Appendix — Bein v. United States

20 146'9 war 15 2001

OFFICE OF THE CLERK

APPENDIX

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA, )

-VS-

WILLIAM BEIN and EASTER BEIN, Criminal No. 94-214

Defendants.

AMBROSE, District Judge. ;

FINDINGS OF FACT

CONCLUSIONS OF LAW

and

ORDER OF COURT

FINDINGS OF FACT

1. On October 3, 1994, Defendants William and Esther Bein

(“the Beins”) were arrested by agents of the Federal Bureau Of

Investigation (“FBI”), on warrants issued in connection with an

indictment charging them with conspiracy and interstate transporta-

tion of stolen property.

2. Following the filing of a superseding indictment, the Beins

pled guilty to conspiracy to commit interstate transportation of

stolen property and conspiracy to launder money. In Conjunction

with the plea, the Beins agreed to cooperate with the Government in

the prosecution of other individuals.

3. The current dispute arises from the execution of search

warrants at the Beins’ residence and warehouse on the date of the

arrest. Specifically, the Beins contend that certain items were seized

and improperly destroyed.

4. At the sentencing hearing, this Court directed the Govern-

ment to return all noncontraband items. The Beins were apparently

1

unsatisfied with the Government’s response and eventually filed the

pending Motion for return of Seized Property (Docket No. 74).

5. This Court held evidentiary hearings on September 14,

1998, October 29, 1998, February 24, 1999 and April 16, 1999

regarding the seizure and destruction of the Beins’ property.

(A) Execution of the Search Warrants

6. FBI and IRS agents, aided by a number of police officers

from the Interstate Theft Task Force who were deputized as United

States Marshals, executed the search warrants issued in conjunction

with Operation ‘Fence Fry.”

7. Of the seven to eight search warrants issued, only three

pertained to the Beins.

8. Three of the agents involved in the arrests and execution of

the warrants, Agent Millar of the FBI, Agent Haefner of the IRS,

and Detective Conn of the Pittsburgh Police, testified at the

hearings.

9. Detective Conn testified that he arrived at the Beins’

residence and arrested Mrs. Bein. He searched her purse for a

weapon, removed a few items such as business cards and telephone

numbers, and then returned it to her.

10. Conn detained Mrs. Bein at the residence for a short

period of time and then took her to the warehouse. Upon arrival, he

used one of Mrs. Bein’s keys to gain access. -

11. Conn remained at the warehouse for approximately

2'/2 hours and aided in the seizure of health and beauty aids, and of

shipping documents, bills of lading, and other business records.

12. Agent Haefner testified that she too participated in the

execution of the search warrants, and that she was present at the

Beins’ residence for a short period of time.

13. Agent Millar coordinated the execution of the warrants

and of the arrests.

14. Government Exhibit 5 lists the items seized from the

residence and Exhibit A to the Motion for Return of Seized Items

lists the items seized from the warehouse.

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(B) Transportation of Seized Items

15. Agents transported the goods from Cleveland, Ohio to

Pittsburgh, Pennsylvania. The goods (health and beauty aids) were

placed in a forfeiture lot maintained by the Pittsburgh Police

Department.

16. Agent Millar testified that all of the documents seized

pursuant to the search warrants, were tendered to Agent Haefner

and were stored with the IRS.

(C) Return of the Seized Items

17. Conn testified that a portion of the seized items were

returned during pretrial preparation. Specifically, Conn explained

that certain items which were determined not to be contraband were

returned.

18. Agent Millar recalled that items were returned to the

Beins, or to their counsel, on three occasions.

19. Millar testified that, approximately two months after the

seizure, a variety of goods were returned because the Government

could not determine that they were of a stolen nature.

20. Government Exhibit 1, which is an IRS receipt signed by

Mrs. Bein dated December 14, 1994, confirms that a number of

items were returned, including: makeup cases; hair items; office

supplies; computer disks; toys; toasters; answering machines; desk

lamps; pictures with frames; and Christmas items.

21. On March 13, 1995, Agent Haefner returned to Mr. Bein

numerous items seized pursuant to the warrants, including:

2 videos; checks in the amount of $17.48, $2,566.24 and $50.00:

and four Canadian Postal money orders. See Defendants’ Exhibit J.

22. On January 17, 1995, Agent Haefner of the IRS released

to counsel for the Beins a copy Of “Jencks” material; copies of

“purchase orders/invoices” seized pursuant to the warrants; and a

number of computer equipment items. See Government Exhibits 2

and 4.

23. Finally, on November 20, 1996, $2,410.00 in cash seized

pursuant to the warrants was returned. See Government Exhibit 3.

(D) Destruction of Items

24. Detective Conn testified that various items seized during

the execution of warrants on October 3, 1994 were destroyed

between April 9th and April 11th, 1996. Conn explained that he

was aware of the Court’s Order to return property, but understeod

the Court to mean only that property which was not contraband.

25. I find that Conn’s interpretation is cons‘stent with this

Court’s intention. Defendants’ Exnibit H is the Destruction

Log of those items seized during Operation Fe:..< Fry and de-

stroyed between April 9th and April 11, 1996.

26. The Destruction Log identifies the Beins as the source for

those item seized pursuant to the warrants, and which are de-

scribed as Bulky No. 1B-325 (stolen goods); Bulky No. 1B-331

(stolen goods); Bulky No. 1B-337 (stolen goods); and Bulky

No. 1B-340 (documents).

27. The Beins culled information from the Inventory Log and

the Destruction Log to ascertain what items allegedly had been

improperly seized and destroyed. These items are listed in Defend-

ants’ Exhibit A.

28. Exhibit A includes several items’ for which the Beins did

not submit proposed findings of fact and conclusions of law.

Accordingly, I find that the Beins have abandoned any claim for

compensation relating to these items.

29. In the alternative, I find that the Beins failed to satisfy

their burden of proof in establishing the existence, improper de-

struction, and value of these items.

30. With respect to those items which are included in the

proposed findings of fact and conclusions of law, I make the

following findings:

i.c., items “sold” to Steve Sykora; glass figurines; purse with money; library

floor; closet shelves; dishes; Seiko directory; stocks; microfiche; Buyer’s guide

from RSA; Zupan lease and video; “multipower 3” and “Transco” glue.

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Goods “Sold” to Photaz, Brodt, Allou and K.I.D. International

31. The Beins contend that the Government improperly seized

and destroyed documents relating to the sale of such items as

disposable cameras, shampoo, toothpaste, and paper goods.

32. The Beins insist that the sale of these goods was legiti-

mate, that the goods were not contraband, and that without the

paperwork documenting the sales, they are unable to collect on the

contracts.

33. According to the Beins, these contracts amount to

$16,000. Although Detective Conn indicated that, in order to foster

an air of legitimacy, individuals such as the Beins may sell

noncontraband goods, there is simply no credible evidence to

Suggest that these items were legitimate.

34. I accept, as credible, the testimony of the Government

agents that, during extensive debriefing, the Beins never claimed to

have engaged in legitimate sales with these entities. Furthermore,

Mr. Bein even conceded at the hearing that approximately 80% to

90% of all of the goods which he sold to these companies were

Contraband.

35. Even were I to accept the Beins’ representations as

credible, which I do not, I find that the Government returned all of

the appropriate documentation. Government agents testified, and

Exhibits 2 and 4 reflect, that all invoices/purchase orders were

returned to the Beins during pretrial proceedings.

36. As such, the Beins have not been deprived of the docu-

ments which they claim to need.

37. Finally, and in the alternative, I find Mr. Bein’s allegations

that they are unable to collect on the contracts to be wholly

speculative. Mr. Bein acknowledged that he had not actually tried to

collect. Instead, he merely predicts that, given his felony conviction,

a trier of fact would not find his testimony to be credible.

38. 1 find this to be an insufficient effort to prove that the

disputed amounts are, in fact, uncollectible.

Gemachs

39. The Beins also demand compensation in the amount of

$453,800 for the alleged destruction of documents referred to as

““gemachs.”

40. Testimony presented at the hearings established that Or-

thodox Jews often lend money to various Jewish institutions. The

gemachs are a series of checks or “IOUs” which identify the

maker, the amount of money pledged to be redeemed on a certain

date, and the payee. The Beins testified that the documents would

have been written in Hebrew.

41. The Beins testified that they had possession of gemachs

totaling $420,000, which were given to them by Mrs. Bein’s late

uncle, and $33,500 of their own gemachs.

42. According to the Beins, they made multiple copies of the

gemachs and placed them throughout the house. Without the

gemachs, the Beins contend, they cannot collect on the loans.

43. I do not find any credible evidence to support the Beins’

contention that over $450,000 in gemachs were seized and

destroyed.

44. The testimony elicited at the hearing established that

Agent Haefner reviewed every document seized from the Bein

residence. She testified that her purpose in reviewing the documents

was to track any evidence of income to the Beins and that she

would have recalled seeing any loan documentation of this nature.

She further represented that she did not recall seeing any documents

containing the word “gemach,” and that she did not recall seeing

multiple copies of the same documents.

45. I find Haefner’s testimony to be credible and conclude that

the Government did not improperly seize and destroy the alleged

documents.

46. In the alternative, I find that even if the Government seized

and improperly destroyed the gemachs, the Beins have not estab-

lished that the destruction of the documents precludes them from

collecting on the loans.

47. For instance, neither of the Defendants testified that an

institution refused to honor a !oan.

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48. Nor did the Defendants proffer any evidence indicating

that they took steps to ascertain which institutions received loans.

Indeed, all the Beins did was claim, without any supporting

documentation, that the attorney representing Mrs. Bein’s late uncle

suffers from Alzheimers, and is unable to help gather this

information.

49. I decline to give credence to such bald, unsupported

assertions.

Warehouse Merchandise

50. According to the Beins, the Government improperly

seized and destroyed $16,000 worth of merchandise located in the

warehouse. The merchandise allegedly consisted of toothbrushes,

soaps, toothpaste, Revlon items and G.E. lightbulbs.

51. The Beins contend that Defendants’ Exhibit I, a letter to

counsel for the defense from Jeffrey Killeen of the FBI, acknowl-

edges that such items were destroyed.

52. I disagree. The letter indicates only that toothbrushes were

destroyed, but denies all other allegations. I reject the Beins’

assertion that the toothbrushes were legitimate goods.

53. Agent Millar conceded that he never knew the Beins to be

involved with stolen toothbrushes. Yet he opined that, given his

years of experience, he believed the toothbrushes were stolen. He

explained that the toothbrushes had various retail stickers on them

and that this was consistent with stolen merchandise.

54. I find Agent Millar’s testimony to be credible.

55. As to the Revion items, I find that all of the seized Revion

products and other items were returned to the Beins on Decem-

ber 14, 1994 as evidence by Government Exhibits 2 and 4.

Carts

56. The Beins claim entitlement to $1,500 for the destruction

of 6 carts valued at $250.00 a piece. The Government agrees that

five of the six carts were improperly destroyed and that the sixth

cart should be returned. See Docket No. 94, p. 21.

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57. I find Mr. Bein’s testimony as to the value of the carts to

be credible and further find that the loss attributable to the destruc-

tion of the carts to be reasonable. I also find that the Beins are

entitled to the return of the remaining cart.

Photographs

58. According to the Beins, the Government seized and de-

stroyed numerous wedding and family photographs. They claim to

have had numerous photographs spread out on a ping pong table in

the basement. They explained that they were using them in prepar-

ing a gift for their son.

59. While the Inventory Log does note that “miscellaneous

photographs” were found in a closet in the hall, there are no entries

indicating that photographs were taken from a ping pong table.

60. Furthermore, each agent testified that they did not recall

seeing a large number of wedding or family photographs. Agent

Haefner specifically testified that she would have recalled seeing

any.

61. I accept this testimony as credible.

62. Finally, the FBI report memorializing those items de-

stroyed reflects only that photographs gathered pursuant to the

Spelic search warrant were destroyed.

63. Consequently, I find that the Government did not improp-

erly seize and/or destroy a large number of wedding and family

photographs.

Keys

64. The Beins claim, and the Government concedes, that the

Government improperly destroyed several keys.

65. Mr. Bein testified that he spent approximately $300 re-

placing locks and keys for their residence, warehouse and cars.

66. Although the Government urges that there is no credible

evidence regarding the value of the keys, I find Mr. Bein’s testi-

mony to be credible.

Memorabilia

67. The Beins also claim to have had 10-15 copies each of

more than 17 letters written in Hebrew from noted rabbinical

scholars and/or famous Orthodox Jews.

68. According to Mr. Bein, many of these letters were ad-

dressed to either his wife or him, or to their parents.

69. The Beins presented expert testimony valuing these items

collectively at $40,000. The expert had never seen the letters, and

relied solely upon the Beins’ representations concerning the exis-

tence, the condition, the author, the content, and the age of the

letters.

70. The Beins charge the Government with improperly seizing

and destroying these letters.

71. I find the Beins testimony to lack credibility in this regard.

72. As stated above, I accept Agent Haefner’s testimony as

credible. Agent Haefner testified that she did not see any documents

which had been copied i0 to 15 times.

73. Moreover, Haefner explained that she saw only a few

“Jewish documents” and that she had a fellow agent translate them

for her. She then understood them to be referring to a “Heter

Iskah” - which is apparently some type of loan (other than a

gemach). There is no indication that the documents were personal

letters.

Briefcases

74. The Beins also claim that two briefcases were seized and

improperly destroyed. The Government acknowledges the same.

Thus, I find that the Government improperly seized and destroyed

two leather briefcases.

75. 1 do not, however, accept as credible the Defendants’

contention that the briefcases were worth $600. First, the Defend-

ants did not direct this Court to any portion of the record in which a

witness stated that the briefcases were worth $600. Second,

Mr. Bein testified that he received one briefcase as a gift in 1974 or

1975, and that he received the other in 1981 or 1982.

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76. I find it entirely too speculative to conclude that two

briefcases which were approximately 20 years old were worth

$600.

Lawsuit — Woodhill Supply

77. The Beins were allegedly involved in a legal dispute with a

contractor who had done some work on their home.

78. As a result of the alleged seizure and improper destruction

of documents and a video detailing the home repairs, the Beins

contend, they were unable to produce checks and invoices docu-

menting payment of disputed claims, and incurred $15,000 worth of

loss. :

79. I agree that entries F44-46 on the Inventory Log suggest

that the documents pertaining to a lien were seized, but I do not see

any indication that videos were taken.

80. Yet even if I were to accept as credible the Beins’

assertions that such documents were destroyed, there exists no

credible evidence upon which to base the conclusion that the

destruction cost the Beins $15,000 in losses. For instance, the Beins

did not produce a copy of the lien. Nor did they produce a copy of

the judgment.

81. Simply stated, there is no independent evidence support-

ing their contention that the loss was $15,000.

82. Furthermore, there is no evidence other than Mr. Bein’s

bald assertion, that any loss should have been placed upon the

contractor.

83. I acknowledge that the invoices which were allegedly

destroyed would have been the most obvious means of proof that

the Beins had paid the contractor, but I also believe that the Beins

could have proffered copies of their bank records which would

reflect that certain checks were paid, or that cash in the amount of a

disputed payment was withdrawn on a particular clay. It does not

appear that they made any such efforts before the Ohio court.

84. In sum, I find the Beins’ assertion of a loss caused by the

destruction of the documents to lack credibility, and that the record

10

ee

is devoid of any reliable evidence regarding the amount of any such

loss, or responsibility for the loss.

Computer Programs

85. The Beins complain, and the Government agrees, that

agents improperly destroyed computer diskettes. Although the

Government does not concede as much, the Beins contend that

between 500 and 600 diskettes were destroyed.

86. According to the Beins, the diskettes were program disket-

tes, such as “Windows” and children’s games, rather than data

diskettes.

87. Prior to the execution of the search warrants, Mr. Bein

claimed, he had been able to use certain information from the

existing diskettes to purchase updates for many of the programs,

Because the diskettes have since been destroyed, he no longer has

the option of buying program updates, but must buy new programs

themselves.

88. Mr. Beins estimated that replacing all of the seized

programs diskettes would cost approximate $6,000.00.

89. I find this testimony to be incredible. The $6,000 estimate

is wholly speculative. Mr. Bein was able to recall only a few

programs and made absolutely no effort to supply any sort of basis

for his claimed loss. Certainly the Defendants could have brought in

price lists from a computer store or something of that nature.

90. Furthermore, based upon Mr. Bein’s own testimony, he

need not replace 500-600 diskettes. Rather, at least some portion of

the diskettes were mere “updates,” the replacement of which are

unnecessary.

91. As it stands, I find a sum as large as $6,000, for which the

Defendants offer no specificity regarding the nature and type of

program diskettes destroyed, the number of diskettes to be replaced,

or even any corroborating proof as to replacement cost, to be

wholly speculative and unreasonable.

11

Pe ee

Airline Ticket

92. Mr. Bein also claimed that Mrs. Bein’s airline ticket to

Israel] was lost. According to Mr. Bein, the agents seized the ticket

and failed to return it. He further contends that because they were

unable to recall the flight information and/or provide a doctor’s

excuse for not traveling, Delta would not refund the purchase price

of the ticket.

93. The Inventory Log seflects only that airline “information”

was taken. See Government Ex. 5, Line 03. There is no indication

that an actual ticket was taken.

94. I find the Beins’ assertions to the contrary to be incredible.

95. Furthermore, I have difficulty accepting the implicit con-

tention that Mrs. Bein could not recall at least the dates upon which

she traveled, or that the Beins could not reproduce a credit card

statement or canceled check confirming that they had paid for a

ticket.

96. Neither did the Beins offer any written documentation

supporting Delta’s alleged refusal to refund the price, or of Delta’s

fequirement that Mrs. Bein provide a doctor’s excuse.

97. In short, I find the Beins’ assertions in this regard to lack

credibility.

Important Papers and invitations

98. The Beins argue that the Government destroyed important

personal papers such as diplomas, marriage documents, ordination

certification, and invitations to a wedding and a bar mitzvah.

99. I do not find the Beins’ testimony regarding the existence

and destruction of personal papers, other than the invitations as

detailed below, to be worthy of credence. There is no indication in

the Inventory Log that such items were taken, nor did any agent

testify to seeing such items.

100. However, the Inventory Log does contain two entries for

“invitations.”’ Additionally, Agent Millar testified that he recalled

seeing bar mitzvah invitations, which he further believed had been

marked as destroyed.

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101. Mr. Bein testified that the actual cost of the wedding

invitations was $200. I find his testimony in this regard to be

credible, and that the sum of $200 is reasonable.

102. Although there is no evidence of the cost of the bar

mitzvah invitations, I find it reasonable to presume that they also

cost approximately $200.00.

Fax Machine

103. The Beins also claim that a new fax machine was

improperly seized and destroyed. The Government does not dispute

this contention.

104. Mr. Bein testified that the machine was brand new, and

cost approximately $500.00. The Government did not offer any

evidence controverting this amount.

105. I find Mr. Bein’s testimony as to the cost to be credible,

and the sum of $500 to be reasonable.

Lucas-Tenant

106. Finally, the Beins claim that the Government improperly

destroyed documents relating to repairs on property in Canada.

Specifically, the Beins urge that, lacking appropriate documenta-

tion, they were unable to persuade their insurance carrier that they

bore no responsibility for certain losses incurred by their tenants.

As a result, their insurance premiums increased by $2,000 a year.

107. I find that the Beins’ claim is far too speculative to award

compensation. For instance, they did not tender any proof of what

they pay for insurance, or that their premiums increased by $2,000.

108. Furthermore, as to the underlying matter, the Beins did

not provide any details of the nature of the dispute, the amount in

controversy, or an explanation of what the documents consisted of

or why they would have ensured their success.

109. I am left simply with Mr. Bein’s bald, conclusory, and

unsupported allegations, which I find to be incredible.

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CONCLUSIONS OF LAW

1. “‘The general rule is that seized property other than contra-

band, should be returned to its rightful owner once the criminal

proceedings have terminated.” United States v. Brant, 684 F. Supp.

421, 423 (M.D. N.C. 1988), aff'd, 865 F.2d 1260 (4th Cir. 1988),

quoting, United States v. La Fatch, 565 F.2d 81, 83 (6th Cir. 1977),

cert. denied, 435 U.S. 971 (1978).

2. Indeed, I have “‘both the jurisdiction and the duty to ensure

the return to a defendant of ‘that property seized from him in the

investigation but which is not ...stolen, contraband, or otherwise

forfeitable, and which is not needed, or is no longer needed, as

evidence.’ ’ Brant, 684 F. Supp. at 424, quoting, United States v.

Wilson, 540 F.2d 1100, 1101 D.C. Cir. 1976).

3. By seizing the property pursuant to valid search warrants, I

conclude that the Government has met its burden of establishing the

reasonableness of the search. See Otonye v. United States, 903 F.

Supp. 357, 363-64 n. 8 (E.D. N.Y. 1995).

4. The Beins thus bear the burden of prov.ng “the extent and

value of [the] claimed property....” Otonye, 903 F. Supp. at

364 n. 8.

5. As set forth in the Findings of Fact, the Beins did not

Satisfy the burden of proving the existence of the following items:

the gemachs; rabbinical letters; personal items; noncontraband

items; photographs; the lawsuit; ticket to Israel; the increase in

insurance premiums; items “‘sold” to Steve Sykora; glass figurines;

purse containing money; library floor; closet shelves; dishes; Seiko

directory; stocks; microfiche; Buyer’s Guide from RSA; Zupan

lease and video; “multipower 3”; and “Traco” glue.

6. Nor did the Beins satisfy their burden of proof regarding

the value of: the briefcases and the computer diskettes.

7. Consequently, the Government does not have any obliga-

tion with respect to these items.

8. The Beins’ inclusion of these items in the pending Motion

did not, however, constitute fraud, unconscionability or bad faith.

9. As such, the clean hands doctrine does not preclude them

from seeking equitable relief for the remaining items.

is

10. The Beins did meet their burden of proving the existence

and value of the following items: six carts; keys; invitations; and fax

machine.

11. Because the Government still retains possession of one of

the carts, I conclude that it must return it to the Beins.

12. It is undisputed that the Government no longer has the

remaining items, and thus cannot return them.

13. In response to the Beins’ request for compensatory dam-

ages, the Government contends that this Court lacks the requisite

jurisdiction.

14. I disagree. “Post conviction filings for the return of

property seized in connection with a criminal case are treated 25

civil equitable actions, and the district couft where the claimant was

tried has subject-matter jurisdiction ancillary to its criminal juris-

diction to hear the equitable action.” Thompson v. Covington, 47

F.3d 874, 875 (8th Cir. 1995), citing, Rufu v. United States, 20 F.3d

62, 65 (2d Cir. 1994) (per curiam) (district court where defendant

tried has ancillary jurisdiction to decide post-trial motion for return

of property; motion treated as civil complaint for equitable relief

and court must make findings tu identify items government still

possesses, and then fashion relief); and Mora v. United States, 955

F.2d 156,158-59 (2d Cir. 1992 (same).

15. As did the court in United States v. Martinson, 809 F.2d

1364, 1368 (9th Cir. 1987), I recognize “that there are cases

holding that damages are unavailable in a proceeding based on a

motion for return of property.” See also Otonye v. United States,

903 F. Supp. 357, 360-61 (E.D. N.Y. 1995) (citations omitted).

16. Yet, I too “find these reasons unpersuasive in light of the

equitable powers of the court. When a citizen has invoked the

jurisdiction of a court by moving for return of his property, [I] do

not think that the government should be able to destroy jurisdiction

by its own conduct.” Martinson, 809 F.2d at 1368.

17. “The government should not at one stroke be able to

deprive the citizen of a remedy and render powerless the court that

could grant the remedy.” /d.

15

18. Here, as detailed in the Findings of Fact, the Government

destroyed the property at issue after this Court ordered its return.

Consequently, I conclude that I have ancillary jurisdiction to award

damages.

19. The Beins satisfied their burden in proving the following

values, all of which I find reasonable and appropriate, and I

conclude that the Government is obligated to tender to the Beins the

following amounts: Carts $1,250; keys $300; Invitations $400; and

fax machine $500 for a total of $2,450.00.

FR I ek ka ak a koe a og ae ak ak

DATE FILED: JULY 7, 1999

GOVERNMENT’S COUNSEL: U.S. ATTORNEY’S OFFICE

ATTN: SHAWN SWEENEY, ESQ., AUSA

633 U.S. POST OFFICE & COURTHOUSE

PITTSBURGH PA 15219-1906

DEFENDANTS’ COUNSEL: STANLEY GRFUNFIELD ESQ

1035 FIFTH AVE

PITTSBURGH PA 15219

16

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA, )

-VS-

WILLIAM BEIN and EASTER BEIN, ( Criminal No. 94-214

Defendants.

AMBROSE, District Judge. ;

ORDER OF COURT

AND NOW, this this _ th day of July, 1999, for the reasons

set forth in the accompanying Findings of Fact and Conclusions of

Law, the Motion for Return of Seized Property (Docket No. 74) is

granted in part and denied in part. It is GRDERED that the Motion

is GRANTED insofar as the Government is required to return the

remaining cart, and tender the following amounts: $1,250 (carts);

$300 (keys); $400 (invitations); and $500 (fax machine). The

Motion is DENIED in all other respects.

BY THE COURT:

/s/ Donetta W. Ambrose

Donetta W. Ambrose,

U. S. District Judge

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA, )

Vv.

WILLIAM BEIN and ESTHER BEIN, > Criminal No. 94-214

Defendants.

AMBROSE, District Judge.

MOTION TO AMEND AND/OR

ALTER JUDGMENT PURSUANT TO F.R.C.P. 59(e)

19. The Beins object to this finding only to the extent it

provides a value of only $400.00 for invitations based on the actual

cost of printing, and nothing for sentimental value, and provides

nothing for other items claimed to have been destroyed. In all other

respects it has no objection to Conclusions of Law 19.

GREENFLELD, BREWER,

BAILOR & KAY

/s/ Stanley W. Greenfield, Esquire

Stanley W. Greenfield, Esquire

PA I.D. No. 00622

Attorney for William and Esther enon

1035 Fifth Avenue

Pittsburgh, PA 15219

(412) 261-4466

8/18/99

After careful consideration of the parties’ submissions, the

Motion to Amend and/or Alter Judgment (Doc. No. 101) is denied.

Donetta W. Ambrose

18

eee eH Me eter nan nee

UNITED STATES OF AMERICA v. ESTHER BEIN and

WILLIAM BEIN, Appellants.

No. 99-3822

UNITED STATES COURT OF APPEALS FOR THE THIRD

CIRCUIT

214 F.3d 408; 2000 U.S. App. LEXIS 12234

May 9, 2000, Argued

June 5, 2000, Filed

PRIOR HISTORY: [** 1] On Appeal from the United

States District Court for the Western District of Pennsylvania. (D.C.

Crim. No. 94-214). District Judge: Hon. Donetta W. Ambrose.

DISPOSITION: Order of district court entered July 9, 1999

vacated and remanded. Order of August 18, 1999, affirmed. Case

remanded to district court for entry of an order in accordance with

this opinion.

COUNSEL: Stanley W. Greenfield (argued), Daniel J. Kraut,

Greenfield, Brewer & Kay, Pittsburgh, PA, Attorneys for

Appellants.

Harry Litman, United States Attorney, Bonnie R. Schlueter

(argued), Assistant United States Attorney, Pittsburgh, PA, Attorney

for Appellee.

JUDGES: Before: GREENBERG, McKEE, and GARTH,

Circuit Judges. '

OPINIONBY: GREENBERG

OPINION: [*410] OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

This matter is before this court on an appeal by Esther and

William Bein from an order of the district court entered August 18,

1999, denying their motion to amend or alter an order entered

July 9, 1999, denying in part their motion pursuant to Rule 41(e) of

the Federal Rules of Criminal Procedure for return of property. The

Beins, alleging the Government wrongfully had destroyed or failed

to return their property, filed their Rule 41(e) [**2] motion to

19

recover compensatory damages or the return of the property. The

district court granted the motion in part, awarding damages in the

amount of $2,450, and ordering the Government to return a cart in

its possession. The court, however, denied the Beins’ motion with

respect to their claim for losses of other property. The Beins appeal,

seeking additional damages.

Although the Government has not appealed, it asserts, as it did

in the district court, that the court did not have jurisdiction to

entertain the Beins’ Rule 41(e) motion to the extent that it sought

compensatory damages. Because we find that sovereign immunity

bars a claim against the Government seeking money damages under

Rule 41(e), we will vacate the order of the district court entered

July 9, 1999, insofar as it awarded damages. We do not, however,

disturb the order with respect to the return of the cart. Inasmuch as

the district court did not have jurisdiction to award damages, we do

not consider on the merits the arguments the Beins raise as they

advance them only in an attempt to recover additional damages.

Thus, we will affirm the order of August 1%, 1999, denying the

Beins’ motion to amend the order of July 9, 1999. [**3]

This matter arises out of the investigation and arrest of the

Beins and their subsequent prosecution in the district court. On

October 3, 1994, agents of the Federal Bureau of Investigation

arrested the Beins who then were charged with conspiracy and

interstate transportation of stolen merchandise. Following the filing

of a superseding indictment, the Beins pleaded guilty to conspiracy

to commit interstate transportation of stolen property and conspir-

acy to launder money.

At the time of the Beins’ arrest, the Government executed

search warrants at their home and at their wholesale toiletries and

pharmaceutical products business.' The Government maintained an

inventory of all items that were seized. See app. at 9-25. At the

Beins’ sentencing hearing, the court directed the Government to

return all non-contraband items to the Beins.

' FBI, Internal Revenue Service agents and a number of local police officers who

were deputized as United States Marshals executed the warrants as part of an

investigation called Operation “Fence Fry.” The Pittsburgh Police Department

placed the goods seized from the Beins in a forfeiture lot it maintained. The IRS

stored all documents seized.

20

There is no dispute that the Government returned certain items

to the Beins. Nevertheless, the Beins filed their motion pursuant to

Fed. R. Civ. P. 41(e) as they asserted that the Government did not

return many items seized and instead destroyed them. Conse-

quently, in their Rule 41(e) motion the Beins largely sought to

recover monetary damages to compensate them for their loss.

Indeed, the Beins acknowledge that the Government told them

before they filed their Rule 41(e) motion that the property it had not

returned had been destroyed.

The Beins alleged in particular that the Government improp-

erly had destroyed (1) documentation of goods sold to certain

entities, (2) gemachs,’ (3) certain warehouse merchandise, (4) six

carts, (5) photographs, (6) keys, (7) memorabilia, (8) two brief-

cases, [*411] (9) documents related to a particular lawsuit,

(10) computer programs, (11) an airline ticket, (12) certain impor-

tant papers and invitations, (13) a fax machine, and (14) documents

relating to the repair of a property in Canada the Beins owned. As

we have indicated, the district court determined that the Govern-

ment retained in its possession one of the six carts for which the

Beins sought damages [**5] and ordered its return, a matter not in

issue On this appeal. The court further determined that the Govern-

ment wrongfully had destroyed five carts, the keys, a fax machine

and wedding and bar mitzvah invitations. Inamsuch as the Govern-

ment could not return these items, the court awarded the Beins

$2,450 in damages to compensate them for their loss. The district

court found, however, that the Beins had not established that the

Government took possession of the remaining property or had not

presented adequate proof of damages for its loss. The Beins have

appealed from the order of the district court to the extent it denied

their Rule 41(e) motion seeking damages for this remaining prop-

erty. We have jurisdiction over their appeal pursuant to 28 U.S.C.

§1291.

* A gemach is a promissory note representing a loan made to a charitable

Organization. The loan is repaid at an agreed upon date by either the borrower or

a third party makifg~payment on behalf of the borrower. The gemach is

considered under Orthodox Jewish Law to be a high form of charity because the

repayment relieves the recipient of any feeling of obligation to the donor. See

App. at 231-35.

II. DISCUSSION

It is well settled that the Government may seize evidence for

use in investigation and trial, but that it must return the property

once the criminal proceedings have concluded, unless it is contra-

band or subject to forfeiture. See United States v. Chambers, 192

F.3d 374, 376 (3d Cir. 1999); see also United States v. Premises

Known as 608 Taylor Ave., Apartment 302, 584 F.2d 1297, 1302

(3d Cir. 1978); United States v. Wilson, 176 U.S. App. D.C. 321,

540 F.2d 1100, 1103 (D.C. Cir. 1976) (district court has both the

jurisdiction and duty to return property against which no govern-

ment claim lies). A person aggrieved by the deprivation of property

may file a motion under Rule 41(e) to request its return. See

Chambers, 192 F.3d at 376; Government of Virgin Islands v.

Edwards, 903 F.2d 267, 273 (3d Cir. 1990). A district court has

jurisdiction to entertain a motion for return of property even after

the termination of criminal proceedings against the defendant and

such an action is treated as a civil proceeding for equitable relief.

See United States v. McGlory, 202 F.3d 664, 670 (3d Cir. 2000) (en

[**7] banc); Chambers, 192 F.3d at 376-77 (citing United States v.

Martinson, 809 F.2d 1364 (9th Cir. 1987); Rufu v. United States,

20 F.3d 63, 65 (2d Cir. 1994); Thompson v. Covington, 47 F.3d

974, 975 (8th Cir. 1995)). Further, even if it is alleged that the

property the movant seeks to have returned is no longer within the

Government's possession, the district court has jurisdiction to

determine whether such property had been in its possession and

whether it wrongfully disposed of such property. See Chambers,

192 F.3d at 378.

The Beins filed their Rule 41(e) motion primarily seeking not

the return of their property, but rather compensatory damages for

property they alleged the Government wrongfully destroyed. The

Government asserts the district court did not have subject matter

jurisdiction to address such a claim under Rule 41(e).’ For [*412]

* The Government also asserts that the Beins’ appeal was not timely. See Appellee

Br. at 1-3. The Government argues that, because Rule 41(e) is a rule of criminal

procedure, the time for appeal should be ten days, as opposed to the 60 days that

would be allowed for a civil appeal in a case in which it is a party. See id. As

noted by the Government, those courts that have addressed the issue have held

that because Rule 41(e) motions filed after the conclusion of criminal proceed-

ings are treated as civil proceedings in equity, the time period for filing a notice

22

the reasons set forth below, we find that, as a result of the

Government's immunity from suit, the district court lacked subject

matter jurisdiction over the Beins’ claims for monetary damages.

While the Government has not appealed from the order entered

in the district court, it asserts that, based upon its sovereign

immunity, the district court did not have jurisdiction to enter a

claim for monetary damages as relief on a Rule 41(e) motion. See

Appellee Br. at 4-6. But the Government need not have appealed

formally from the order of the district court for us to consider this

issue as a claim of sovereign immunity advances a jurisdictional bar

which a party may raise at any time, even on appeal, and which the

court may raise sua sponte. See Brown v. Secretary of the Army,

316 U.S. App. D.C. 284, 78 F.3d 645, 648 (D.C. Cir. 1996); see

also United States v. United States Fidelity & Guaranty Co., 309

U.S. 506, 514, 60 S. Ct. 653, 657, 84 L. Ed. 894 (1940) (“Consent

alone gives jurisdiction to adjudicate against a sovereign. Absent

that consent, the attempted exercise of judicial power is void.”).

It is a fundamental principle of sovereign immunity that

federal courts do not have jurisdiction over suits against the United

States unless Congress, via a statute, expressly and unequivocally

waives the United States’ immunity to suit. See United States v.

Mitchell, 463 U.S. 206, 212, 103 S. Ct. 2961, 2965, 77 L. Ed. 2d

580 (1983). [**9] Moreover, when the Government does consent to

be sued, “the terms of [the] waiver of sovereign immunity define

the extent of the court’s jurisdiction.” United States v. Mottaz, 476

U.S. 834, 841, 106 S. Ct. 2224, 2229, 90 L. Ed. 2d 841 (1986).

“Waivers of the Government’s sovereign immunity, to be effective,

of appeal in civil cases should be applied for the sake of simplicity and clarity.

See id. at 3 (citing United States v. Madden, 95 F.3d 38, 39 n.1 (10th Cir. 1996);

United States v. Garcia, 65 F.3d 17, 18 n.2 (4th Cir. 1995); Hunt v. U.S. Dep’t of

Justice, 2 F.3d 96 (Sth Cir. 1993); United States v. Taylor, 975 F.2d 402, 403

(7th Cir. 1992); Martinson, 809 F.2d at 1367). While we have not addressed this

issue, we do not find any compelling reason to part from the consensus that

appears to have arisen among those courts that have done so. Accordingly, we

find that the time for appeal applicable to civil actions should apply in the

context of an appeal from a post-conviction decision on a Rule 41(e) motion and

thus, as the Beins appealed within 60 days of August 18, 1999, their appeal is

timely. Of course, we do not consider whether a Rule 41(e) motion made during

the pendency of the criminal proceedings should be treated as a civil proceeding

for purposes of calculating the time for appeal as that issue is not before us.

23

must be ‘unequivocally expressed,’ ‘ and any such waiver must be

construed strictly in favor of the sovereign. United States v. Nordic

Village, Inc., 503 U.S. 30, 33-34, 112 S. Ct. 1011, 1014-15, 117 L.

Ed. 2d 181 (1992).

As we have indicated, we are concerned with Fed. R. Crim. P.

4 1(e) which reads:

Motion for Return of Property. A person aggrieved by an

unlawful search and seizure or by the deprivation of property

may move the district court for the district in which the

property was seized for the return of the property on the

ground that such person is entitled to lawful possession of the

property. The court shall receive evidence on any issue of fact

necessary to the decision of the motion. If the motion is

granted, the property shall be returned to the movant, although

reasonable conditions may be imposed to protect access and

use of the [** 10] property in subsequent proceedings. If a

motion for return of property is made or comes on for hearing

in the district of trial after an indictment or information is

filed, it shall be treated also as a motion to suppress under

Rule 12.

Inasmuch as Rule 41(e) motions are treated as civil equitable

actions, see n.3, supra, in light of its equitable powers the district

court concluded that it had ancillary jurisdiction to award damages

to the Beins and against the United States.

Unquestionably the district court had reason to believe that it

could award damages as some courts have suggested that a court

under Rule 41(e) “has power to award damages incident to the

complaint.” United States v. Martinson, 809 F.2d at 1367-68; see

also United States v. Kanasco, Ltd., 123 F.3d 209, 210 n.1 (4th Cir.

1997); Mora v. United States, 955 F.2d 156, 159-60 (2d Cir. 1992).

Other courts, however, have disagreed with this approach. [*413]

See, e.g., Pena v. United States, 157 F.3d 984, 986 (Sth Cir. 1998);

United States v. Chambers, 92 F. Supp. 2d 396, 2000 WL 369786,

at *3-6 (D.N.J. 2000). We seem never to have made a definitive

[**11] ruling on the point and thus we make our own analysis of

the issue.

Soveicign immunity protects the Government from suit except

insofar as it has waived that immunity. A waiver must be expressed

24

s

unequivocally in statutory text and will not be implied. See Lane v.

Pena, 518 U.S. 187, 192, 116 S. Ct. 2092, 2096, 135 L. Ed. 2d 486

(1996) (citations omitted). Rule 41(e), however, does not expressly

authorize an award of monetary damages and thus a_court’s

jurisdiction to award damages pursuant to that rule is questionable.

Notwithstanding the absence of an express provision in

Rule 41(e) authorizing an award of damages, the Court of Appeals

for the Ninth Circuit has stated that this omission is not controlling

with respect to the availability of damages under that rule. Thus, in

Martinson it indicated:

When a citizen has invoked the jurisdiction of a court by

moving for return of his property, we do not think that the

government should be able to destroy jurisdiction by its own

conduct. The government should not at one stroke be able to

deprive a citizen of a remedy and render powerless the court

that could grant the rernedy.

Martinson, 809 F.2d at 1368. [**12] The court feared that if it

allowed the Government to moot a motion for return of property by

giving the property away or destroying it, it would be encouraging

the United States to undertake unilateral actions which would have

the effect of circumventing the judicial process. See id. While we

respect this policy argument, it overlooks the fact that a determina-

tion of whether Rule 41(e) authorizes an award of damages raises a

question not of mootness, but of jurisdiction. Moreover, application

of sovereign immunity, by its very nature, will leave a person

wronged by Government conduct without recourse.

Indeed, a more recent decision of the Court of Appeals for the

Ninth Circuit appears to be contrary to its reasoning in Martinson to

the extent it held that a district court has jurisdiction to award

monetary damages despite the fact that Rule 41(€) does not

expressly provide for such an award. In United States v. Woodley,

the court considered the question of whether a court could impose a

monetary sanction on the United States under the Federal Rules of

Criminal Procedure. See 9 F.3d 774 (9th Cir. 1993). Fed. R. Crim.

P. 16(d)(2) provides a court with the authority to [**13] “prescribe

such terms and conditions as are just” to remedy a violation of a

discovery order. See id. at 782 (quoting Rule 16 (d)(2)). The court

found that because Rule 16(d)(2) did not include independent

25

authority for a monetary sanction it would decline to recognize that

the rule waived sovereign immunity. Accordingly, the sanction

could not be imposed. See id. at 781. It seems to us that this

conclusion is at odds with the result in Martinson. Moreover,

Rule 16(d)(2) is broader than Rule 41(e) in that Rule 16fd)(2)

allows a court to prescribe such terms and conditions as are just,

whereas Rule 41(e), even though proceedings under it are treated as

general equitable actions, only provides for one express remedy —

the return of property.

After careful analysis we reject the cases which allow an

award of damages in a proceeding under Rule 41(e) as we conclude

that a Federal Rule of Criminal Procedure that does not expressly

provide for an award of monetary damages does not waive sover-

eign immunity. n4 [*414] We find the reasoning of the Court of

Appeals for the Fifth Circuit in Pena and of the United States

District Court for the District of New Jersey in Chambers [**14] to

be persuasive on this point.

The court in Pena reasoned as follows:

Pena has named the United States as the defendant in his

case. The principle of sovereign immunity protects the federal

government from suit except insofar as that immunity is

waived. A waiver must be unequivocally expressed in statutory

text and will not be implied. See Lane v. Pena, 518 U.S. 187,

192, 116 S. Ct. 2092, 2096, 135 L. Ed. 2d 486 (1996)

(citations omitted). Rule 41(e) makes no provision for mone-

tary damages, and we will not read into the statute a waiver of

the federal government’s immunity from such damages. Nu-

merous Supreme Court decisions hold that courts should

construe statutes against waiver unless Congress has explicitly

provided for it. See, e.g., Lane, 116 S. Ct. at 2097 (refusing to

allow monetary damages under §504(a) of the Rehabilitation

Act of 1973, 29 U.S.C. §791 et seq., where the relevant

™ The case law suggests that sovereign immunity may be waived only by a clear

statutory expression of waiver; legislative history will not suffice to operate as a

waiver. See United States v. Nordic Village, Inc., 503 U.S. at 37, 112 S. Ct. at

1016. Given our holding in this case, however, we need not address the broader

question of whether rules of procedure, standing alone, can be found to

constitute a waiver of sovereign immunity.

26

statutory provisions failed to provide the ‘clarity of expression

necessary to establish a waiver of the Government’s sovereign

immunity against monetary damages’); United States v. Nor-

dic Village, Inc., 503 U.S. 30, 33-34, 112 S. Ct. 1011, 1014-

15, 117 L. Ed. 2d 181 (1992) [**15) (holding that although the

contemporary §106(c) of the Bankruptcy Code waived sover-

eign immunity, ‘it failed to establish unambiguously that the

waiver extended to monetary claims’). However compelling

his case, Pena may not maintain a suit against the United

States for monetary damages under Rule 41(e).

Pena, 157 F.3d at 986. The district court in Chambers agreed.

See Chambers, 2000 WL 369786 at *3.

In this case the district court appeared to have assumed, and

the Beins have argued, that because the courts have construed

Rule 41(e) to (**16] grant a district court the power to award

certain equitable relief, the court had jurisdiction to award complete

relief, which in certain circumstances could include an award of

monetary damages. While this line of reasoning may have merit in

analogous situations with respect to a non-governmental entity, it

does not properly address the sovereign immunity claim raised by

the Government. In fact, the Supreme Court has found that the

waiver of sovereign immunity does not extend beyond the express

terms of the waiver. See Department of the Army v. Blue Fox, Inc.,

525 U.S. 255, 119 S. Ct. 687, 142 L. Ed. 2d 718 (1999).

In Blue Fox the respondent sued the Army under section 702

of the Administrative Procedures Act, which provides in relevant

part:

A person suffering legal wrong because of agency action,

or adversely affected or aggrieved by agency action within the

meaning of a relevant statute, is entitled to judicial review

thereof. An action in a court of the United States seeking relief

other than money damages and stating a claim that an agency

or an officer or employee thereof acted or failed to act in an

official capacity or under color of legal authority shall [**17]

not be dismissed nor relief therein be denied on the ground

that it is against the United States or that the United States is

an indispensable party.

27

Id. at 260, 119 S. Ct. at 691 (citing 5 U.S.C. §702). The

respondent asked the Court to find that the provision waiving

sovereign immunity from actions seeking relief other than money

damages would allow it to seek a lien on funds held by the United

States. See id.

The court of appeals in Blue Fox had read an earlier decision

of the Supreme Court as standing for the proposition that section

702’s reference to “‘other than money damages” constituted a

waiver of sovereign immunity as to all actions equitable in nature.

See id. at 261, 119 S. Ct. at 691. The Supreme Court disagreed,

finding that the waiver of sovereign immunity must be found in the

language of the statute, [*415] and thus proceeded to determine

whether the relief sought by respondents constituted money dam-

ages. See id. at 261-62, 119 S. Ct. at 691-92. The Court held that

the imposition of the equitable lien sought by respondent was in

fact a claim for money damages outside the waiver of sovereign

immunity. See id. at 263, 119 S. Ct. at 692. [**18]

In keeping with the reasoning of Blue Fox, to the extent a

court may read Rule 41(e) as a waiver of sovereign immunity, it

must limit the waiver to the express terms of the rule. We reiterate

that Rule 41(e) provides for one specific remedy — the return of

property. Although courts treat a motion pursuant 'o Rule 41(e) as a

civil equitable action, such a characterization cannot serve as the

basis for subjecting the United States to all forms of equitable

relief. A court must strictly construe the scope of a waiver of

sovereign immunity in favor of the sovereign. See Blue Fox, 525

U.S. at 261, 119 S. Ct. at 691. The interpretation of Rule 41(e)

urged by the Beins would apply a liberal construction of the scope

of a waiver of sovereign !mmunity. Consequently, we conclude that

the district court erred wnen it exercised subject matter jurisdiction

over the Beins’ claims for monetary damages. Therefore we will

vacate the order of the district court of July 9, 1999, to the extent it

awarded the Beins monetary damages and we will remand the

matter to the district court to dismiss the' Rule 41(e) motion, to the

extent that it sought monetary damages for lack of subject matter

[**19] jurisdiction.

We believe our conclusion is buttressed by a review of the

specific instance under the Federal Tort Claim Act (““FTCA”’) in

which the Government has waived sovereign immunity in actions

28

seeking damages for loss or damage to property. We refer to that

waiver not to suggest that any particular remedy is, or was,

available in this case, or would be available in future cases

involving seizure of evidence in criminal matters, but rather to

illustrate the manner in which a Rule 41(e) action for damages

could undermine the limitations set forth on the waiver of sovereign

immunity in property loss or damages cases.

While the FTCA waives sovereign immunity for certain claims

for money damages, that waiver is subject to several limitations.

See, e.g., 28 U.S.C. 1346(b)(1) (providing jurisdiction in the district

courts for claims for money damages resulting from injury to, or

loss of, property caused by the negligence of a Government

employee). As particularly germane here, the waiver in section

1346(b) does not extend to any claim “arising in respect. . . of the

detention of goods or merchandise by any officer of customs or

excise or any other law-enforcement [* *20] officer.” 28 U.S.C.

§2680(c).

The courts have interpreted section 2680(c) to bar claims

premised upon essentially any injury to property sustained during

its detention. See Kosak v. United States, 465 U.S. 848, 853-55,

104 S. Ct. 1519, 1523-24, 79 L. Ed. 2d 860 (1984). Further, the

courts usually broadly interpret the term law enforcement official

within 2680(c). See United States v. 2,116 Boxes of Boned Beef,

726 F.2d 1481, 1490-91 (10th Cir. 1984) (USDA inspectors in-

cluded); see also Halverson v. United States, 972 F.2d 654, 655-56

(Sth Cir. 1992) (INS border patrol agents included); Schlaebitz v.

United States Dep’t. of Justice, 924 F.2d 193, 194 (11th Cir. 1991)

(federal Marshals included); Ysasi v. Rivkind, 856 F.2d 1520, 1525

(Fed. Cir. 1988) (INS border patrol agents included); Formula One

Motors, Ltd. v. United States, 777 F.2d 822, 823 (2nd Cir. 1985)

(DEA agents included); United States v. Lockheed L-188 Aircraft,

656 F.2d 390, 397 (9th Cir. 1979) (FAA employees included); but

see Bazuaye v. United States, 317 U.S. App. D.C. 370, 83 F.3d 482

(D.C. Cir. 1996) [**21] (postal employees not included); Kurinsky

v. United States, 33 F.3d 594, 598 (6th Cir. 1994) (section 2680(c)

is limited to detention of goods by law enforcement officers acting

in tax or customs capacity).

[*416] If a party were to proceed under the FTCA on a

negligence theory, then his or her claim for money damages might

29

be barred because the lost or damaged property was detained by law

enforcement officials. Indeed, if the Beins had proceeded under the

FTCA their action might have been barred on this very basis. See

28 U.S.C. § 2680(c). Thus, granting an award of damages under

Rule 41(e) could allow a party to make a recovery pursuant to a

procedural rule even though he or she would be barred from such

recovery under a statute passed by Congress. Such a result would

be incongruous as it would be directly contrary to the intent of

Congress.

Finally, we make reference to two of our recent cases. First we

observe that our holding today is not inconsistent with our opinion

in United States v. Chambers, 192 F.3d 374. In Chambers, we were

presented with the question of what role the district court should

play when addressing a Rule 41(e) motion [**22] in which the

Government asserts it no longer has possession of the property at

issue. We concluded that in such a case the District Court must

determine, in fact, whether the government retains possession of the

property; if it finds that the government no longer possesses the

property, the District Court must determine what happened to the

property. The District Court must hold an evidentiary hearing on

any disputed issue of fact necessary to the resolution of the motion.

If the District Court concludes that the government's

actions. . . were not proper, it shall determine what remedies

are available.

Chambers, 192 F.3d at 378 (citations omitted). We did not

consider there whether such available remedies would include an

award of monetary damages. See id. Indeed, we never mentioned

sovereign immunity in our opinion. Second, we note that in our en

banc opinion in United States v. One Toshiba Color Television, 213

F.3d 147, 2000 U.S. App. LEXIS 11584, 2000 WL 669978, at * 10

(3d Cir. 2000), we indicated that even if an owner of property

obtains an order vacating an order for forfeiture “that [success]

does not mean that he is entitled to any monetary relief [**23] or

relief in the form of a transfer of property.” We, however, did not

make a ruling on the point as we merely indicated that under Fed.

R. Civ. P. 60(b) such relief might not be available. Again, as in

Chambers, we did not discuss sovereign immunity. Thus, our

opinion in One Toshiba left open the issue we decide here.

30

Ill. CONCLUSION

For the reasons set forth above, we find that the district court

did not have jurisdiction over the Beins’ Rule 41(e) motion to the

extent it sought to recover damages for property the Government

allegedly destroyed. Accordingly, we will vacate the order of the

district court entered July 9, 1999, and remand the matter to the

district court for dismissal for lack of jurisdiction insofar as the

motion sought and the order awarded monetary damages. Thus, the

order of July 9, 1999, shall stand only with respect to the order to

the Government to return the one cart in its possession. The order of

August 18, 1999, will be affirmed. We will remand the case to the

district court for entry of an order in accordance with this opinion.

31

OFFICE OF THE CLERK

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

21400 United States Courthouse

601 Market Street

Philadelphia PA 19106-1790

pacer.ca3.uscourts.gov

December 13, 2000

Marcia M. Waldron Telephone

Clerk 267-299-4924

Mr. James A. Drach, Clerk

U.S. District Court for the Western District of PA

7th & Grant Streets

Room 829

Pittsburgh, PA 15219

RE: Docket No. 99-3822

USA vs. Bein

D.C. CIV. No. 94-cr-00214

Dear Mr. Drach:

Enclosed is a certified copy of the judgment in the above-

entitled case(s), together with copy of the opinion. The certified

judgment is issued in lieu of a formal mandate and is to be treated

in all respects as a mandate.

(x) We release herewith the certified list in lieu of the record.

Counsel are advised of the issuance of the mandate by copy of

this letter. A copy of the certified judgment is also enclosed

showing costs taxed, if any.

Very truly yours,

MARCIA M. WALDRON

Clerk

By: /s/_ Nicole M. Bruno

Nicole M. Bruno

Case Manager

Enclosure

cc: Bonnie R. Schlueter, Esq.

Stanley W. Greenfield, Esq.

Ms. Esther J. Bein

Mr. William S. Bein

32

TILE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 99-3822

UNITED STATES OF AMERICA;

V.

ESTHER BEIN;

WILLIAM BEIN,

Appellants

On Appeal from the United States District Court

for the Western District of Pennsylvania

D.C. Crim. No. 94-214

District Judge: Hon. Donetta W. Ambrose

Present: GREENBERG, McKEE, and GARTH, Circuit Judges

JUDGMENT

This cause came on to be heard on the record from the United

States District Court for the Western District of Pennsylvania and

was argued by counsel on May 9, 2000.

On consideration whereof, it is now here ordered and adjudged

by this Court that the District Court did not have jurisdiction over

the Beins’ Rule 41(e) motion to the extent it sought to recover

damages for property the Government allegedly destroyed. Accord-

ingly, the order of the district court entered July 9, 1999 is vacated

and the matter is remanded to the district court for dismissal for

lack of jurisdiction insofar as the motion sought and the order

awarded monetary damages. The order of July 9, 1999 shall stand

only with respect to the order to the Government to return the one

cart in its possession. Thus, the order of August 18, 1999 is

33

i a

affirmed. All of the above in accordance with the opinion of this

Court.

ATTEST:

/s/__Marcia M. Waldron

Marcia M. Waldron

Acting Clerk

Dated: June 5, 2000

Certified as a true copy and issued in lieu of a formal mandate on

December 13, 2000.

Teste: /s/ Marcia M. Waldron

Marcia M. Waldron

Clerk, United States Court of Appeals for the Third Circuit

(e) Motion for Return of Property. A person aggrieved by an

unlawful search and seizure or by the deprivation of property may

move the district court for the district in which the property was

seized for the return of the property on the ground that such person

is entitled to lawful possession of the property. The court shall

receive evidence on any issue of fact necessary to the decision of

the motion. If the motion is granted, the property shall be returned

to the movant, although reasonable conditions may be imposed to

protect access and use of the property in subsequent proceedings. If

a motion for return of property is made or comes on for hearing in

the district of trial after an indictment or information is filed, it shall

be treated also as a motion to suppress under Rule 12.

Sec. 2414. Payment of judgments and compromise settlements

Except as provided by the Contract Disputes Act of 1978,

payment of final judgments rendered by a district court or the Court

of International Trade against the United States shall be made on

settlements by the Secretary of the Treasury. Payment of final

judgments rendered by a State or foreign court or tribunal against

the United States, or against its agencies or officials upon obliga-

tions or liabilities of the United States, shall be made on settlements

by the Secretary of the Treasury after certification by the Attorney

General that it is in the interest of the United States to pay the same.

Whenever the Attorney General determines that no appeal

shall be taken from a judgment or that no further review will be

34 _

sought from a decision affirming the same, he shall so certify and

the judgment shall be deemed final.

Except as otherwise provided by law, compromise settlements

of claims referred to the Attorney General for defense of imminent

litigation or suits against the United States, or against its agencies

or officials upon obligations or liabilities of the United States, made

by the Attorney General or any person authorized by him, shall be

settled and paid in a manner similar to judgments in iike causes and

appropriations or funds available for the payrnent of such judg-

ments are hereby made available for the payment of such compro-

mise settlements.