MORALES v. NEW VALLEY CORP.
163 F.3d 763 | 999 F.Supp. 470 | 999 F.Supp. 477
We disagree. The statutory and regulatory provisions governing group status do not restrict a group‘s salience to the particular class of security that its constituent members have combined to аcquire, hold, vote, or dispose. On the contrary, the regulations make clear that a group member is deemed to have beneficial ownership of the group‘s holdings of any equity securities of the issuer. See
Because we affirm the district court‘s result in Morales III on this ground, we need not address any оf the other reasons on account of which Veritovtrade and the Holders might also be a group.
III. Prejudgment interest
Prejudgment interest is generally awarded as part of
CONCLUSION
The judgment of the district court is affirmed.
CIGNA Corp., Petitioner, v. DRUG ENFORCEMENT ADMINISTRATION, Respondent. Peter YSKAMP; CIGNA Corp., in its individual capacity and in its capacity as subrogee to the rights and interest of Peter Yskamp, and in its capacity as subrogee to the rights and interest of James E. Haldan, deceased v. DRUG ENFORCEMENT ADMINISTRATION,
No. 98-6148.
United States Court of Appeals, Third Circuit.
Submitted Pursuant to Third Circuit LAR 34.1(a) Dec. 14, 1998. Decided Dec. 21, 1998.
Robert A. Zauzmer, Office of United States Attorney, Philadelphia, PA, for Respondent.
Before: SLOVITER and COWEN, Circuit Judges, and OBERDORFER, District Judge.*
OPINION OF THE COURT
SLOVITER, Circuit Judge.
Appellant CIGNA Corp. (“CIGNA“) seeks review оf the 1994 administrative forfeiture of a Lear jet by the Drug Enforcement Administration (“DEA“). CIGNA contends that because the value of the aircraft seized exceeded $500,000, it was improper for the DEA to use administrative forfeiture instead of judicial forfeiture. Additionally, CIGNA raises several constitutional grounds for reversing the forfeiture. For the reasons stated herein, we will deny CIGNA‘s Petition for Review.
Peter Yskamp purchased the Lear jet in 1991 for use in a charter operation certified by the Fеderal Aviation Administration (“FAA“). James E. Haldan held a lien on the jet pursuant to a security agreement signed in August 1991, a few days before Yskamp purchased the jet, but that agreement was not filed with the FAA (as required by law) until after seizure of the plane more than three years later. CIGNA insured the jet under a standard policy which was later amended at Yskamp‘s request to cover losses caused by war or confiscation.
In September 1994, DEA officers who had become suspicious of thе activities of certain suspects tracked them to the Bermuda Dunes airport in California. The suspects unloaded luggage from a truck into Yskamp‘s jet. After the suspects boarded the jet, the officers approached and requested permission to search it, which was granted. On board, the officers found 12 pieces of luggage containing 300 kgs of cocaine.
When questioned afterwards, Yskamp conceded that this flight and a prior one with the same suspects wеre odd, because the bulk of the payment was in cash, the travelers had significantly more luggage in one direction than the other, and the turn-around time was short. Additionally, when questioned by the DEA, pilots for Yskamp stated initially (but later retracted when Yskamp was present) that they had informed him of their suspicions, and that he told them to ignore these concerns.
Following the DEA‘s seizure of the jet, Yskamp filed a claim for loss with CIGNA, which CIGNA approved and paid under his amended insurance policy. As provided in the contract, CIGNA then became Yskamp‘s subrogee. CIGNA also paid the outstanding loan balance owed Haldan, even though Haldan was not named on the policy, and then claimed status as Haldan‘s subrogee, as well. Finally, by paying Yskamp‘s insurance claim, CIGNA became owner of the jet outright in addition to his subrogee.
Pursuant to the administrative forfeiture provision in
Attorney John Scott Hoff (CIGNA‘s counsel here) notified the DEA of his representation of both CIGNA and Yskamp on October 11, 1994. Included with this notice was a petition for expedited release of the jet. The DEA then issued a notice of seizure addressed to Yskamp c/o Hoff as his attorney. CIGNA wrote to the DEA on November 15, 1994, confirming its understanding that the DEA would proceed on the petition for expedited release and stating that CIGNA‘s decision whether to post bond was still pending.
CIGNA failed to post the judicial bond and, on December 16, the DEA administratively forfeited the jet. Several days later, the DEA denied CIGNA‘s expedited release рetition, but agreed to treat CIGNA‘s submission as a petition for discretionary mitigation or remission and agreed to CIGNA‘s filing of additional documentation for that purpose.
Following the submission of additional information, the DEA denied the mitigation or remission petition. The DEA concluded, inter alia, that neither Yskamp nor CIGNA had taken reasonable steps to assure that the jet was not used for conveying illegal drugs. CIGNA filed a petition for reconsideration of the forfeiture based on the DEA‘s failure to consider CIGNA‘s status as subrogee of Haldan‘s interest. The DEA denied that petition in August 1996.
In September 1996, CIGNA, together with Yskamp, timely filed in the Court of Appeals for the Ninth Circuit a Joint Petition for Review of the DEA‘s order of forfeiture. The court dismissed the claims of Yskamp as well as those of CIGNA as subrogee of both Yskamp and Haldan for lack of jurisdiction, reasoning that Yskamp was not an aggrieved party, and that Haldan was merely an unsecured creditor with whom CIGNA had no relationship creating subrogation. The court
We have jurisdiction pursuant to
II.
The principal issue in this appeal is a pure question of law and depends on statutory interpretation. At issue is whether the DEA must use the procedures fоr judicial forfeiture, rather than for administrative forfeiture, if the value of the object seized because it was transporting a controlled substance exceeds $500,000. To address the issue, we briefly review the history and operation of the civil forfeiture laws.
A.
The statutory procedures for civil forfeiture applicable to the DEA and other agencies, such as the Immigration and Naturalization Service, the Customs Service, and the Federal Bureau of Investigation, appear at
§ 1607. Seizure; value $10,000 or less
If such value of such vessel, vehicle, merchandise, or baggage does not exceed $10,000, the appropriate customs officer shall cause a notice of the seizure of such articles and the intention to forfeit and sell or otherwise dispose of the same according to law to be published for at least three successive weeks in such manner as the Secretary of the Treasury may direct. For the purposes of this section and sections 1610 and 1612 of this title merchandise the importation of which is prohibited shall be held not to exceed $10,000 in value.
§ 1610. Seizure, value more than $10,000
If the value of any vessel, vehicle, merchandise, or baggage so seized is greater than $10,000, the appropriate customs officer shall transmit a report of the case, with the names of available witnesses, tо the United States attorney for the district in which the seizure was made for the institution of the proper proceedings for the condemnation of such property.
Thus, the statute required an agency seeking forfeiture of property to use judicial process whenever the value of the property exceeded $10,000. For property appraised at or below $10,000, the agency could use administrative procedures, and these procedures required public notice of the intended action. A party claiming an interest in property that was subjected to administrative forfeiture could opt for a judicial proceeding by notifying the seizing agency and posting a bond, both within a specified period from the date of first public notice.
The relevant sections of the statute, as amended in 1984, provided:
§ 1607. Seizure; value $100,000 or less, prohibited merchandise, transporting conveyances
(a) If—
(1) the value of such seized vessel, vehicle, aircraft, merchandise, or baggage does not exceed $100,000;
(2) such seized merchandise is merchandise the importation of which is prohibitеd; or
(3) such seized vessel, vehicle, or aircraft was used to import, export, transport, or store any controlled substance;
the appropriate customs officer shall cause a notice of the seizure of such articles and the intention to forfeit and sell or otherwise dispose of the same according to law to be published for at least three successive weeks in such manner as the Secretary of the Treasury may direct. Written notice оf seizure together with information on the applicable procedures shall be sent to each party who appears to have an interest in the seized article.
§ 1610. Seizure; judicial forfeiture proceedings
If any vessel, vehicle, aircraft, merchandise, or baggage is not subject to section 1607 of this title, the appropriate customs officer shall transmit a report of the case, with the names of available witnesses, to the United States attorney for the district in which the seizure was made for thе institution of the proper proceedings for the condemnation of such property.
The upper limit on
The 1984 amendments effected a major change in the statute from one that authorized administrative forfeiture only if the property fell below a fixed appraised value to one that also authorized administrative forfeiture of certain categories of propеrties based on the type of property or the reason for forfeiture regardless of the property‘s appraised value. In fact, the House Conference Report accompanying the 1990 amendment, which added the monetary instruments category (a)(4), noted that the addition of
To summarize, the four distinct categories of property subject to administrative forfeiture under the forfeiture statute are: (1) certain property valued at or under $500,000;4 (2) merchandise that may not be imported; (3) vehicles, aircraft, and vessels used to transport drugs; and (4) monetary instruments. Only the first category, that in
In light of this historical background, we turn to CIGNA‘s contentions. First, CIGNA argues that federal law requires the DEA to use judicial forfeiture proceedings any time the value of the property seized exceeds $500,000, and that because the DEA failed to use judicial forfeiture to seize the jеt, it violated CIGNA‘s constitutional rights.
CIGNA relies on dictum in Marshall Leasing, Inc., 893 F.2d at 1102-03 n. 6, which CIGNA reads to suggest that the 1984 amendments increasing the dollar threshold for triggering judicial forfeiture to $100,000 applies to all property. Indeed, notwithstanding that the 1984 revision explicitly distinguished, for purposes of administrative forfeiture, between property seized below a fixed dollar value and certain classes of property subject to administrative forfeiture irrespective of the dollar value (a distinction carried over to the 1990 amendments), many courts have continued to refer to property generally without acknowledging that distinction. See, e.g., Weng v. United States, 137 F.3d 709, 712 (2d Cir.1998); Ibarra v. United States, 120 F.3d 472, 474 (4th Cir.1997); Litzenberger v. United States, 89 F.3d 818, 819-20 (Fed.Cir.1996); United States v. Baird, 63 F.3d 1213, 1217 n. 9 (3d Cir.1995); United States v. Giraldo, 45 F.3d 509, 510 (1st Cir.1995); Linarez v. United States Dept. of Justice, 2 F.3d 208, 209 (7th Cir.1993); Schrob, 948 F.2d at 1412 n. 9. We note that these statements, however, are mere dicta. Several cases have recognized the statutory distinctions. See Arango v. United States Department of the Treasury, 115 F.3d 922, 925 & n. 4 (11th Cir.1997) (grouping all property together in text while specifying in footnote different categories of seizure); United States v. Idowu, 74 F.3d 387, 394 & n. 10 (2d Cir.1996) (enumerating four categories of property administratively forfeitable after notice).
We rely on plain language of the statute to hold that
As an alternativе argument, CIGNA asserts that the DEA‘s own regulations require the use of judicial proceedings. See
CIGNA focuses on the language of
CIGNA suggests no reason why the DEA, the agency in the forefront of drug interdiction, would do any less than Congress. Moreover, the DEA was aware that under the statute all that is required to invoke judicial forfeiture proceedings is the posting of a bond. We are obliged to defer to the DEA‘s interpretative application of these regulations when, as here, it is neither plainly erroneous nor inconsistent with the regulation. See Shell Oil Co. v. Babbitt, 125 F.3d 172, 175-76 (3d Cir.1997).
In conclusion, we hold that the DEA was not obligated under the federal forfeiture statutes or regulations to pursue judicial forfeiture merely because the value of the property seized pursuant to
III.
CIGNA raises several constitutional arguments against the forfeiture of the jet. First, it claims that the forfeiture is violative of the Eighth Amendment‘s prohibition on excessive fines. See Austin v. U.S., 509 U.S. 602 (1993). In United States v. Bajakajian, 524 U.S. 321 (1998), the Supreme Court analyzed whether a criminal forfeiture of $357,144 sought by the government was grossly disproportionate to the crime and, therefore, punitive and excessive. It stated that although a court should defer to the decision of the legislature regarding the appropriateness of the forfeiture, id. at 336, the statute is not conclusive. Because Bajakajian‘s offense involved only a willful failure to report the export of currency in amounts at or over $10,000, see
Even before the Bajakajian opinion, this court was moving toward a proportionality test for forfeiture cases, both civil and criminal. See, e.g., United States v. Sarbello, 985 F.2d 716 (3d Cir.1993) (discussing criminal RICO forfeiture). In United States v. Premises Known as RR #1, 14 F.3d 864 (3d Cir.1994), there was a question whether the property at issue was in fact used “to facilitate” violation of the drug laws, a prerequisite for civil forfeiture. Id. at 876. We stated that if that nexus were proven, then the trier of fact would be required to look at the overall circumstances, including seriousness of the offense and personаl benefit or culpability, to decide excessiveness. Id. at 875 (citing Sarbello, 985 F.2d at 724).
We conclude that the forfeiture here was not excessive. The federal statute clearly authorized the forfeiture of aircraft used in the transportation of drugs. The amount of cocaine to be transported in the jet was comparatively large for a drug case. Indeed, an offense involving 150 kgs or more of cocaine has been placed in the highest base offense level under the Sentеncing Guidelines. See
CIGNA‘s other constitutional arguments are equally meritless. On its Fifth Amendment claims, there is no question that CIGNA‘s counsel was aware of the forfeiture proceedings and could have acted to preserve the company‘s rights to a judicial forfeiture by submission of a $5,000 bond, but he failed to do so in a timely manner. CIGNA has not pursued an argument that it must receive personal notice, as opposed to the notices counsel received on behalf of Yskamp and
CIGNA has not challenged the use of administrative forfeitures generally, only the use of administrative forfeiture instead of judicial forfeiture in this case. Because we have concluded that the DEA‘s administrative forfeiturе was permissible here, and authorized by statute, we need not address CIGNA‘s Sixth and Seventh Amendment arguments.
Finally, CIGNA raises, apparently for the first time, an argument that the jet was not subject to forfeiture because it served as a common carrier under
IV.
In conclusion, we will deny CIGNA‘s Petition for Review.
FERTILIZER INSTITUTE, a Delaware non-profit corporation, Appellant, v. Carol M. BROWNER, Administrator, United States Environmental Protection Agency; The United States Environmental Protection Agency.
No. 97-7494.
United States Court of Appeals, Third Circuit.
Submitted Pursuant to Third Circuit LAR 34.1(a) Oct. 5, 1998. Decidеd Dec. 21, 1998.