United States District Court, Eastern District of New York
June 29, 1990
UNITED STATES OF AMERICA, PLAINTIFF,
UNITED STATES CURRENCY IN THE AMOUNT OF TWENTY THREE THOUSAND FOUR HUNDRED EIGHTY ONE DOLLARS, ($23,481), MORE OR LESS, DEFENDANT.
The opinion of the court was delivered by: Bartels, District Judge.
MEMORANDUM-DECISION AND ORDER
In this in rem forfeiture action arising under 31 U.S.C. § 5316
and 5317, the United States has moved, and
intervenor-claimants of the defendant currency have
cross-moved, for summary judgment under Fed. R.Civ.P. 56. In
addition, the claimants have moved for a change of venue under
28 U.S.C. § 1404(a) claiming forum non conveniens, and for
dismissal of the action for lack of in rem jurisdiction under
Fed.R. Civ.P. 12(b)(2).
On November 9, 1988, at John F. Kennedy International Airport
("JFK") in Queens, New York, Joseph A. Ojo was an outbound
passenger boarding Nigerian Airlines Flight 851 en route to
Nigeria. Before boarding the flight, Ojo was asked to fill out
a customs form in which he was required to report, pursuant to
31 U.S.C. § 5316, whether he was transporting monetary
instruments in excess of $10,000. Ojo declared only $4,000. Due
to Ojo's nervous manner and bulky appearance, the customs
official conducted a search of Ojo and found he was carrying
the defendant currency in the amount of $23,481. Ojo was
arrested, and the defendant currency was seized at JFK and
transferred by U.S. Customs officials to United States Customs
Service office in Manhattan.
Ojo subsequently plead guilty before Chief Judge Platt to
violating 31 U.S.C. § 5316 and 5322, was sentenced to three
years probation, and was fined $25,050.
On August 10, 1989, the United States as Plaintiff filed a
Verified Complaint In Rem
against the money that was seized from Ojo at JFK — i.e., the
defendant United States Currency in the amount of $23,481 — to
condemn and forfeit the use of the currency in accordance with
31 U.S.C. § 5316 and 5317.*fn1 On the same day, a Warrant for
Arrest for Article In Rem was issued to the Marshal of the
Eastern District of New York. On October 2, 1989, in Manhattan,
the currency was formally arrested pursuant to the warrant, and
it remains stored in a bank account maintained by the U.S.
Customs Service in the Southern District of New York. Nine
persons, including Ojo, have intervened in the present case,
claiming that various portions of the defendant currency belong
to them. The claimants all live in or near Maryland.
The Plaintiff argues that it is entitled to summary judgment
because the undisputed facts show that Ojo was attempting to
transfer the defendant United States currency from the United
States to a place outside the United States without completing
the requisite currency reporting form in violation of 31 U.S.C. § 5316,
thus entitling the Plaintiff to the forfeiture of the
defendant currency as a matter of law under 31 U.S.C. § 5317.
On the other hand, the eight claimants other than Ojo have
submitted affidavits stating that they individually gave
various sums of money to Ojo to transport to their families in
Nigeria. The claimants argue that this Court lacks jurisdiction
because jurisdiction was destroyed when the currency was
transferred from the Eastern District to the Southern District;
that, for the convenience of the claimants, a change of venue
to the District of Maryland would be proper; and that, since
Ojo was not acting within the scope of his authority when he
violated § 5316, they are entitled to summary judgment as a
matter of law.
United States district courts are court of limited
jurisdiction whose authority to hear a case must be based upon
both a constitutional grant and congressional authorization. 4
Wright & Miller, Federal Practice & Procedure, § 1063 at 226
(1987). Therefore, before turning to the forfeiture claims, the
question of jurisdiction must be addressed.
This Court has subject matter jurisdiction over this
forfeiture action pursuant to 28 U.S.C. § 1345, which grants
the district courts exclusive jurisdiction over all actions in
which the United States is a plaintiff, and by 28 U.S.C. § 1355,
which provides that the District Court shall have
original exclusive jurisdiction of all actions or proceedings
for forfeitures under any Act of Congress. 28 U.S.C. § 1345
(1988); 28 U.S.C. § 1355 (1988); United States v. One Parcel of
Real Property with Improvements Thereon, Known as 5708 Beacon
Drive, Austin, Texas, Situated In Travis County, Texas,
712 F. Supp. 525, 526 (S.D. Miss. 1988).
However, a grant of authority by Congress over a particular
subject matter or type of action is not enough for a court to
exercise jurisdiction over a particular controversy. More is
necessary. A federal court must also have jurisdiction over the
defendant's person, his property, or the res that is the
subject of the suit. Wright & Miller at 224. See, e.g., Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85
L.Ed.2d 528 (1985); World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Shaffer v.
Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977);
Shoe v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95
(1945). Where the defendant is a "res" or thing, for the Court
to exercise jurisdiction "the only essentials . . . are
presence of the res within its borders, its seizure at the
commencement of the proceedings and the opportunity of the
owner to be heard." Pennington v. Fourth Nat'l Bank,
243 U.S. 269, 272, 37 S.Ct. 282, 61 L.Ed. 713 (1917).
Thus, since in rem jurisdiction is predicated upon the
presence of the res within the judicial district, see Beale,
Harv. L.Rev. 107, 108 (1913), the question presented by the
claimants is whether this Court's in rem jurisdiction was
destroyed when the res was removed from this district after it
was seized.*fn2 Since this is a case involving customs, in
deciding whether jurisdiction exists in this forfeiture action,
reference is to the applicable customs law. United States of
America v. One 1974 Cessna Model 310R Aircraft, Serial No.
310R0203, F.A.A. Registration No. N5083J, 432 F. Supp. 364, 368
In the present case the governing statute is 19 U.S.C. § 1605.
Section 1605 provides:
All vessels, vehicles, aircraft,
merchandise, and baggage seized under the
provisions of the customs laws . . ., unless
otherwise provided by law, shall be placed and
remain in the custody of the appropriate customs
officer for the district in which the seizure was
made to await disposition according to law.
Pending such disposition, the property shall be
stored in such place as, in the custom officer's
opinion, is most convenient and appropriate with
due regard to the expense involved, whether or not
the place of storage is within the judicial
district or the customs collection district in
which it was seized; and the storage of the
property outside the judicial district or customs
collection district in which it was seized shall in
no way affect the jurisdiction of the court which
would otherwise have jurisdiction over such
19 U.S.C. § 1605 (1988). Although the claimants argue that this
statute specifically addresses "vessels, vehicles, merchandise
and baggage" which would require special storage areas, and
thus is not applicable in this case involving money,
"merchandise" is defined as "goods, wares, and chattel of every
description . . . and monetary instruments," 19 U.S.C. § 1401(c)
(1988) (emphasis added)*fn3
, and the phrase "monetary
instruments" is further defined to include United States
currency, 31 U.S.C. § 5312(a)(3)(A) (1988). Therefore, when the
currency was transferred from the territory of the Eastern
District of New York, the in rem jurisdiction of this Court was
in no way affected since the currency was first seized in this
district by United States customs officers and was thereafter
removed to the territory of the Southern District of New York
The next question is the matter of venue and it is clear
that under 28 U.S.C. § 1395(b), the venue for a civil
proceeding for forfeiture of property is properly laid in the
district where such property is "found." 28 U.S.C. § 1395(b)
(1988). Since the currency was "found" in this district, the
only district where venue is proper in this civil in rem
forfeiture action against
the United States currency is the Eastern District of New
York. See United States v. $358,613.00 United States Currency,
703 F. Supp. 452, 454 (W.D.N.C. 1989); 1A J. Moore, Moore's
Federal Practice ¶ 0.345[6.-4] at 4401-02 (1989). Thus, a
transfer of venue due to forum non conveniens would be
inappropriate because venue is proper in no other district.
In this case, both parties move for summary judgment. Rule
56(c) of the Federal Rules of Civil Procedure provides that
summary judgment is appropriate where "there is no genuine
issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law." Fed.R. Civ.P.
56(c). In a summary judgment motion, it is not the function of
the Court to weigh the evidence presented and determine the
truth of the matter, but, to determine whether there is a
genuine issue for trial. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).
Forfeiture statutes, which derive from English common law,
generally provide that an owner's interest in the property may
be forfeited even though the owner was not a participant in
and had no knowledge of the illegal acts which brought about
the forfeiture. See, United States v. Stowell, 133 U.S. 1,
13-14, 10 S.Ct. 244, 246, 33 L.Ed. 555 (1889); Goldsmith-Grant
Co. v. United States, 254 U.S. 505, 511, 41 S.Ct. 189, 191, 65
L.Ed. 376 (1921); Various Items of Personal Property v. United
States, 282 U.S. 577, 580-81, 51 S.Ct. 282, 283, 75 L.Ed. 558
(1931). Once the offense attaches to the res (here, the
currency), it is without regard to the personal innocence of
the owner because it is the res that is primarily considered
the offender. Goldsmith-Grant, 254 U.S. at 511, 41 S.Ct. at
There are, however, two exceptions to this general rule. The
first was intimated in Goldsmith-Grant and then later confirmed
in Van Oster v. Kansas, 272 U.S. 465, 467, 47 S.Ct. 133, 134,
71 L.Ed. 354 (1926). This exception, not applicable in the
present case, exists where the object is stolen or taken from
the owner without his consent. Id.
A second exception was suggested in dicta by the Supreme
Court in Calero-Toledo v. Pearson Yacht Leasing Co.,
416 U.S. 663, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974). There, the Court
suggested that the property of an owner could not properly be
forfeited where the owner
proved not only that he was uninvolved in and
unaware of the wrongful activity, but also that
he had done all that reasonably could be expected
to prevent the proscribed use of his property;
for, in that circumstance, it would be difficult
to conclude that forfeiture served legitimate
purposes and was not unduly oppressive.
Calero-Toledo, 416 U.S. at 690-91, 94 S.Ct. at 2095. However,
this suggested exception was adopted by the United States Court
of Appeals for the Second Circuit in United States v. One
Tintoretto Painting, 691 F.2d 603, 607 (2d Cir. 1982). The
Tintoretto court stated that the history of forfeiture "clearly
demonstrates that its principal purpose was to protect
government revenues, not to impose punishment without fault on
those who are acting in good faith and without negligence". Id.
Recognizing the existence of the second exception in this
circuit,*fn4 the next question is whether the claimants in
this case have raised a sufficient issue of fact as to whether
they fall within this exception. Even assuming the eight
claimants other than Joseph Ojo were not aware of and were not
involved with Mr. Ojo's failure to report moneys in excess of
as required by 31 U.S.C. § 5316, their innocence is not enough.
These eight claimants "must present evidence . . . that [they]
did all that reasonably could be expected to prevent this
illegal act involving property [they] claim as [their] own."
Id. (citation omitted).
In support of their assertion that they meet this
requirement, the claimants in their Memorandum of Law in
opposition to plaintiff's motion for summary judgment, state
that if afforded the chance they will testify that Ojo assured
them that all precautions would be taken with the money,
including conforming to customs regulations.*fn5 This unsworn
statement alone, however, is not sufficient to raise a genuine
issue of material fact. It is now well-settled that legal
memoranda and oral argument are not evidence and "cannot by
themselves create a factual dispute sufficient to defeat a
summary judgment motion where no dispute otherwise exists."
British Airways Bd. v. Boeing Co., 585 F.2d 946, 952 (1978).
See also Transurface Carriers, Inc. v. Ford Motor Co.,
738 F.2d 42, 46 (1st Cir. 1984); Watts v. United States, 703 F.2d 346,
353 (9th Cir. 1983). Therefore, as the claimants' affidavits
fail to establish that they did all they could to prevent the
illegal act in connection with their property, the Plaintiff's
motion for summary judgment with respect to these eight
claimants is granted.
The claim against Joseph Ojo as to the money that Ojo claims
as his own is also granted summarily. Ojo was convicted
pursuant to 31 U.S.C. § 5316 and 5322, and he is therefore
precluded from creating a factual issue as to his knowledge of
the disclosure requirements in this civil action to forfeit the
currency. See United States v. Podell, 572 F.2d 31 (2d Cir.
1978); United States v. $26,660 In United States Currency,
777 F.2d 111 (2d Cir. 1985). There is, therefore, no genuine issue
of material fact with regard to Mr. Ojo's claim and the
Plaintiff is entitled to summary judgment as a matter of law.
In light of the foregoing, Plaintiff's motion for summary
judgment under Fed.R. Civ.P. 56 is GRANTED, and claimants'
cross-motions under 28 U.S.C. § 1404(a), Fed.R.Civ.P. 12(b)(2),
and Fed.R.Civ.P. 56 are DENIED. The Clerk of the Court is
directed to enter judgment for plaintiff.