Roy LANGBORD; David Langbord; Joan Langbord v. UNITED STATES DEPARTMENT OF the TREASURY; United States Bureau of the Mint; Secretary of the United States Department of the Treasury; Acting General Counsel of the United States Department of the Treasury; Director of the United States Mint; Chief Counsel United States Mint; Deputy Director of the United States Mint; John Doe Nos. 1 to 10 “John Doe” being fictional first and last names; United States of America
No. 12-4574
United States Court of Appeals, Third Circuit
August 1, 2016
Argued En Banc on October 14, 2015
Argued on November 19, 2014 before Merits Panel; Court Ordered Rehearing En Banc on July 28, 2015
Zane David Memeger, Robert A. Zauzmer [Argued], Jacqueline C. Romero, Nancy Rue, Office of United States Attorney, 615 Chestnut Street, Suite 1250, Philadelphia, PA 19106, Attorneys for Defendants--Appellees
Before: McKEE, Chief Judge, AMBRO, FUENTES, SMITH, FISHER, CHAGARES, JORDAN, HARDIMAN, VANASKIE, SHWARTZ, KRAUSE, and RENDELL,* Circuit Judges.**
OPINION
HARDIMAN, Circuit Judge, with whom AMBRO, FUENTES, SMITH, FISHER, CHAGARES, VANASKIE, and SHWARTZ, Circuit Judges, join.
This appeal presents a high-stakes dispute over ten pieces of gold. Joan Langbord and her sons, Roy and David Langbord, claim to be the rightful owners of the gold pieces while the Government claims they are property of the United States. Following a jury trial, the United States District Court for the Eastern District of Pennsylvania ruled in favor of the Government. The Langbords initially prevailed on appeal to this Court, but we vacated the panel opinion and agreed to hear the case en banc. For the reasons that follow, we will affirm the District Court‘s judgment.
The ten gold pieces at issue—1933 Double Eagles with a face value of $20—were designed at the request of President Theodore Roosevelt by Augustus Saint-Gaudens shortly before the renowned sculptor‘s death in 1907. During the next twenty-five years, the United States Mint manufactured and circulated tens of millions of Double Eagles as legal tender. Things changed significantly for the Double Eagle during the Great Depression, however. Within days of his inauguration on March 4, 1933, President Franklin Delano Roosevelt signed a series of orders effectively prohibiting the Nation‘s banks from paying out gold. See
By 1937, all of the 1933 Double Eagles held at the Philadelphia Mint were supposed to have been melted. This turned out not to be the case, however, as some coins were transferred among collectors, which prompted the Secret Service to begin investigating the matter in March 1944. The following year, the Secret Service recovered a small number of 1933 Double Eagles and determined that they had been stolen from the Mint by George McCann, who was the Mint‘s Cashier from 1934 to 1940. The Secret Service also concluded that the coins had been distributed by a Philadelphia merchant, Israel Switt, who was Joan Langbord‘s father (and grandfather to Roy and David Langbord).
Since 1944, the United States has attempted to locate and recover all extant 1933 Double Eagles. See United States v. Barnard, 72 F.Supp. 531, 532-33 (W.D. Tenn. 1947) (seeking replevin of a 1933 Double Eagle held by a private collector). The only exception has been a 1933 Double Eagle sold to King Farouk of Egypt in 1944 and later acquired in 1995 by Stephen Fenton, an English coin dealer. When Fenton attempted to resell that coin to a collector in New York, the Government seized it and a protracted legal dispute ensued. According to the Government, it agreed to resolve its dispute with Fenton because the Treasury Department had improvidently issued an export license for the coin when it was sold to King Farouk in 1944. The “Fenton-Farouk Coin” was sold at auction in 2002 to an anonymous buyer for $7,590,020 and the net proceeds were divided equally between Fenton and the Government pursuant to their settlement agreement.
Just over a year after the Fenton-Farouk Coin was sold at auction, Joan Lang-
The Mint authenticated the coins in May 2005, but refused to return them to the Langbords. In July 2005, attorney Berke asked the Mint to reverse course in light of its treatment of other coins of questionable provenance and argued that “there [was] no basis for the government to seek forfeiture of the ... 1933 Double Eagles.” App. 911-13. A month later, the Mint rejected Berke‘s overture, writing:
The United States Mint has no intention of seeking forfeiture of these ten Double Eagles because they are, and always have been, property belonging to the United States; this makes forfeiture proceedings entirely unnecessary. These Double Eagles never were lawfully issued but, instead, were taken out of the United States Mint at Philadelphia in an unlawful manner. Indeed, the Langbord family was legally obligated to return this property to the United States ... and will not be able to establish based on any reliable or admissible evidence how they currently possess, or ever possessed, title to this United States Government property.
App. 823.
Although the Mint had disclaimed any intention of forfeiting the coins, the Lang-
bords responded in September 2005 by sending a “seized asset claim” to the Mint, invoking
II
Unable to obtain relief through negotiation or administrative procedures,2 the Langbords turned to the courts. In December 2006, they brought suit in the United States District Court for the Eastern District of Pennsylvania against the Mint, the Department of the Treasury, and various federal officials. The Langbords alleged violations of the United States Constitution, CAFRA, and the Administrative Procedure Act, as well as common law torts. They also sought a declaratory judgment to require the Government to comply with CAFRA either by returning the coins
A
Following discovery, the parties filed cross-motions for partial summary judgment and the District Court rendered a split decision. See Langbord v. U.S. Dep‘t of the Treasury, 645 F.Supp.2d 381, 401-02 (E.D. Pa. 2009).
The Langbords prevailed on both of their constitutional claims. The District Court first held that the Mint committed an unconstitutional seizure when it refused to return the coins to the Langbords. Citing Mason v. Pulliam, 557 F.2d 426, 429 (5th Cir. 1977), the Court reasoned that the Langbords’ Fourth Amendment possessory rights to the ten Double Eagles were not vitiated by the Government‘s claim of ownership. Langbord, 645 F.Supp.2d at 390-92. The seizure was unreasonable, the Court held, because the Government failed to obtain a warrant and its “superior property interest” did not “control the right of the Government to search and seize.” Id. at 393-94 (quoting Warden, Md. Penitentiary v. Hayden, 387 U.S. 294, 304 (1967)). The District Court also found that the Langbords’ Fifth Amendment due process rights were violated. After rejecting the Government‘s contention that the Mint had not seized “property” within the meaning of the Due Process Clause, the Court evaluated the factors established in Mathews v. Eldridge, 424 U.S. 319, 335 (1976) and concluded that the Langbords were entitled to a predeprivation hearing before a neutral arbiter. Langbord, 645 F.Supp.2d at 394-99.
Unlike its adjudication of their constitutional claims, the District Court rejected the Langbords’ argument that the Government violated CAFRA by failing to comply with the statute‘s notice and claim procedures. In doing so, the Court held that CAFRA did not apply because the Mint‘s repossession of the coins was not tantamount to a nonjudicial (i.e., administrative) forfeiture. Id. at 388-90. Despite CAFRA‘s inapplicability, the District Court nevertheless ordered the Government to “initiate a judicial forfeiture proceeding concerning the 1933 Double Eagles” as a remedy for the Mint‘s Fourth and Fifth Amendment violations, id. at 402, reasoning:
Where a court concludes, as we have here, that the Government seized property without due process and intends to retain the property, we must “order the government to either return the [property] to the plaintiffs or to commence judicial forfeiture ... at which time the plaintiffs may raise whatever defenses are available to them.”
Id. at 399 (quoting Garcia v. Meza, 235 F.3d 287, 292 (7th Cir. 2000)) (citing United States v. Von Neumann, 474 U.S. 242, 251 (1986); Acadia Tech., Inc. v. United States, 458 F.3d 1327, 1334 (Fed. Cir. 2006); United States v. Giraldo, 45 F.3d 509, 512 (1st Cir. 1995)). Consequently, the District Court required the Government to file a judicial forfeiture action in accordance with the dictates of CAFRA. Id.
B
Before complying with the District Court‘s order to initiate a judicial forfeiture proceeding, the Government sought leave to allege three additional counts: replevin, declaratory judgment, and claims against John Does “to resolve ripening disputes concerning ownership of other
The District Court did, however, permit the Government to seek a declaratory judgment that the coins “were not authorized to be taken from the United States Mint and that therefore, as a matter of law, all of the 1933 Double Eagles remain property belonging to the United States.” App. 1150; see also Langbord, 749 F.Supp.2d at 271-72, 274-75 (treating the claim as a counterclaim). In doing so, the Court rejected the Langbords’ contention that the Government‘s nearly four-year delay in seeking a declaratory judgment was “prejudicial,” “undue,” or in “bad faith.” Langbord, 749 F.Supp.2d at 272-76 (citing Foman v. Davis, 371 U.S. 178, 182 (1962); Cureton v. NCAA, 252 F.3d 267, 273 (3d Cir. 2001)). Instead, the District Court found the Government‘s delay was caused by a “misguided legal strategy,” and that the Langbords were not prejudiced because they had previously “brought title issues into the mix” by asserting claims for replevin and conversion. Id. at 273, 275-76.
C
At this stage of the litigation, the positions of the parties were as follows. Consistent with the District Court‘s remedial order, the Government sought forfeiture of the ten 1933 Double Eagles and a declaration that it owned the coins. Meanwhile, the Langbords attempted to fend off the Government by arguing, inter alia, that “[f]orfeiture of the 1933 Double Eagles [was] barred by
For two weeks in July 2011 the dispute was tried to a jury, which issued a verdict for the Government on its forfeiture claim. The Langbords sought judgment as a matter of law both at the close of the evidence and following the verdict. On August 29, 2012, the District Court denied the Langbords’ post-trial motion and entered judgment for the Government on its forfeiture claim. Langbord v. U.S. Dep‘t of the Treasury, 888 F.Supp.2d 606, 637 (E.D. Pa. 2012). The Court also declared:
The disputed Double Eagles were not lawfully removed from the United States Mint and accordingly, as a matter of law, they remain the property of the United States, regardless of (1) the applicability of CAFRA to the disputed Double Eagles, (2) Claimants’ state of mind with respect to the coins; or (3) how the coins came into Claimants’ possession.
Id. at 633-34. The Langbords filed a timely appeal to this Court; the Government did not file a cross-appeal.
D
On appeal, the Langbords challenged several orders of the District Court, as well as the jury verdict. A panel of this Court vacated “all orders at issue on appeal that postdate[d] the [District Court‘s] July 29, 2009 order, including the jury verdict and the ... order entering judgment.” Langbord v. U.S. Dep‘t of the Treasury, 783 F.3d 441, 445 (3d Cir. 2015). In
The United States filed a timely petition for rehearing en banc. In an order dated July 28, 2015, we granted the petition and vacated the panel opinion and judgment. Oral arguments were heard on October 14, 2015, and the matter is ripe for disposition.
III
The District Court had jurisdiction over the Langbords’ claims under
IV
The Langbords’ appellate arguments can be summarized as follows: (1) the Government‘s forfeiture action was time-barred; (2) the District Court should not have decided the Government‘s declaratory judgment claim; (3) the District Court committed reversible errors with respect to the evidence; and (4) the jury instructions were erroneous. We address each argument in turn.3
A
We turn first to the Langbords’ argument that the Government‘s forfeiture action was time-barred. Under
erty seized in a nonjudicial forfeiture proceeding under a civil forfeiture statute may file a claim with the appropriate official after the seizure.” Assuming that the claim is timely and formally adequate, see
(A) Not later than 90 days after a claim has been filed, the Government shall file a complaint for forfeiture ... or return the property pending the filing of a complaint, except that a court in the district in which the complaint will be filed may extend the period for filing a complaint for good cause shown or upon agreement of the parties.
(B) If the Government does not ... file a complaint for forfeiture or return the property, in accordance with subparagraph (A) ... the Government shall promptly release the property pursuant to regulations promulgated by the Attorney General, and may not take any further action to effect the civil forfeiture of such property in connection with the underlying offense.
Consistent with this statutory scheme, the Langbords’ argument is a straightforward syllogism: (1) they filed a seized asset claim which started
While the logic of this syllogism is valid, it is based on a false premise, namely, that the Langbords’ seized asset
another part superfluous.“). Given that property must be seized in a nonjudicial forfeiture proceeding before a seized asset claim triggers the Government‘s ninety-day period to respond, for the Langbords’ argument to succeed, they would have to show that the Mint‘s retention of the coins initiated a nonjudicial forfeiture. As we shall explain, that was not the case.
Here, the Government determined that it was not obliged to initiate forfeiture proceedings against the 1933 Double Eagles because it had merely repossessed its own property. Consistent with this view, neither the Mint nor any other federal agency took any steps to initiate a nonjudicial forfeiture. In fact, the Government explicitly disclaimed any intent to forfeit the coins: “The United States Mint has no intention of seeking forfeiture of these ten Double Eagles because they are, and always have been, property belonging to the United States; this makes forfeiture proceedings entirely unnecessary.” App. 823.5
Nor do we agree with the Langbords that the Government “intended to achieve a nonjudicial forfeiture” because federal agencies besides the Mint thought pursuing forfeiture would be a prudent course of action, or because “subsequent communications to the Langbords made clear the government was retaining the Coins with the intent of permanently divesting the Langbords of their property without providing compensation or going
Instead, the Government asserted its ownership rights to the coins.
In reaction to the Government‘s assertion of ownership, the Langbords incongruously responded with a seized asset claim in an attempt to invoke protections afforded those whose property is being forfeited—a different subject matter. See United States v. A Parcel of Land Known as 92 Buena Vista Ave., 507 U.S. 111, 125-26 (1993) (plurality opinion) (citing United States v. Grundy, 7 U.S. (3 Cranch) 337, 350-51 (1806) (“Until the Government does win ... a judgment [of forfeiture], however, someone else owns the property.“)); id. at 134 (Scalia, J., concurring) (“What the United States already owns cannot be forfeited to it.“). While forfeiture is a process by which “[t]itle is instantaneously transferred to another,” Black‘s Law Dictionary 722 (9th ed. 2009), an assertion of ownership presupposes that the party already has title. Thus, the Langbords’ seized asset claim was akin to filing a petition for writ of habeas corpus on behalf of someone not in custody—mismatched and ineffective.
The Langbords counter that regardless of the agency‘s intentions and conduct, the Government nonetheless initiated a nonjudicial civil forfeiture proceeding when it
seized the 1933 Double Eagles. We disagree for two reasons.
First, seizures and forfeitures are not the same. A “seizure” is “[t]he act or an instance of taking possession of property by legal right or process.” Black‘s Law Dictionary 1480 (9th ed. 2009). “Forfeiture,” as previously noted, involves a transfer of title from one party to another. Id. at 722. As these definitions indicate, the essential difference between a “seizure” and a “forfeiture” is that in the former, the government obtains possession while in the latter it obtains title (i.e., ownership). Government actors regularly seize property with the intention of returning it to the person from whom it was seized. See, e.g., United States v. Chambers, 192 F.3d 374, 375-76 (3d Cir. 1999) (“It is well settled that the government is permitted to seize evidence for use in investigation and trial, but that such property must be returned once criminal proceedings have concluded, unless it is contraband or subject to forfeiture.“).6 It follows that a seizure alone does not initiate a forfeiture proceeding because it does not implicate a transfer of legal title. See 92 Buena Vista, 507 U.S. at 125 (“It has been proved that in all forfeitures accruing at common law, nothing vests in the government until some legal step shall be taken for the assertion of its right....” (emphasis add-
Second, we have impliedly rejected the Langbords’ argument twice before. See Mantilla v. United States, 302 F.3d 182 (3d Cir. 2002); United States v. $8,221,877.16 in U.S. Currency, 330 F.3d 141 (3d Cir. 2003). In Mantilla, we considered a putatively time-barred forfeiture of money seized by the Customs Service during an undercover drug sting. See id. at 184 (case proceeding under
tions period starting from the date of seizure to hold the claimant‘s cause of action timely. See id. Had the government‘s seizure of the drug money commenced a “de facto” forfeiture, a six-year period would have applied.
One year after Mantilla we applied the same principle against the government. In $8,221,877.16 in U.S. Currency, we rejected the government‘s argument that it commenced a forfeiture proceeding within the applicable statute of limitations simply by seizing funds it believed to be the proceeds of drug trafficking. 330 F.3d at 157-61. In that case, the government sought forfeiture of the defendant funds under
We acknowledge that Mantilla and $8,221,877.16 were not decided under CAFRA and do not squarely answer the question of when a “nonjudicial civil forfeiture proceeding” begins under the statute.7 Nevertheless, these decisions plainly recognized—contrary to the Langbords’ contention here—that a seizure is neither the same as a forfeiture nor does it automatically trigger forfeiture proceedings. See also Dusenbery v. United States, 534 U.S. 161, 163 (2002)
For the reasons stated, we reject the Langbords’ premise that the Government initiated a “nonjudicial civil forfeiture proceeding” subject to CAFRA‘s ninety-day deadline. Accordingly, the District Court did not err when it ordered the Government to pursue a judicial forfeiture of the 1933 Double Eagles to remedy the Government‘s constitutional violations.9
B
We next consider the Langbords’ three challenges to the District Court‘s declaratory judgment. First, they claim that CAFRA is a special statutory proceeding that prohibits the Government from seeking a declaratory judgment. Second, they argue that if a declaratory judgment action were appropriate, it had to be submitted to a jury. Finally, they contend it was an abuse of discretion for the District Court to allow the Government to seek a declaratory judgment nearly four years after the litigation began.
1
The Langbords argue that CAFRA constitutes a special statutory proceeding
The problem for the Langbords is that if CAFRA were a special statutory proceeding, it would only preclude declaratory judgments that affect forfeiture. In this case, the Government did not seek a declaratory judgment in lieu of forfeiture; it did so in an attempt to quiet title to the Double Eagles in addition to the court-ordered judicial forfeiture proceeding. While the declaratory judgment action did turn on a similar factual predicate as the forfeiture claim (i.e., that the coins were stolen or embezzled), it used this fact to establish an independent legal theory, namely, that the Government was attempting to regain possession of what it believed to be its own property. As the District Court persuasively reasoned:
[A]lthough CAFRA could be considered the prosecutor‘s remedy, the forfeiture proceeding only resolves one of the two open questions in this case: were the Double Eagles stolen from the Mint and/or possessed by individuals who knew they were stolen, rendering them forfeitable under
18 U.S.C. § 641 ? If the United States does not meet its burden on the forfeiture count, whether the Langbords are the legal owners of the Double Eagles remains unanswered because a second question—did the Langbords ever obtain legal title to the Double Eagles by virtue of their leaving the Mint through authorized channels?—would remain. The declaratory judgment count provides a mechanism for determining the answer to the second inquiry, relevant because of the United States’ second role as previous lawful owners—and according to the United States, perpetually lawful owners—of the Double Eagles.
Langbord v. U.S. Dep‘t of the Treasury, 798 F.Supp.2d 607, 610 (E.D. Pa. 2011).
In sum, because such a theory does not implicate forfeiture, it could not be precluded by any special procedures of CAFRA. To hold otherwise would prevent the Government from seeking a declaratory judgment in its capacity as a property owner, which would have the untenable effect of putting the United States in a worse position than a civilian property owner—a position at odds with longstanding precedent. Cf. United States v. California, 332 U.S. 19, 40 (1947) (“[O]fficers who have no authority at all to dispose of Government property cannot by their conduct cause the Government to lose its valuable rights by their acquiescence, laches, or failure to act.“); United States v. Steinmetz, 973 F.2d 212, 222–23 (3d Cir. 1992).
For these reasons, the District Court did not err in allowing the Government to seek a declaratory judgment that the coins are the property of the United States.
2
The Langbords also contend that once the Government‘s declaratory judgment action was allowed to proceed, it should have been submitted to the jury. To answer this question, we ask whether the declaratory judgment action fits within the pattern of cases typically decided by a court sitting in equity or whether the case presents an “inverted law suit” brought by one who would have been a defendant at common law, which would be for the jury
We perceive no error in the District Court‘s conclusion that the Government‘s declaratory judgment claim fits the equitable pattern of an action to quiet title. As the District Court found: “Here, the Government possesses the coins and claims rightful ownership, but the Langbords’ assertion that the Double Eagles legally belonged to Israel Switt and were legally inherited by the Langbord Claimants clouds the Government‘s title.” Langbord, 798 F.Supp.2d at 611. We agree that such a claim is analogous to a claim to quiet title. See 5 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1250 (3d ed. 2016) (describing quiet title, traditionally, as an action brought by a plaintiff who alleges both ownership and possession of property for which she seeks to uncloud title).
The Langbords challenge this conclusion, arguing that Pennsylvania law does not provide for an action to quiet title to personal property. In their view, the absence of a Pennsylvania counterpart to a suit in equity means that the Government‘s declaratory judgment is more akin to an action in replevin—a cause of action resolved by juries. We disagree, principally because the Langbords’ reliance on Pennsylvania law is misplaced. Determining whether a declaratory judgment action is tried before a jury is a question of federal, not state law. Owens-Illinois, 610 F.2d at 1189; see also Simler, 372 U.S. at 222 (“[T]he right to a jury trial in the federal courts is to be determined as a matter of federal law in diversity as well as other actions.“). Thus, we look to whether the “basic character” of the suit sounds in equity under federal law. See Simler, 372 U.S. at 222-23; Owens-Illinois, Inc., 610 F.2d at 1189. And here it clearly does—fitting the pattern of a quiet title action. See
The Langbords next argue that the Government‘s declaratory judgment claim should have been submitted to the jury because, had the Government not unconstitutionally seized the coins, it would have been forced to try a replevin action to a jury. We decline the Langbords’ invitation to engage in a hypothetical analysis. In this case, the District Court remedied the Government‘s impermissible seizure of the coins by ordering a forfeiture action to be filed and did not require that the coins be returned to the Langbords. The Langbords essentially ask us to supplement this remedy by asserting that we should determine whether the Government‘s declaratory judgment should have gone to a jury based on the premise that the Langbords retained possession of the coins. And they do so without citing precedent or explaining why the remedy given by the District Court should be displaced on appeal. Even if we were to find merit in the Langbords’ contention, it does not follow that had the Government not seized the coins, it would have been forced to bring a replevin action. The Government would have had other options. For example, it could have authenticated the coins, returned them to the Langbords, and then seized the coins pursuant to a warrant before bringing an action to quiet title. In sum, we see no good reason to supplement the District Court‘s remedy and we reject the Langbords’ implicit claim that the unconstitu-
Lodging one final attack on the Court‘s decision not to submit the declaratory judgment to the jury, the Langbords contend that they reserved the right to a jury trial when they relinquished the coins to the Mint for authentication with the proviso that they “reserved all rights.” Whatever rights the Langbords reserved, it would be passing strange for us to conclude that the right to be sued in replevin was one of them. Because the Government was under no obligation to file any action in replevin and had other means to attempt to prove title to the coins, the Langbords were not entitled to a jury trial on the Government‘s declaratory judgment claim.
3
The Langbords’ final challenge to the District Court‘s declaratory judgment is that the Government forfeited the claim by failing to add it to its counterclaim in a timely manner. The
“A district court may deny leave to amend ... if a plaintiff‘s delay in seeking amendment is undue, motivated by bad faith, or prejudicial to the opposing party.” Cureton, 252 F.3d at 272-73. The mere passage of time “is an insufficient ground to deny leave to amend.” Id. Nevertheless, “at some point, the delay will become ‘undue,’ placing an unwarranted burden on the court, or will become ‘prejudicial,’ placing an unfair burden on the opposing party.” Id. at 273 (internal quotation marks omitted) (quoting Adams v. Gould Inc., 739 F.2d 858, 868 (3d Cir. 1984)). In furtherance of this analysis, courts “focus on the movant‘s reasons for not amending sooner.” Id.
Here, the Langbords contend the District Court abused its discretion by allowing the Government to add its declaratory judgment claim after the case had been progressing for nearly four years. In their view, the request to amend should have been denied because the Government had no good reason not to amend sooner.
Our review of the record leads us to conclude that the District Court committed no error when it allowed the Government to amend its counterclaim. Agreeing with the Langbords’ arguments in many respects, the District Court found that the Government‘s delay “though significant, was not undue.” Langbord, 749 F.Supp.2d at 275. In particular, the District Court noted that the Government did not have a good reason for its delay because its proffered excuse seemed like a “strategic choice.” Id. The Court then proceeded to consider all the other factors that inform the “undue delay” analysis. Specifically, the Court found that the claim for declaratory judgment “neither introduce[d] new factual issues nor revive[d] irrelevant disputes.” Id. at 273, 275. Rather, it involved matters the Langbords themselves had put at issue in their complaint—claims that were still unresolved at the time the Government sought leave to amend. Id. Thus, the Court found the amendment would put the Langbords in “no worse a position had the Government brought th[e] counterclaim” along with its initial answer. Id. And for that reason, the Court concluded the amendment would neither prejudice the Langbords, nor place an unwarranted burden on the Court. Id. In so finding, the
C
The Langbords next claim they are entitled to a new trial because the District Court committed various evidentiary errors. They contend: (1) Secret Service reports were erroneously admitted; (2) documents related to United States v. Barnard, 72 F.Supp. 531 (W.D. Tenn. 1947), should have been excluded; (3) evidence related to Israel Switt‘s prior arrest and forfeiture of gold should not have been admitted; and (4) certain testimony of the Government‘s expert witness, David Tripp, should have been excluded. We find no error in admitting the evidence related to Barnard and Switt‘s prior forfeiture, but we agree with the Langbords that portions of both the Secret Service reports and Tripp‘s testimony should have been excluded. After examining the entire record of the case, however, we hold that those evidentiary errors were harmless.
1
We begin by examining the admission of a number of Secret Service reports dating back to the 1930s and 1940s. These documents were admitted under the “ancient documents” exception to the hearsay rule, which provides that “[a] statement in a document that is at least 20 years old and whose authenticity is established” is “not excluded by the rule against hearsay, regardless of whether the declarant is available as a witness.”
As the District Court observed, courts have disagreed about whether the multiple-hearsay rule applies to statements made in ancient documents. Compare United States v. Hajda, 135 F.3d 439, 443-44 (7th Cir. 1998). (“[If] the [ancient] document contains more than one level of hearsay, an appropriate exception must be found for each level.“); Hicks v. Charles Pfizer & Co., 466 F.Supp.2d 799, 805-07 (E.D. Tex. 2005) (“Even if a document qualifies as ancient under
Santa Clara L. Rev. 719, 752-60 & nn.161-63 (1999). In our view, stronger precedent supports the application of Rule 805 to ancient documents.
We are particularly persuaded by the analysis of the United States District Court for the Eastern District of Pennsylvania in United States v. Stelmokas. In that case, Judge DuBois held that ancient documents were subject to Rule 805 because “hearsay statements contained within an ancient document lack the same indicia of trustworthiness and reliability that provide the rationale for admitting statements when the declarant is the author of the ancient document.” 1995 WL 464264, at *6. The court noted that the exception “is based on a rationale that authenticated ancient documents bear certain indicia of trustworthiness,” namely: (1) a lack of motive to fabricate due to the document‘s age; (2) the writing requirement “minimizes the danger of mistransmission“; and (3) “the document is more likely to be accurate than the oral testimony of the declarant based on his memory of events of twenty or more years ago.” Id. at *5 (citing 2 John W. Strong et al., McCormick on Evidence § 322 (4th ed. 1992); Charles E. Wagner, Federal Rules of Evidence Commentary 452 (1993); 4 Jack B. Weinstein & Margaret A. Berger, Weinstein‘s Evidence ¶ 803(16)(1) (1994)). While these indicia of trustworthiness justified admitting the ancient document as such, they did not justify admitting hearsay statements contained therein:
[T]here is no guarantee that a hearsay statement contained in the [ancient document] is accurate. The author of the ancient document may have misheard or misunderstood the hearsay statement or his written words may not convey the meaning intended by the hearsay declarant. These issues of perception and narration are not merely peripheral but are fundamental problems of hearsay evidence.
Id. at *6; see also Daniel J. Capra, Electronically Stored Information and the Ancient Documents Exception to the Hearsay Rule: Fix It Before People Find Out About It, 17 Yale J.L. & Tech. 1, 9 n.32 (2015) (“[T]he ancient documents exception does not abrogate the rule on multiple hearsay imposed by Rule 805—at least in the view of right-thinking courts.“).10
The District Court and the Government rely principally on treatises that disagree with the multiple-hearsay rule‘s application out of fear that requiring a separate exception for each level of hearsay would eviscerate the ancient documents exception. See Langbord, 2011 WL 2623315, at *16-17; Gov‘t Br. 40-41; see also 30C Michael H. Graham, Federal Practice and Procedure § 7057 n.1 (2014) (stating that requiring establishment of a different hearsay exception for the embedded hearsay statements “would effectively emasculate Rule 803(16)‘s utility as it did in Hicks“). Alternatively, the District Court reasoned that the multiple-hearsay rule was satisfied because “Rule 803(16) supplies the grounds by which each level within an ancient docu
We therefore hold that the District Court abused its discretion by admitting the hearsay embedded within Secret Service reports into evidence without applying
2
The Langbords’ second evidentiary objection concerns the introduction of the opinion and findings of fact from United States v. Barnard, 72 F.Supp. 531 (W.D. Tenn. 1947). In Barnard, the United States filed a replevin action against a coin collector to recover a 1933 Double Eagle and the judge found that the coin at issue had not left the Philadelphia Mint legally. 72 F.Supp. at 532. On initial review of the Barnard documents in the Langbords’ case, the District Court found them admissible under the ancient documents exception to the hearsay rule. Langbord, 2011 WL 2623315, at *5. But after examining them under
On appeal, the Langbords insist that the Barnard documents should have been excluded for four reasons. Their first objection—that the documents were hearsay—is a nonstarter for the obvious reason that they were not offered to prove the truth of their contents. See
Second, the Langbords claim that the Barnard documents, even if not hearsay, should have been excluded because they were irrelevant. In their view, the Government was unable to prove Switt was aware of the Barnard opinion because it could not show that he read either the opinion, news articles discussing the opinion, or an article about the case in The Numismatist (a journal for coin dealers). As such, the Barnard opinion could not have put Switt on notice that holding the 1933 Double Eagles was illegal. As we shall explain, these arguments do not satisfy the high bar for establishing irrelevance.
Evidence is relevant so long as it has “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” United States v. Sriyuth, 98 F.3d 739, 745 (3d Cir. 1996) (quoting
In light of all the evidence, the District Court did not abuse its discretion by determining that a jury could reasonably find by a preponderance of the evidence that Switt was aware of the Barnard documents. This is true for several
The Langbords argue alternatively that the Barnard documents should have been excluded under
The Langbords have not satisfied the exacting standard of
Finally, the Langbords claim the District Court abused its discretion by admitting the Barnard documents under
3
Next, the Langbords contend that evidence that Israel Switt forfeited 98 gold coins that he possessed in contravention of the
The Langbords argue that the District Court abused its discretion by admitting this evidence for three reasons: (1) it was improper character evidence used to show Switt had a propensity to unlawfully hoard coins; (2) it was not relevant as the prior forfeiture took place under the
With proper purposes identified, the Government must then demonstrate that the evidence it seeks to introduce is relevant for those purposes—meaning that it had “any tendency” to make a consequential fact “more or less probable than it would be without the evidence,”
While Switt‘s prior forfeiture and the one at issue here do arise from different legal bases, the fact that Switt had previously forfeited gold coins to the Government is relevant to his knowledge that holding gold coins may be unlawful under certain circumstances. His prior loss of gold coins through a forfeiture proceeding also made it more likely that Switt would
Nor was this evidence excludable under
While posing some prejudice to the Langbords, we cannot conclude that the District Court‘s determination that such prejudice failed to outweigh the evidence‘s probative value was “arbitrary and irrational.” Bhaya, 922 F.2d at 187 (quoting DePeri, 778 F.2d at 973-74). In deciding to admit the evidence over the Langbords’ objection, the District Court carefully weighed its probative value and possible prejudicial impact. The Court found the fact that the evidence spoke to Switt‘s knowledge and motivation at the time in which the Double Eagles were allegedly concealed particularly probative as to whether a violation of
4
For their final evidentiary objection, the Langbords assert that the Government‘s expert, David Tripp, transmitted inadmissible hearsay to the jury without drawing upon any specialized knowledge and that this hearsay‘s probative value did not substantially outweigh its prejudicial effect. Langbord Br. 60-62 (citing
We turn first to the Langbords’ argument that Tripp‘s testimony was not supported by specialized knowledge. We have interpreted
Next, we consider the Langbords’ related argument that Tripp‘s testimony contained inadmissible hearsay that should have been excluded under
On this point, most of the Langbords’ arguments evaporate in light of our preceding analysis. As we have already discussed, the first-level hearsay found in the Secret Service reports, the Barnard opinion, and information related to Switt‘s prior forfeiture are all admissible. Because they are admissible for a purpose other than “assist[ing] the jury to evaluate” Tripp‘s opinion, we need not engage in the
Nevertheless, one portion of the Langbords’ argument survives—the challenge to Tripp‘s invocation of the embedded hearsay contained in the Secret Service reports that we previously held inadmissible. And we agree with the Langbords that this testimony‘s probative value did not substantially outweigh its prejudicial impact. While probative, the testimony was cumulative because it recounted interviews and reports that were later compiled into a final report that contained their most important information in admissible form—i.e. that the coins were stolen from the Mint and landed in Switt‘s possession. At the same time, this testimony posed addi
5
While we have found evidentiary errors regarding portions of the Secret Service reports and portions of Tripp‘s testimony about them, a new trial is appropriate only when “a substantial right of the party is affected.” Becker v. ARCO Chem. Co., 207 F.3d 176, 180 (3d Cir. 2000) (quoting Glass v. Phila. Elec. Co., 34 F.3d 188, 191 (3d Cir. 1994)); see also
a
To prevail on its forfeiture action, the Government needed to prove the Double Eagles “constitute[d] or [were] derived from the proceeds traceable to ... any offense constituting ‘specified unlawful activity’ (as defined in [
b
The evidence at trial demonstrated overwhelmingly that no 1933 Double Eagle ever left the Mint through authorized channels and any that did were either stolen or embezzled. Within 24 hours of his inauguration on March 4, 1933, President Roosevelt issued a proclamation that banned the payout of gold coin from banks and the Treasury. On March 9, Congress codified this presidential order. Not until six days later, on March 15, 1933, did the first 1933 Double Eagles arrive at the Cashier‘s office of the Philadelphia Mint—the office that serves as the “gatekeeper,” taking newly minted coins and releasing them to the public. A few weeks later, on April 5, 1933, President Roosevelt issued another proclamation ordering that all gold in private hands be returned to the Government.13 And on January 30, 1934,
The aforementioned legal framework dictated that no 1933 Double Eagles could lawfully be issued to the public. The coins arrived at the Cashier‘s office after Congress had forbidden the payout of gold. And any coins that left the Mint were required to have been returned under the direction of President Roosevelt‘s April 5 proclamation. The next year, by January 30, 1934, all the coins were ordered to be melted.
The Langbords nonetheless contend that 1933 Double Eagles may have left the Mint because of miscommunication or mistake. In particular, they point to a window of time between March 7 and April 12, 1933, during which the coins may have left the Mint via innocent means. On March 7, an Assistant Treasury Secretary informed the Mint that gold coin or bars could be issued in exchange for bullion. This information was at odds with President Roosevelt‘s inaugural proclamation and Congress‘s March 9 codification of that proclamation. And the Mint was not instructed in a letter from the Treasury to halt gold exchanges until April 12, 1933. The parties (and their experts) therefore dispute whether gold intended for private use could have left the Mint during this time. But regardless of whether this window actually existed, the Mint‘s own records from the relevant years show that no 1933 Double Eagle ever left the Mint through authorized channels.
The Mint‘s records track the movement of each 1933 Double Eagle. These records were remarkably detailed, going so far as to show the payment of three pennies and their year of minting in one transaction. The records indicate that 445,500 Double Eagles were struck. Five hundred of those were sent to the Cashier, while the remaining 445,000 were sealed in a basement vault. Of the 500 held in the Cashier‘s office, 29 were destroyed in tests to determine the coins’ purity and weight, 2 were sent to the Smithsonian, and the remaining 469 were placed in the basement vault. Then, in accordance with the
The Langbords try mightily to discredit these records, but fail to do so in a meaningful way. They claim the records are not reliable for three reasons. First, they argue that Mint employees “disregarded regulations governing quality control and bookkeeping audits,” Langbord Br. 14, as evidenced by the fact that the Cashier failed to properly select coins for the assay process,14 and that the Mint‘s holdings and records may not have been audited as frequently as regulations required. Neither of these concerns raises serious reliability questions—selecting the right coin for the assay process has little to do with the number of coins held by the Mint and the absence of a timely audit of the Mint‘s holdings does not indicate that the records actually contain errors.
Second, the Langbords note the fact that Mint records show the release of only four 1933 Eagles (not Double Eagles)
And finally, the Langbords argue that the records fail to show the release of gold coins on certain dates when other documents show that disbursements did in fact occur. As the Government explained at trial, however, this argument is factually incorrect because the documents to which the Langbords refer show only that individuals asked for gold coin in return for deposits of gold bullion, not that gold coin was actually paid out.15 Mint regulations corroborate the Government‘s theory by stating that gold would be paid out only if requested and available—otherwise, requests would be fulfilled by check.
Beyond the Mint records, the Government introduced evidence to show that the coins were either stolen or embezzled. In particular, the Government pointed to a Secret Service report regarding its investigation following the appearance of 1933 Double Eagles after all the coins should have been destroyed. The report‘s final conclusion stated that, in the opinion of the Secret Service, none of the 1933 Double Eagles that had surfaced ever left the Mint through authorized channels. Thus, the Secret Service report and the Mint records reflect the same conclusion that the 1933 Double Eagles had left the Mint illegally.16
In sum, considering the record as a whole, we have no doubt that any evidentiary errors were harmless as they relate to the jury finding that the coins were either stolen or embezzled from the Mint.
c
Next, the Government was required to show that whoever stole or embezzled the coins knew he was doing so or whoever received, concealed, or retained the coins, knew that the coins were stolen or embezzled and nonetheless intended to use them for his own gain. In light of the passage of so many decades, it is unsurprising that direct evidence of intent is lacking in this case. Such evidence is not required, however, because “a jury may draw inferences of subjective intent from evidence of ... objective acts, and from circumstantial evidence.” United States v. Piekarsky, 687 F.3d 134, 147-48 (3d Cir. 2012). Here, there is overwhelming circumstantial evidence in support of the Government‘s case.
For starters, we recall the evidence which shows that no 1933 Double Eagle
The Government‘s evidence did not stop there. Turning back to the reports from the Secret Service‘s investigation of 1933 Double Eagles that surfaced in the 1940s, the Government showed that Israel Switt was interviewed by Secret Service agents to determine his connection to the coins that had left the Mint. That investigation led the Secret Service to conclude that all of the Double Eagles that made it into private hands were connected to Switt. The fact that Switt had been involved in the dissemination of 1933 Double Eagles and that he had been investigated by the Secret Service for doing so provide strong evidence that he knew the coins were stolen or embezzled and that the Government sought their return.
Moreover, the Government pointed to Barnard and related documents as providing a reason to think Switt knew the Double Eagles were stolen or embezzled. Those documents—the publication of the opinion in 1947, a news report covering the case in the New York Times, and an article in The Numismatist about the matter—all make it more likely that Switt would have been aware of the controversy surrounding the legality of holding 1933 Double Eagles.
Finally, yet another body of evidence points to Switt knowing the coins were stolen or embezzled: the documents demonstrating that the Government forfeited 98 gold coins Switt possessed in contravention of the
Taking all of this evidence together, the Government showed that Switt knew that the 1933 Double Eagles were embezzled or stolen and that it was illegal to possess them. Yet they were stored in a safe-deposit box for decades until his daughter disclosed their whereabouts soon after the Fenton-Farouk coin was auctioned for $7,590,020. These circumstances are more than sufficient to find a violation of
D
The Langbords’ last line of attack on the District Court‘s judgment is that the Court erroneously instructed the jury on two elements of the Government‘s forfeiture case. First, they claim the District Court improperly instructed the jury on the mens rea necessary to establish liability under
1
In Morissette, the Supreme Court held that, in the absence of an express intent requirement in
The District Court‘s instructions conveyed exactly this point of law. The Court instructed the jury that it was required to find that “whoever stole or embezzled [the 1933 Double Eagles] did so knowingly,” and that “to steal means to take somebody else‘s property without permission with the intention of permanently keeping it.” App. 2702 (emphasis added) (also defining embezzlement as “to knowingly and intentionally take somebody else‘s property with the intent to permanently keep it by virtue of your employment or your position of trust“).
The Langbords nonetheless contend that the District Court misstated the law when it further elaborated that “knowingly means that you‘re conscious and aware of what you‘re doing. Right? It means that you‘re exercising a choice, a deliberate choice. It‘s not an accident. It‘s not a mistake.” App. 2702. We disagree.
As an initial matter, the District Court‘s definition of “knowingly” accords with our model instruction. See Third Circuit Model Criminal Jury Instruction 5.02 (revised Apr. 2015) (“‘knowingly’ means that the defendant was ‘conscious and aware of the nature of [his or her] actions and of the surrounding facts and circumstances, as specified in the definition of the offense(s) charged‘” (emphasis added)). And in conjunction with the District Court‘s definition of “steal,” the jury was required to find that whoever took the coins was “conscious and aware” that they were “somebody else‘s property.” App. 2702 (also stating that the jury was required to find “improper” or “guilty knowledge“). Of course, taken in isolation, the definition of knowingly—because it does not specify what knowledge is required—could simply require mere intentionality of the kind rejected in Morissette. But we do not review jury instructions in isolation as the Langbords tacitly propose. See, e.g., Limbach Co. v. Sheet Metal Workers Int‘l Ass‘n, AFL-CIO, 949 F.2d 1241, 1258-59 n.15 (3d Cir. 1991) (“When interpreting jury instructions, the reviewing court considers the totality of the instructions and not a particular sentence or paragraph in isolation.“).18 The District Court properly
instructed the jury on the mens rea required by
2
The Langbords’ last objection concerns the District Court‘s instruction that a theft under
In addition to reforming several procedural aspects of civil asset forfeiture, CAFRA vastly expanded the scope of property subject to forfeiture by amending
The question thus arises whether CAFRA‘s amendment to
The District Court accordingly did not abuse its discretion in declining to give the Langbords’ requested charge to the jury. See United States v. Croft, 750 F.2d 1354, 1362 (7th Cir. 1984) (“[N]o particular verbal formula or talismanic combination of words is required to properly allege the element of specific intent under
***
This case is unique for many reasons. It involves iconic American gold pieces that apparently had lain dormant in a safe-deposit box for decades. Almost immediately after the 1933 Double Eagles surfaced in 2002, the right to possess and own them was vigorously disputed. The resolution of that dispute required the District Court to consider novel questions of constitutional, statutory, and common law. The able trial judge worked diligently through all of the issues and gave both sides a fair trial. Once the jury had spoken, the District Court declared that the 1933 Double Eagles had always been property of the United States. Although the benefit of hindsight has convinced us that certain errors were committed in the conduct of the trial, they did not affect the outcome.
JORDAN, Circuit Judge, concurring in part and concurring in the judgment:
I agree with the excellent opinion of the Majority in all but one respect. Like Judge Rendell and those joining her partial dissent, I cannot join Part IV.A of the Majority Opinion. I have serious doubts about the Majority‘s assertion that there was no nonjudicial forfeiture proceeding here and, hence, I also question the conclusion that CAFRA does not apply. Nothing in CAFRA or, to my knowledge, elsewhere in the United States Code specifies how a “nonjudicial forfeiture proceeding” actually begins. Although the government asserts, and the Majority agrees, that there were no such proceedings here, the language of CAFRA suggests otherwise.
Of particular note is
gun, even though no “notice” designated as such may have been provided. In addition,
That is not to say that no notice is necessary. Some manifestation of the intent to keep the seized property is needed. The Code of Federal Regulations provides that an “administrative forfeiture proceeding”2 commences, as relevant here, “when the first personal written notice” of the seizure is sent to interested parties.
It is noteworthy that, in teaching Department of Justice attorneys the proper contours of forfeiture policy, the 2016 Department of Justice Asset Forfeiture Policy Manual cautions its attorneys not to use formalistic distinctions to try to bypass CAFRA‘s statutory deadlines. That manual provides that, even though CAFRA‘s 90-day deadline may not apply to property subject only to judicial forfeiture, in a case involving such seized property, “the prosecutor should treat [a seized asset claim] as if it were a ‘claim’ referred to in
[i]f the Government were to seize property for forfeiture in a situation where administrative forfeiture was authorized, but then ignore the 60- and 90-day deadlines in sections 983(a)(1) and (3) on the ground that it intended all along to skip over the administrative forfeiture process and proceed directly with a judicial forfeiture, courts might suspect that the Government was actually conjuring an ad hoc excuse for missing the statutory deadlines, or had decided to bypass the administrative forfeiture proceeding for the express purpose of circumventing
the statutory deadlines and the underlying congressional intent.
Id. at 57. That is an insight worth mulling over.
The Majority‘s careful distinction between a “seizure” and a “forfeiture“—that the former transfers possession while the latter transfers title—is certainly correct. (Majority Op. at 183.) But a seizure will often be a component of a forfeiture. And that distinction is of limited utility here, because when the government seized the disputed coins it simultaneously asserted that it had no intention to seek forfeiture since it already had title. In other words, the government took possession and, in doing so, asserted title. It is difficult to square the Majority‘s distinction between seizure and forfeiture on this record, when the government took the coins and said that it had both possession and title. Under these circumstances, the government‘s claim of ownership and the manifestation of its intent to retain indefinite possession of the coins was, in my view, sufficient to initiate a nonjudicial forfeiture proceeding.
All of this accords with common sense because, in the absence of some clear description of what a notice must contain or how a nonjudicial forfeiture proceeding starts, the reasonable default conclusion is that it begins when the government takes your property and refuses to ever give it back—in short, when there is a seizure accompanied by some manifestation of an intent to claim ownership. I thus am inclined to agree with Judge Rendell that, when CAFRA speaks of a “nonjudicial forfeiture proceeding,” it is not referencing
The oddity of the government‘s decision to initially forgo any approach to a court in this case is that it was apparent from the outset there were claimants to the property in question. Laying claim to the Double Eagles without going to court was thus a bad idea from the start. Most every government agency involved here—the U.S. Attorney‘s Office for the District of Columbia, the Secret Service, and the Department of the Treasury—seemed to share that view. Every agency except one: the Mint. A nonjudicial approach to resolving the dispute over ownership should not have been the option chosen by the government, and, indeed, the District Court determined that the government‘s actions here violated the Langbords’ constitutional rights, concluding “that the Government‘s belief that the coins had been stolen did
not diminish [the Langbords‘] Fourth Amendment rights and did not change the nature of the Government‘s seizure.” (App. 153.) That conclusion has not been challenged on appeal and it is supported by the record. The District Court then faced the difficult decision of determining how to remedy the constitutional violation while giving both the Langbords and the government the day in court that should have been sought in the first instance. The Court‘s decision requiring the government to “promptly initiate a forfeiture action” may or may not have been appropriate under the circumstances, but the government‘s handling of the dispute was clearly ill-advised. (App. 157.) The safe and sensible choice would have been to comply with CAFRA.
That reasoning leads me also to reject the Majority‘s characterization of the Langbords’ decision to file a seized asset claim as being “incongruous[ ].” (Majority Op. at 178.) A seized asset claim certainly sounds like the right way to claim assets that the government has seized, so there was nothing incongruous about that step. Nor am I persuaded by the Majority‘s assertion that the Langbords’ “seized asset claim was akin to filing a petition for writ of habeas corpus on behalf of someone not in custody—mismatched and ineffective.” (Majority Op. at 183.) To borrow the metaphor, it seems to me instead that the situation is more like one in which the government is keeping a habeas claimant locked in a 6’ by 9’ room while insisting that he is not really in custody. Just because the government says a person is not in custody does not make it so. Likewise, the government took custody of the Double Eagles and would not return them, so its assertion
But the strict deadlines in CAFRA do not always apply and we have reason to question whether they do here. The reason for doubt is not because the government says, “these are ours; you stole them.” CAFRA specifically contemplates property stolen from the government as being subject to CAFRA‘s regime. See
No court has yet addressed that question, and it is an interesting one, but,
In short, because a separate action to quiet title was permissible in this unusual context, we need not venture into the CAFRA thicket. I emphasize, however,
I concur in the balance of the Majority‘s opinion and in its judgment.
RENDELL, Circuit Judge, dissenting with whom McKEE, Chief Judge and KRAUSE Circuit Judge join:
I respectfully dissent from Part IV.A of the majority‘s opinion. The majority‘s reasoning as to why CAFRA‘s nonjudicial forfeiture provisions do not apply here is at best cryptic and, at worst, sets an incorrect and dangerous precedent that would allow the Government to nullify CAFRA‘s provisions at will. In effect, the majority holds that the Government did not commence a nonjudicial forfeiture proceeding, and thus avoided the dictates of CAFRA, based mainly on its buy-in to the Government‘s audacity—the Government‘s say-so that it owned the 1933 Double Eagles and had no intention of forfeiting them. But in reaching this unprecedented result, the majority not only disregards how CAFRA works and what actually happened here, but also renders CAFRA‘s protections largely meaningless and defies Congress‘s intent in passing the statute.
I.
This case involves precisely the type of situation that CAFRA was enacted to prevent: the Government‘s seizing and taking ownership of property in derogation of the rights of ordinary citizens. Indeed, Congress passed CAFRA to “level[] the playing field between the government and persons whose property has been seized.” United States v. Real Prop. in Section 9, 241 F.3d 796, 799 (6th Cir. 2001). To that end, CAFRA imposes deadlines on the Government for commencing a nonjudicial forfeiture proceeding of seized property and for filing a judicial forfeiture action in response to a citizen‘s timely claim to that property—not to mention deterrent penalties for missing those deadlines.
A nonjudicial forfeiture proceeding under CAFRA is not a “proceeding” in the true sense of the word, but, rather, a statutory scheme. That scheme is commenced when the Government seizes property and notifies all interested parties within “60 days ... of the seizure,”
The majority concludes that the Langbords failed to trigger the 90-day deadline with their seized asset claim because the Government chose not to initiate forfeiture proceedings against the 1933 Double Eagles. It reasons that “the Government determined that it was not obliged to initiate forfeiture proceedings against the 1933 Double Eagles because it had merely repossessed its own property” and “[i]n fact ... explicitly disclaimed any intent to forfeit the[m].” Majority Op. 182. Instead, the majority notes, “the Government asserted its ownership rights to the coins.” Id. 182. It thus holds that the Government never took any steps to commence a nonjudicial forfeiture proceeding against the 1933 Double
But that approach enables the Government to nullify all of CAFRA‘s protections merely by asserting its ownership of property and lack of intent to forfeit that property. Congress cannot have intended this result. See Civil Asset Forfeiture Reform Act of 2000, Pub. L. No. 106-185, 114 Stat. 202 pmbl. (CAFRA‘s purpose is “[t]o provide a more just and uniform procedure for Federal civil forfeitures“); United States v. Khan, 497 F.3d 204, 208 (2d Cir. 2007) (Congress passed CAFRA “to deter government overreaching“); United States v. Martin, 460 F.Supp.2d 669, 672 (D. Md. 2006) (“CAFRA was enacted in 2000 to curb what Congress perceived as abuses of the existing civil forfeiture system.“). Rather, to stay true to Congress‘s intent, we must focus on what actually occurred here: the Government seized property that is, by statute, subject to forfeiture, see supra note 2, with the intent to keep that property permanently and without a court proceeding, and so notified the Langbords. Clearly, then, a nonjudicial forfeiture proceeding was in process before the Langbords filed their seized asset claim, which should have triggered the filing of a judicial forfeiture complaint by the Government within 90 days, see
Accordingly, because the Government‘s failure to file a judicial forfeiture action within 90 days of the Langbords’ timely seized asset claim barred it as a matter of law from taking any further action to forfeit the 1933 Double Eagles, see
should have ordered the 1933 Double Eagles returned to the Langbords pursuant to the statutory directive. I would therefore reverse the District Court‘s order.
II.
But we must address another issue as to the applicability of CAFRA‘s nonjudicial forfeiture provisions here. Even though the Government‘s seizure and notice usually commence the nonjudicial forfeiture scheme, some property is ineligible for nonjudicial forfeiture. The Government has urged that the 1933 Double Eagles are ineligible for nonjudicial forfeiture because they are “merchandise” whose value “exceed[s] $500,000” and not “monetary instrument[s].”
This issue should give us pause. The definition of “monetary instruments” includes, among other things, “United States coins and currency,” “travelers’ checks,” and “bearer securities.”
This is a threshold issue that must be decided—one that cuts to the very applicability of CAFRA‘s nonjudicial forfeiture scheme.7 Nevertheless, although it was presented to the District Court, it was never addressed there, let alone decided. We should therefore remand to the District Court for it to make the initial ruling on this issue.8
Sina SUNDAY, Petitioner
v.
ATTORNEY GENERAL UNITED STATES OF AMERICA,
Respondent
No. 15-1232
United States Court of Appeals, Third Circuit.
Argued: January 19, 2016
(Filed: August 1, 2016)