of the notice of the forfeiture. 19 U.S.C. § 1608. Upon the timely filing of a claim and cost bond, the United States attorney for the district in which the seizure occurred is obliged to commence a forfeiture action. Id. If the claimant does not timely file a claim and cost bond, the appropriate customs officer shall declare the property forfeited. 19 U.S.C. § 1609(a). Such a declaration of forfeiture shall have the same force and effect as a final decree and order of forfeiture in a judicial forfeiture proceeding in a district court. 19 U.S.C. § 1609(b).
Instead of filing a claim and cost bond, a claimant may file a petition for the remission or mitigation of the forfeiture with the Treasury Department. 19 U.S.C. § 1618. If the Treasury Department finds that there was no intent to violate the applicable law, or finds mitigating circumstances to be present, it may remit or mitigate the forfeiture upon terms and conditions that it deems reasonable and just. Id.
Here, as discussed above, Plaintiffs elected to file a petition for remission or mitigation with the IRS rather than to initiate a federal court action by timely filing a claim and cost bond.
B. Jurisdiction of this Court
As a general rule, "a federal court lacks jurisdiction to review the merits of administrative forfeiture decisions once the administrative process has begun." United States v. One 1987 Jeep Wrangler Auto., 972 F.2d 472, 480 (2d Cir. 1992). "To hold otherwise would be to ignore the jurisprudential particularities of actions in rem". Id. at 479 (holding that "once the administrative process had begun, the district court loses subject matter jurisdiction to adjudicate the matter in a peripheral setting such as a [Federal Rule of Criminal Procedure] 41(e) motion") (citations omitted).
Moreover, the decision whether to remit or mitigate the forfeiture is the domain of the forfeiting agency, and once the agency has made a determination on the petition for remission or mitigation, courts generally have no power to review that decision. See Schrob v. Catterson, 948 F.2d 1402, 1412 n.9 (3d Cir. 1991) ("Generally, once the government has made an administrative determination on the petition, courts have no power to review that decision") (citations omitted); Averhart v. United States (In the Matter of Sixty Seven Thousand Four Hundred Seventy Dollars ($ 67,470.00), 901 F.2d 1540, 1543-44 (11th Cir. 1990) ("federal common law consistently has held that federal courts lack jurisdiction to review the merits of a forfeiture decision that the Secretary has reached in the exercise of his discretion . . . . Moreover, federal courts are generally prohibited from reviewing agency forfeiture decisions even where it is alleged that the Secretary abused his discretion") (citations omitted); LaChance v. Drug-Enforcement Admin. 672 F. Supp. 76, 79 (E.D.N.Y. 1987) ("remission of a forfeiture is a matter of grace and discretion delegated solely to the exclusive authority of the administrative agency"); see also 19 U.S.C. § 1618 (forfeiting agency "may remit or mitigate" the forfeiture "upon such terms and conditions as [it] deems reasonable and just").
Here, there is no dispute that an administrative process was initiated. Plaintiffs filed a timely petition for remission or mitigation of the forfeiture of the Mercedes, thereby triggering that process pursuant to 19 U.S.C. § 1618. In response to the Petition, the IRS advised Newberg that the Petition would be denied in the amount of $ 61,600 (corresponding to the amount of bank checks and money orders used in Plaintiffs' "structured" transaction) and that the balance of any proceeds from the sale of the vehicle would be remitted to Plaintiffs. Plaintiffs subsequently filed a Petition for Reconsideration, which was denied.
In sum, Plaintiffs, having pursued their administrative remedy by filing a petition for remission or mitigation, and having failed to file a claim and cost bond, are deemed to have elected to forego judicial review of the forfeiture pursuant to 19 U.S.C. § 1608. This Court, therefore, lacks subject matter jurisdiction. See LaChance, 672 F. Supp. at 80 ("plaintiff has elected his administrative remedy instead of a judicial proceeding, and this operates to foreclose his application before the court") (citations omitted).
Courts, however, have recognized an exception to the general rule that a federal court lacks subject matter jurisdiction to review the merits of an administrative forfeiture decision once the administrative process has begun if there was a procedural deficiency in the administrative process. See Jeep Wrangler, 972 F.2d at 480 ("an exception exists which allows an appellate court jurisdiction to review a decision of an administrative agency which amounts to a refusal to exercise its discretion. . . . Such review, however, is, limited to determining whether the agency followed the proper procedural safeguards when it declared [claimant's] property summarily forfeited'") (citations omitted). In other words, "if an administrative forfeiture is procedurally deficient, the court has jurisdiction to correct the deficiency." Onwubiko v. United States, 969 F.2d 1392, 1398 (2d Cir. 1992). The Second Circuit and courts within this Circuit have found subject matter jurisdiction to lie in actions concerning procedural deficiencies with respect to adequacy of notice and arbitrary denials of opportunities to be heard. See Jeep Wrangler, 972 F.2d at 480 (judicial review was permitted because DEA's decision to treat plaintiff's notice of claim as relating to an earlier notice of seizure not at issue was arbitrary and denied plaintiff an opportunity to be heard); Onwubiko, 969 F.2d at 1399 (judicial review permissible based on government's "Dickensian" requirement that plaintiff visiting the United States file $ 250 bond, despite the government's having seized all of plaintiff's money); Taft v. United States, 824 F. Supp. 455, 462 (D.Vt. 1993) (holding that "nowhere is this remedial exception more necessary than in the case where the initial notice to an interested party is inadequate to properly advise him or her of the appropriate procedures and remedies"); LaChance, 672 F. Supp. at 79 (stating that "limited exception exists to this rule of judicial non-review of agency forfeitures where it can be shown that the agency has refused to consider the petition for remission or that there are concessions indicating that the agency has a formalized invariable policy of denying petitions, and, in fact, failed to give any reason for denial of the petition in question").
Plaintiffs' First Claim, alleging that the Government's notice of seizure was inadequate, fits squarely in the aforementioned exception. Because Plaintiffs' Second, Third, Fourth and Fifth Claims do not allege procedural deficiencies (or claims analogous to procedural deficiencies), these claims do not fall within the recognized exception and are dismissed for lack of subject matter jurisdiction.
Finally, the Court observes that with respect to Plaintiffs' Fifth Claim, which alleges an excessive fine in violation of the Eighth Amendment, the Supreme Court's decision in Austin v. United States, U.S. , 113 S. Ct. 2801, 125 L. Ed. 2d 488 (1993), permitting a challenge to a civil forfeiture on Eighth Amendment grounds,
does not, as Plaintiffs argue, provide a basis for either subject matter jurisdiction or waiver of sovereign immunity. Nor does Austin authorize judicial review of an administrative forfeiture decision.
C. Sovereign Immunity
With respect to Plaintiffs' First Claim, the Government raises the issue of sovereign immunity as an additional bar to Plaintiffs' action. The doctrine of sovereign immunity holds that an individual may not sue the United States without its consent. See, e.g., Doe v. Civiletti, 635 F.2d 88, 93 (2d Cir. 1980) (citations omitted). Furthermore, a waiver of sovereign immunity "cannot be implied but must be unequivocally expressed". Id. (quoting United States v. Testan, 424 U.S. 392, 399, 96 S. Ct. 948, 953, 47 L. Ed. 2d 114 (1976)).
Plaintiffs, however, argue that sovereign immunity has been waived by § 702 of the APA, which provides for judicial review of agency action. The Government counters that § 702 of the APA is limited by § 701 of that statute, which provides that the APA does not apply where there are other "statutes [that] preclude judicial review." 5 U.S.C. § 701(a)(1). The Government further maintains that because the customs forfeiture statute (19 U.S.C. §§ 1602-1619) affords judicial relief with respect to forfeitures, it is a statute that "precludes judicial review" within the meaning of § 701(a)(1)'s exception to the APA's jurisdiction. Additionally, the Government argues that Plaintiffs' challenge to the forfeiture falls within another exception to the APA's jurisdiction: under § 701(a)(2), the APA does not apply to the extent that "agency action is committed to agency discretion by law." 5 U.S.C. § 701(a)(2).
Despite the Government's argument to the contrary, courts have recognized that in the context of civil forfeitures, § 702 does provide a waiver of sovereign immunity for claims relating to the adequacy of notice. See Sarit v. United States Drug Enforcement Admin., 987 F.2d 10, 17 (1st Cir.), cert. denied, U.S. , 114 S. Ct. 241, 126 L. Ed. 2d 195 (1993) ("courts have entertained challenges to the adequacy of notice, reasoning that the mechanism [for obtaining judicial relief provided in the forfeiture statute and regulations] is not available to a plaintiff who is not properly notified of the pending forfeiture") (citations omitted); Taft, 824 F. Supp. at 463 ("it is by now well-recognized that in the forfeiture context, section 702 provides a waiver for issues relating to the adequacy of notice") (citations omitted). The Court finds that the APA effectively waives sovereign immunity as to Plaintiffs' First Claim for relief with respect to inadequacy of notice.
Although the APA provides a limited waiver of sovereign immunity, the APA is not an independent source of subject matter jurisdiction. See Sterling v. United States, 749 F. Supp. 1202, 1209 (E.D.N.Y. 1990) (citing Califano v. Sanders, 430 U.S. 99, 104-06, 97 S. Ct. 980, 983-85, 51 L. Ed. 2d 192 (1977)). It is indisputable, however, that Plaintiffs' First Claim for relief raises a federal question pursuant to 28 U.S.C. § 1331. See Taft, 824 F. Supp. at 463; Sterling, 749 F. Supp. at 1209. This Court, therefore, may properly consider Plaintiffs' First Claim.
D. Summary Judgment
Rule 56(c) of the Federal Rules of Civil Procedure provides for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that 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).
On a motion for summary judgment, the moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). The substantive law determines which facts are to be considered material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In considering the moving party's motion for summary judgment, all ambiguities must be resolved and all inferences must be drawn in favor of the non-moving party. See Gallo v. Prudential Residential Servs. Ltd. Partnership, 22 F.3d 1219, 1223 (2d Cir. 1994). If the moving party meets its burden, the burden then shifts to the non-moving party to come forward with "specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). The non-moving party "may not rest upon the mere allegations or denials of the [non-moving] party's pleading, but the [non-moving] party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Id. "When no rational jury could find in favor of the nonmoving party because the evidence to support its case is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper." Gallo, 22 F.3d at 1224.
Plaintiffs' First Claim for relief alleges that the Government's failure to provide notice to all ten Plaintiffs constituted a denial of Plaintiffs' due process rights. The Supreme Court has held that when litigation is initiated to deprive individuals of their property, due process is satisfied by "notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652, 657, 94 L. Ed. 865 (1950).
Where, as here, the Government has satisfied their obligations under Rule 56(c) with respect to showing an absence of a genuine issue of material fact concerning actual notice of the impending forfeiture to Plaintiffs, Plaintiffs may not rest upon the mere allegations of lack of actual notice in the Complaint but Plaintiffs must set forth specific facts showing that there is a genuine issue for trial with respect to actual notice or lack thereof. Fed.R.Civ.P. 56(c) and 56(e). The parties do not dispute the fact that the vehicle was registered only in the name of Amaral. Plaintiffs effectively established a condition in which any party, public or private, interested in asserting a claim or lien would be expected to direct any such notice to Amaral as the owner or designee of the owner. Further, while the Complaint alleges that no plaintiff other than Amaral received actual (or constructive) notice of the forfeiture, Plaintiffs have submitted no evidence to show that there is an issue of fact with respect to actual notice in response to the Government's motion. Moreover, Plaintiffs (1) by filing the Petition with the IRS, (2) by the statements made in the Petition, and (3) by their admissions in their Memorandum of Law, demonstrate that they had actual notice of the impending forfeiture.
The Court notes that the Government did not notify any of the Plaintiffs other than Amaral of the forfeiture
and that the Government does not dispute Plaintiffs' statements that the Government had knowledge of the other Plaintiffs and their addresses prior to May 15, 1992. Nevertheless, the Court is constrained to follow the decision in Jeep Wrangler, 972 F.2d 472, in which the Second Circuit held:
. . . appellant's argument that he was denied sufficient notice as to the second seizure is counter-intuitive to the facts as presented. If the claimant responded to the second seizure with a Notice of Claim, as he contends, he attests to the fact that he had received actual notice of the seizure. . . . the Court holds that in this instance, by virtue of [claimant's] admitted actual knowledge of the seizure, the lack of the latter publication notice did not arise to the level of a due process violation.