869 F.3d 429
6th Cir.2017Background
- The United States filed an in rem civil forfeiture complaint against multiple bank accounts, three vehicles, two real properties, and cash, asserting proceeds and instruments of illegal prescription drug sales and money laundering tied to Osama Salouha and related parties.
- Salouha and others were criminally indicted; Salouha failed to appear for arraignment and a warrant was issued. Salouha and his family relocated to Gaza after asset seizures.
- Claimants (Salouha and HYS Health Mart, Inc.) filed verified claims to 18 assets. The government moved to strike those claims under the fugitive disentitlement statute, 28 U.S.C. § 2466. The district court granted the motion and later approved a stipulated decree of forfeiture disposing of the assets.
- Claimants moved to vacate or clarify; the district court denied relief. Claimants appealed. The government moved to dismiss the appeal as untimely; the Sixth Circuit concluded the appeal was timely because no separate Rule 58 judgment had been entered and thus the appeal period had not begun to run.
- On the merits the Sixth Circuit (1) affirmed the district court’s use of § 2466 to strike Claimants’ claims, finding Salouha deliberately declined to reenter the U.S. despite assistance from the State Department, and (2) affirmed the forfeiture order — either on the record as treated for default or because the verified forfeiture complaint supplied a sufficient factual basis for forfeiture.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness / Jurisdiction of appeal | Appeal timely because later district activity (motion to vacate) restarted appeal clock | Appeal untimely as to earlier orders; 60-day clock ran from each earlier order | Appeal timely: no separate Rule 58 judgment for the stipulation/decree, so the 150-day rule applied and Claimants’ notice was treated as timely |
| Applicability of fugitive disentitlement (§ 2466) | Salouha was unable to return from Gaza due to travel restrictions, so he did not deliberately avoid prosecution | Govt. showed State Dept. assistance enabled the family to leave Gaza and Salouha nonetheless failed to reenter, satisfying § 2466 factors | § 2466 applies; court affirmed disentitlement because Salouha deliberately declined to reenter despite opportunity and was not confined elsewhere |
| Standard / procedure for forfeiture after disentitlement (default/default judgment) | District court erred by approving forfeiture without a formal default-judgment process and without proving forfeiture elements | Forfeiture governed by Supplemental Rules; Rule 55 not required; in any event the verified complaint provided a sufficient factual basis | Affirmed: Claimants lost statutory standing after disentitlement so procedural objections fail; even on the merits the verified complaint supplies the preponderance-based factual predicates for forfeiture |
| Whether government had to prove sole motive to avoid prosecution | Salouha argues he remained abroad for other non-evasive reasons (health, security) so disentitlement improper | Govt. argues intent to avoid prosecution need not be sole motive; any deliberate avoidance suffices | Held that § 2466 requires intent to avoid prosecution but not as the exclusive motive; disentitlement affirmed |
Key Cases Cited
- Kusens v. Pascal Co., Inc., 448 F.3d 349 (6th Cir.) (federal courts must independently examine jurisdiction)
- Bonner v. Perry, 564 F.3d 424 (6th Cir.) (timing of appeals and finality under § 1291 and Rule 4)
- FirsTier Mortgage Co. v. Investors Mortgage Insurance Co., 498 U.S. 269 (U.S.) (notice-of-appeal filed before entry of judgment treated as filed on entry)
- Indrelunas v. Bankers Trust Co., 411 U.S. 216 (U.S.) (background on final judgment rule and Rule 58 purposes)
- Collazos v. United States, 368 F.3d 190 (2d Cir.) (framework for fugitive-disentitlement analysis)
- Technodyne LLC v. United States, 753 F.3d 368 (2d Cir.) (procedural standards and discussion of disentitlement vs. summary-judgment paradigms)
- Nishimatsu Constr. Co. v. Houston Nat’l Bank, 515 F.2d 1200 (5th Cir.) (default judgments require a sufficient basis in the pleadings)
- United States v. $22,050.00 U.S. Currency, 595 F.3d 318 (6th Cir.) (practice and procedures in civil in rem forfeiture actions)