Appellants Brief — Calero-Toledo v. Pearson Yacht Leasing Co.

SUPREME Courr, u, @No. 73-157 | OV 16 1973

meme | | Meme nome. nce

| Supreme Court of the Anited States

OctToBeR TERM, 1973

Astot CaLEro-ToLtepo, Superintendent of Police,

Epeak R. Bauzac, Administrator of the General

Services Administration of the Commonwealth of

Puerto Rico, Appellants,

v.

i Pearson YacouT Leastne Co., Appellee

On Appeal from the United States District Court for the

District of Puerto Rico

APPELLANTS’ BRIEF

FRANCISCO DE JEsus-ScHUCK

Attorney General

MreraM Naverra DE Ropon

Solicitor General

Tue COMMONWEALTH OF PvERTO Rico

Post Office Box 192

San Juan, Puerto Rico 00902

Lynn R, CoLEMAN

1701 Pennsylvania Avenue

N. W.

Suite 1120

Washington, D.C. 20006

Of Counsel:

Vinson, E.xins, Szarts, ConnatLy & Smite

1701 Pennsylvania Avenue, N. W.

Suite 1120

Washington, D.C. 20006

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INDEX

Page

CN TI ani eek cap ehncecseccieteecssnees 1

JURISDICTION 2.0... ccc ccc cc ccc cece ccc c ccc ceccece 2

SratTutTes INVOLVED ...........c cece cece cece cence 3

QUESTIONS PRESENTED ........... cece cc ccccccccenee 3

oe ty a eee Ser ere 4

SumMaRY OF ARGUMENT .......... 0. cece cece ec eeees 7

BWOGMORR oo hoc se eee oe ceah erasseeesaciacess 10

I. The Court Below Erred in Holding That Seizure

Without Notice Deprived Pearson of Property

Without Due Process of Law .................. 10

II. The Court Below Erred in Holding That Pearson

Suffered a Taking of Property Without Just Com-

NTA iin 35 0565 e5cdaseaanseeeseesoesaces 13

A. Pearson Lacked Standing to Complain. ...... 14

B. The Commonwealth’s Forfeiture Statute Does

Not Violate the Fifth Amendment ‘‘ Just Com-

pensation’’ Requirement. .................085 15

C. If Allowance of the ‘‘Innocent Owner’’ Defense

Against Forfeiture is Constitutionally Re-

quired, the District Court Nevertheless Erred

in Construing the Puerto Rican Statutes as

Denying Such Defense. ..................06. 18

D. The District Court Erred in Holding Pearson

had not Received Just Compensation for its

Interest in the Seized Property. ............ 20

CANNOT a oie hoe Fa ie ne bandon ky edeneseuseces 22

PO Pe eer eer err rere Tree er TTT la

ii Index Continued

CITATIONS

CASES: Page

Americana of Puerto Rico, Inc. v. R. Kaplas, 368 F.2d

S31 (3rd Cit. 1066): ..ccciscsvicsereyesinssens

Ashwander v. T.V.A., 297 U.S. 288 (1935) ........ 15

Bonet v. Texas Co., 308 U.S. 463, 471 (1940) ........ 20

Burge v. United States, 342 F.2d 408 (9th Cir. 1965),

cert. denied 382 U.S. 829 (1965) ..............

Commonwealth v. Superior Court, 96 D.P.R. 843, 96

PER. CRE CGR) cick de csccdsersccisenseys 14

Dobbin’s Distillery v. United States, 96 U.S. 395 (1878) 16

Downs v. Porrata 76 P.R.R. 572 (1954) ............ 10

England v. Bd. of Medical Examiners, 375 U.S. 411

(1964) oo. e cece cece cece eeeecceeeeeeeeeeeeeees 20

Fornaris v. Ridge Tool Co., 400 U.S. 41 (1970) .... 20

Fuentes v. Shevin, 407 U.S. 67 (1972) ....... 6, 9, 11, 12

Garcia v. Superior Court, 91 P.R.R. 146 (1964) ....14, 15

Goldsmith Jr.—Grant Co. v. United States, 254 U.S.

OO CERN occ iveadeee eet as eens ccseuesccaces 16, 17

Gore v. United States, 357 U.S. 396 (1958) ........ 17

McKeehan v. United States, 438 F.2d 739 (6th Cir.

DOT) oe hone eg sua ee ends sce sensecusteceessans 15

Metro Taxi Cabs, Inc. v. Treasurer, 73 D.R.R. 171,

738 PBB. 166 (1968). occ ccscccntsvsseicsecees 18, 19

Mora v. Meijas, 115 F.Supp. 610 (D.P.R. 1953) ...... 2

Mora v. Meijas, 206 F.2d 550 (1st Cir., 1953) ...... 2

Mullane v. Central Hanover Tr. Co., 399 U.S. 306

COBO) es eo cee hace ey en eae scns cen esa eeaeesees 13

N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S.

ROO TABOO) heck a en sees 6s ks ce steeecies 19

Ochoteco v. Superior Court, 88 D.P.R. 517, 88 P.R.R.

BO CG ores veneers ec henneisscereseaeen 16, 18, 19

The Palmyra, 25 U.S. (12 Wheat.) 1 (1827) ......... 16

Pa. (19653 Util. Comm’n v. Pa. R.R.Co., 382 U.S. 281

re errr rer re errr rr ee

Re One 1965 Ford Mustang, 105 Ariz. 293, 463 P.2d

> ae 7) a

Reetz v. Bozanich, 397 U.S. 82 (1970) ............. 20

Robinson v. Hanrahan, 409 U.S. 38 (1972) .......... 13

Rorick v. Bd. of Comm’rs of Everglades Drainage

Dist., 307 U.S. 208 (1939) ...............0008. 3

Stainback v. Wo Hock Ke Lok Po., 336 U.S. 376 (1949) 3

Sn aTE) v. United States, 345 F.Supp. 650 (D.Md.

ce} ae Px ca aac cd aw sees cn 4eesecdeevens 15

Index Continued lii

Page

United States v. One 1971 Buick Riviera, 463 F.2d

2168 (5th Cie, F908). 6 ic oe ena ceawe esse ecu tases 16

United States v. One 1967 Ford Mustang, 457 F.2d

OSL. COU IE, ABR) pos een y ence esse reesesean 16

United States v. One 1971 Ford Truck, 346 F.Supp.

Gis 10.0. Cell, ISTE) xcvcecs os 0 setae es ccis

United States v. Toroiano, 365 F.2d 416 (3rd Cir.

1966) cert denied 385 U.S. 958 (1966) .......... 12

United States v. United States Coin and Currency,

401 U.S. 715, 721-722 (1971)-........ 7, 9, 15, 16, 18

Wackenhut Corp. v. Aponte, 266 F.Supp. 401 (D.P.R.

NOGG) eeune ees dssaauns estas aaeectscenccenses

STaTuTES

21 U.S.C. § 88 ita), subparagraphs (A) and (B) ....7, 18

96 U.S.C. $ TOOL aincensa dei ckins baccdsnctasivcwesss 7

28 U.S.C. S053 pau ee eee eesoeeeeus oa54seeeeseas 3

9B USC. S1S6S ccc cv ewens cone in veveseceasseces 2, 6

ZS WBC. BBP cares n en 4s bn tees ene esesecsases 2, 6

WO NB. RUBS nave ccc ece cen yeeseswacesraeveseeuses 7

Controlled Substances Act of Puerto Rico, 24 L.P.

R.A. § 2102-2607 (Supp. 1972) ................ 4

24 L.P.R.A. § 2512 (a) (4) and (b) (Supp. 1972) 3, 5, 6, 12

24 L.P.R.A. § 2510 (Supp. 1972) ................ 13

Uniform Vehicle, Mount, Vessel and Plane Seizure

Act, 34 L.P.R.A. § 1722 Sencweeeees 3, 5, 6, 12, 13, 14

23 L.P.R.A. § 451, 451b, and 45le ............ 3, 5, 22

14A Fla. Stats. Ann. § 398.24 .................... 7

561% Ill. Stats. Ann. § 712, § 1505 (Supp. 1973) .... 7

18 Mich. Stats. Ann. § 18.1070 (55) (Supp. 1973) .. 7

IN THE

Supreme Court of the United States

OcToBER TERM, 1973

No. 73-157

Astro. CaLEeRo-ToLepo, Superintendent of Police,

Epaar R. Bauzac, Administrator of the General

Services Administration of the Commonwealth of

Puerto Rico, Appellants,

v.

Pearson Yacut Leasina Co., Appellee

On Appeal from the United States District Court for the

District of Puerto Rico

APPELLANTS’ BRIEF

OPINION BELOW

This is an appeal from the judgment of the United

States District Court for the District of Puerto Rico,

sitting as a three-judge court, entered on March 29,

1973. The opinion of the court below is not yet re-

2

ported. A copy of the memorandum opinion and order

is attached to the jurisdictional statement as Appendix

A* thereto, p. 19.

JURISDICTION

This suit was brought by Appellee Pearson Yacht

Leasing Co. (‘‘Pearson’’) under 28 U.S.C. §1343 to

redress alleged deprivation of Pearson’s rights under

the Fifth and Fourteenth Amendments. Defendants-

Appellants are the current Superintendent of Police

and the Administrator of the General Services Admin-

istration of the Commonwealth of Puerto Rico (here-

inafter collectively referred to as ‘‘the Common-

wealth”’). A three-judge court was convened pur-

suant to 28 U.S.C. § 2281. This Court has never

passed on the applicability of 28 U.S.C. § 2281 to

the Commonwealth of Puerto Rico. But district

courts have taken Puerto Rico to be a “‘state’’ within

contemplation of § 2281 ever since shortly after it be-

came a commonwealth. Mora v. Meijas, 115 F.Supp.

610 (D.P.R. 1953) ; Wackenhut Corp. v. Aponte, 266

F.Supp. 401 (D.P.R. 1966). See also Mora v. Meijas,

206 F.2d 550 (1st Cir. 1953), and Americana of Puerto

Rico, Inc. v. R. Kaplas, 368 F.2d 431 (3rd Cir. 1966).

The judgment of the District Court was entered on

March 29, 1973, and notice of appeal was filed in that

court on May 8, 1973. Assuming that the three-judge

court was properly called, the jurisdiction of the

?In this brief, parts of the record previously printed as appen-

dices to Appellants’ jurisdictional statement will be cited ‘‘Jrsd.

Stat., App. A, p. 19’. Inasmuch as the filing of briefs in this

case is being accelerated pursuant to the Clerk’s request, and the

appendix is to be filed after Appellant’s brief, citations to the

appendix will be to certified record pagination and follow the

designation ‘‘R’’.

3

Supreme Court to review this decision by direct appeal

is conferred by Title 28, United States Code, Section

1253. Pa. Public Util. Comm’n v. Pa. R.R. Co., 382

U.S. 281 (1965); Stainback v. Wo Hock Ke Lok Po,

336 U.S. 376 (1949); Rorick v. Bd. of Comm’rs of

Everglades Drainage Dist., 307 U.S. 208 (1939). This

Court noted probable jurisdiction on October 9, 1973.

STATUTES INVOLVED

The pertinent parts of 24 L.P.R.A. §2512 (a) (4)

and (b) (Supp. 1972), 34 L.P.R.A. § 1722 (a)-(e),

and 23 L.P.R.A. § 451, 451b, and 451e are set forth in

Appendix I hereto.

QUESTIONS PRESENTED

1. Whether Pearson, nominally lessor but effec-

tively conditional vendor of a yacht seized by and

forfeited to the Commonwealth, had such a property

interest in the yacht as would support a claim of

deprivation of property without due process of law

and taking without just compensation.

2. Whether certain confiscation and forfeiture

statutes of the Commonwealth, in authorizing seizure

of property without notice and prior adversary hear-

ing, deny persons with interests therein due process

of law.

3. Whether these statutes must be construed as

authorizing the taking without just compensation of

Pearson’s property, to wit, by denying owners and

lienholders who have consented to the use by others

of the property seized the right to challenge the for-

feiture on the grounds of their own innocence in the

wrong for which the property is seized and forfeited,

and if so, whether such statutes are constitutional.

4

STATEMENT 2

Pearson is a New York incorporated and based

division of Grumman, Inc., engaged in leasing pleas-

ure yachts. On March 15, 1971, Pearson leased a

yacht to Donovan and Loretta Olson (‘‘Lessee’’) for

a five-year term.* The parties simultaneously exe-

cuted an option contract giving Lessee the right to

purchase the yacht on thirty days’ notice at any time

during the lease term, the option price diminishing

over that period at a depreciation rate equivalent to

the monthly rental. At the end of the fifth year the

yacht could be purchased for $1.00. Jrsd. Stat., App.

C, pp. 53-54. In effect, then, Pearson sold the yacht

to its ‘‘lessee’’, retaining title until it had received full

payment.

On May 6, 1972, Puerto Rican authorities dis-

covered marihuana on the yacht. Under the Con-

trolled Substances Act of Puerto Rico, 24 L.P.R.A.

§ 2102-2607 (Supp. 1972), App. L., infra, p. 1a, posses-

?The factual record on which this appeal is based consists of

a Stipulation of Facts and the lease and option-to-purchase agree-

ments between Pearson and Lessee, all of which was printed as

Appendix C to the Commonwealth’s jurisdictional statement at

p. 37.

* The lease agreement provided that Lessee was to use the yacht

only for legal purposes; that Lessee, at its expense, was to insure

Pearson against loss of the yacht ‘‘sustained in any manner what-

soever’’: that ‘‘forfeiture’’ of said Equipment shall not discharge

or diminish the obligation of Lessee to pay rent... .’’ [emphasis

supplied] ; that Lessee had the exclusive right to use and possession

of the Yacht during the term unless and until default by Lessee,

written notice of default by Pearson, expiration of a fifteen-day

correction period, and exercise by Pearson of its right to ter-

minate; and finally, that the yacht was to be based at the con-

tract date home port of Lessee, specified as a Puerto Rican address,

except with the written consent of Pearson. Jrsd. Stat., App. C,

pp. 42-50.

ails EME IUGR MEE APTI RE RIE I BREE

=

5

sion of marihuana is prohibited. It was stipulated

at trial that Pearson was wholly innocent of this vio-

lation of law. On July 11, 1972, the yacht was seized

by the Superintendent of Police, predecessor in office

of appellant Astol Calero-Toledo. 24 L.P.R.A. § 2512

(a) (4) (Supp. 1972) subjects to forfeiture to the Com-

monwealth of Puerto Rico vessels used to transport

controlled substances. Under § 2512(b) such property

is to be seized and forfeited in the manner provided

by the Uniform Vehicle, Mount, Vessel and Plane

Seizure Act, 34 L.P.R.A. § 1722 b. App. L,, infra, p. 1a.

Section 1722 requires the Superintendent to serve

notice of the seizure ‘‘on the owner of the property

seized or the person in charge thereof or any person

having any known right or interested [sic] therein’’

within ten days. The Superintendent duly notified

Lessee, who was on record with the Division of Marine

Operations of the Ports Authority as the owner of the

vessel. 23 L.P.R.A.§ 451b and 451c require the owner

of the vessel who wishes to operate it within the

navigable waters of Puerto Rico to file an application

for an identification number with the Authority.

Neither the Superintendent nor Lessee notified Pear-

son, who was not on record with the Ports Authority.

Jrsd. Stat., App. B, pp. 33, 34, 36; App. C, p. 39.

Lessee failed to challenge the confiscation within the

fifteen-day period following service of notice on him

as provided by §1722(a); under § 1722(c), the yacht

then became subject to sale at auction or reservation

for official use of the Government of Puerto Rico. The

Chief of the Office of Transportation, predecessor in

office of Edgar R. Balzac, second-named appellant,

has retained the vessel pending outcome of this appeal.

Pearson did not learn of the seizure until Lessee de-

_ a a " at WIR Art cone

6

faulted and Pearson unsuccessfully attempted, on Oc-

tober 19, 1972, to regain possession of the yacht. Jrsd.

Stat., App. A, p. 22.

On November 6, 1972, Pearson filed suit in the

United States District Court for the District of

Puerto Rico under 28 U.S.C. § 1343, seeking to compel

the return of the yacht, to have 24 L.P.R.A. §2512

(a)(4) and (b) and 34 L.P.R.A. § 1722 declared un-

constitutional, and to enjoin their enforcement. R.8.

Pearson also filed a motion to have a three-judge court

convened in accordance with 28 U.S.C. § 2281. R.22.

On December 21, the Commonwealth withdrew its op-

position (on the basis of the abstention doctrine) to

the convening of the three-judge court, and submitted

thereto. R.40, Jrsd. Stat., App. A, p. 20.

In its memorandum opinion and order issued March

29, 1973, the three-judge court, in effect, ordered the

Commonwealth to pay Pearson the appraised value of

the yacht, as provided under 34 L.P.R.A. § 1722(d),

and issued a permanent injunction against the enforce-

ment of the challenged statutory provisions. The

order was based on two holdings. First, the cotirt

declared that the challenged statute, in authorizing

seizure without prior notice and hearing, permitted a

deprivation of Pearson’s property without due

process, and was, therefore, ‘‘on its face unconstitu-

tional.’’ Jrsd. App. A, p. 27. The court claimed sup-

port for this proposition in Fuentes v. Shevin, 407

U.S. 67 (1972). (The court did not hold that the

Commonwealth had failed to make reasonable efforts

to notify interested parties before the forfeiture, spe-

cifically indicating that had this issue been reached

it would have been decided in favor of the Common-

wealth. Jrsd. Stat., App. A, p. 26). Second, the

> SOR ETAT

eet eee SR vecerer eT

7

court held that the statutes effected a taking of Pear-

son’s property without just compensation in that, as

the court read the Supreme Court of Puerto Rico’s

construction of the statutes, they do not allow the own-

er of seized property to nullify a forfeiture by proving

his own innocence in the crime for which the property

was seized. United States v. United States Coin and

Currency, 401 U.S. 715, 721-722 (1971) (hereinafter,

Coin and Currency), was said to be controlling. The

district court entered judgment on June 15, 1973, R.87,

based on its March 29, 1973 memorandum opinion and

order.

SUMMARY OF ARGUMENT

Forfeiture is a standard statutory prescription for

property used in connection with any of a broad range

of violations of criminal law. See, e.g., 21 U.S.C.

§ 881(a), from which the Puerto Rican statute was

copied; 49 U.S.C. § 782; 26 U.S.C. § 7301; 56% Tl.

Stats. Ann. § 712, § 1505 (Supp. 1973) ; 18 Mich. Stats.

Ann § 18.1070 (55) (Supp. 1973); 14A Fla. Stats.

Ann. § 398.24. All of these statutes and many others

-.must fall if the decision below is affirmed. None pro-

vides notice before seizure, which the district court held

due process to require; none of the cited federal

statutes by its terms protects innocent owners and lien-

holders against forfeiture, which the district court held

is necessary to avoid taking without just compensa-

tion. If this Court affirms the district court’s decision

without modification, it will make drafting an effective

and constitutional forfeiture statute an impossibility. ~

Obviously, notice and an adversary hearing before seiz-

ure would enable the genuinely criminal to remove and

hide any property sought to be seized.

8

The Commonwealth regards its seizure and for-

feiture statutes as being particularly important to its

ability to control traffic in illegal drugs. This is

especially so since most illegal drugs are smuggled into

the island by plane or boat. Manifestly, the ability to

obtain forfeiture of the vehicle or vessel used in con-

nection with the commission of a crime is itself an

important inducement to obedience of the drug laws;

it also assists in controlling the instrumentalities of

crime. The effect of the challenged statutes being on

the books is that the legislature of Puerto Rico has

made the determination that such statutes are required

or at least are useful and convenient to the carrying

out of highly important governmental functions. This

determination, especially in view of the Common-

weath’s peculiar status vis-a-vis the United States,

must not lightly be disregarded.

The decision of the court below would require

material reassessment of our understanding of the

Fourth Amendment’s guarantee against ‘‘unreason-

able searches and seizures’’: if notice and an adver-

sary hearing must be provided before property whose

possessor has already been arrested can be seized, does

it not follow that notice and an adversary hearing

must be provided before the suspect himself canbe

arrested ?

We respectfully submit that the decision of the

court below is clearly erroneous. As concerns the

seizure issue, Pearson was not deprived of any prop-

erty interest by the seizure of the yacht from Lessee

because it had no possessory interest whatsoever in the

vessel at that moment, only a security interest, or at

most bare title. But even if Pearson had standing to

complain, due process has never been construed by this

9

Court to require an adversary hearing before seizure,

related to a quasi-criminal proceeding such as for-

feiture, and Fuentes v Shevin, cited by the district

court as supporting that construction, expressly re-

jects it. Due process does require an attempt to pro-

vide appropriate notice and opportunity for hearing

before forfeiture; but the challenged statutes make

adequate provisions for this, and the district court

expressed satisfaction with Puerto Rico’s efforts to

notify parties with interests in the yacht.

The district court found that Pearson’s property was

taken without ‘‘just compensation’’ because it would

have been barred, under Puerto Rican law, from de-

feating the forfeiture by establishing its own in-

nocence of the particular crime involved. This con-

clusion is incorrect for four reasons. First, there is a

threshold question of Pearson’s standing. Depending

upon the proper interpretation of another part of the

Puerto Rican statutes, Pearson either still has, or

once had but lost by inaction, an opportunity to present

its defenses to a Puerto Rican court. In neither case

can Pearson be found to have suffered any loss from

the constitutional infirmity it alleges. Second, this

Court’s statement in Coin and Currency, supra, at

721-22, that forfeiture statutes ‘‘are intended to impose

a penalty only upon those who are significantly in-

volved in a criminal enterprise’? has never been

authoritatively interpreted to require legislative pro-

vision of such a defense as a condition to the constitu-

tionality of forfeiture statutes; the weight of the ex-

pressions of lower courts is against this interpretation ;

and policy and precedent are against such a require-

ment. Third, even if the district court was correct in

finding that any constitutionally sound forfeiture

10

statute must permit the defense, there is ample Puerto

Rican precedent for recognizing it without invalidating .

the statutes. The court below should have followed

these precedents to avoid declaring the statutes uncon-

stitutional. Fourth, it would be grossly unjust to

permit Pearson to extract from Puerto Rico the ap-

praised value of the yacht. Pearson is already en-

titled, under its agreement with Lessee, to the insur-

ance proceeds and to an action against Lessee for the

balance of the rent due, each of which is presumably

at least equal in value to the yacht when seized, as

stipulated by Pearson itself. Moreover, whatever op-

portunities to contest the forfeiture Pearson did have

or should have had, it lost them by its own negligent

failure to register its interest in the yacht with the

Puerto Rican Ports Authority as required by the laws

of Puerto Rico.

ARGUMENT

I. The Court Below Erred in Holding That Seizure Without

Notice Deprived Pearson of Property Without Due Process

of Law.

Initially, the record establishes that Pearson suf-

fered no injury, of a character sufficient to justify a

complaint of deprivation of its property without due

process, as a result of the yacht’s seizure. Under

Clauses 6 and 11 of the lease, Lessee, not Pearson, had

the exclusive right to possession of the yacht at the

time of seizure. Jrsd. Stat., App. C, pp 45, 47. In

Puerto Rico, title to seized property does not pass until

forfeiture, Downs v. Porrato, 76 P.R.R. 572 (1954).

Therefore the court below erred when it found that

Pearson ‘‘has been deprived, since [the seizure of the

yacht, on] July 11, 1972 of valuable property .. .”

il

Jrsd. Stat., App. A, p. 21. And it is therefore im-

possible for the seizure of the yacht to have violated

Pearson’s rights under the due process clause.

The district court found the statute unconstitutional

on its face because it made no provision for notice and

a hearing before seizure. The district court cited

Fuentes v. Shevin, 407 US 57 (1972), as prohibiting

such a ‘‘deprivation’’, and’concluded that “‘forfeiture”’

is not one of those extraordinary situations justifying

postponing a hearing’’ [all emphasis supplied unless

otherwise indicated]. Jrsd. Stat., App. A, p. 28. But

the issue, as put by the court below, is whether seizure

involves considerations justifying postponing a hear-

ing; Puerto Rico, like other American jurisdictions,

does provide opportunity for a hearing before for-

feiture. The replevin statutes which were held in

Fuentes v. Shevin to deprive without due process were

described by this Court as follows:

The statutes, moreover, abdicate effective state

control over state power. Private parties, serv-

ing their own private advantage, may unilaterally

invoke state power to replevy goods from another.

No state official participates in the decision to seek

a writ; no state official reviews the basis, for the

claim to repossession; and no state” official

evaluates the need for immediate seizure. (407

U.S. at 93)

The Court then went on to say that:

The seizure of possessions under a writ of replevin

is entirely different from the seizure of posses-

sions under a search warrant. First, the search

warrant is generally issued to serve a highly im-

portant governmental need—e.g., the apprehen-

sion and conviction of criminals—rather than the

mere private advantage of a private party in an

12

economic transaction. Second, a search warrant

is generally issued in situations demanding

prompt action. The danger is all too obvious that

a criminal will destroy or hide evidence or fruits

of his crime if given any prior notice. Third, the

Fourth Amendment guarantees that the state will

not issue search warrants merely upon the conclu-

sory application of a private party. It guaran-

tees that the state will not abdicate control over

the issuance of warrants and that no warrant will

be issued without a showing of probable cause.

Thus, our decision today in no way implies that

there must be opportunity for an adversary hear-

ing before a search warrant is issued. (Id. at

93-94, n. 30.)

The considerations expressed by the Court in

Fuentes v. Shevin, as distinguishing seizure under a

search warrant from seizure under a writ of replevin,

apply generally to seizure in connection with a for-

feiture proceeding. In Puerto Rico, seizure pursuant

to the Controlled Substance Act, 24 L.P.R.A. 2512, can

only apply to vehicles used in connection with the com-

mission of a crime, where prompt action is generally

necessary, and can only occur if authorized by a “‘high

government official’’, ie., ‘‘the Secretary of Justice

[ Attorney General], the Secretary of the Treasury or

the Police Superintendent.’”’ 34 L.P.R.A. 1722(a).

Thus, seizure in a forfeiture proceeding, like seizure

of evidence for a criminal proceeding has been held

subject to the ‘‘probable cause’’ requirement of the

Fourth Amendment, not the adversary hearing re-

quirement of the due process clause.* United States v.

*It would be especially absurd to require notice before seizure

on the specific facts of this case: is the commonwealth to carry

the burden of notifying all holders of security interests in a

vessel transporting contraband before seizing it?

8

13

Troiano, 365 F.2d 416 (3rd Cir. 1966), cert. denied 385

U.S. 958 (1966) ; Burge v. United States, 342 F.2d 408

(9th Cir. 1965), cert. denied 382 U.S. 829 (1965): ef.

} 24 L.P.R. § 2510 (Supp. 1972).

The due process clause does obligate the state to

make efforts ‘‘reasonably calculated, under all the

circumstances, to apprise interested parties of the

pendency of the action (in which their interests will

be affected),’’ Mullane v. Central Hanover Tr. Co.,

399 U.S. 306, 314 (1950) ; Robinson v. Hanrahan, 409

U. S. 38 (1972). The challenged statute provides for

such notice, 34 L.P.R.A. § 1722(a), and the court be-

low stated that ‘‘from the record in this case, we are

not disposed to rule that the Commonwealth of Puerto

Rico did not have reason to believe that notice to the

owner was, in fact, given.’’ Jrsd. Stat., App. A, p. 26.

Accordingly, the court below unquestionably erred in

holding that notice and hearing are constitutional pre-

requisites to a lawful seizure.

II. The Court Below Erred in Holding That Pearson Suffered

a Taking of Property Without Just Compensation.

Pearson alleged that the hearing Puerto Rico pro-

vides before forfeiture is not meaningful because the

defense of innocence of the crime for which the vessel

is forfeited is not provided by the statutes. The three-

judge court treated this contention as raising the issue

of taking without just compensation. As discussed

below, the district court’s conclusion is erroneous for

; a number of reasons. We observe initially, however,

that analysis of the legality of forfeiture in terms of

the Fifth Amendment’s ‘‘just compensation”’’ standard

appears fundamentally unsound because no property

is being taken ‘‘for public use’’ in the eminent domain

EE Maranon precy — Rad omerenan ys oe <a ore

14

sense which is at the core of the just compensation re-

quirement of the Fifth Amendment.*

Pearson Lacked Standing to Complain.

A. The constitutionality of the alleged failure of

Puerto Rican law to allow the innocent third party de-

fense in forfeiture proceedings is an issue that the dis-

trict ‘court should never even have reached. 34

L.P.R.A. § 1722(a) provides that an interested party

has fifteen days in which to challenge a forfeiture if

the courts are to have jurisdiction over his complaint.

App. I, infra, p. la. It is well established that this

period does not run against an interested party until

he himself has been notified. Garcia v. Superior

Court, 91 P.R.R. 146 (1964). In 1964 the Supreme

Court of Puerto Rico said ‘‘we have no quarrel with

the theory”’ of a plaintiff corporation seeking to con-

test a forfeiture on the grounds that notice was not

properly served on it more than one year after notice

had been served on its president. Commonwealth v.

Superior Court, 96 P.R.R. 822, 824 (1969), n. 1 [trans-

lation from the Spanish text by Fernando E. Agrait-

Betancourt, Assistant Secretary, Office of the Attorney

General of the Commonwealth of Puerto Rico].

Pearson by its own admission had actual knowledge

of seizure of the yacht by October 19, 1972, more than

fifteen days before it filed its suit in federal district

court. If actual notice satisfies the statutory require-

ments, then Pearson, like the plaintiff in Common-

wealth v. Superior Court, supra, has lost its chance

to air its third party defense through its own.inaction.

Presumably this is the basis of the conclusion of the

court below that Pearson is time-barred from the

5 Armstrong v. United States ,364 U.S. 40, 49 (1960); United

States v. Willow River Power Co., 324 U.S. 499, 502 (1945).

ER RTS ROE RR ES MTN LIN EDEMA NT RIT

PD PLOTS HRs,

15

Puerto Rican courts. Jrsd. Stat., App. A, pp. 21-22.

If, however, only notice according to the statutory

formula will suffice, as Garcia v. Superior Court,

supra, would indicate, then Pearson has not yet been

notified and hence has not yet been barred from the

court of Puerto Rico. On either interpretation, Pear-

son has suffered no damage as a result of the alleged

failure of the Puerto Rican statute to satisfy the as-

serted just compensation standard. As Justice

Brandeis said in his benchmark concurring opinion in

Ashwander v. T.V.A., 297 U.S. 288, 347-8 (1935) :

The Court will not pass upon the validity of a

statute upon complaint of one who fails to show

that he is injured by its operation.

The Commonwealth's Forfeiture Statute

Does Not Violate the Fifth Amendment

“Just Compensation” Requirement

B. The district court reasoned that if forfeiture

statutes ‘‘are intended to impose a penalty only upon

those who are significantly involved in a criminal en-

terprise,’’ Coin and Currency, supra, at 721-2, it is a

taking without just compensation to deny one having

an interest in property seized, but lacking involvement

in the crime for which the seizure was made, the right

to preserve his interest against forfeiture by proof of

his innocence. In support of this reasoning, the court

offered one federal appellate decision and two federal

district court decisions. The appellate decision,

McKeenhan v. United States, 438 F.2d 739 (6th Cir.

1971), and one of the district court cases, Suhomlin v.

United States, 345 F.Supp. 650 (D. Md. 1972), each

held that the government was not entitled to forfeiture,

given that it had dropped the criminal charges upon

which the initial seizure has been made. Thus neither

examined the statuS of the property interest of an in-

nocent party when the possessor of the property seized

16

is in fact guilty of a criminal violation supporting for-

feiture. The remaining district court decision,

United States v. One 1971 Ford Truck, 346 F.Supp.

613 (C.D. Calif. 1972), does proclaim the principle

sought to be supported, but only in dictum: the court

held that the possessor of the truck was unlawfully in

possession of it when apprehended and so, under a

statutory exception, the innocent owner’s interest could

not be forfeited. Jd. at 619-20. This same exception

is judicially recognized in Puerto Rico. Ochoteco v.

Superior Court, 88 D.P.R. 517, 88 P.R.R. 500 (1963).

However, the unlawful possession involved in One 1971

Ford Truck is fundamentally different from the Les-

see’s contractual-consensual possession of the yacht in

this case.

This Court has rejected in a long line of cases the

principle announced by the court below. Goldsmith

Jr.-Grant Co. v. United States, 254 U.S. 505 (1921) ;

Dobbin’s Distillery v. United States, 96 U.S. 395

(1878) ; The Palmyra, 25 U.S. (12 Wreat.) 1 (1827).

On the strength of a single district court’s dicta the

court below belives that Coin and Currency overruled

these cases. At least two circuit courts of appeal dis-

agree flatly. United States v. One 1971 Buick

Riviera, 463 F.2d 1168 (5th Cir. 1972) ; United States

v. One 1967 Ford Mustang, 457 F.2d 931 (9th Cir.

1972). The latter makes the obvious point that such

a decision should be made only by this Court or by the

appropriate legislature. Id. at 932.

The desirability of the result reached by the district

court is by no means self-evident. Of course it would

be unjust for an owner to lose his vehicle as a result

of a crime committed by one who has stolen it, because

the owner bears no causal responsibility for the crime,

did not in any way consent to the risk of its occurrence,

—— S SEE RTE es MA WINERIES IIE ARE OE

17

and cannot be made the medium of any deterrence of

future occurrences by the imposition of a forfeiture

upon him. No American jurisdiction permits for-

feiture in these circumstances. But the owner who

consents to the possession and use of his property by

another presents a different case. He is a physical

cause of the use of that property in a subsequent viola-

tion of law by the possessor. He is in a position to

know of the risk, to discourage the possessor from com-

mitting the crime, and to protect himself against loss.°

In one of the decisions which the court below thinks

has been overruled, this Court said that in enacting a

forfeiture statute a legislature ‘‘interposes the care

and responsibility of the owner of property which may

be used to facilitate volations of law in aid of the

prohibitions of the law and its punitive provisions.

... Goldsmith, Jr.-Grant Co. v. United States, 254

U.S. 505, 511 (1921). Itis entirely consistent to inter-

pose the owner’s responsibility when he has consented

to use of the property by another and to refuse to do

so when use by another was against his will. Certainly

it is a matter of the ‘‘severity of punishment,’’ ‘‘its

efficacy or its futility,’’ matters which this Court has

said to be ‘‘peculiarly questions of legislative policy.”’

Gore v. United States, 357 U.S. 386, 393 (1958). Thus,

the Commonwealth legislature should be entitled to

make the policy determination that provision to law

enforcement agencies of the power to seize and forfeit

property (or property interests) of persons situated

similarly to Pearson is necessary, or at least useful

and convenient, to the conduct of vital government

business.

® Pearson is a paradigm example. See lease clauses 4(a), 4(c),

6. Jrsd. Stat., App. C, pp. 43, 44, 45.

18

If Allowance of the “Innocent Owner”

Defense Against Forfeiture is Constitutionally

Required, the District Court Nevertheless

Erred in Construing the Puerto Rican Statutes as

Denying Such Defense.

C. But if justice today insists on allowing the in-

nocent third party defense against forfeiture, in the

form sought by Pearson, this can and should be done

short of striking down the Puerto Rican statutes as

unconstitutional. There are already two standard

exceptions to the long-standing rule that innocence will

not save a third party’s interest in the seized object,

one exempting property used as a common earrier un-

less the owner or person in charge is a consenting

party to the violation, the other exempting con-

veyances unlawfully in the possession of one other

than the owner. See, e.g., 21 U.S.C. §881(a), sub-

paragraphs (A) and (B). In Puerto Rico these ex-

ceptions exist, as the district court remarked, by virtue

of judicial recognition. Jrsd. Stat., App. A., p. 24, n.

12: Metro Taxi Cabs, Inc. v. Treasurer, 73 D.P.R. 171,

73 P.R.R. 164 (1952), and Ochoteco v. Superior Court,

88 D.P.R. 517, 88 P.R.R. 500 (1963).

The district court emphasized that the irrelevance to

proceedings under Puerto Rican forfeiture statutes of

the owner’s innocence is ‘‘solely as a result of their in-

terpretation by the Supreme Court of the Common-

wealth of Puerto Rico.’”’ Jrsd. Stat., App. A, p. 24.

The court continued :

We cannot in fairness say that the result is the

fault of the Supreme Court of the Commonwealth

of,Puerto Rico, for it, like many other courts,

state and federal, was merely following the con-

struction given the federal forfeiture statutes by

the Supreme Court of the United States [before

Coin and Currency]. Ibid.

The court below was, moreover, confident ‘‘that the

Supreme Court of the Commonwealth of Puerto Rico

SRE CA Oh Sees tar

PRAT EAE ER AN 9

RS OT LE LT LT TET TRI a i re oe ep ence

19

would have reached the same result as we do here

today, in view of the fact that it has followed federal

decisions in interpreting local forfeiture statutes.”’

Jrsd. Stat., App. A, p. 21. But if the Puerto Rican

Supreme Court were going to reach this result, it is

doubtful that it would have done so by declaring the

statutes unconstitutional. It is far more likely that

the Puerto Rican Supreme Court would have

recognized the innocence defense as a gloss on the

statutes, just as it did with the other two innocence

exceptions. Metro Taxi Cabs, Inc. v. Treasurer,

supra; Ochoteco v. Superior Court, supra. Recently,

the Arizona Supreme Court construed the Arizona

vehicle forfeiture statute to permit proof of the own-

er’s innocence of the crime, related to seizure, to defeat

forfeiture of his property. Re One 1963 Ford Mus-

tang, 105 Ariz. 293, 463 P.2d 827 (1970). This result

was reached even though the court had no similar

Arizona precedents for its interpretation.

The district court below plainly erred when it said —

“‘there is no conceivable way in which the Common-

wealth courts can construe the challenged statutes ‘to

avoid the constitutional issues raised in this ease.’ ”’

Jrsd. Stat., App. A, p. 21.

This Court has said:

The cardinal principle of statutory construction is

to save and not to destroy. * * * as between two

possible interpretations of a statute, by one of

which it would be unconstitutional and the other

valid, our plain duty is to adopt that which saves

the act. Even to avoid a serious doubt the rule is

the same. (N.L.R.B. v. Jones & Laughlin Steel

Corp., 301 U.S. 130 (1936).)

In this case this principle should apply with special

force, since the federal court elected not to abstain to

PH PPR STORIES OE ELE LL IRE BUDGE I Ly POSSI IRR a Oe Ee acerca en eee

20

allow the Puerto Rican Supreme Court to construe and

pass first on the constitutionality of local statutes."

Fornaris v. Ridge Tool Co., 400 U.S. 41 (1970) ; Reetz

v. Bozanich, 397 U.S. 82 (1970); Bonet v. Texas Co.,

308 U.S. 463, 471 (1940).

The District Court Erred in Holding

Pearson had not Received Just Compensation

for its Interest in the Seized Property. ~

D. Following its conclusion that the mechanics of

the forfeiture statute of necessity would deprive Pear-

son of its property without just compensation, the

court held Pearson ‘‘is entitled to be paid the amount

of the appraisal, plus interest.’”’ Jrsd. Stat., App. A.,

p. 30. The district court cannot be basing its determi-

nation on what it would take to justly compensate

Pearson. Despite the stipulation that Pearson was

the ‘‘lawful owner”’ of the yacht and that it was and

had been since its seizure in the possession of Com-

monwealth agents, there, nevertheless, is no evidence

that Pearson suffered an injury for which compensa-

tion mandatorily should be held due. Clause 4(a) of

the lease, which Pearson incorporated in its complaint,

R. 8, 10, required Lessee to furnish Lessor with in-

surance policies with loss payable to Lessor ‘insuring

Lessor against Gamage, loss, or destruction of the

Equipment under this lease sustained in any manner

whatsoever in an amount not less than the replacement

value of said Equipment.”’ Jrsd. Stat., App. C., p.

Faithful adherence to the principle of preservative construc-

tion is indispensable to support that narrow limitation of the doc-

trine of abstention which this Court, on the grounds of duplica-

tion of efforf and expense, has insisted upon. England v. Bd. of

Medical Examiners, 375 U.S. 411 (1964). If state (or Common-

wealth) officials cannot confidently expect adherence to this prin-

ciple, they are remiss in their duties when they cooperate, as the

Commonwealth: did, in facilitating federal consideration of the

constitutionality of local statutes.

>

21

43. The record contains no pleading, much less any

evidence, and there is no reason to assume, that this

insurance does not exist or did not fully compensate

_ Pearson.

In addition, clause 4(c) provides that ‘‘the damage,

destruction, loss, disability or forfeiture of said Equip-

ment shall not discharge or diminish the obligation of

Lessee to pay rent as provided in this agreement.”’

Jrsd. Stat., App. C, p. 44. The agreement provided

rental payments of $474.66 per month, which over the

full lease term comes to considerably more than the

“unit price’’ specified by Pearson—obviously reflect-

ing an interest factor. Jrsd. Stat., App. C, P. 52.

This sum became due no later than October 19, 1972,

under clause 7, Jrsd. Stat., App. C, p. 45, thus “‘en-

titling’ Pearson to an action in debt for that amount.

This cause of action is the compensation properly

evisaged by the lease in the event of forfeiture, and

Pearson should be held to it.

If Pearson is entitled here to compensation, how

could the case of any mortgagor, conditional vendor or

other security interest holder be distinguished? If

their interests are entitled to recognition and protection

under the ‘‘just compensation’’ standard, the state’s

ability to obtain forfeiture of the property of those

“significantly involved in a criminal enterprise’’ will

be seriously undermined. It is common knowledge

that a large percentage of all vessels, vehicles and air-

planes in use today are subject to outstanding security

interests held by third parties.

Finally, if Pearson is now badly placed to seek from

Puerto Rico courts the relief it believes itself guaran-

teed by the federal Constitution, this is doubly due to

its own negligence. Pearson knew—insisted on know-

ing—that the yacht would be based in Puerto Rico,

22

clauses 9, 12, Jrsd. Stat., App. C, pp, 47-48, but failed

to register with Puerto Rico authorities the ownership

interest which it claims, contrary to 23 L.P.R.A.

§45lce. A mortgagee who fails to record his interest

loses it to a good faith purchaser; Pearson deserves no

greater protection when it fails to comply with a state’s

police measures. Pearson knew by October 19, 1972,

that the yacht had been seized, but failed to act within

the time provided by Puerto Rican law. This case

should present no occasion to reward inattention to

local law.

CONCLUSION

For the foregoing reasons, the decision of the court

below shoyld be reversed. :

Respectfully submitted,

FRANCISCO DE JEsus-ScHUCK

Attorney General

MrriaM NAVEIRA DE Ropon

Solicitor General

THE COMMONWEALTH OF PvuERTO RIco

- Post Office Box 192

San Juan, Puerto Rico 00902

Lynn R. CoLEMAN

1701 Pennsylvania Avenue

N. W.

Suite 1120

Washington, D.C. 20006

Of Counsel:

Vinson, ELKrins, SEARLS, CONNALLY & SMITH

1701 Pennsylvania Avenue, N. W.

Suite 1120

Washington, D.C. 20006

November 16, 1973

la

APPENDIX I

Statutes Involved

Section 512 of the Controlled Substances Act of Puerto

Rico, 24 L.P.R.A. § 2512 (Supp. 1972) provides in per-

tinent part:

(a) The following shall be subject to forfeiture to

the Commonwealth of Puerto Rico:

(4) All conveyances, including aircraft, vehicles,

mount or vessels, which are used, or are intended for

use, to transport, or in any manner to facilitate the

transportation, sale, receipt, possession, or concealment

of property described in clauses (1) and (2) of this

subsection;

(b) Any property subject to forfeiture under clause

(4) of subsection (a) of this section shall be seized by

process issued pursuant to Act No. 39, of June 4, 1960,

as amended, known as the Uniform Vehicle, Mount

Vessel and Plane Seizure Act sections 1721 and 1722

of Title 34.

Section 2 of the Uniform Vehicle, Mount, Vessel and

Plane Seizure Act, 34 L.P.R.A. § 1722, provides in per-

tinent part :

Whenever any vehicle, mount, or other vessel or

plane is seized pursuant to the provisions of Act No. 6

of June 30, 1936, Act No. 220 of May 15, 1948, Act No.

17 of January 19, 1951, Act No. 48 of June 18, 1959

and/or Act No. 2 of January 20, 1956, such seizure

shall be conducted as follows:

(a) The proceedings shall be begun by the seizure

of the property by the Secretary of Justice, the Secre-

tary of the Treasury or the Police Superintendent,

through their delegates, policemen or other peace offi-

2a

cers. The officer under whose authority the action is

taken shall serve notice on the owner of the property

seized or the person in charge thereof or any person

having any known right or interested [sic] therein, of

the seizure and of the properties so seized, said notice to

be served in an authentic manner, within ten (10) days

following such seizure and such notice shall be under-

stood to have been served upon the mailing thereof

with return receipt requested. The owners, persons in

charge, and other persons having a known interest in

the property so seized may challenge the confiscation

within the fifteen (15) days following the service of the

notice on them, through a complaint against the officer

under whose authority the confiscation has been made,

on whom notice shall be served, and which complaint

shall be filed in the Part of the Superior Court cor-

responding to the place where the seizure was made and

shall be heard without subjection to docket. All ques-

tions that may arise shall be decided and all other

proceedings shall be conducted as in an ordinary civil

action. Against the judgment entered no remedy shall

lie other than a certiorari before the Supreme Court,

limited to issues of law.. The filing of such complaint

within the period herein established shall be considered

a: jurisdictional prerequisite for the availing of the

action herein authorized.

(b) Every vehicle, mount, or any vessel or plane

so seized shall be appraised as soon as taken possession

of by the officer under whose authority the seizure

took place, or by his delegate, with the exception of

motor vehicles, which shall be placed under the custody

of the Office of Transportation of the Commonwealth of

Puerto Rico, which shall appraise same immediately

upon receipt thereof.

In the event of a judicial challenge of the seizure, the

court shall, upon request of the plaintiff and after

~

3a

hearing the parties, determine the reasonableness of

the appraisal as an incident of the challenge.

Within ten (10) days after the filing of the challenge,

the plaintiff shall have the right to give bond in favor

of the Commonwealth of Puerto Rico before the per-

tinent court’s clerk to the satisfaction of the court, for

the amount of the assessed value of the seized property,

which bond may be in legal tender, by certified check,

hypothecary debentures, or by insurance companies.

Upon the acceptance of the bond, the court shall direct

that the property be returned to the owner thereof. In

such case, the provisions of the following paragraphs

(c), (d) and (e) shall not apply.

When bond is accepted the subsequent substitution

of the seized property in lieu of the bond shall not

be permitted, said bond to answer for the seizure if the

lawfulness of the latter is upheld, and the court shall

provide in the resolution issued to that effect, for the

summary forfeiture execution of said bond by the clerk

of the court and for the covering of such bond into the

general funds of the Government of Puerto Rico in

case it may be in legal tender or by certified check;

the hypothecary debentures or debentures of insurance

companies shall be transmitted by the pertinent clerk

of the court to the Secretary of Justice for execution.

(c) After fifteen (15) days have elapsed since sery-

ice of notice of the seizure without the person or

persons with interest in the property seized have filed

the corresponding challenge, or after twenty-five (25)

days have elapsed since service of notice of the seizure

without the court’s having directed that the seized

property be returned on account of the bond to that ef-

fect having been given, the officer under whose author-

ity the seizure took place, the delegate thereof, or the

Office of Transportation, as the case may be, may pro-

4a

vide for the sale at auction of the seized property,

or may set the same aside for official use of the Gov-

ernment of Puerto Rico. In case the seized property

cannot be sold at auction or set aside for official use

of the Government, the property may be destroyed by

the officer in charge, setting forth in a minute which

he shall draw up for the purpose, the description of

the property, the reasons for its destruction and the

date and place where it is destroyed, and he shall serve

notice with a copy thereof on the Secretary of Justice.

(d) In case the vehicle, mount, or vessel or plane

is sold at auction, the proceeds from the sale shall be

covered into the general fund of the Government of

Puerto Rico, after deducting and reimbursing expenses:

incurred.

(e) If the seizure is judicially challenged and the

court declares same illegal, the Secretary of the Treas-

ury of Puerto Rico shall, upon presentation of a cer-

tified copy of the final decision or judgment of the

court, pay to the challenger the amount of the appraisal

of the proceeds from the public auction sale of such

property, whichever sum is the highest, plus in t

thereon at the rate of 6% per annum, counting fromthe

date of the seizure. ——

Sections 1, 3, and 4 of the Act of June 14, 1965, 23

L.P.R.A. § 451, 451b, 451c, provide in pertinent part:

§ 451. As used in this chapter, unless the context

clearly implies a different meaning:

(e) ‘‘Owner’’ means a person other than a lien

holder, having the property in or title to a motor-

boat. The term includes a person entitled to the use

or possession of a motorboat subject to an interest in

another person, reserved or created by agreement and

<. securing payment or performance of an obligation.

5a

§451b. Every motorboat on the waters of the Com-

monwealth shall be numbered. No person shall operate

or give permisson for the operation of any motorboat

on such waters unless the motorboat is numbered

in accordgnce with this chapter, or in accordance with

applicable federal law, or in accordance with a federally

approved numbering system of another state, and

unless (1) the certificate of number awarded to such

motorboat is in full force and effect, and (2) the

identifying number set forth in the certificate of num-

ber is displayed on each side of the bow of such motor-

boat.

§ 45le. (a) The owner of each motorboat requiring

numbering by this Commonwealth shall file an appli-

cation for number with the Authority.