizure of an automobile for purposes of forfeiture proceedings.” Id., 452, 93 S.Ct. 2533. The circuit courts have generally regarded forfeiture as an established exception. Pappas, 600 F.2d at 303. See also, e. g., United States v. Milham, 590 F.2d 717, 720 (8th Cir. 1979); United States v. Capra, 501 F.2d 267, 280 (2d Cir. 1974), cert. denied, 420 U.S. 990, 95 S.Ct. 1424, 43 L.Ed.2d 670 (1975); United States v. White, 488 F.2d 563, 564-65 (10th Cir. 1973); Interbartolo, 303 F.2d at 38; contra, United States v. McCormick, 502 F.2d 281 (9th Cir. 1974). In what is perhaps the leading circuit opinion, Judge Friendly, writing for the Second Circuit in 1967, recognized the difficulty of the issue, as did this court in Interbartolo, 303 F.2d at 37-38, but concluded that precedent pointed to treating such seizure as an exception to the warrant requirements. United States v. Francolino, 367 F.2d 1013 (2d Cir. 1966), cert. denied, 386 U.S. 960, 87 S.Ct. 1020, 18 L.Ed.2d 110 (1967). While arguments can be advanced to distinguish or limit them, the Supreme Court’s decisions in Cooper v. California, 386 U.S. 58, 87 S.Ct. 788, 17 L.Ed.2d 730 (1967), and, especially, in G. M. Leasing Corp. v. United States, 429 U.S. 338, 97 S.Ct. 619, 50 L.Ed.2d 530 (1977), lend considerable support to the Francolino analysis, whereas no Supreme Court authority pertaining specifically to forfeitures points in the other direction.

It would take a bold person to predict in a changing world that even such apparently solid precedent will always remain in place, but we think that changes, if any, should be left to a higher court. The law enforcement process is better served if not undermined by a plethora of diverse opinions around the country. We see no insult to personal liberty, or threat to property, arising from the present state of the law such as would encourage us to embark upon a new direction. We therefore hold that the warrantless seizure, undergirded as it was by probable cause, was constitutional, and that no special exigency was required.

There is a further reason to affirm in the present case. Once property is used in violation of the internal revenue laws, the government is entitled to its possession. See Boyd v. United States, 116 U.S. 616, 623, 6 S.Ct. 524, 29 L.Ed. 746 (1886), quoted in United States v. Zaicek, 519 F.2d at 412, 414 (2d Cir. 1975), and discussion 519 F.2d at 414. Even if a seizure for forfeiture purposes were not an exception to the fourth amendment warrant requirement, it is not clear why an inadequacy in the process used to secure initial possession would or should defeat the government’s ultimate entitlement to the property as established by untainted evidence at a properly conducted forfeiture proceeding. It is one thing to deny the government the use, in a trial, of evidence arrived at as a result of illegal procedures, and another to divest the government of property to which it is entitied on the basis of legally obtained proof simply because of a purported initial misstep in the government’s mode of taking temporary possession.

In Interbartolo we indicated that a prior unauthorized seizure of the object did not preclude a valid forfeiture. We do not pass at this time on the continued vitality of Interbartolo itself nor do we purport finally to decide the question we last raised; we only observe that it cannot easily be seen how defects in the temporary initial seizure of a forfeitable object would or should carry over in such a way as to prevent its forfeiture in a properly conducted proceeding like that below in which all conditions establishing the government’s title have been proven by evidence the genesis of which did not lie in the allegedly illegal seizure.

To be sure, as Chief Judge Coffin points out in his dissent, the concurring opinion in Berkowitz v. United States, 340 F.2d 168, 174 (1st Cir. 1965), speaks of not wanting to place a premium upon unconstitutional conduct. See also Melendez v. Shultz, 356 F.Supp. 1205 at 1210 (D.C.). But while this approach makes for plausible rhetoric, it falls apart upon analysis. There is simply no connection here between the warrantless seizure and the government’s later-made case for possession. The latter was not a derivative of the former, as would be true in a typical fourth amendment suppression situation; the government’s right to the vehicle “has [not] been come at by exploitation” of the, in the dissent’s view, unconstitutional seizure. See United States v. Crews,-U.S.-,-, 100 S.Ct. 1244, 1248, 63 L.Ed.2d 537 (1980). No evidence obtained by reason of the supposed illegal seizure is being used to strengthen the case for forfeiture. Our colleague’s rule would deprive the government of a vehicle whose forfeit character is fully proven by untainted evidence — simply, it appears, to punish the government for failing to get the warrant to which, as the outcome of the forfeiture case shows, it would have been entitled all along. (If the claimant wins the forfeiture case, he, of course, gets his car back; our colleague’s rule operates only in those cases where the government has independently established its right to seize the car.)

If illegal automobile seizures were a serious social problem, and if other means did not exist for deterring illegal conduct, perhaps such a new twist in the already byzantine law of search and seizure would make sense. As it is, we see little need and no precedent for such a new complexity. Should the police overreach to the extent of seizing an “innocent” vehicle, the victim will regain his vehicle at the forfeiture proceeding, and should he be able to show that the warrantless seizure was effected in bad faith and caused personal damage, he can bring a damages action against the offending officer. Our colleague’s proposal to deprive the government of the vehicle in those cases where its right to possession thereof was fully established at the forfeiture proceeding, would be the classic case of punishing the government, and the larger society, for the assumed procedural bumble of the magistrate where a more finely tuned remedy — a damages remedy — exists to accomplish, in a more coherent manner, the objective of achieving deterrence of unconstitutional police conduct.

Affirmed.

1 . Ҥ 7302. Property used in violation of internal revenue laws

“It shall be unlawful to have or possess any property intended for use in violating the provisions of the internal revenue laws, or regulations prescribed under such laws, or which has been so used, and no property rights shall exist in any such property. A search warrant may issue as provided in chapter 205 of title 18 of the United States Code and the Federal Rules of Criminal Procedure for the seizure of such property. Nothing in this section shall in any manner limit or affect any criminal or forfeiture provision of the internal revenue laws, or of any other law. The seizure and forfeiture of any property under the provisions of this section and the disposition of such property subsequent to seizure and forfeiture, or the disposition of the proceeds from the sale of such property, shall be in accordance with existing laws or those hereafter in existence relating to seizures, forfeitures, and disposition of property or proceeds, for violation of the internal revenue laws.”

Ҥ 7321. Authority to seize property subject to forfeiture

“Any property subject to forfeiture to the United States under any provision of this title may be seized by the Secretary or his delegate.”

2 . This notion of the legal personification of property used in violation of the law has long been the object of criticism. See 1 W. Blackstone, Commentaries, c. 8, * 300 (seizure of innocent person’s property a “superstition” from the “blind days” of feudalism) quoted in United States v. United States Coin & Currency, 401 U.S. 715, 720-21, 91 S.Ct. 1041, 1044, 28 L.Ed.2d 434 (1971).

3 . E. g., 19 U.S.C. § 1595a (property used in connection with illegal importation); 21 U.S.C. § 881 (property used to facilitate violation of narcotics laws); 49 U.S.C. § 782 (property used in connection with counterfeiting).

4 . 26 U.S.C. § 7327 incorporates 19 U.S.C. § 1618 as follows:

“The provisions of law applicable to the remission or mitigation by the Secretary or his delegate of forfeitures under the customs laws shall apply to forfeitures incurred or alleged to have been incurred under the internal revenue laws.”

5 . The statute here is distinguishable from the forfeiture provision recently addressed in United States v. Pappas, 613 F.2d 324 (1st Cir. 1979) (en banc). In Pappas the statute in question, 21 U.S.C. § 881(b), set up an express warrant requirement with enumerated exceptions. The court inferred a limitation on the “probable cause” exception to the general warrant requirement, reasoning that a literal reading of the statutory language would have vitiated the general provision. The internal logic of section 7302 does not support such an approach here.

6 . The panel decision in Pappas has since been vacated, this court having reheard the case en banc; and in the new en banc decision, this court redecided Pappas on purely statutory grounds that do not bear upon the case at bar. The en banc court did not decide whether the constitution would have required a warrant.