United States v. One Cashiers Check

Opinion

F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS SEP 29 1998 TENTH CIRCUIT PATRICK FISHER Clerk

UNITED STATES OF AMERICA,

Plaintiff-Appellee, v.

ONE CASHIER’S CHECK IN THE AMOUNT OF $312,227.95,

Defendant,

HELEN BEST; ANGELA BUIE; DEANNA COWAN; LINDA DEEDER; SHARON DERBY; SHELLY FERGUSON; MELINDA FIESELMAN; SHELLY FLETCHALL; LINDA No. 97-6433 FULLER; VERA GILBERT; JAYNE (D.C. No. CIV-96-1987-L) HEARD; LORA KITCHENS; SANDRA (Western District of Oklahoma) LARA; JENNIFER LYNCH; REBECCA MCALISTER; PEBBLES NUGENT; SHANNON O’BRIEN; MICHELLE ODEN; RUTH PARKER; CINDY PRIEN; JOANNE RAGLAND; MICHAEL REYNOLDS; TAJ SNYDER; MARVETTA WILLIAMS; TRUDY WILLIAMSON; ARNA GRAVES; KEELY ADKINS; MARCELLA DENNISON,

Claimants-Appellants. ORDER AND JUDGMENT*

Submitted on the Briefs.** __________________________________

Before EBEL, Circuit Judge, MURPHY, Circuit Judge, and McWILLIAMS, Senior Circuit Judge.

The United States filed a civil action in rem in the United States District Court for

the Western District of Oklahoma to enforce the provisions of 18 U.S.C. § 545 for the

forfeiture of a cashier’s check in the amount of $312,227.95, which check represented the

value of certain goods unlawfully smuggled into the United States, in violation of 18

U.S.C. § 545 and 21 U.S.C. § 331(a). In its Verified Complaint of Forfeiture, the United

States alleged that the cashier’s check in the amount of $312,227.95 represented the value

of an adulterated medical device, i.e., silicone gel breast implants, smuggled into the

United States by Dr. Joe Dan Metcalf, which sum was subject to forfeiture to the United

States pursuant to 18 U.S.C. § 545. The named defendant in the forfeiture proceeding

was “One Cashier’s Check in the Amount of $312,227.95.” Jurisdiction was based on 28

* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3 ** Both parties waived oral argument, and, after examining the briefs and appellate record, this panel has now determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The cause therefore is ordered submitted without oral argument.

-2- U.S.C. §§ 1345 and 1355. By way of relief, the United States asked, inter alia, that

notice be given all interested parties to appear and show cause why forfeiture should not

be decreed.

Pursuant to Rule C(6) of the Supplemental Rules for Certain Admiralty and

Maritime Claims, claimants filed a Claim of Interest in the forfeiture proceeding. In that

Claim of Interest, the claimants alleged that each had paid $2,600.00 to Dr. Metcalf for

surgery, believing that they were receiving an FDA approved implant, whereas, in fact,

Dr. Metcalf used the silicone gel breast implants that he had smuggled into the United

States, which were “defective and unreasonably dangerous.” Each asserted that they

were entitled to a refund of their $2,600.00. Additionally, all alleged that they had

suffered personal injuries as a result of their exposure to the illegal silicone gel breast

implants and would incur “cost of explantation” of the implants to the end that all

claimants “have been damaged in amounts exceeding $50,000.00 each . . . .” The Claim

of Interest concluded by stating that the “claimants have incurred damage far exceeding

the amount forfeited” and that each has “a claim against the defendant property in the

amount of $312,227.95.”1

The United States filed a motion to dismiss the claims on the ground that none of

the claimants had an “ownership interest” in the cashier’s check sought to be forfeited

The claimants also filed an answer in the forfeiture proceeding which paralled the 1

language in their Claim of Interest.

-3- and that accordingly all lacked standing to contest forfeiture of the check. By their

response, the claimants argued that they did have an ownership interest in the cashier’s

check and had standing to contest the forfeiture. On this state of the record, the district

court concluded that claimants did not have an ownership interest in the cashier’s check

and therefore lacked standing to contest the forfeiture. A judgment and order of

forfeiture was then entered. Claimants appeal. We affirm. Some background.

In a fifteen-count indictment filed in the United States District Court for the

Western District of Oklahoma, Dr. Joe Dan Metcalf was charged with various violations

of 18 U.S.C. §§ 545, 1956 and 1957, and 21 U.S.C. § 331(a), and was charged

specifically with illegally smuggling some 557 pairs of silicone gel breast implants into

the United States from Brazil and the Bahamas in violation of federal statutes and

regulations. In the indictment, the United States also asked that Dr. Metcalf forfeit all

items of property involved in the smuggling operation and all property traceable thereto,

including, but not limited to, $312,227.95 in United States currency.

Dr. Metcalf entered into a plea agreement with the United States whereby he pled

guilty to one count of the indictment with the other counts to be dismissed. In that

agreement, Dr. Metcalf admitted that he had, with an intent to mislead, illegally smuggled

into the United States approximately 557 pairs of Class III medical devices, known as

silicone gel breast implants. As a part of the plea agreement, Dr. Metcalf agreed to turn

over to the United States any and all silicone gel breast implants smuggled in and still in

-4- his possession, and also agreed to an administrative forfeiture of $312,227.95, to be paid

by a cashier’s check, representing breast implants smuggled into the United States by him

but no longer in his possession. At sentencing, Dr. Metcalf was sentenced to six months

imprisonment, a one-year term of supervised release, a $5,000.00 fine, and, pursuant to

the plea agreement, a cashier’s check in the amount of $312,227.95 was turned over to the

court.

The pertinent statute, 18 U.S.C. § 545, reads as follows:

§ 545. Smuggling goods into the United States

Whoever knowingly and willfully, with intent to defraud the United States, smuggles, or clandestinely introduces or attempts to smuggle or clandestinely introduce into the United States any merchandise which should have been invoiced, or makes out or passes, or attempts to pass, through the customhouse any false, forged, or fraudulent invoice, or other document or paper; or Whoever fraudulently or knowingly imports or brings into the United States, any merchandise contrary to law, or receives, conceals, buys, sells, or in any manner facilitates the transportation, concealment, or sale of such merchandise after importation, knowing the same to have been imported or brought into the United States contrary to law– Shall be fined under this title or imprisoned not more than five years, or both. Proof of defendant’s possession of such goods, unless explained to the satisfaction of the jury, shall be deemed evidence sufficient to authorize conviction for violation of this section. Merchandise introduced into the United States in violation of this section, or the value thereof, to be recovered from any person described in the first or second paragraph of this section, shall be forfeited to the United States. The term “United States”, as used in this section, shall

-5- not include the Virgin Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef, Johnston Island, or Guam. (Emphasis added.)

The underlined portion of the above cited statute is our starting point, and

provides, in essence, that goods smuggled into the United States, “or the value thereof, to

be recovered from any person described in either the first or second paragraph of the

statute, shall be forfeited to the United States.”

Claimants’ position in this court, as we understand it, is that smuggled implants in

the possession of Dr. Metcalf when arrested were, under 18 U.S.C. § 545, “clearly”

subject to forfeiture. Also, in their brief at the top of page 5, it is asserted that, since some

of the smuggled implants were implanted into various women, including the claimants,

such implants were not “capable of forfeiture” and in connection therewith, they

apparently concede that, under 18 U.S.C. § 545, the “value of . . . [those] implants was

forfeited.” Notwithstanding these concessions, claimants go on to assert that they still

have standing to “assert a claim to the tendered funds,” i.e., the cashier’s check. We

disagree. Such in our view would clearly be at odds with 18 U.S.C. § 545.

We are not here concerned, as such, with forfeiture cases arising out of violation of

federal drug laws. 21 U.S.C. § 881(a)(6). The instant forfeiture arises out of the illegal

introduction into the United States of unauthorized breast implants in violation of 18

U.S.C. § 545. The difference between a forfeiture under 21 U.S.C. § 881(a)(6) and one

under 18 U.S.C. § 545 is set forth in United States v. One 18th Century Colombian

-6- Monstrance, 797 F.2d 1370, 1376 (5th Cir. 1986), cert. denied sub nom., Newton v. U. S.,

481 U.S. 1014 (1987), which involved the unlawful importation into the United States of

a work of art, i.e., a Monstrance. In that case, the Fifth Circuit also held that in order to

contest a forfeiture under 18 U.S.C. § 545, a would-be claimant, to have standing, must

show at least a “facially colorable interest in the proceedings sufficient to satisfy the case-

or-controversy requirement and ‘prudential considerations defining and limiting the role

of the courts’,” Id. at 1374-7, citing Warth v. Seldin, 422 U.S. 490, 517-518 (1975),

though the would-be claimant did not, at that point in time, have “to prove the merit of his

underlying claim.” Id. at 1375. The court also noted that a claimant asserting standing to

contest forfeiture of property “must establish that he has an ownership interest in the

property subject to forfeiture.” Id. The Fifth Circuit, in that case, further stated that a

would-be claimant had to show standing “before demanding that the United States prove

it had probable cause to seize the Monstrance.” Id. at 1374. This latter holding was

emphatically confirmed upon petition for rehearing, when the en banc court stated that to

hold otherwise would put the “cart before the horse.” United States v. One 18th Century

Colombian Monstrance, 802 F.2d 837, 838 (5th Cir. 1986).

Under the rationale of Monstrance, in order to have standing to contest a forfeiture

action brought by the United States pursuant to 18 U.S.C. § 545, a claimant must have a

“facially colorable ownership interest” in the property sought to be forfeited. If a would-

be claimant can demonstrate such an interest, he has standing. If he cannot, or does not,

-7- he lacks standing to thereafter participate as a party to the forfeiture proceeding. We agree

with the district court that, on the showing made, these claimants lack standing. They do

not have a facially colorable ownership interest in the cashier’s check. Indeed,

“ownership,” as such, of the cashier’s check in question is not even alleged in the

claimants’ Claim of Interest, only that they have “claims” against Dr. Metcalf and the

cashier’s check which he posted.2 The claimants apparently do have claims against Dr.

Metcalf, sounding, perhaps, in both contract and tort. In this regard, we are advised that

at least some of the claimants have filed civil actions for damages against Dr. Metcalf in

the state courts of Oklahoma, which actions were then pending. However, a civil claim

against Dr. Metcalf cannot be transmogrified into an ownership interest in the cashier’s

check. A “claim” is not synonymous with “facially colorable ownership.”

Judgment affirmed.

Entered for the Court,

Robert H. McWilliams Senior Circuit Judge

2 In United States v. $38,570 U.S. Currency, 950 F. 2d 1108, 1112 (5th Cir. 1992) (a drug case), the 5th Circuit held that “a bare assertion of ownership of the res, without more, is inadequate to prove an ownership interest sufficient to establish standing.” In this same connection, the 5th Circuit in Monstrance, said that the “trial court, therefore, committed no error in requiring Newton [the would-be claimant] to produce proof of his ownership interest.” Monstrance, 797 F.2d at 1375.

-8-