The opinion of the court was delivered by: Irving Ben Cooper, District Judge.
The United States of America (the "government") commenced
this civil in rem forfeiture action on October 21, 1988 by
filing a verified complaint against the premises and real
property located at 710 Main Street, Peekskill, New York (the
"property"). Jesse James Bunch filed the only claim to the
property in opposition to the forfeiture action. In an opinion
dated August 13, 1990, we dismissed the government's complaint
and ordered the property returned to Mr. Bunch ("the August 13
Opinion"). 744 F. Supp. 510 (S.D.N.Y. 1990). The government
timely moved for 1) reargument of the August 13 Opinion
pursuant to Rule 3(j) of the Civil Rules for the United States
District Courts for the Southern and Eastern Districts of New
York ("Local Rule 3(j)"); 2) a new trial pursuant to Fed.
R.Civ.P. 59(b); and 3) a stay of enforcement of the judgment
filed August 17, 1990 ("the August 17 Judgment"), pursuant to
Fed.R.Civ.P. 62(b), pending the disposition of the other two
motions, or pending appeal. Mr. Bunch opposed the motions.
On September 24, 1990 we granted the government's application
for the stay of enforcement of the August 17 Judgment, and on
September 25 we granted the motion for reargument; oral
arguments were heard on October 18, 1990. We shall address each
motion separately hereinbelow.
The facts of this case are set forth at length in the August
13 Opinion; familiarity with them is assumed.
Motion to Vacate the August 17 Judgment
The government contends that consideration of the Second
Circuit opinion in United States v. 141st Street Corp. ("141st
Street Corp."), 911 F.2d 870 (2d Cir. 1990), rendered four days
after our August 13 Opinion, would change our disposition of
the instant matter. In 141st Street Corp., our Circuit Court
addressed the "lack of consent" issue in its discussion of the
"innocent owner" defense contained in 21 U.S.C. § 881(a)(7)
(1988); in so doing, the Court applied a standard to determine
lack of consent which varies from the standard we applied in
the August 13 Opinion. Having found that the strict standards
for a motion for reargument had been met, see Ruiz v. Comm'r of
Dept. of Transp. of City of New York, 687 F. Supp. 888, 890
(S.D.N.Y. 1988); B.A.M. Brokerage Corp. v. New York,
724 F. Supp. 146, 147 (S.D.N.Y. 1989); H. Sand & Co., Inc. v.
Airtemp Corp., 743 F. Supp. 279 (S.D.N.Y. 1990) (Cooper, J.), we
granted, on September 25, 1990, the government's motion for
In 141st Street Corp., the claimant, the corporation's
president and principal shareholder, acted as the managing
agent of the defendant property, and his uncle, the
superintendent, also performed functions associated with a
managing agent. 911 F.2d at 873. Police had received complaints
of narcotics trafficking in connection with 24 of the
building's 41 apartments. Crack vials and broken pipes designed
for smoking crack were observed in the hallways and common
areas, and "lookouts" and "steerers" were observed in front of
and in the lobby of the building. Several police officers
called the claimant on at least eight different occasions,
leaving messages each time. Police also left at least three
messages with the claimant's uncle, and one police officer
wrote a letter to the claimant wherein he expressed his desire
to discuss with the claimant the narcotics activity at the
building. The claimant did not respond to any of the attempts
by the police to contact him. The police thereafter chose not
to contact the claimant because they felt that "'the owner was
possibly aware of [the narcotics trafficking], if not working
directly with the narcotics traffickers in th[e] building.'"
Additionally, police discovered an alarm system, wired from
a box on the roof to several apartments in the building, which
was designed to alert drug dealers to police presence at or
near the building, and narcotics purchases were made by
undercover police in 17 of the building's 41 apartments.
When the police raided the building a first time, executing
search warrants for eight apartments, they arrested twenty-six
people and recovered narcotics, money and weapons. Two weeks
later, the police executed search warrants for nine additional
apartments, wherein they arrested another twelve people and
recovered more contraband. At the same time, law enforcement
officers executed a seizure warrant for the entire building.
The evidence adduced at trial in 141st Street Corp.
established that the claimant took no affirmative steps to curb
the drug activity until after the police first raided the
property; moreover, the only action he took after the first
raid was to instruct his uncle not to accept rent from those
tenants who had been arrested. Id. at 879. "The jury concluded
either that Realty Corp. knew of the narcotics activity before
[the first raid] and took no steps to stop it, or that Realty
Corp.'s response after learning of the raid was inadequate."
Id. at 879-80.
In contrast to the claimant in 141st Street Corp., Mr. Bunch
introduced evidence at trial demonstrating that he took steps
to terminate the problem with drugs at the property. We found
that although he knew of the drug activity, he made a number of
attempts to keep it from the property. Based on the credible
evidence admitted at trial, we concluded that Mr. Bunch, in an
attempt to rid the property of illegal drug activity:
fired two bartenders after they were arrested on
separate occasions on drug-related charges;
locked the restrooms and restricted access thereto
to patrons who requested the key from the
ultimately closed the restrooms entirely and only
reopened them upon orders from the Department of
initiated a policy of allowing one person in the
restroom at a time, for one minute per person,