880 F. Supp. 2d 1158
D. Utah2012Background
- Criminal in personam forfeiture action seeks forfeiture of Brinton’s real property in Provo, Utah; government obtained a preliminary order of forfeiture on April 6, 2012.
- Brinton pled guilty on May 18, 2010 to conspiracy to distribute phentermine and to conspiracy to commit international money laundering, with Brinton’s interest in the Property a forfeiture proceeds.
- Elase filed a motion on April 26, 2012 asserting an interest in the Property, but did not identify a specific ownership, lien, or other vested interest.
- Elase claimed potential vicarious liability for Brinton’s malpractice and sought indemnification if liable, but did not demonstrate a current, specific legal interest in the Property.
- The court evaluates standing under 21 U.S.C. § 853(n) and related rules, concluding Elase lacks a superior interest or bona fide purchaser status, leading to dismissal of Elase’s petition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for a third party in ancillary forfeiture | Elase's indemnification potential warrants standing | United States contends Elase has no superior or bona fide purchaser interest | Elase lacks standing under §853(n) (superior interest not shown) |
| Superior legal interest over the United States | Indemnification claims may vest before 2003 | Interest not vested before October 1, 2003; proceeds rule applies | Elase cannot show a superior interest to the government |
| Bona fide purchaser for value | Elase seeks value in exchange via indemnification | No actual transfer of value or contract-based transaction | Elase not a bona fide purchaser under §853(n)(6)(B) |
| Effect of proceeds/traceable offense doctrine | Property derived from Brinton’s crime supports standing | Proceeds/traceable assets do not grant standing to Elase | Prohibition on unvested or unsecured claims to proceeds; Elase lacking standing |
Key Cases Cited
- United States v. Campos, 859 F.2d 1233 (6th Cir.1988) (standing requirements for third parties in forfeiture actions; superior interest or bona fide purchaser)
- United States v. Watkins, 320 F.3d 1279 (11th Cir.2003) (bona fide purchaser limitation in § 853(n) analysis)
- Lavin v. Lavin, 942 F.2d 177 (3d Cir.1991) (limits standing to those with superior legal interest or bona fide purchaser)
- United States v. Hooper, 229 F.3d 818 (9th Cir.2000) (proceeds doctrine applicability to third-party interests)
- Pavoni v. Nielsen, 999 P.2d 595 (Utah App.2000) (indemnification rights do not vest as property interests)
- United States v. Cambio Exacto, S.A., 166 F.3d 522 (2d Cir.1999) (standing framework in criminal ancillary proceedings)
- United States v. Reckmeyer, 836 F.2d 200 (4th Cir.1987) (limits standing in forfeiture contexts)
- United States v. Andrews, 530 F.3d 1232 (10th Cir.2008) (state-law determinations of third-party interests in property)