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LOBZUN v. U.S.

September 9, 2004.

KYM LOBZUN, Plaintiff,
v.
UNITED STATES OF AMERICA Defendant.



The opinion of the court was delivered by: PAUL PLUNKETT, Senior District Judge

MEMORANDUM OPINION AND ORDER

Kym Lobzun ("Lobzun") has moved for return of property pursuant to Federal Rule of Criminal Procedure ("Rule") 41(g) and the equitable jurisdiction of this Court. The government has filed a response. For the following reasons, Lobzun's motion is denied.

BACKGROUND*fn1

  On September 3, 2003, law enforcement officers from the United States Drug Enforcement Administration (the "DEA") seized $379,931 in United States currency from Lobzun in Chicago. At the time of the seizure, Lobzun received a form entitled "Address Acknowledgement Receipt For Seized Property" (the "Receipt"). (Michael Decl. Ex. A.) The Receipt listed the amount of currency seized, the date of the seizure, the DEA case number and the address of the DEA's Office of Chief Counsel of the Asset Forfeiture Section. The Receipt advised Lobzun that the DEA may seek forfeiture of the seized currency and, in that case, the DEA would provide her with written notice. To facilitate receipt of the notice, the Receipt directed Lobzun to write her mailing address in the space provided. She indicated that her mailing address was 257 W. King Edward, Vancouver, British Columbia, V54 2J1. The Receipt also stated that any questions regarding the DEA's notice of intent to forfeit be directed to the Office of Chief Counsel, Asset Forfeiture Section. No criminal charges were filed against Lobzun relating to the seizure of the funds.

  In early October 2003, Lobzun received at least two telephone messages from DEA Special Agent Ken Pavlina ("Pavlina") of the Chicago Office. Lobzun's attorney in Canada, John Conroy ("Conroy") returned Pavlina's telephone calls. Conroy says that he told Pavlina he was representing Lobzun and gave Pavlina his contact information. (Conroy Decl. ¶ 5.) Pavlina told Conroy that the DEA would send a notice of seizure ("Notice") pertaining to the seized funds. (Id.)

  The DEA sent a Notice to Lobzun by certified mail, return receipt requested. The Notice was addressed to Lobzun at 257 W. King Edward, Vancouver, British Columbia, V54 2J1, the same address that Lobzun provided on the Receipt. The Notice provided information about the administrative forfeiture procedures that were underway and the process to contest them. A request for remission or mitigation of the forfeiture had to be filed within thirty days of receipt of the Notice. A claim to contest the forfeiture had to be filed by November 11, 2003. The certified mail return receipt indicates that the Notice was signed for on November 3, 2003. The signature on the return receipt, in the space marked "signature of addressee," is illegible. Lobzun says she resided at 257 W. King Edward on November 3, 2003.

  On December 22, 2003, Conroy called Pavlina and left him a message, telling Pavlina that Lobzun had not received any notice regarding the seized funds. Pavlina returned Conroy's call on December 29 and left a message stating that the DEA's records showed that Lobzun received the Notice on November 3, 2003. (Conroy Decl. ¶ 6.) The DEA received no claims as to the seized funds and so the funds were administratively forfeited on January 5, 2004.

  Pavlina left Conroy a voice mail message on January 7, 2004, to confirm that Conroy had received Pavlina's prior message. Conroy returned Pavlina's call, and left him a voice mail message saying that Lobzun still had not received any notice about the seized currency and asking for Pavlina to provide him with a copy of the Notice that was sent. The next day, Pavlina faxed a copy of the DEA Notice used in another case. Also on January 8, 2004, the Asset Forfeiture Section of the DEA sent Conroy a copy of the Notice sent to Lobzun and a copy of the certified mail return receipt used in connection with the Notice. The correspondence from the Asset Forfeiture Section was not received by Conroy until January 28, 2004.

  Shortly after January 8, Conroy consulted an attorney based in California, David Michael ("Michael"). Michael contacted an attorney in the Asset Forfeiture Section ("DEA Forfeiture Counsel") by phone and then by mail on January 22, 2004, stating that Lobzun never received notice of the forfeiture and that the DEA was told by Conroy that Lobzun never received it. Michael asked for copies of all the documentation relating to the matter.

  After having received copies of the documentation, Michael drafted a second letter to the DEA Forfeiture Counsel on February 9, 2004. In his letter, Michael noted that the signature on the certified mail return receipt was not that of Lobzun and reminded the DEA that it had been aware since November 3, 2003, that Lobzun never received the Notice that was sent. Michael requested that the DEA set aside the administrative forfeiture and allow Lobzun a reasonable time to file an administrative claim. The DEA Forfeiture Counsel responded, writing that although the notice provided to Lobzun was legally adequate, the DEA would give Lobzun thirty days to file a petition for remission of the funds. The letter also stated that if Lobzun filed an administrative claim, it would be treated as late and processed accordingly. Lobzun then filed this motion.

  Discussion

  The first matter we must address is whether we have jurisdiction to consider Lobzun's motion. Our court of appeals has said that the jurisdiction of the district courts over forfeitures of certain types of property is limited. Linarez v. United States, 2 F.3d 208, 211-12 (7th Cir. 1993). One of these types of property is United States currency of $500,000 or less. See 19 U.S.C. § 1607 (West 1999). When the agency that seized the property initiates administrative forfeiture proceedings, the district court is divested of its jurisdiction over those proceedings. Id. Unless an interested party files a claim of interest and posts a bond with the agency within twenty days of the date of the first publication of the notice of seizure pursuant to 19 U.S.C. § 1608 and 21 C.F.R. § 1316.76, the forfeiture process continues administratively and the district court remains without jurisdiction over the process. Linarez, 2 F.3d at 211-12.

  In this case, the DEA initiated administrative forfeiture proceedings of the $379,931 seized, and Lobzun failed to file a claim of interest in the property and post a bond. Therefore, we have no jurisdiction to inquire into the propriety of the forfeiture itself. See Chairez v. United States, 355 F.3d 1099, 1101 (7th Cir. 2004) (because plaintiff never filed a claim for the seized money before the forfeiture, the district court could not inquire into the propriety of the forfeiture). Lobzun does not, however, directly challenge the forfeiture; rather, she argues that the government's notice to her regarding the forfeiture did not satisfy constitutional requirements of due process. District courts always have "jurisdiction to review whether the notice given in the administrative forfeiture proceeding afforded the claimant constitutional due process." Garcia v. Meza, 235 F.3d 287, 290 (7th Cir. 2000). Accordingly, we can consider Lobzun's motion.*fn2

  "An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is 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 (1950). See also Garcia, 235 F.3d at 291 (reaffirming application of Mullane standard for due process challenges to administrative forfeiture proceedings). The adequacy of the notice is typically measured at the time the notice was sent. See Krecioch v. United States, 221 F.3d 976, 980 (7th Cir. 2000). Actual notice is not required, "so ...


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