Vereda, Ltda. v. United StatesVereda, Ltda. v. United States
In this case we are called upon to review an order,
Vereda, Ltda. v. United States,
[w]hether a mortgagee may assert a viable Fifth Amendment taking claim in the United States Court of Federal Claims following the government’s in rem administrative forfeiture of the property securing the mortgage after proceedings in the United States District Court.
Vereda III,
The Court of Federal Claims certified the order at the request of the United States after it denied the motion of the United States to dismiss Vereda, Ltda.’s (‘Vereda’s”) taking claim under the Fifth Amendment to the United States Constitution.
1
Vereda’s claim arose from the Drug Enforcement Administration’s (“DEA’s”) seizure and
in rem
administrative forfeiture of an aircraft in which Vereda had a mortgage interest. In denying the government’s motion to dismiss, the Court of Federal Claims held that our decision in
Shelden v. United States,
For the reasons set forth below, we answer the certified question in the negative. Accordingly, we reverse the decision of the Court of Federal Claims denying the government’s motion to dismiss Vereda’s taking claim. The case is remanded to the Court of Federal Claims with instructions to enter judgment dismissing Vereda’s complaint.
BACKGROUND
I.
Vereda is a limited partnership. It is registered and does business in Colombia as a broker and dealer in small aircraft and aircraft parts.
Vereda I,
In June of 1993, Export-Air located a 1978 Rockwell Commander aircraft (the “airplane”) that was being offered for sale in North Carolina for $460,000.
Id.
On June 30, 1993, after obtaining Vereda’s approval, Exportr-Air entered into a contract for the purchase of the airplane.
Aeroexpreso agreed to pay Vereda a total of $544,500 for the airplane. Id. Under its agreement with Vereda, Aeroexpreso was required to pay Export-Air $50,000 and Vereda $222,250 before Aeroexpreso received the airplane in Bogota, Columbia. Id. Vereda accepted a mortgage on the airplane from Aeroexpreso in order to secure payment of the remainder of the purchase price of the airplane. Id. By August 3, 1993, Vereda had paid Export-Air a total of $496,000. Id. On August 4, 1993, Export-Air paid the seller the balance owed on the purchase of the airplane. Id.
DEA seized the airplane on August 6, 1993, when it arrived in Fort Lauderdale. Id. at 496-97. The seizure was based on a warrant alleging probable cause to believe that the airplane was intended to be used to facilitate the possession and transportation of cocaine and that the airplane had been purchased with the proceeds of illegal drug transactions. Id. at 497. The warrant alleged that the ultimate purchaser and user of the airplane was not Aeroexpreso, but Avia 2000, a Colombian corporation allegedly owned by a member of the Medellin cocaine cartel. Id.
II.
Certain items that are subject to forfeiture are described in
The following shall be subject to forfeiture to the United States and no property right shall exist in them:
(4) All conveyances, including aircraft, vehicles, or vessels, which are used, or are intended for use, to transport, or in any manner facilitate the transportation, sale, receipt, possession, or concealment of [controlled substances]....
(6) All moneys, negotiable instruments, securities, or other things of value furnished or intended to be furnished by any person in exchange for a controlled substance .... in violation of this subchapter, all proceeds traceable to such an exchange, and all moneys, negotiable instruments, and securities used or intended to be used to facilitate any violation of this subchapter....
Pursuant to the applicable customs statute,
If no claim of ownership is filed within twenty days of the publication of notice of the seizure, the seized item is declared forfeited.
III.
On September 15, 22, and 29,1993, DEA published notice of the airplane’s seizure and impending forfeiture in
USA Today.
On October 14, 1993, Vereda requested that it receive notice of the seizure. Responding to the request, DEA sent Vereda information regarding the seizure and impending forfeiture and granted Vereda an additional twenty days from Vereda’s receipt of the information to file a claim of ownership. On October 28, 1993, Aer
On November 19, 1993, DEA declared the airplane administratively forfeited to the government pursuant to
On February 24, 1994, while DEA was considering Aeroexpreso’s and Vereda’s petitions for remission and Export-Air’s claim of ownership, Aeroexpreso filed suit in the United States District Court for the Southern District of Florida, seeking the return of the airplane and damages based on the government’s alleged violation of Aeroexpreso’s constitutional due process rights during the administrative forfeiture proceeding. The district court granted the government’s motion to dismiss the suit for lack of jurisdiction. The court held that because Aeroexpreso had notice of the seizure and impending forfeiture, the court could not exercise its equitable jurisdiction over the administrative forfeiture of the airplane.
Aeroexpreso de la Frontera v. United States,
No. 94-0365, slip op. at 7-12 (S.D.Fla. July 28, 1994). The court stated that it was “uncontroverted that a certified copy of the notice was sent by certified mail [to Aeroexpreso],” and that there had thus “been no ‘callous disregard for the constitutional rights’ of’ Aeroexpreso.
Id.
at 10-11 (citation omitted). Aeroexpreso appealed, and the dismissal was summarily affirmed by the United States Court of Appeals for the Eleventh Circuit.
Aeroexpreso De La Frontera v. United States,
On December 5, 1994, Export-Air filed its own action in the district court. It claimed that it had not received sufficient notice of the seizure and proposed forfeiture under
IV.
On May 6, 1996, Vereda filed a complaint in the Court of Federal Claims. Vereda’s complaint sought monetary damages under the theories that DEA’s seizure and administrative forfeiture of the
The government sought rehearing on its motion to dismiss Vereda’s illegal exaction claim and its taking claim. After considering the motion, the Court of Federal Claims revised its decision in
Vereda I,
dismissing Vereda’s illegal exaction claim but affirming its earlier decision to allow Vereda to proceed with its taking claim.
Vereda II,
The government filed a motion in the Court of Federal Claims on November 16, 1999, asking for a certification for interlocutory appeal and for a stay of proceedings. Vereda did not oppose the motion. The Court of Federal Claims granted the motion, and certified the question set forth above.
Vereda III,
We granted the government permission to appeal the certified order. In so doing, we agreed with the Court of Federal Claims that there is “substantial ground for difference of opinion ... regarding the implications of
Crocker
and
Shelden,”
and we noted that because “the Fifth Amendment taking claim is the sole remaining claim[,] ... if this court determines that the Court of Federal Claims lacks jurisdiction, then the entire lawsuit will be dismissed.”
Vereda IV
at *1-2. We have jurisdiction over the government’s appeal pursuant to
DISCUSSION
We review a decision by the Court of Federal Claims regarding its jurisdiction without deference because jurisdiction is a question of law.
Tippett v. United States,
I.
Vereda bases its taking claim on a challenge to the substantive validity of the forfeiture of its interest in the airplane. Vereda asserts that it is innocent of any wrongdoing. Accordingly, it argues, it is entitled to the benefit of the provisions of
We reject Vereda’s challenge to the forfeiture in this case. We do so because we conclude that the Court of Federal
The Court of Federal Claims lacks jurisdiction in this matter because the relevant statutes provide for a comprehensive administrative and judicial system to review the
in rem
administrative forfeiture of property seized pursuant to
In short, Congress created a statutory scheme that provides a claimant such as Vereda with the ability to challenge the merits of an
in rem
forfeiture, both administratively and before a district court. This statutory scheme evinces Congress’ intent to preempt any Tucker Act jurisdiction over a money claim that challenges the propriety of an
in rem
administrative forfeiture of property seized under
The trial court’s exercise of jurisdiction over Vereda’s substantive claims also is barred by the effect of
Vereda contends that our decision in
Shelden
supports jurisdiction in the Court of Federal Claims in this case.
Shelden
involved a taking claim, brought in the United States Claims Court, regarding a mortgage interest the Sheldens held in real property that was subject to an
in personam
forfeiture pursuant to
Vereda’s reliance on
Shelden
is misplaced.
Shelden
involved an
in person-am
forfeiture accompanying a third-party criminal conviction. An
in personam
forfeiture results from a proceeding against the property owner, not the property itself, and is meant to punish the property owner for criminal conduct.
United States v. Bajakajian,
The Sheldens were an innocent party, like Vereda claims to be in this case. However, unlike Vereda, because they were deprived of a property interest as the result of an
in personam
forfeiture against the owner under the RICO statute, there was not available to them a “specific and comprehensive scheme for administrative and judicial review” of their third-party interest in the property.
St. Vincent’s Med. Ctr.,
CONCLUSION
For the foregoing reasons, we answer in the negative the question “[w]hether a mortgagee may assert a viable Fifth Amendment taking claim in the United States Court of Federal Claims following the government’s
in rem
administrative forfeiture of the property securing the mortgage after proceedings in the United States District Court.” Consequently, we reverse the order of the Court of Federal Claims denying the government’s motion to dismiss for lack of jurisdiction and remand the case to the Court of Federal
REVERSED and REMANDED.
No costs.
Notes
. The Fifth Amendment provides in relevant part as follows: "nor shall private property be taken for public use, without just compensation.”
. The provisions of the Controlled Substances Act and the applicable Customs statutes, see infra, that are relevant to this appeal are largely unchanged from the period 1993-1994, when the seizure and forfeiture at issue in this case took place. Accordingly, unless otherwise indicated, we refer to these provisions in the present tense, and all references are to the 1999 edition of the United States Code.
. If the item seized is worth more than $500,000, the forfeiture action is prosecuted from the outset by the appropriate United States Attorney in district court.
. On April 11, 2000, Congress passed the Civil Asset Forfeiture Reform Act of 2000 ("CAF-RA”), Pub.L. No. 106-185, 114 Stat. 202, in an effort to address due process concerns associated with federal civil forfeitures. H.R.Rep. No. 106-192, at 4-5 (1999).
See
Pub.L. No. 106-185 § 2,
CAFRA is not applicable to this case, as it was not enacted by signature until April 25, 2000, and by its terms, CAFRA only applies to "any forfeiture proceeding commenced on or after the date that is 120 days after the date of the enactment of this Act.” Pub.L. No. 106-185 § 21,
. The Eighth Amendment provides in relevant part as follows: "nor excessive fine imposed....”
. Vereda based its illegal exaction claim on the contention that the seizure and forfeiture were in contravention of the provisions of
. At the time of the forfeiture in question,
The innocent owner provisions of
. For purposes of its taking claim, Vereda does not contend that the seizure and forfeiture of the airplane were procedurally defective. In any event,
Crocker
bars Vereda from challenging the procedural validity of the
in rem
administrative forfeiture of the airplane in the Court of Federal Claims. In
Crocker,
this court considered a claim seeking compensation for a seizure and forfeiture under