United States of America, Plaintiff - Appellee, v. Real Property Located at 3234 Washington Avenue North, Minneapolis, Minnesota, Defendant, Minnesota Church of Angels, Claimant - Appellant.
No. 06-1983
United States Court of Appeals FOR THE EIGHTH CIRCUIT
March 22, 2007
Submitted: November 13, 2006
LOKEN, Chief Judge.
The Church timely filed a claim asserting its ownership interest and contesting the government‘s right to forfeit the property. See
Congress significantly modified civil forfeiture procedures in the Civil Asset Forfeiture Reform Act of 2000, Pub. L. No. 106-185, 114 Stat. 202 (2000) (“CAFRA“). Under CAFRA, “the burden of proof is on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture.”
In 2003, Patrick Matter and Richard Rohda pleaded guilty to federal drug offenses and agreed to cooperate with the government to earn reduced sentences. Matter was president of the Club from 1982 to 2003 and an incorporator of the Church in 1995. Rohda was a ten-year Club member who rose to the rank of “road captain.” The summary judgment record includes excerpts of testimony by Matter and Rohda to a grand jury in August 2003; at the criminal trial of Paul Seydel, a witness for the Church, in the fall of 2004; and at March 2005 depositions.
Matter and Rohda testified that substantial quantities of methamphetamine were frequently delivered to members at the clubhouse, that drugs were routinely used by members during parties at the clubhouse, and that workmen who engaged in the 1995 remodeling of the clubhouse were often paid, at least in part, with methamphetamine. Matter testified that members’ drug trafficking was discussed at the clubhouse on a monthly basis. Rohda testified that drugs were constantly present and used at the clubhouse. The government submitted other testimony supporting this evidence of widespread illegal drug activity at the clubhouse. Non-members Jacob Dailey and Christopher Tolck testified that they saw members using methamphetamine and cocaine at the clubhouse. Two workers, James Flett and Joseph Pitino, testified that drugs were used to pay for clubhouse renovation work. Pitino further testified that he consumed lines of cocaine at the clubhouse bar with a prospective member on one occasion and received cocaine at a clubhouse party on another. In a 2001 warrant
We have no doubt that this evidence, if credited by the finder of fact, would satisfy the government‘s burden to prove a “substantial connection” between the Church‘s clubhouse property and violations of the federal drug laws punishable by more than one year‘s imprisonment. Under prior law, the government needed only to show probable cause to believe that property was subject to forfeiture to shift the burden of proof on this issue to the claimant.1 In this forfeiture-friendly environment, summary judgment in favor of the government was not uncommon. See, e.g., One Blue 1977 AMC Jeep CJ-5 v. United States, 783 F.2d 759 (8th Cir. 1986). But the summary judgment inquiry depends on “the substantive evidentiary standard of proof that would apply at the trial on the merits.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). CAFRA shifted the burden of proof to the government. When the party with the burden of proof moves for summary judgment, “the standard is more stringent.” Nat‘l State Bank v. Fed. Reserve Bank of N.Y., 979 F.2d 1579, 1582 (3d Cir. 1992).
Though the burden of proof is relevant, the same principles apply when either party moves for summary judgment. “Once the movant has supported his or her motion . . . the opponent . . . may not simply rest on the hope of discrediting the movant‘s evidence at trial.” Matter of Citizens Loan & Sav. Co., 621 F.2d 911, 913 (8th Cir. 1980); see generally Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986) (a principal purpose of summary judgment “is to isolate and dispose of factually unsupported claims or defenses“) (emphasis added). We agree with other circuits that CAFRA did not modify this summary judgment principle. “That the burden is on the
The difficulty here is that the government‘s summary judgment evidence did not go unrefuted. The Church submitted deposition testimony of Club members William Test and Paul Seydel, and affidavits by member Hans Brenner and non-member Jerry Schiro. Test, the Church‘s treasurer since 1995, testified that he never saw drugs used or exchanged at the clubhouse at any time. Seydel, a founding Club member, testified that he never saw drugs used or shared at the clubhouse. Seydel explained that his drug conspiracy conviction resulted when Pat Matter twice gave Seydel methamphetamine to satisfy debts, exchanges which took place at Matter‘s motorcycle shop, not at the clubhouse. Brenner averred that he did most of the electrical work during the clubhouse renovation, never heard of a worker being paid with drugs, and never saw drugs at the clubhouse. Schiro‘s affidavit tended to impeach the testimony of his stepson, Jacob Dailey, that Dailey saw a large quantity of methamphetamine during one of his many visits to the clubhouse.
The district court granted the government‘s motion for summary judgment on the ground that the Church‘s evidence did not adequately refute the government‘s evidence of a substantial connection between drug trafficking and the clubhouse. The court concluded that Seydel and Test did not create a genuine issue of material fact as to whether Matter distributed methamphetamine at the property. Because Seydel and Test admitted they had “limited contact” with the clubhouse, the property could still have been used for drug transactions and drug use even if they did not personally
We do not agree with this analysis. The burden of proof is particularly relevant when the party with the burden of proof moves for summary judgment and the opposing party presents evidence contesting the veracity of the movant‘s evidence. In this situation, if the testimony of a witness (as opposed to documentary evidence) is necessary to carry the movant‘s burden of proof, we look carefully at whether the witness is unbiased and competent, and whether his testimony is “positive, internally consistent, unequivocal, and in full accord with the documentary exhibits.” Lundeen v. Cordner, 354 F.2d 401, 408 (8th Cir. 1966). If the movant makes this showing, then the opposing party cannot force a trial merely to cross-examine the witness or in the hope “that something might turn up at the trial.” Id.; see 10A Wright, Miller & Kane, Federal Practice and Procedure: Civil 3d § 2726, at 444-45. But “where specific facts are alleged that if proven would call the credibility of the moving party‘s witness into doubt, summary judgment is improper,” especially when the challenged testimony “is an essential element of the plaintiff‘s case.” Lodge Hall Music, Inc. v. Waco Wrangler Club, Inc., 831 F.2d 77, 81 (8th Cir. 1987); see Sartor v. Arkansas Gas Corp., 321 U.S. 620, 626-28 (1944). Indeed, if the credibility of a critical interested witness is even partially undermined in a material way by the non-moving party‘s evidence, summary judgment in favor of the party with the burden of proof should be denied. See Chem. Bank v. Hartford Acc. & Indem. Co., 82 F.R.D. 376, 378-79 (S.D.N.Y. 1979).
In this case, we agree that the Church‘s member witnesses -- Test, Seydel, and Brenner -- could not from their own personal knowledge refute all the testimony by
- Matter testified that he delivered methamphetamine to Paul Seydel at the clubhouse ten or twenty times. Seydel denied that accusation.
- Matter testified that he paid William Test $500 per pound to store methamphetamine for Matter. Test denied that accusation.
- Matter testified that Seydel and Test were aware that Matter delivered methamphetamine to other members at the clubhouse. Seydel and Test denied that accusation.
- Seydel and Test contradicted Rohda‘s grand jury testimony that “[t]here‘s always drugs at the clubhouse” being used “in the open.”
- Dailey testified that he went to the clubhouse with his dad “[o]ff and on when I wasn‘t in jail” and once saw a half pound of methamphetamine on the bar being consumed by members. Schiro‘s affidavit impeached both this testimony and Dailey‘s general credibility.
These are not minor inconsistencies. They are direct contradictions on points materially related to the government‘s proof of a substantial connection. If a jury believed the Church‘s witnesses on these points, it could reasonably discredit all of the testimony of Matter, Rohda, and Dailey. Moreover, the government‘s key witnesses are neither disinterested nor inherently credible. Convicted of serious drug crimes, they have a strong incentive to win the government‘s support for reducing their sentences. In these circumstances, the governing principle that a court may not weigh the evidence or resolve credibility issues means that summary judgment must be denied, not granted.
Here, the government‘s witnesses testified that the clubhouse was acquired and fortified to create a safe haven for Club members’ illegal drug trafficking and use. If that testimony is credible, the property should clearly be forfeited. But many legitimate non-profit institutions own real property, and it is not unrealistic to posit an institutional owner‘s otherwise innocent premises being used for illicit drug trafficking by agents misusing their right of access and authority. CAFRA should be construed in a manner that protects such institutions from unwarranted or disproportionate forfeitures. Thus, while one seizure of a small quantity of an illegal drug at the clubhouse supports the government‘s forfeiture case, it does not by itself justify summary judgment forfeiting the property. See Premises Known as 3639-2nd St., 869 F.2d at 1098 (R. Arnold, J., concurring) (“the quality of the relationship between the property and the crime must be substantial“).
The judgment of the district court is reversed, and the case is remanded for further proceedings not inconsistent with this opinion. The Church‘s motion to strike portions of the government‘s brief is denied.