The opinion of the court was delivered by: Mukasey, District Judge.
On June 27, 1989, pursuant to a seizure warrant issued by
United States Magistrate Michael H. Dolinger, who found
probable cause for seizure of the property under 21 U.S.C. § 881(b),
United States Marshals seized the building at 16
Clinton Street, including the leasehold interests on the first
floor. On July 19, 1989, the Government filed a verified
complaint against the defendant in rem, and on August 11, 1989
David and Nathan Shuchat, the owners of the property, filed a
notice of claim for the return of the property.
The defendant in rem now moves to dismiss the Government's
verified complaint under Fed.R.Civ.P. 12(b)(6) for failure to
state a claim, or, in the alternative, for violation of the
Excessive Fines Clause of the Eighth Amendment. For the
reasons set forth below, defendant's motion is denied.
On a motion to dismiss, the court must decide whether the
complaint on its face sets forth a claim upon which relief may
be granted. Fed.R.Civ.P. 12(b)(6). In forfeiture cases under
21 U.S.C. § 881, the complaint must comply with the
Supplemental Rules for Certain Admiralty and Maritime Claims.
21 U.S.C. § 881(b). Under Supplemental Rule E(2)(a), a
"complaint shall state the circumstances from which the claim
arises with such particularity that the defendant or claimant
will be able, without moving for a more definite statement, to
commence an investigation of the facts and to frame a
responsive pleading." A forfeiture complaint thus is subject to
dismissal if it fails to assert specific facts supporting an
inference that the property is subject to forfeiture under the
statute. United States v. $39,000 in Canadian Currency,
801 F.2d 1210, 1219 (10th Cir. 1986); United States v. $38,000 in
U.S. Currency, 816 F.2d 1538, 1548 (11th Cir. 1987). Section
881(a)(7) provides that real property is subject to forfeiture
if it was "used or intended to be used, in any manner or part,
to commit, or to facilitate the commission of, a violation of
this title punishable by more than one year's imprisonment. . .
." 21 U.S.C. § 881(a)(7).
In order to state a claim, the Government need demonstrate
only probable cause for a forfeiture. Under § 881, which
incorporates 19 U.S.C. § 1615, once the Government makes that
showing, the burden shifts to the claimant to prove that the
factual predicates for forfeiture have not been met: "the
burden of proof shall lie upon such claimant. . . . Provided,
That probable cause shall be first shown for the institution of
such suit or action." 19 U.S.C. § 1615. At this stage, the
claimant "must prove either that the property was not used
unlawfully . . . or that the illegal use was without the
claimant's knowledge or consent." United States v. The Premises
and Real Property at 4492 South Livonia Road, 889 F.2d 1258,
1267 (2d Cir. 1989) (citations omitted). To meet the probable
cause requirement, the Government's grounds for bringing the
complaint "must rise above the level of mere suspicion but need
not amount to what has been termed 'prima facie proof.'" U.S.
v. Banco Cafetero Panama, 797 F.2d 1154, 1160 (2d Cir. 1986).
See United States v. One 1978 Chevrolet Impala, 614 F.2d 983,
984 (5th Cir. 1980).
In order to survive a motion to dismiss, therefore, the
Government must demonstrate probable cause in its complaint
that the property itself — regardless of the activities of the
property's owner — was connected with narcotics activity.
United States v. Banco Cafetero Panama, 797 F.2d 1154, 1160 (2d
Cir. 1986); United States v. Property Known as 303 W. 116th St.
New York, 710 F. Supp. 502, 505 (S.D.N. Y. 1989). Here, the
Government's complaint satisfies the probable cause
requirement, because it alleges in detail numerous drug
transactions connecting the property with illegal narcotics
Claimants here allege that the complaint does not state a
claim and does not meet the particularity requirement of Rule
E(2) because although it recites facts connecting the two
leased stores with drug transactions, it does not link the
entire building or "fee interest" with such transactions.
Claimants argue that the leased stores downstairs and the
residential apartments upstairs are separate property
interests; thus the Government cannot seize the entire
building based on acts of the downstairs tenants. Claimants'
assertion that their property rights should not be curtailed
because of other people's illegal acts is a valid defense to
the forfeiture claim against their building. Nevertheless,
because the government need show only probable cause to state
a claim, this "innocent owner" defense is not relevant to a
motion to dismiss.
Under the statute, property may not be forfeited "to the
extent of an interest of an owner, by reason of any act or
omission established by that owner to have been committed or
omitted without the knowledge or consent of that owner."
21 U.S.C. § 881(a)(7). If claimants had no knowledge of the drug
activity in their building, they may assert such an"innocent
owner" defense at trial. But "lack of knowledge or consent by
the property owner is a defense in a forfeiture proceeding and
thus is not an essential element of the government's case. . .
. The plain meaning of this last clause of § 881(a)(7) clearly
places the burden on the property owner to come forward at the
forfeiture trial to prove his 'ignorance' defense. . . . As in
any typical civil action, such a defense need not be
anticipated in the complaint."*fn1 United States v. A Parcel
of Real Property Commonly Known as 3400-3410 W. 16th St.,
Chicago, 636 F. Supp. 142, 146 (N.D.Ill. 1986). See also United
States v. A Single Family Residence, 803 F.2d 625, 629 (11th
Cir. 1986); United States v. 124 East North Ave., Lake Forest,
Ill., 651 F. Supp. 1350 (N.D.Ill. 1987). That the Government
properly states a forfeiture claim does not deprive claimants
of a means to recover their property, as Congress has ensured
the return of property to owners who ultimately can show lack
of involvement in the illegal activities.
Claimants allege also that the government has not shown
probable cause connecting the entire building with the sale of
drugs, and that the Government has not stated with
particularity the facts showing a connection between the
entire building and the sale of drugs. The statute does not
require the Government to show a connection between an entire
property interest and the drug-related activities; rather, it
provides for the forfeiture of property that has been used "in
any manner or part" in criminal activities. Claimants'
argument that a leasehold in a building is completely separate
from the fee interest in the whole building, if accepted,
would weaken the force of the forfeiture statute, which was
designed to deter "drug transactions by attacking the
profitability of crime." United States v. Property Ident. as
3120 Banneker Dr. N.E., 691 F. Supp. 497, 501 (D.D.C. 1988).
Two lines of authority undermine claimants' assertion that
the fee interest in the building and the leasehold interests
in the stores should be treated separately under the
forfeiture statute. First, courts have allowed the forfeiture
of property based on illegal transactions involving tenants
— and not owners — of the property. See United States v. Real
Property Located at 2011 Calumet, Houston, 699 F. Supp. 108
Tex. 1988). Second, although the Second Circuit has declined
to resolve this issue, courts in other circuits consistently
have held that when one part of a piece of property is
connected with drug transactions, the whole property interest
is subject to forfeiture. See United States v. A Parcel of Land
With a Building Located Thereon at 40 Moon Hill Road,
884 F.2d 41, 44-45 (1st Cir. 1989); United States v. Santoro,
866 F.2d 1538, 1540 (4th Cir. 1989); United States v. Reynolds,
856 F.2d 675, 677 (4th Cir. 1988); See also United States v. Certain
Property in Auburn, Me., 711 F. Supp. 660 (D.Me. 1989); United
States v. 26.075 Acres, Located in Swift Creek Tp., 687 F. Supp. 1005
Concededly, our Court of Appeals, in United States v. 4492
South Livonia Road, recently questioned the constitutionality
of extending too far the forfeiture of real property. The Court
was "troubled by the failure of § 881(a)(7) to place an express
territorial limit on the extent of the real property that is
forfeitable," because if taken to an extreme, the statute could
result in forfeitures hugely disproportionate to the
geographical scope of the crimes. Livonia Road, 889 F.2d at
1270. "At some point, it seems that a forfeiture would cross
the line of condemning an instrumentality of crime and move
into the area of punishing a defendant by depriving him of his
estate." Livonia Road, 889 F.2d at 1270.
The Court of Appeals, however, declined to specify or locate
that point. Instead, the Court recognized that the language of
the statute itself authorizes the forfeiture of a whole fee
interest based on illegal activity on just one part of the
property, noting that "courts have construed the phrase 'in
any manner or part' to authorize the forfeiture of the whole
of the property if any 'part' was used for drugs; however,
since the quoted words modify the phrase 'is used, or intended
to be used,' it is possible to instead construe the statute as
authorizing forfeiture if the property is partially used for
drug transactions, but mostly for legitimate purposes."
Livonia Road, 889 F.2d at 1270. Thus, although the Court
suggested that § 881(a)(7) might be unconstitutional as applied
under certain circumstances, it acknowledged that the statute
itself provides for forfeiture of the entire property in cases
such as the one at bar.
The Court did recognize a possible interpretation of the
statute limiting forfeiture to "real estate of the size
usually associated with a lot or a tract of fairly limited
acreage, rather than whatever land area is encompassed within
the deed by which the owner acquired title," but it added that
in objecting to the territorial scope of a forfeiture, the
owner "may also have the burden of showing some appropriate
demarcation between what property is forfeitable and what is
not." Livonia Road, 889 F.2d at 1270. However, simply because
claimants here ...