Petition for Writ of Certiorari — Miladis Salgado, Petitioner v. United States
Supreme Court briefNov 19, 2019
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No. _________
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In The
Supreme Court of the United States
-----------------------------------------------------------------MILADIS SALGADO,
Petitioner,
v.
UNITED STATES OF AMERICA,
Respondent.
-----------------------------------------------------------------On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Eleventh Circuit
-----------------------------------------------------------------PETITION FOR A WRIT OF CERTIORARI
-----------------------------------------------------------------JUSTIN PEARSON*
INSTITUTE FOR JUSTICE
2 S. Biscayne Boulevard
Suite 3180
Miami, FL 33131
(305) 721-1600
jpearson@ij.org
*Counsel of Record
DAN ALBAN
INSTITUTE FOR JUSTICE
901 N. Glebe Road
Suite 900
Arlington, VA 22203
(703) 682-9320
dalban@ij.org
Counsel for Petitioner
================================================================================================================
COCKLE LEGAL BRIEFS (800) 225-6964
WWW.COCKLELEGALBRIEFS.COM
i
QUESTIONS PRESENTED
1.
When does a civil forfeiture claimant “substantially
prevail” under 28 U.S.C. § 2465(b)(1)?
2.
In civil forfeiture lawsuits where a district court
has ordered the United States to return the seized
money and the lawsuit will never be refiled, is it
an abuse of discretion for the dismissal to be
without prejudice?
ii
PARTIES TO THE PROCEEDINGS AND
DIRECTLY RELATED PROCEEDINGS
Petitioner is Miladis Salgado. Respondent is the
United States of America.
In the district court, the defendants were: (i)
$70,670.00 in U.S. Currency; (ii) $101,629.59 in U.S.
Currency Seized from Wells Fargo Bank Cashier’s
Check No. 6648201039; and (iii) $30,000.00 in U.S.
Currency Seized from Chase Bank Cashier’s Check No.
1178710368. In addition to Petitioner Miladis Salgado,
the other claimants were Wilson Colorado and Kurvas
Secret by W. Although not listed as a party, AnnCherry
Fajas USA Inc. was also involved as a judgment-creditor possessing a state court judgment against Wilson
Colorado and Kurvas Secret by W.
The directly related proceedings are:
1.
United States of America v. $70,670.00 in U.S.
Currency, et al., No. 1:15-cv-23616-DPG (S.D.
Fla.)—Dismissal without prejudice entered
August 10, 2017; Order denying Claimants’
Motion for Attorneys’ Fees, Costs, and Interest entered January 3, 2018.
2.
United States of America v. $70,670.00 in U.S.
Currency, et al., No. 18-10312 (11th Cir.)—
Judgment entered July 8, 2019.
iii
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED ................................
i
PARTIES TO THE PROCEEDINGS AND DIRECTLY RELATED PROCEEDINGS .............
ii
TABLE OF AUTHORITIES ................................. vii
INTRODUCTION ................................................
1
OPINIONS BELOW.............................................
5
JURISDICTION ...................................................
5
STATUTES AND RULES INVOLVED ................
5
STATEMENT .......................................................
7
REASONS FOR GRANTING THE PETITION ....
13
I.
The Court has Never Addressed the Question of When a Civil Forfeiture Claimant
“Substantially Prevails” Under 28 U.S.C.
§ 2465(b)(1), Leading to Widespread Confusion in the Lower Courts and Increased
Civil Forfeiture Abuse ............................... 13
A. There is Widespread Confusion in the
Lower Courts ....................................... 14
B. The Court of Appeals’ Approach Cannot Be Correct ..................................... 15
i. The Court of Appeals’ Approach is
Irreconcilable with CAFRA’s Text ..... 16
ii. The Court of Appeals’ Approach is
Irreconcilable with CAFRA’s Legislative History .................................... 18
iv
TABLE OF CONTENTS—Continued
Page
iii. The Court of Appeals’ Approach Makes
It More Difficult for a Claimant to
“Substantially Prevail” Than to “Prevail” ................................................... 20
C. This Confusion Leads to Well-Chronicled
Abuses, Including Those Mentioned by
Justices Thomas and Sotomayor ......... 21
II. The Circuit Split Over Whether Dismissal
Without Prejudice is Allowed in this Situation Has Resulted in Different Levels of
Protection Against Forfeiture Abuse Based
Solely on the Circuit Where the Innocent
Owner Lives ................................................. 24
A. The Ruling Below Directly Conflicts
with the Ninth Circuit’s Rule .............. 25
B. The Ruling Below Deepens the Split Between the Ninth Circuit and the Fifth,
Eighth, and (Now) Eleventh Circuits ..... 27
C. The Circuit Split on This Issue Has
Created Chaos in the District Courts,
with Widely Divergent Outcomes ........ 28
D. The Side of the Circuit Split Joined by
the Court Below Creates a Catch-22...... 30
CONCLUSION..................................................... 31
v
TABLE OF CONTENTS—Continued
Page
APPENDIX
Opinion, United States Court of Appeals for the
Eleventh Circuit (July 8, 2019) ....................... App. 1
Final Judgment, United States Court of Appeals
for the Eleventh Circuit (July 8, 2019).......... App. 22
Entry by the United States District Court for
the Southern District of Florida on Order
Denying Motion to Alter Judgment and Order
Denying Motion for Attorney Fees (January 3,
2018) ............................................................... App. 24
Entry by the United States District Court for
the Southern District of Florida on Order Regarding Release of Defendants In Rem (December 19, 2017) ............................................ App. 34
Stipulation for Settlement in Forfeiture Action
(November 6, 2017) ........................................ App. 37
Entry by the United States District Court for
the Southern District of Florida on Order Dismissing Case (August 10, 2017) .................... App. 53
Excerpts from Deposition of DEA Agent Jose
Mantilla (March 27, 2017) ............................. App. 56
Craig Stevens and Robin Cross, Cashing In?
Small business owner out $200K after DEA
raid (June 1, 2016), https://wsvn.com/news/
special-reports/cashing-in-small-business-ownerout-200k-after-dea-raid/ ................................. App. 63
H.R.Rep. No. 106–192 (1999) ............................ App. 67
vi
TABLE OF CONTENTS—Continued
Page
Federal Rule of Civil Procedure 41(a)(2) ........ App. 144
Civil Asset Forfeiture Reform Act of 2000
(“CAFRA”), Pub.L. No. 106–185 (2000) ....... App. 146
28 U.S.C. § 2465(b) ........................................... App. 202
vii
TABLE OF AUTHORITIES
Page
CASES
Buckhannon Bd. and Care Home, Inc. v. West
Virginia Dep’t of Health and Human Res., 532
U.S. 598 (2001) ........................................................20
Carlson v. Green, 446 U.S. 14 (1980) ..........................27
CRST Van Expedited, Inc. v. EEOC, 136 S. Ct.
1642 (2016) .............................................. 3, 16, 20, 21
Digital Realty Trust, Inc. v. Somers, 138 S. Ct.
767 (2018) ................................................................16
Kazazi v. U.S. Customs and Border Protection,
376 F. Supp. 3d 781 (N.D. Ohio 2019).....................14
Kazazi v. U.S. Customs and Border Protection,
Case No. 19-3270 (6th Cir. 2019) ............................15
Leonard v. Texas, 137 S. Ct. 847 (2017)......................21
Loggerhead Turtle v. Cty. Council of Volusia Cty.,
307 F.3d 1318 (11th Cir. 2002) ................................17
On Lee v. United States, 343 U.S. 747 (1952) .............27
Texas State Teachers Ass’n v. Garland Indep.
School Dist., 489 U.S. 782 (1989) ............................20
Timbs v. Indiana, 139 S. Ct. 682 (2019) .....................23
United States v. 115-98 Park Lane South, No. 10CIV-3748, 2012 WL 3861221 (E.D.N.Y. Sept. 5,
2012) .................................................................. 17, 29
United States v. 2007 BMW 335i Convertible,
648 F. Supp. 2d 944 (N.D. Ohio 2009).....................29
viii
TABLE OF AUTHORITIES—Continued
Page
United States v. $32,820.56 in U.S. Currency,
106 F. Supp. 3d 990 (N.D. Iowa 2015)................. 4, 27
United States v. $32,820.56 in U.S. Currency,
838 F.3d 930 (8th Cir. 2016) ........................ 26, 27, 29
United States v. $60,201.00 in U.S. Currency,
291 F. Supp. 2d 1126 (C.D. Cal. 2003) ....................14
United States v. $107,702.66 in U.S. Currency,
No. 7:14-CV-00295-F, 2016 WL 413093
(E.D.N.C. Feb. 2, 2016) ............................................28
United States v. Any & All Funds on Deposit at
JPMorgan Chase, No. 12-CIV-7530, 2013 WL
5511348 (S.D.N.Y. Oct. 2, 2013) ..............................29
United States v. Approximately $16,500.00 in
U.S. Currency, 113 F. Supp. 3d 776 (M.D. Pa.
2015) ........................................................................29
United States v. Bednar, Case No. 15-2232 (4th
Cir. 2016) .................................................................15
United States v. Capital Stack Fund, LLC, 543
F. App’x 17 (2d Cir. 2013) ........................................29
United States v. Certain Real Prop., 543
F. Supp. 2d 1291 (N.D. Ala. 2008) ...........................29
United States v. Certain Real Prop., Located at
317 Nick Fitchard Rd., N.W., Huntsville, AL,
579 F.3d 1315 (11th Cir. 2009) ................................19
United States v. Coffman, 625 F. Appx 285 (6th
Cir. 2015) .................................................................19
United States v. Ito, 472 F. App’x 841 (9th Cir.
2012) ........................................................ 4, 25, 26, 29
ix
TABLE OF AUTHORITIES—Continued
Page
United States v. Minh Huynh, 334 F. App’x 636
(5th Cir. 2009)................................................ 4, 28, 29
United States v. One 2008 Toyota RAV 4 Sports
Utility Vehicle, 2010 WL 11531203 (C.D. Cal.
July 16, 2010) ..........................................................25
United States v. Twenty-Seven Parcels of Real
Property Located in Sikeston, Scott Cty., Mo.,
236 F.3d 438 (8th Cir. 2001) ....................................11
Youakim v. Miller, 425 U.S. 231 (1976) ......................27
STATUTES, CODES, AND RULES
19 U.S.C. § 1621 ..........................................................11
28 U.S.C. § 1254(1) ........................................................5
28 U.S.C. § 2465(b)(1) ......................................... passim
Federal Rule of Civil Procedure 41(a)(2) .....................7
OTHER AUTHORITIES
Antonin Scalia and Bryan A. Garner, Reading
Law: The Interpretation of Legal Texts (West
2012) ........................................................................17
Bobby Allyn & Ryan Briggs, Cash Grab: As Asset
Forfeiture Quietly Expands Across Pa., Abuses
Follow, PA. POST (April 24, 2019) ............................22
Christopher Ingraham, How Police Took $53,000
from a Christian Band, an Orphanage, and a
Church, WASH. POST (April 25, 2016) .....................22
x
TABLE OF AUTHORITIES—Continued
Page
Christine A. Budasoff, Modern Civil Forfeiture is
Unconstitutional, 23 Tex. Rev. of Law & Politics 467.......................................................................2
David B. Smith, Prosecution and Defense of Forfeiture Cases (2018) ......................................... 2, 3, 23
David Pimentel, Civil Asset Forfeiture Abuses:
Can State Legislation Solve the Problem? 25
Geo. Mason L. Rev. 174 (2018) ..................................2
Deanna Paul, Police Seized $10,000 of a Couple’s
Cash. They Couldn’t Get it Back—Until They
Went Public, WASH. POST (Aug. 31, 2018) .................1
Dick M. Carpenter II, et al., Policing for Profit:
The Abuse of Civil Asset Forfeiture (2d ed. Nov.
2015) .................................................................... 2, 12
Edgar Walters & Jolie McCullough, Texas Police
Made More than $50 Million in 2017 from
Seizing People’s Property. Not Everyone Was
Guilty of a Crime, TEXAS TRIB. (Dec. 7, 2018) ...........1
Fed. Prac. & Proc. Civ. § 2364 (3d ed., updated
Aug. 2019) .......................................................... 25, 26
German Lopez, “It’s Been Complete Hell”: How
Police Used a Traffic Stop to Take $91,800
from an Innocent Man, VOX (March 20, 2018) ...........23
How Crime Pays: The Unconstitutionality of
Modern Civil Asset Forfeiture as a Tool of
Criminal Law Enforcement, Harvard L. Rev.
(June 8, 2018) ..........................................................22
xi
TABLE OF AUTHORITIES—Continued
Page
Last Week Tonight with John Oliver, Civil Forfeiture, YOUTUBE (Oct. 5, 2014) https://www.
youtube.com/watch?v=3kEpZWGgJks ...................23
Mark Joseph Stern, Neil Gorsuch and Sonia Sotomayor Just Came Out Swinging Against Policing for Profit, SLATE (Nov. 28, 2018) ....................22
Michael Sallah, et al., Stop and Seize, WASH.
POST (Sept. 6, 2014) ............................................. 4, 10
Nate Gartrell, Contra Costa Cops Seized $1.1
Million From People Not Charged With a
Crime in Past Four Years, Records Show, THE
MERCURY NEWS (June 14, 2019) ..............................22
Nathaniel Cary & Mike Ellis, TAKEN: Risk a
Trial To Get Your Money Back, or Settle For
Less? THE GREENVILLE NEWS (Jan. 29, 2019) ...........1
Nick Sibilla, Cops Use Traffic Stops to Seize Millions From Drivers Never Charged with a
Crime, FORBES (March 12, 2014) ............................23
Rishi Batra, Resolving Civil Forfeiture Disputes,
66 U. Kan. L. Rev. 399 (2017) ..................................10
Sarah Stillman, Taken, THE NEW YORKER (Aug.
5, 2013) ......................................................................1
Scott Rodd, Should Police Be Allowed to Keep
Property Without a Criminal Conviction? ASSOCIATED PRESS (Feb. 8, 2017) ...................................2
xii
TABLE OF AUTHORITIES—Continued
Page
Substantial, Merriam-Webster’s Dictionary (2019).......17
Substantial Performance, Cornell Law Sch.
Legal Info. Inst., https://www.law.cornell.edu/
wex/substantial_performance.................................18
1
INTRODUCTION
This civil forfeiture case presents two questions of
national importance. The first is an unsettled question
of federal law. The second is the subject of a circuit
split.
Both arise from a particularly disturbing aspect of
modern civil forfeiture—law enforcement’s practice of
wrongfully seizing money and then using the time and
expense required to contest a forfeiture lawsuit as leverage to extract a settlement from the innocent owner.
See Edgar Walters & Jolie McCullough, Texas Police
Made More than $50 Million in 2017 from Seizing
People’s Property. Not Everyone Was Guilty of a Crime,
TEXAS TRIB. (Dec. 7, 2018); Deanna Paul, Police Seized
$10,000 of a Couple’s Cash. They Couldn’t Get It
Back—Until They Went Public, WASH. POST (Aug. 31,
2018); see also Sarah Stillman, Taken, THE NEW
YORKER (Aug. 5, 2013) (police threatened to send a
couple’s children to Child Protective Services unless
they surrendered their money to police on the spot). In
these settlements, the government frequently receives
roughly fifty percent of the money in exchange for returning the rest. See, e.g., Nathaniel Cary & Mike Ellis,
TAKEN: Risk a Trial To Get Your Money Back, or Settle For Less? THE GREENVILLE NEWS (Jan. 29, 2019)
(providing specific examples).
More often than not, these innocent Americans are
not arrested, let alone convicted of anything. But they
cannot afford to litigate for two years or more while
they wait for the return of their money. See, e.g., Scott
2
Rodd, Should Police Be Allowed to Keep Property Without a Criminal Conviction? ASSOCIATED PRESS (Feb. 8,
2017) (detailing how it took two innocent people two
years and thousands of dollars in attorneys’ fees to
obtain return of money). As a result, most owners bitterly take the deal. In fact, 88 percent of federal civil
forfeitures never make it to a judge. See Dick M. Carpenter II, et al., Policing for Profit: The Abuse of Civil
Asset Forfeiture, 12–13 (2d ed. Nov. 2015); see also
David Pimentel, Civil Asset Forfeiture Abuses: Can
State Legislation Solve the Problem? 25 Geo. Mason L.
Rev. 173–74, 182–83 (2018) (collecting sources estimating that between 80 percent and 88 percent of
federal forfeitures are uncontested); Christine A. Budasoff, Modern Civil Forfeiture Is Unconstitutional, 23
Tex. Rev. of Law & Politics 467, 482 (“five-sixths of the
cash seizures in the [federal equitable sharing] program were afforded no hearing at all”). When innocent
people are treated this way, many of them lose all trust
in our legal system.
In the rare cases where the owners can survive
without their money until the summary judgment
stage, another disturbing pattern emerges. The United
States will suddenly decide to return all the money
and move to voluntarily dismiss the forfeiture lawsuit
without prejudice, which district courts usually grant.
See David B. Smith, Prosecution and Defense of Forfeiture Cases § 10.08[2] (2018). The United States will
then argue, often successfully, that this means the
owner did not “substantially prevail” under 28 U.S.C.
§ 2465(b)(1) and therefore cannot obtain an award of
3
attorneys’ fees, costs, and interest. See Smith at
§ 10.08[2]. This also means that even in the rare cases
where the owners have the wherewithal to fight back,
they are almost never made whole. This tactic has become so widespread that a leading civil forfeiture treatise refers to it as the “issue that has arisen most
frequently in civil forfeiture cases.” Id.
The primary reason this tactic exists is the lower
courts’ widespread confusion over the first question
presented here—when does a civil forfeiture claimant
“substantially prevail” under 28 U.S.C. § 2465(b)(1)?
See Smith at § 10.08[2]. This question has never been
addressed by this Court.
Congress, for its part, spoke clearly. In an attempt
to combat abusive forfeiture tactics, Congress made it
easier for civil forfeiture claimants to obtain awards
of attorneys’ fees, costs, and interest than litigants
in other types of fee-eligible cases. See 28 U.S.C.
§ 2465(b)(1). The statute’s text mandates that any civil
forfeiture claimant who merely “substantially prevails” “shall” receive an award of attorneys’ fees, costs,
and interest. Id. Unfortunately, the unsettled question
of how to apply this provision has led many courts to
read the word “substantially” out of the statute. See
Smith at § 10.08[2].
Worse still, courts overseeing civil forfeiture cases
have ignored this Court’s holding that a ruling on the
merits is not always required to obtain an award of attorneys’ fees, costs, and interest as a prevailing party.
See CRST Van Expedited, Inc. v. EEOC, 136 S. Ct.
4
1642, 1651–53 (2016). Consequently, it is now more difficult for civil forfeiture victims to obtain awards of attorneys’ fees, costs, and interest than in other types of
fee-eligible cases. That outcome is the opposite of the
approach Congress stated in the statute’s plain text.
Faced with law enforcement’s effective use of this
tactic to frustrate Congress’s plainly stated intent, as
well as the injustice inherent in preventing civil forfeiture’s victims from being made whole, a circuit split
has arisen. This split focuses on the second question
presented here—in civil forfeiture lawsuits where a
district court has ordered the United States to return
the seized money and the lawsuit will never be refiled,
is it an abuse of discretion for the dismissal to be without prejudice? Compare United States v. Ito, 472
F. App’x 841, 841–42 (9th Cir. 2012) (holding that it
is an abuse of discretion), with United States v.
$32,820.56 in U.S. Currency, 838 F.3d 930, 937 (8th Cir.
2016) (holding that it is not); United States v. Minh
Huynh, 334 F. App’x 636, 639 (5th Cir. 2009) (same).
The decision below has only deepened the split. See
Pet. App. 1–21.
Although both questions presented merit the
Court’s attention, the core of the problem is the first. If
law enforcement were forced to follow Congress’s mandate that victims of baseless forfeiture cases must be
made whole, the result would be a substantial reduction in the abuse we see nationwide. Because this case
presents the Court with a rare opportunity to address
these nationally important issues affecting thousands
of innocent Americans, see Michael Sallah, et al., Stop
5
and Seize, WASH. POST (Sept. 6, 2014), as well as a good
vehicle to do so, the Court should grant certiorari.
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OPINIONS BELOW
The opinion of the court of appeals is reported at
929 F.3d 1293. Pet. App. 1–21. The opinions of the district court were not reported but are included in the
Appendix. Pet. App. 24–33, 53–55.
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JURISDICTION
The United States Court of Appeals for the Eleventh Circuit entered its judgment on July 8, 2019. Pet.
App. 22–23. On September 17, 2019, Petitioner Miladis
Salgado timely sought an extension of time through
November 21, 2019, which Justice Thomas granted on
September 25, 2019. Petitioner Miladis Salgado respectfully petitions for a writ of certiorari under 28
U.S.C. § 1254(1).
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STATUTES AND RULES INVOLVED
The fee-shifting provision of the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”), codified at 28
U.S.C. § 2465(b)(1), states:
Except as provided in paragraph (2), in any
civil proceeding to forfeit property under any
provision of Federal law in which the claimant
6
substantially prevails, the United States shall
be liable for—
(A) reasonable attorney fees and other litigation costs reasonably incurred by the
claimant;
(B) post-judgment interest, as set forth in
section 1961 of this title; and
(C) in cases involving currency, other negotiable instruments, or the proceeds of an
interlocutory sale–
(i)
interest actually paid to the United
States from the date of seizure or arrest of the property that resulted
from the investment of the property
in an interest-bearing account or instrument; and
(ii) an imputed amount of interest that
such currency, instruments, or proceeds would have earned at the rate
applicable to the 30-day Treasury
Bill, for any period during which no
interest was paid (not including any
period when the property reasonably
was in use as evidence in an official
proceeding or in conducting scientific
tests for the purpose of collecting evidence), commencing 15 days after
the property was seized by a Federal
law enforcement agency, or was
turned over to a Federal law enforcement agency by a State or local law
enforcement agency.
7
Federal Rule of Civil Procedure 41(a)(2) states:
Except as provided in Rule 41(a)(1), an action
may be dismissed at the plaintiff ’s request
only by court order, on terms that the court
considers proper. If a defendant has pleaded a
counterclaim before being served with the
plaintiff ’s motion to dismiss, the action may
be dismissed over the defendant’s objection
only if the counterclaim can remain pending
for independent adjudication. Unless the order states otherwise, a dismissal under this
paragraph (2) is without prejudice.
------------------------------------------------------------------
STATEMENT
1. Petitioner Miladis Salgado’s full-time, primary employment is at an airport duty-free store,
where she undergoes periodic background checks confirming her lack of a criminal record. See Dkt. 109-16
at 7. To make ends meet, she also works a second job
part time at a Subway sandwich shop. See id. at 7, 13.
Ms. Salgado is currently divorced. See id. at 15.
Her ex-husband Wilson Colorado was a claimant in the
lower courts but is not a petitioner here. Pet. App. 1–
22. At the time of the seizure, Ms. Salgado and Mr. Colorado were not yet divorced, but were separated and
living in different bedrooms in the same house, along
with their son and daughter. See Dkt. 109-16 at 15–16,
19.
8
In May 2015, federal Drug Enforcement Agency
agents raided their house based on a tip from a confidential informant that Mr. Colorado was a drug dealer.
See Dkt. 33-2 at 6. The tip was false; Mr. Colorado is
not a drug dealer. Dkt. 109-12 at 12:18–23. At the time,
he owned a garment sales company. Id. at 19:8–16.
The DEA agents did not find any drugs belonging
to Ms. Salgado or Mr. Colorado. Instead, they found a
small quantity of drugs that clearly belonged to their
son and was not substantial enough to pursue charges.
Dkt. 108-1 at 93; Dkt. 109-12 at 167.
However, the DEA agents found something else
that interested them—cash. Mr. Colorado had approximately $55,000 in cash, as well as cashier’s checks totaling approximately $132,000, which he intended to
use to purchase garments for resale. Dkt. 109-12 at
48:12–50:7, 168:14–169:19. Ms. Salgado had approximately $15,000 in cash, which mostly consisted of
gifts from family members and which she was saving
to spend on her children, including for her teenage
daughter’s then-upcoming fifteenth birthday “quinceañera” celebration. Dkt. 109-2 at 28; Dkt. 109-16 at
33:1–34:23.
The lead DEA agent for the case would later admit
in his deposition that the United States had zero evidence connecting Ms. Salgado, Mr. Colorado, Mr. Colorado’s business, or any of their money to any criminal
activity. Pet. App. 56–62. But the DEA agents seized all
the money anyway and refused to return it. This
9
included Ms. Salgado’s money, thereby forcing her to
cancel her daughter’s quinceañera. See Dkt. 8-2.
2. Ms. Salgado insisted on vindicating her rights.1
Her search for an attorney was complicated by the fact
that she could not access her seized money, but she was
able to find an attorney willing to represent her on a
contingency fee basis. See Pet. App. 40–45. This meant
that Ms. Salgado could only be made whole if she obtained an award of attorneys’ fees and costs. See id.
Otherwise, approximately one-third of the money recovered would be retained by her attorney. See id.
Two years after the seizure, the civil forfeiture
lawsuit reached the summary judgment stage. Considering the lead DEA agent’s admissions that the United
States had no evidence connecting Ms. Salgado, Mr.
1
Although not a petitioner here, Mr. Colorado also insisted
on vindicating his rights in the lower courts. Indeed, at the time
of the seizure, he asked the DEA agents to arrest him in the hope
that he could appear before a judge in time to save his business.
Dkt. 109-12 at 149:5–8. Later, his predicament was covered by
the local news. Pet. App. 63–66. However, the DEA agents declined his request and simply kept his money, thereby destroying
his business. His inability to access his seized money also prevented him from hiring his preferred attorney to represent him
and his now-defunct business in a legal dispute with one of his
garment suppliers in state court. Dkt. 112 at 3 n.3. Eventually,
he was able to find a temporary attorney willing to accept the
meager funds he could scrape together, but those funds soon ran
out, and the temporary attorney withdrew from the case, leaving
Mr. Colorado to defend the state court lawsuit pro se. See id.
Based solely on discovery violations, the state trial court entered
a default judgment against Mr. Colorado for $318,019.70, which
exceeded the amount of his claim in the present civil forfeiture
action. Pet. App. 5, 7.
10
Colorado, Mr. Colorado’s business, or any of their money
to any criminal activity, see Pet. App. 56–62, it appeared
likely that Ms. Salgado was finally going to win.
When the parties filed their cross-motions for
summary judgment, the United States included an alternative request asking that if the court denied the
government’s motion for summary judgment, then the
court should allow the United States to voluntarily dismiss the entire case without prejudice. Dkt. 110. The
rationale for doing so had nothing to do with Ms. Salgado or her money. Id.2 Other than her likelihood of
success on the merits, there was no reason why the
United States could not continue with the civil forfeiture lawsuit solely against Ms. Salgado’s money.3
Nonetheless, the United States sought dismissal of the
entire case without prejudice, including Ms. Salgado’s
claim. Dkt. 110.
2
The government’s asserted rationale for dismissing the entire case without prejudice was that the seized money should go
to pay the default judgment against Mr. Colorado and his nowdefunct business. Dkt. 110. Ms. Salgado was not a party to the
state court lawsuit or the resulting default judgment, and the
judgment-creditor expressly disclaimed any interest in her
money. Dkt. 155.
3
This includes the absence of any practical obstacle preventing the United States from continuing against Ms. Salgado’s
money. Indeed, Ms. Salgado’s $15,000.00 far exceeded the typical
amounts sought by the United States in civil forfeiture lawsuits.
See Michael Sallah, et al., Stop and Seize, WASH. POST (Sept. 6,
2014) (finding that half of cash seizures through federal “equitable sharing program” were for below $8,800); see also Rishi Batra,
Resolving Civil Forfeiture Disputes, 66 U. Kan. L. Rev. 399, 413
(2017) (noting that median property value forfeited in ten states
ranged from $451 to $2,048).
11
The district court allowed the United States to voluntarily dismiss the entire lawsuit without prejudice
over Ms. Salgado’s objection. See Pet. App. 55. However,
the order also stated that if the United States were
ever to refile the lawsuit, then the district court “will
award costs” to Ms. Salgado and Mr. Colorado. Id. This
provision was significant because approximately three
years remained under the statute of limitations for the
United States to refile the civil forfeiture action. See 19
U.S.C. § 1621; see also U.S. v. Twenty-Seven Parcels of
Real Property Located in Sikeston, Scott Cty., Mo., 236
F.3d 438, 440–41 (8th Cir. 2001) (discussing changes to
statute of limitations under CAFRA).
The district court ordered the United States to disburse Ms. Salgado’s $15,000.00 to her and her attorney.
Pet. App. 36 at ¶ 3. As a result, $10,387.92 plus interest
was immediately distributed to Ms. Salgado, while the
remainder of her seized money was placed in her attorney’s trust account, where it remains today. Pet. App.
42–45. If Ms. Salgado obtains an award of attorneys’
fees, the remainder will be returned to her, and she will
finally be made whole. See id. Otherwise, it will be paid
to her attorney as fees. See id.
Ms. Salgado moved to amend the dismissal without prejudice and argued that it should be with prejudice, but the district court denied the motion. Pet. App.
26, 32. The district court stated that the “curative conditions” the court had imposed preventing the United
States from refiling the case precluded the need to dismiss the case with prejudice. Pet. App. 30. The district
court also ruled that Ms. Salgado’s counsel had failed
12
to timely assert the argument that dismissal without
prejudice could prevent them from being able to obtain
an award of attorneys’ fees, costs, and interest. Pet.
App. 30–31. Nonetheless, the court considered the merits of the argument and found that dismissal without
prejudice was appropriate even if the argument had
been timely asserted. Pet. App. 31.
The district court denied Ms. Salgado’s motion for
an award of attorneys’ fees, costs, and interest solely
on the grounds that the dismissal was without prejudice and, therefore, Ms. Salgado had not substantially
prevailed under 28 U.S.C. § 2465(b)(1). Pet. App. 32.
3. Ms. Salgado (and Mr. Colorado) timely appealed to the court of appeals, which affirmed the district court in full. Pet. App. 1–21.
Regarding the first question presented, the court
of appeals held that the fact that the dismissal was entered without prejudice meant that Ms. Salgado did
not substantially prevail under 28 U.S.C. § 2465(b)(1)
and therefore could not be awarded attorneys’ fees,
costs, and interest. Pet. App. 17–20.
Regarding the second question presented, the
court of appeals agreed with the district court that Ms.
Salgado’s counsel had failed to timely argue that dismissal without prejudice would harm them by preventing them from seeking an award of attorneys’ fees,
costs, and interest. Pet. App. 14–15. Nonetheless, the
court of appeals considered the merits of the argument.
Pet. App. 15–16. The court of appeals held that the district court acted within its discretion when it allowed
13
the United States to voluntarily dismiss the case without prejudice, even though this prevented Ms. Salgado
from obtaining an award of attorneys’ fees, costs, and
interest. Id.
------------------------------------------------------------------
REASONS FOR GRANTING THE PETITION
The Court should grant certiorari as to both questions presented.4 The question of when a civil forfeiture claimant “substantially prevails” under 28 U.S.C.
§ 2465(b)(1) has never been addressed by the Court,
leading to widespread confusion and increased civil
forfeiture abuse. And the related question of whether
it is an abuse of discretion for a district court to dismiss
a civil forfeiture lawsuit without prejudice in the situation presented here is the subject of a circuit split.
I.
The Court Has Never Addressed the Question of When a Civil Forfeiture Claimant
“Substantially Prevails” Under 28 U.S.C.
§ 2465(b)(1), Leading to Widespread Confusion in the Lower Courts and Increased
Civil Forfeiture Abuse.
The question of when a civil forfeiture claimant
“substantially prevails” under 28 U.S.C. § 2465(b)(1) is
4
Although Ms. Salgado’s position is that the Court should
grant certiorari as to both questions presented, each question presented can stand on its own. Therefore, if the Court were to deny
certiorari as to either question presented, Ms. Salgado would
nonetheless ask the Court to grant certiorari as to the other question presented.
14
one of first impression for this Court. However, it frequently arises in the lower courts, and especially in
district courts (since even the cases that make it to a
district court tend to settle before reaching a court of
appeals), and the Court should not pass up this valuable opportunity to provide much-needed clarity. This is
true for three reasons. First, there is widespread confusion in the lower courts. Second, this confusion has
led many courts to adopt a fundamentally flawed approach. Third, this confusion directly exacerbates
many of the same forfeiture abuses that have already
been commented on by members of this Court.
A. There Is Widespread Confusion in the
Lower Courts.
Absent guidance from this Court, confusion
abounds in the lower courts over when a civil forfeiture
claimant “substantially prevails” under 28 U.S.C.
§ 2465(b)(1). On one hand, some lower courts take a
practical approach, see, e.g., Kazazi v. U.S. Customs and
Border Protection, 376 F. Supp. 3d 781, 784 (N.D. Ohio
2019) (holding that owners substantially prevailed
and therefore were entitled to an award of fees, costs,
and interest, even though resolution was not on the
merits) or even expressly hold that CAFRA “broadens
the class that can receive fees in forfeiture actions to
claimants who ‘substantially prevail.’ ” United States v.
$60,201.00 in U.S. Currency, 291 F. Supp. 2d 1126,
1130 (C.D. Cal. 2003). On the other hand, some lower
courts take the approach that a civil forfeiture
15
claimant never “substantially prevails” without a judicial ruling on the merits. Pet. App. 1–21.
This confusion is exacerbated by the tendency of
cases that initially make it to the courts of appeals to
disappear before the courts of appeals rule. See, e.g.,
Order Dismissing Appeal, Kazazi v. U.S. Customs and
Border Protection, Case No. 19-3270 (6th Cir. 2019)
(Kazazi Dkt. 8-1) (allowing the United States to voluntarily dismiss appeal after the United States originally
elected to appeal an adverse ruling on the present
issue); Unopposed Mot. to Remand, United States v.
Bednar, Case No. 15-2232 (4th Cir. 2016) (Bednar
Dkt. 39) (the United States agreeing to pay the owners’ attorneys’ fees shortly before the Fourth Circuit
was to hear oral argument on the present issue).
Now, against all odds, an innocent owner has
managed to reach this stage without succumbing to
the extreme pressure to enter into a settlement along
the way. The Court should capitalize on this rare opportunity to provide much-needed guidance for the
lower courts.
B. The Court of Appeals’ Approach Cannot
Be Correct.
This confusion is perfectly illustrated in the present case, making it a good vehicle for the Court to
address the issue. As a result of the confusion over
when a civil forfeiture claimant “substantially prevails,” the court of appeals applied an approach that
cannot be correct, regardless of whether the Court
16
applies a textualist approach or examines the legislative history. Compare Digital Realty Trust, Inc. v.
Somers, 138 S. Ct. 767, 783–84 (2018) (Thomas, J., concurring) (explaining textualist position that “we are a
government of laws, not of men, and are governed by
what Congress enacted rather than by what it intended”), with id. at 782–83 (Sotomayor, J., concurring)
(explaining opposing view that, even when statute is
unambiguous, “consulting reliable legislative history
can still be useful, as it enables us to corroborate and
fortify our understanding of the text”).
The court of appeals’ approach is also flawed for
another reason, in that it makes it even more difficult
for a civil forfeiture claimant to “substantially prevail”
under 28 U.S.C. § 2465(b)(1) than for other types of feeshifting claimants to “prevail” under this Court’s precedent. See CRST Van Expedited, Inc. v. EEOC, 136
S. Ct. 1642, 1651–53 (2016). In other words, the result
of the court of appeals’ approach is precisely backwards.
i.
The Court of Appeals’ Approach is
Irreconcilable with CAFRA’s Text.
From a textualist standpoint, the court of appeals’
approach, in which it read the word “substantially” out
of the statute, is impermissible. Therefore, this section
will begin by addressing the lower court’s deletion of
the word “substantially” from the statute before turning to the canons of construction this approach violates.
17
The court of appeals unambiguously stated that it
was applying 28 U.S.C. § 2465(b)(1) as if the term “substantially” were not included. In the court’s words, “we
interpret ‘substantially prevailed’ fee-shifting statutes
consistently with ‘prevailing party’ fee-shifting statutes.” Pet. App. 18 (citing Loggerhead Turtle v. Cty.
Council of Volusia Cty., 307 F.3d 1318, 1322 n.4 (11th
Cir. 2002)). In fairness to the court of appeals, it is not
alone. See United States v. 115-98 Park Lane South, No.
10-CIV-3748, 2012 WL 3861221, at *8 (E.D.N.Y. Sept.
5, 2012) (noting that several circuits view the terms
“prevailing party” and “substantially prevails” as the
same when determining possible recovery under a feeshifting statute).
By doing so, the court of appeals violated the canons of construction, with the surplusage canon likely
at the top of the list. The surplusage canon holds that
every word in a statute is to be given effect whenever
possible. See Antonin Scalia and Bryan A. Garner,
Reading Law: The Interpretation of Legal Texts 174–79
(West 2012). Therefore, the court of appeals’ approach
would only have been permissible if it were impossible
to give effect to the word “substantially.” But the word
“substantially” is common and well-understood, making it quite possible to give it effect. See, e.g., Substantial, Merriam-Webster’s Dictionary (2019) (defining
“substantial” as “being largely but not wholly that
which is specified”).
Moreover, the terms “substantial” and “substantially” are often used in the legal world, with the Doctrine of Substantial Performance providing a notable
18
example. See Substantial Performance, Cornell Law
Sch. Legal Info. Inst., https://www.law.cornell.edu/wex/
substantial_performance. There, it allows recovery for
less-than-complete performance. See id. Likewise, in
CAFRA’s fee-shifting provision, its use is clearly designed to allow civil forfeiture victims who less-thancompletely prevail to obtain awards of attorneys’ fees,
costs, and interest.
In the case at hand, Ms. Salgado substantially prevailed. She obtained the full return of her money, and
she even obtained a court order inhibiting the United
States from refiling the civil forfeiture lawsuit. The
only way she could be deprived of an award of fees,
costs, and interest was for the lower courts to read the
word “substantially” out of the statute and require a
full victory on the merits. But that is what the lower
courts in this case did, thereby violating the surplusage canon (and possibly other canons, including the
presumption against ineffectiveness, see Scalia and
Garner at 63–65), while presenting a good vehicle for
the Court to address this issue.
ii. The Court of Appeals’ Approach is
Irreconcilable with CAFRA’s Legislative History.
The court of appeals’ approach fares no better if
one examines the legislative history. The House Report
on CAFRA expressly stated that this provision was designed to, among other goals, “give owners innocent of
any wrongdoing the means to recover their property
19
and make themselves whole after wrongful government
seizures.” Pet. App. 90 (emphasis added); see also, e.g.,
United States v. Coffman, 625 F. App’x 285, 289 (6th
Cir. 2015) (“[T]he stated purpose of CAFRA is to make
federal civil forfeiture procedures fair to property owners and to give owners innocent of any wrongdoing the
means to recover their property and make themselves
whole after wrongful government seizures.” (emphasis
added)); United States v. Certain Real Prop., Located at
317 Nick Fitchard Rd., N.W., Huntsville, AL, 579 F.3d
1315, 1322 (11th Cir. 2009) (using same quote (emphasis added)).
The House Report also explained that this approach was being taken in response to the problem
that “many civil seizures are not challenged” due to the
costs incurred along “the arduous path one must journey” to challenge them, “often without the benefit of
counsel, and perhaps without any money left after the
seizure with which to fight the battle.” Pet. App. 96–97;
see also 317 Nick Fitchard Rd., 570 F.3d at 1322–23
(discussing this specific aspect of House Report). In
other words, Congress intended the provision to have
the exact opposite effect as the approach taken by the
lower courts in this case. The Court should accept this
opportunity to finally settle this important federal
question.
20
iii. The Court of Appeals’ Approach
Makes It More Difficult for a Claimant to “Substantially Prevail” Than
to “Prevail.”
Even setting aside the difference, arguendo, between substantially prevailing and prevailing, the approach taken by the court of appeals worsens another
problem. Under the court of appeals’ approach, it was
more difficult for Ms. Salgado to “substantially prevail”
than it would be for Ms. Salgado to “prevail” under this
Court’s precedent. See CRST Van Expedited, Inc. v.
EEOC, 136 S. Ct. 1642, 1651–53 (2016). The lower
courts have turned Congress’s plainly stated goal of
making it easier for civil forfeiture claimants to prevail
on its head.
In CRST Van Expedited, the Court held that a ruling on the merits is not required for a party to be
awarded attorneys’ fees and costs as a prevailing party.
Id. at 1646. Instead, the party is merely required to obtain a “material alteration of the legal relationship of
the parties” that is “marked by ‘judicial imprimatur.’ ”
Id. (quoting Texas State Teachers Ass’n v. Garland Indep. School Dist., 489 U.S. 782, 792–93 (1989); and
Buckhannon Bd. and Care Home, Inc. v. West Virginia
Dep’t of Health and Human Res., 532 U.S. 598, 605
(2001); respectively) (emphasis in original).
Ms. Salgado meets the criteria this Court stated in
CRST Van Expedited. Indeed, the district court believed that it had materially changed the parties’ legal
relationship, which the district court thought made
dismissal with prejudice unnecessary. Pet. App. 30.
21
Ms. Salgado’s argument is also consistent with the
Court’s underlying logic. In CRST Van Expedited, the
Court explained that common sense must be used in
reading statutes. See 136 S. Ct. at 1651. There, “[c]ommon sense undermine[d] the notion that a defendant
cannot ‘prevail’ unless the relevant disposition is on
the merits.” Id.
Here, common sense similarly undermines the approach taken by the courts below. Other than the feeshifting question at issue here, Ms. Salgado wanted
two types of practical relief: She wanted her money
back, and she wanted the government to be prevented
from seeking forfeiture against her money in the future. She successfully obtained both.
Even if many courts insist on conflating “substantially prevailing” and “prevailing,” the former should
not be more stringent on claimants than the latter. Yet,
that is the result in civil forfeiture cases, as shown by
the case at hand. The Court should resolve this tension.
C. This Confusion Leads to Well-Chronicled
Abuses, Including Those Mentioned by
Justices Thomas and Sotomayor.
As Justice Thomas has already pointed out, the
civil forfeiture “system—where police can seize property with limited judicial oversight and retain it for
its own use—has led to egregious and well-chronicled
abuses.” See Leonard v. Texas, 137 S. Ct. 847, 848
(2017) (Thomas, J., statement respecting the denial
22
of certiorari). And Justice Sotomayor recently compared aspects of the civil forfeiture process to the
Star Chamber. See Mark Joseph Stern, Neil Gorsuch
and Sonia Sotomayor Just Came Out Swinging
Against Policing for Profit, SLATE (Nov. 28, 2018)
https://slate.com/news-and-politics/2018/11/neil-gorsuchsonia-sotomayor-tyson-timbs-civil-forfeiture.html. These
problems are only getting worse, in large part due to
many lower courts’ failure to apply the disincentives
for abuse Congress crafted in 28 U.S.C. § 2465(b)(1).
Government at all levels has become addicted to
civil forfeiture money. One recent national study found
that over 60 percent of the 1,400 municipal and county
agencies surveyed admitted that they “relied on forfeiture profits as a necessary part of their budget.” Note,
How Crime Pays: The Unconstitutionality of Modern
Civil Asset Forfeiture as a Tool of Criminal Law Enforcement, Harvard L. Rev. (June 8, 2018). Another
found that 87 percent of all U.S. Department of Justice
forfeitures are now civil rather than criminal. See D.
Carpenter, et al., at 12.
As civil forfeiture has grown, so too have its
abuses. We have reached the point where news stories
about forfeiture abuse that once horrified us now seem
routine. See, e.g., Christopher Ingraham, How Police
Took $53,000 from a Christian Band, an Orphanage,
and a Church, WASH. POST (Apr. 25, 2016); Bobby Allyn
& Ryan Briggs, Cash Grab: As Asset Forfeiture Quietly
Expands Across Pa., Abuses Follow, PA. POST (Apr. 24,
2019); Nate Gartrell, Contra Costa Cops Seized $1.1
Million From People Not Charged With a Crime in Past
23
Four Years, Records Show, THE MERCURY NEWS (June
14, 2019); German Lopez, “It’s Been Complete Hell”:
How Police Used a Traffic Stop to Take $91,800 from an
Innocent Man, VOX (Mar. 20, 2018); Nick Sibilla, Cops
Use Traffic Stops to Seize Millions From Drivers Never
Charged with a Crime, FORBES (Mar. 12, 2014). Even
comedian John Oliver has taken notice. See Last Week
Tonight with John Oliver, Civil Forfeiture, YOUTUBE
(Oct. 5, 2014) https://www.youtube.com/watch?v=3kE
pZWGgJks.
Although the Court addressed one aspect of civil
forfeiture abuse last term in Timbs, when it held that
the Eighth Amendment’s Excessive Fines Clause is incorporated against the states, see Timbs v. Indiana,
139 S. Ct. 682, 686–87 (2019), the profit incentive driving most civil forfeiture abuse was not before the Court
in Timbs. Nor could the Court have remedied the related issue presented here, which is the judicially-created “get out of jail free” card that allows the United
States to evade financial responsibility for the harm it
causes as long as the government moves to voluntarily
dismiss the lawsuit without prejudice prior to the district court’s summary judgment ruling. See Smith at
§ 10.08[2].
When courts remove the disincentives created by
Congress, the United States responds precisely as one
would expect. The United States does everything possible to maximize forfeiture revenue, knowing that
most courts will later allow it to avoid the disincentives
found in the statute. See id.
24
Without oversight from this Court, this national
problem will only continue to worsen. And the very nature of the problem will often prevent these cases from
reaching the Court. That is why the Court should take
full advantage of the rare opportunity to address the
questions presented here. The Court should grant
certiorari.
II.
The Circuit Split Over Whether Dismissal
Without Prejudice is Allowed in this Situation Has Resulted in Different Levels of
Protection Against Forfeiture Abuse Based
Solely on the Circuit Where the Innocent
Owner Lives.
The Court should also grant certiorari as to the
second question presented because the opinion below
exacerbates a split between four federal circuits. The
subject of the split concerns whether it is an abuse of
discretion for a district court to dismiss a civil forfeiture case without prejudice when the seized money has
been returned to the owner and the case will not be
refiled. This split has also led to widely divergent decisions by district courts across the country. In the jurisdictions where district courts are permitted to dismiss
such cases without prejudice, claimants are placed in
an unwinnable catch-22.
25
A. The Ruling Below Directly Conflicts
with the Ninth Circuit’s Rule.
The case below conflicts directly with the Ninth
Circuit’s ruling in United States v. Ito, 472 F. App’x 841
(9th Cir. 2012), which presented facts remarkably similar to those presented here. In that case, just as in
this case, the government requested dismissal of a
CAFRA lawsuit without prejudice even though it
acknowledged that it did not intend to refile the action.
See United States v. One 2008 Toyota RAV 4 Sports
Utility Vehicle, 2010 WL 11531203, at *1 (C.D. Cal. July
16, 2010), vacated and remanded sub nom. Ito, 472
F. App’x at 841. As in the present case, the district
court in Ito allowed the government to dismiss the case
without prejudice over the claimant’s objections. 472
F. App’x at 841. The district court in Ito even went out
of its way to “emphasize[ ] that there is no evidence
that the Government is acting in bad faith by requesting the dismissal without prejudice.” Id. at 3.
But unlike the Eleventh Circuit, the Ninth Circuit
in Ito reversed the district court and found the dismissal without prejudice to be an abuse of discretion. 472
F. App’x at 842. Applying the same legal standard applied here by the Eleventh Circuit—whether the claimant would “suffer some plain legal prejudice as a result
of the dismissal”5—the Ninth Circuit concluded that
5
The Circuits differ slightly in whether they refer to this as
“clear legal prejudice” or “plain legal prejudice” and apply somewhat different factors for evaluating whether this standard has
been met. See 9 Fed. Prac. & Proc. Civ. § 2364 (“Wright & Miller”)
(3d ed., updated Aug. 2019) (listing and comparing the factors in
each federal circuit). However, those differences are largely
26
“[t]he Itos suffered plain legal prejudice in losing their
ability to move for attorney’s fees.” Id. The court explained that “dismissal without prejudice precludes
prevailing party status” and thus “[w]ithout prevailing
party status, the Itos were unable to bring their attorney’s fees motion under [CAFRA].” Id. As a result, the
Ninth Circuit vacated the dismissal without prejudice
and remanded with instructions to dismiss the case
with prejudice.
In the present case, the Eleventh Circuit diverged
sharply from the Ninth Circuit’s reasoning, finding
that Ms. Salgado was not entitled to dismissal with
prejudice because “a meritorious claimant’s loss of a
right to statutory attorney’s fees . . . cannot constitute
clear legal prejudice unless it is in turn clear that the
claimants would indeed ‘substantially prevail[ ],’ 28
U.S.C. § 2465(b)(1), were the action litigated to judgment.” Pet. App. 15.6 Accordingly, the court of appeals
immaterial to the outcome in CAFRA fee-shifting cases: None of
the circuits expressly consider the effect of dismissal on the availability of attorneys’ fees, and the Eighth and Ninth Circuits apply
identical factors, id., but have reached directly contradictory conclusions. Compare United States v. $32,820.56 in U.S. Currency,
838 F.3d 930, 937 (8th Cir. 2016), with United States v. Ito, 472
F. App’x 841 (9th Cir. 2012).
6
The Eleventh Circuit also ruled that the district court did
not abuse its discretion by initially rejecting as untimely Ms. Salgado’s argument that dismissal should be with prejudice. Id.
However, this question is properly before this Court because both
the court of appeals and the district court below addressed and
ruled on the substantive merits of Ms. Salgado’s argument as
though it were timely made, in part because she raised it in a
motion for reconsideration before the district court. Id. Because
this issue was both raised and decided by the courts below, it is
proper for this Court to review this ruling on the merits. See, e.g.,
27
found that, “it is not clearly apparent from the record
. . . that [Ms. Salgado and Mr. Colorado] ultimately
would have prevailed, so the district court did not
abuse its discretion in dismissing the complaint without prejudice.” Id.
B. The Ruling Below Deepens the Split Between the Ninth Circuit and the Fifth,
Eighth, and (Now) Eleventh Circuits.
By adopting the reasoning described above, the
Eleventh Circuit widens the split between the Fifth
and Eighth Circuits versus the Ninth Circuit on
whether dismissal without prejudice in these circumstances is an abuse of discretion. The ruling below
cited the Eighth Circuit’s ruling in United States v.
$32,820.56 in U.S. Currency, 838 F.3d 930, 937 (8th Cir.
2016) and quoted from the district court’s opinion in
the same case to support its reasoning that: “Finding
plain legal prejudice on th[is] basis would necessarily
presume that the party resisting voluntary dismissal
would have prevailed on the merits if the case continued to a conclusion.” United States v. $32,820.56 in U.S.
Currency, 106 F. Supp. 3d 990, 997 (N.D. Iowa 2015).
On Lee v. United States, 343 U.S. 747, 750 n.3 (1952) (“Though we
think the Court of Appeals would have been within its discretion
in refusing to consider the point, their having passed on it leads
us to treat the merits also.”). Indeed, this Court may even review
issues that were never raised in the courts below and are presented for the first time in a petition. See, e.g., Carlson v. Green,
446 U.S. 14, 17 n.2 (1980); Youakim v. Miller, 425 U.S. 231, 234
(1976).
28
Similarly, in a per curiam opinion, the Fifth Circuit has also held that it is not an abuse of discretion
to deny fees under CAFRA when the government voluntarily dismisses a civil forfeiture case without prejudice. See United States v. Minh Huynh, 334 F. App’x
636, 639 (5th Cir. 2009).
By joining with the Fifth and Eighth Circuits in
holdings that directly conflict with the Ninth Circuit
(and a district court in the Fourth Circuit),7 the Eleventh Circuit has deepened the circuit split on this issue. This Court should resolve that split.
C. The Circuit Split on This Issue Has Created Chaos in the District Courts, with
Widely Divergent Outcomes.
The circuit split noted above has also resulted in
widely divergent outcomes in district courts across the
country. District courts in the Fourth and Eleventh
Circuits have held that dismissing a case without
prejudice would likely deprive claimants of their
rights to seek fees under CAFRA and have instead dismissed the cases with prejudice. See United States v.
$107,702.66 in U.S. Currency, No. 7:14-CV-00295-F,
2016 WL 413093, at *3-4 (E.D.N.C. Feb. 2, 2016);
7
United States v. $107,702.66 in U.S. Currency, No. 7:14CV-00295-F, 2016 WL 413093, at *4 (E.D.N.C. Feb. 2, 2016) (ruling that dismissing a civil forfeiture case without prejudice would
create a “substantial legal prejudice” to the claimant because “a
voluntary dismissal without prejudice would likely preclude prevailing party status under CAFRA, depriving Claimants of their
right to bring a claim under that statute.”).
29
United States v. Certain Real Prop., 543 F. Supp. 2d
1291, 1292, 1294 (N.D. Ala. 2008) (dismissing case with
prejudice after it was clear that “the government has
no intention of pursuing this civil forfeiture action,”
and awarding attorneys’ fees under CAFRA, noting
that, “[i]f the court were to side with the government
and dismiss this case without prejudice and deny the
claimants request for attorneys’ fees under CAFRA it
would render the fee-shifting provisions of CAFRA essentially meaningless.”)
In addition to the district court rulings overturned
in Ito, and upheld in Huynh and $32,820.56 in U.S.
Currency, district courts in the Second, Third, and
Sixth Circuits have granted dismissals without prejudice in civil forfeiture cases without regard to the
impact that may have on the claimant’s ability to
seek attorneys’ fees under CAFRA. See United States
v. Approximately $16,500.00 in U.S. Currency, 113
F. Supp. 3d 776, 779–80 (M.D. Pa. 2015); United States
v. Any & All Funds on Deposit at JPMorgan Chase, No.
12-CIV-7530, 2013 WL 5511348, at *1 (S.D.N.Y. Oct. 2,
2013); United States v. 115-98 Park Lane South, No.
10-CIV-3748, 2012 WL 3861221, at *5 (E.D.N.Y. Sept.
5, 2012), aff ’d sub nom. United States v. Capital Stack
Fund, LLC, 543 F. App’x 17 (2d Cir. 2013); United
States v. 2007 BMW 335i Convertible, 648 F. Supp. 2d
944, 952 (N.D. Ohio 2009).
To bring uniformity to the federal courts on this
issue, the Court should grant certiorari.
30
D. The Side of the Circuit Split Joined by
the Court Below Creates a Catch-22.
In practice, the position staked out by the Fifth,
Eighth, and Eleventh Circuits holds that claimants
cannot substantially prevail before a dismissal without prejudice (because the right to recover fees, costs,
and interest has not yet vested) and that there is no
clear legal prejudice once a dismissal without prejudice has been granted (because no right to recover fees,
costs, and interest ever vests).
This presents a catch-22 for claimants. In order for
an innocent owner to be awarded attorneys’ fees under
CAFRA, the government’s case against the money or
property cannot be dismissed without prejudice. But the
innocent owner cannot prevent the case from being dismissed without prejudice because, in these circuits, their
right to be awarded attorneys’ fees has not yet vested.
The Court should resolve this quandary. By
granting certiorari, not only can the Court resolve
the deepening circuit split, but the Court can do so
in a way as to rescue innocent civil forfeiture claimants in the Fifth, Eighth, and Eleventh Circuits from
the unwinnable situation created by those circuits’
holdings.
------------------------------------------------------------------
31
CONCLUSION
The petition for a writ of certiorari should be
granted.
Respectfully submitted,
JUSTIN PEARSON*
INSTITUTE FOR JUSTICE
2 S. Biscayne Boulevard
Suite 3180
Miami, FL 33131
(305) 721-1600
jpearson@ij.org
*Counsel of Record
DAN ALBAN
INSTITUTE FOR JUSTICE
901 N. Glebe Road
Suite 900
Arlington, VA 22203
(703) 682-9320
dalban@ij.org
Counsel for Petitioner
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