United States v. One 2011 Porsche Panamera
684 F. App'x 501
| 6th Cir. | 2017Background
- Government filed a verified in rem forfeiture complaint under 21 U.S.C. § 881(a)(4) & (a)(6) against four vehicles and jewelry; notice was published and an attorney (Corliss Shaw) who represented claimants in related DEA administrative proceedings was served.
- Pamela Hill-Duncan, Bernice Hill, and Azalena Hill (Claimants) timely filed verified claims but did not file answers or Rule 12 motions within 21 days as required by Supplemental Rule G.
- Government moved to strike the verified claims for failure to establish statutory standing; claimants responded late and sought dismissal for insufficient process or leave to file untimely answers.
- District court denied dismissal, found claimants had actual notice, denied leave to file untimely answers, struck the claims, entered default, and then entered default judgment for the government.
- Claimants appealed three rulings: denial of motion to dismiss for insufficient service/process, striking of claims & denial of leave to answer, and denial of motion to set aside default; Sixth Circuit affirmed in all respects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court abused discretion in denying dismissal for insufficient process/service | Service was improper because only Shaw (who later disclaimed representation in the judicial action) was served; attempted service on Hill-Duncan was in the wrong state and under a wrong name | Rule G permits service on the claimant’s attorney in related administrative proceedings; claimants had actual notice (they filed timely verified claims), so they cannot challenge service | Affirmed: claimants had actual notice and service on Shaw in the related DEA administrative proceeding satisfied Rule G, so dismissal was properly denied |
| Whether the court abused discretion by striking claims and denying leave to file untimely answers under Supplemental Rule G | They argued deficiency in service and urged equitable consideration and factors from Thirty-Five Firearms to excuse delay | Rule G requires strict compliance for statutory standing; claimants gave no adequate explanation for >3-month delay and untimely response | Affirmed: strict compliance required, no excusable neglect shown, strike and denial of leave proper |
| Whether the court should have applied Fed. R. Civ. P. 55(c) and set aside default | Claimants sought Rule 55(c) good-cause review to set aside default and relitigate standing | Courts apply Rule 55(c) only in true default cases where claimants filed nothing because they lacked notice; where a claimant filed a timely verified claim but failed to answer, strict Supplemental Rule G standards remain applicable | Affirmed: Rule 55(c) did not apply; stricter Supplemental Rule G standards govern and denial of motion to set aside default was proper |
Key Cases Cited
- Nafziger v. McDermott Int’l, Inc., 467 F.3d 514 (6th Cir. 2006) (abuse-of-discretion standard for dismissals for insufficient process)
- Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., 767 F.3d 611 (6th Cir. 2014) (definition of abuse of discretion)
- United States v. $22,050.00 U.S. Currency, 595 F.3d 318 (6th Cir. 2010) (distinguishing true-default cases where Rule 55 applies from cases requiring strict compliance with Supplemental Rules)
- United States v. $5,730.00 in U.S. Currency, 109 F. App’x 712 (6th Cir. 2004) (affirming strict compliance with forfeiture rules for standing)
- Waifersong, Ltd. v. Classic Music Vending, 976 F.2d 290 (6th Cir. 1992) (three-factor standard for setting aside defaults under Rule 55)
- United States v. Currency $267,961.07, 916 F.2d 1104 (6th Cir. 1990) (Supplemental Rules govern judicial forfeiture proceedings)