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United States v. $30

United States District Court, D. Maryland

October 13, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
$30, 020 IN U.S. CURRENCY Defendant.

          MEMORANDUM

          Ellen Lipton Hollander, United States District Judge.

         Plaintiff United States of America filed a Verified Complaint for Forfeiture, pursuant to 21 U.S.C. § 881(a)(6), with respect to $30, 020.00 in U.S. currency that was seized from a Priority Mail package in August 2016. ECF 1 (Complaint). It is supported by the Declaration of Darshelle Thombs, a U.S. Postal Inspector. ECF 1-1.

         The package was addressed to "Gabe Newman" at an address in Sacramento, California. Id. at 1. It had a return address label for "Mel Newman" in Stevenson, Maryland, for whom no records were found. Id. The package was seized at a postal facility in Maryland following an alert by a drug detection dog, which indicated the presence of a controlled substance. ECF 1-1 at 2. A search warrant was subsequently obtained. Id. The United States claims that the currency is subject to forfeiture because it was intended to facilitate a violation of the Controlled Substances Act, 21 U.S.C. § 841. ECF 1, ¶7.

         Self-represented claimant Karla S. Newman, the mother of the addressee, Gabriel Newman, submitted a Verified Claim for the currency on March 15, 2017. ECF 3. She asserted that her son died in September 2016 and, as his next of kin, she is entitled to claim the money on his behalf. Id. at 1. Also on March 15, 2017, Ms. Newman filed an Answer to the Complaint (ECF 4), alleging that her son (the "Decedent") was a semi-professional gambler who frequently mailed money because he "cannot carry more than $10, 000.00 on his person when flying" (id. at 1), and he "frequently shipped his gambling stake money ahead of time." Id. at 2. She also asserted that she had no reason to believe the money was connected to the drug trade. Id. at 2.

         On September 13, 2017, the United States filed a Motion to Strike the Claim and Answer of Karla Newman, pursuant to Rule G(8)(c)(i)(B) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions, claiming Ms. Newman lacks standing to assert a claim to the money. ECF 11 ("Motion").[1] Rule G(8)(c)(i)(B) provides: "At any time before trial, the government may move to strike a claim or answer because the claimant lacks standing." Ms, Newman opposes the Motion. ECF 12 ("Opposition"). The United States has replied. ECF 13 ("Reply").

         No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I shall deny the Motion.

         Discussion

         A.

         A claimant in a civil forfeiture action has Article III standing if she has an ownership, possessory, or security interest in the specific property that is the subject of the forfeiture action. See United States v. $8, 440, 190.00 in U.S. Currency, 719 F.3d 49, 57 (1st Cir. 2013); United States v. Miscellaneous Jewelry, 667 F.Supp. 232, 235-36 (D. Md. 1987), aff'd sub nom. United States v. Walker, 889 F.2d 1317 (4th Cir. 1989).

         The parties agree that the Decedent was domiciled in California at the time of his death and therefore California law applies to the standing inquiry. ECF 11 at 5; ECF 12 at 3. See United States v. Real Prop. Located at 5208 Los Franciscos Way, Los Angeles, Cal, 385 F.3d 1187, 1191 (9th Cir. 2004) ("Ownership interest is determined under the law of the state in which the interest arose-here, California.").

         As the United States acknowledges (ECF 11 at 3), where the claimant asserts factual allegations supporting a possessory interest, they must be taken as true at the motion to dismiss stage. See United States v. $133, 420.00 in U.S. Currency, 672 F.3d 629, 638 (9th Cir. 2012). Likewise, in the early stages of the claim proceedings, a claimant need only show a colorable claim of an ownership or possessory interest in the defendant property to establish standing. See United States v. $8, 440, 190.00 in U.S. Currency, 719 F.3d at 57.

         In its Motion, the government asserts that Ms. Newman lacks standing on two grounds: First, that she does not have legal title to the property because she is an heir of the Decedent rather than the personal representative of his estate, and because the administration of the estate may not yet be complete. ECF 11 at 5-7. Second, the government argues that even if Ms. Newman did have legal title to the Decedent's estate, there is no evidence that the Decedent himself had a legal interest in the package and its contents, and Ms. Newman cannot assert the Decedent's claim if he had none. Id. at 8.

         In support of its first argument, the United States cites Cal. Prob. Code § 8400(a)-(b), which provides that "[a] person has no power to administer the estate until the person is appointed personal representative and the appointment becomes effective." And, under Cal. Prob. Code § 9650, only "[t]he personal representative has the right to . . . all the property of the decedent to be administered in the decedent's estate, " until a court orders the discharge of the, personal representative upon the final distribution. Cal. Prob. Code § 12250.

         Further, the United States asserts (ECF 11 at 5-6) (emphasis in original): "A decedent's heirs, therefore, are presumptively entitled to a decedent's property, subject to the administration of the decedent's estate by the personal representative (see Cal. Prob. Code ยง 7000), who is entrusted with the duty to protect the interests of all of the beneficiaries or creditors who have an interest in the decedent's estate. In other words, the ...


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