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United States v. One Hundred Thirty-Nine Thousand

United States District Court, E.D. Missouri, Eastern Division

September 8, 2017




         Claimants Johnny Khamphengphet and Dent Crew International, Inc.[1] move the Court to reconsider the Order extending the time for filing a complaint for forfeiture and, upon reconsideration, to order the immediate return of the property to Claimants (“Claimants' motion”) [ECF No. 4]. The Government opposes Claimants' motion [ECF No. 5], and Claimants filed a reply in support of their motion [ECF No. 6].

         I. Background

         On July 19, 2017, the Government initiated this proceeding by filing a motion to extend time to file a civil complaint for forfeiture (“Government's motion”) [ECF No. 1]. The Government asked the Court to extend until November 5, 2017, the deadline for the filing of either a complaint for forfeiture or criminal charges related to United States currency seized on February 6, 2017.

         A review of the Government's motion reveals that this action arises out of investigators' seizure of $139, 580.00 from Mr. Khamphengphet on February 6, 2017.[2] On May 8, 2017, Claimants filed an administrative claim to the property with the Drug Enforcement Administration, and no one else filed an administrative claim to the seized currency.[3] To maintain possession of the seized property, the Government had to file either a civil complaint for forfeiture or criminal charges within ninety days after May 8, 2017, or by Monday, August 7, 2017.[4]

         As the Government stated in its initial motion, 18 U.S.C. Section 983(a)(3)(A) allows a court in the district where a civil forfeiture complaint will be filed to extend the period for filing a complaint by agreement of the parties or “for good cause shown.”[5] The Government argued that the “requested extension is in the interest of justice insofar as it avoids the need for duplicative actions and thereby conserves judicial and other governmental resources.”[6] More specifically, the Government asserted (1) it had “an ongoing criminal investigation regarding the conduct giving rise to the forfeiture of the property, ” and (2), if a civil complaint was filed, “any discovery in [the] civil case would impede the Government's ability to conduct its ongoing criminal investigation and would also create a burden on the claimant's right against self-incrimination.”[7] Additionally, the Government contended that, if the currency was returned to “the claimant[, ] there would be no assurance that the property would be available as evidence in any subsequent court proceedings.”[8] The Court granted the Government's motion upon concluding good cause existed due an “ongoing criminal investigation, the potential unavailability of the property in future forfeiture proceedings, and the avoidance of duplicative actions.”[9]

         Claimants argue the Court should reconsider its Order on the grounds that: (1) Claimants did not have an opportunity to be heard before the Court extended the statutory deadline for filing a civil forfeiture action;[10] (2) an ongoing criminal investigation cannot support a finding of “good cause” for an extension of the filing deadline;[11] (3) the Government did not demonstrate “good cause” for the extension;[12] and (4) the Government failed to comply strictly with statutory notice requirements.[13] In support of their motion, Claimants cite United States v. Real Props. Located at 7215 Longboat Drive (Lot 24), 750 F.3d 968 (8th Cir. 2014), for the propositions that forfeitures are not favored and “forfeiture statutes are strictly construed against the government.” Id. at 974.

         The Government opposes Claimants' motion on the grounds: (1) no notice to Claimants is required for an extension of the filing deadline, (2) an ongoing criminal investigation exists, (3) good cause is established, (4) notice of the seizure was timely and proper, and (5) returning the currency to Claimants is contrary to law.

         II. Standard

         A district court has “the inherent power to reconsider and modify an interlocutory order any time prior to the entry of judgment.” K.C. 1986 Ltd. P'ship v. Reade Mfg., 472 F.3d 1009, 1017 (8th Cir. 2007) (internal quotation marks and citation omitted). A district court's decision resolving a motion to reconsider before entry of judgment is subject to review for abuse of discretion. See, e.g., Julianello v. K-V Pharm. Co., 791 F.3d 915, 922-23 and 923 n. 3 (8th Cir. 2015) (reviewing a district court's denial of a motion to reconsider the scope of a pre-judgment order allowing amendment of a complaint). While a motion to reconsider usually cannot be used to present evidence or arguments that could have been presented while the underlying motion was pending, see, e.g., id. at 923, the Court finds it proper to consider each of Claimants' arguments here because Claimants did not have the opportunity to present any of those arguments when the Government's motion was pending.

         III. Discussion

         A. Ex parte consideration of Government's motion

         Claimants argue the Court should reconsider the order granting the extension because Claimants did not have an opportunity to respond to the Government's motion before the Court granted it. The Government counters that Claimants are not entitled to notice of the motion for extension, citing United States v. Real Prop. Located at 475 Martin Lane, Beverly Hills, Calif., 545 F.3d 1134, 1141-44 (9th Cir. 2008) (“475 Martin Lane”).[14]

         In 475 Martin Lane, the United States Court of Appeals for the Ninth Circuit observed that 18 U.S.C. Section 983(a)(3)(A) “neither expressly permits nor prohibits ex parte extensions of time.” Id. at 1141; accord United States v. One Hundred Forty Thousand Dollars in United States Currency, No. 06-CV-3247 (NG) (RLM), 2007 WL 2261650, at *5 (E.D. N.Y. Aug. 2, 2007) (“One Hundred Forty Thousand Dollars”) (“The section does not expressly authorize the court to extend the filing deadline in response to an ex parte application by the government. Nor does it expressly impose a notice requirement on the party applying for the extension”). The Ninth Circuit compared the language in Section 983(a)(3)(A) with the language in other provisions of the Civil Asset Forfeiture Reform Act (“CAFRA”), Pub. L. No. 106-185, 114 Stat.202 (2000), addressing a government application for judicial relief before a lawsuit is filed: 18 U.S.C. Section 983(a)(1)(C) and 18 U.S.C. Section 983(j)(1)(B). 475 Martin Lane, 545 F.3d at 1141-43; accord One Hundred Forty Thousand Dollars, 2007 WL 2261650, at *6. After analyzing use of the term “ex parte” in four other parts of CAFRA, the Ninth Circuit concluded “the structure and purpose of the statute” authorized “a district court [to] issue extensions of time in which to file a complaint based on an ex parte government application.” Id. at 1143, see also id. at 1141, 1144. More specifically, the Ninth Circuit explained:

There is nothing in the statute that prohibits the practice, and to hold otherwise would thwart one of the objects of the statute by forcing the government to reveal when an investigation that led to an initial seizure of property is ongoing and has a broader scope than might be apparent from the initial seizure. The inclusion of restrictions on ex parte applications in other sections and the absence of ...

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