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United States v. Norwood

April 20, 2010

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
LARRY W. NORWOOD, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Central District of Illinois. No. 06-30041--001-Jeanne E. Scott, Judge.

The opinion of the court was delivered by: Posner, Circuit Judge.

SUBMITTED MARCH 17, 2010

Before POSNER, MANION, and HAMILTON, Circuit Judges.

When the defendant, Larry Norwood, was arrested on April 24, 2006, state and federal law enforcement officers took a number of items of personal property from his possession and made a list of them. The list included a Rolex watch, a bracelet, rings, and lighters. (The government does not argue that the items were related to his drug offense.) At the same time, the officers seized the truck he was driving, and the next day they delivered both the truck, and two bags described as containing personal property of his, to a trucking company for safekeeping. But the contents of the bags were not itemized in the delivery document.

When Norwood later asked the company to return his personal property, he was met with a denial that the company had any of it. This was in the midst of the criminal proceeding against him (he had been indicted in May 2006, the month following his arrest), and he complained about his missing property to the district judge in a letter the judge received on December 14, 2006. The judge sent copies of the letter to Norwood's criminal lawyer, directing him to determine what steps should be taken to address Norwood's concerns about his property. It's unclear what if anything the lawyer did in response to this direction; he never submitted anything to the court.

On May 17, 2007, shortly after pleading guilty but before being sentenced, Norwood moved the district court to order the government to return his missing property. Rule 41(g) of the Federal Rules of Criminal Procedure authorizes the judge presiding in a criminal case to order the government to return property of the defendant that is in its possession if it has no reason to continue holding the property. (The Rule 41(g) proceeding may be maintained as an ancillary proceeding in the district court even after the criminal proceeding ends. Okoro v. Callaghan, 324 F.3d 488, 490 (7th Cir. 2003), and cases cited there; see also United States v. White, 582 F.3d 787, 806 n. 3 (7th Cir. 2009).) The government filed a written response to Norwood's motion two weeks later, stating that it had inquired of the Drug Enforcement Administration and the Illinois State Police and neither agency had Norwood's property.

At a hearing on July 26, the judge authorized Norwood to proceed pro se for the remainder of his case (though he hadn't yet been sentenced), and discharged his lawyer. The judge also directed the government to inquire further into the whereabouts of Norwood's property. At his sentencing hearing, on August 13, the government reported that its further investigation suggested that the trucking company might have the property. The judge told Norwood she couldn't help him recover it if it was no longer in the government's possession. She suggested he sue the state police in the Illinois court of claims.

On November 21, 2008, while his appeal (later dismissed) from the criminal judgment was pending, Norwood filed a motion in the district court seeking restitution from the government of the value of the missing property, which he claimed to be $9,995. The district judge denied the motion on May 8, 2009, on the ground that Rule 41(g) does not authorize monetary relief. (That is the order from which the present appeal has been taken.) She was right about that. E.g., Okoro v. Callaghan, supra, 324 F.3d at 491; Adeleke v. United States, 355 F.3d 144, 151 (2d Cir. 2004); United States v. Hall, 269 F.3d 940, 943 (8th Cir. 2001). The rule doesn't mention monetary relief; and it would be odd for a court in a criminal proceeding to be authorized to award damages to the defendant as a remedy for an irregularity committed by law enforcement officers-especially to award damages against the government, in the teeth of the long line of cases which hold that waivers of federal sovereign immunity are not to be lightly presumed, e.g., McMahon v. United States, 342 U.S. 25, 27 (1951), though it is unclear why this should be so; "the Supreme Court has given no rationale for the creation of [this] clear-statement rule." Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3654, p. 336 (3d ed. 1998); see also United States v. Nordic Village, Inc., 503 U.S. 30, 42-44 (1992) (dissenting opinion).

Norwood's motion for restitution did not mention, and in fact was unrelated to, Rule 41(g), as it sought monetary relief rather than the return, no longer possible, of his property by the government. The motion did not indicate a ground for the relief sought. The government responded on November 26, arguing that the court couldn't award damages in a criminal case and, even if it could, Norwood had no claim under the Federal Tort Claims Act. He replied on May 7, 2009, that he had a good claim under both the tort claims act and the Tucker Act. But he muddied the waters by arguing that the court's jurisdiction over his Rule 41(g) motion had not ended when the criminal proceeding had ended-which was true, but irrelevant, because he was no longer seeking the return of the property. The next day the district judge denied the motion for restitution on the ground that the court could not award damages in a criminal case. She did not mention Norwood's tort claims act or Tucker Act arguments. He renews them in this court.

The tort claims act authorizes suits against the United States for damages for "loss of property . . . caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment." 28 U.S.C. § 1346(b)(1). There is an exception, however, for the "detention of any . . . property by any . . . law enforcement officer." 28 U.S.C. § 2680(c); see Kosak v. United States, 465 U.S. 848 (1984). (There are exceptions to the exception, id., §§ 2680(c)(1)-(4), but they are not germane to this case.) Property seized by law enforcement officers and transferred to a third party is deemed still "detained" by the officers. Parrott v. United States, 536 F.3d 629, 636 (7th Cir. 2008); Hatten v. White, 275 F.3d 1208, 1210 (10th Cir. 2002); Schlaebitz v. U.S. Dept. of Justice, 924 F.2d 193, 194 (11th Cir. 1991) (per curiam). So Norwood's claim under the tort claims act is barred-and for the further reason that the act requires exhaustion of administrative remedies, 28 U.S.C. § 2675(a); Osborn v. Haley, 549 U.S. 225, 234 (2007); Palay v. United States, 349 F.3d 418, 425 (7th Cir. 2003), which, as far as we're able to determine, Norwood has not attempted.

The provision of the Tucker Act that he invokes authorizes federal district courts to entertain claims against the United States for up to $10,000 that are founded on the Constitution or a federal statute or regulation. 28 U.S.C. § 1346(a)(2). Apparently mindful of the statutory ceiling on the amount in controversy, Norwood is asking for $5 less than $10,000. If his claim exceeded $10,000, he would have to proceed in the Claims Court. 28 U.S.C. § 1491(a)(1); see, e.g., Talley v. U.S. Dep't of Agriculture, 595 F.3d 754, 758 (7th Cir. 2010).

Norwood claims to have been deprived of his property without due process of law. But the Supreme Court has held that the Tucker Act is not a general waiver of sovereign immunity, as it might appear to be; the plaintiff must be able to point to a constitutional, statutory, or regulatory provision that can "fairly be interpreted as mandating compensation." United States v. Mitchell, 463 U.S. 206, 217 (1983) (quoting earlier cases); see also United States v. Testan, 424 U.S. 392, 400-01 (1976); Willis v. United States, 787 F.2d 1089, 1092 n. 3 (7th Cir. 1986); Blueport Co. v. United States, 533 F.3d 1374, 1383 (Fed. Cir. 2008). The standard example is the Fifth Amendment's takings clause, which in so many words requires the government to award "just compensation" when it takes private property for a public use. See, e.g., Preseault v. ICC, 494 U.S. 1, 11-12 (1990); Rose Acre Farms, Inc. v. Madigan, 956 F.2d 670, 673 (7th Cir. 1992). "By virtue of the express constitutional command for payment of just compensation, takings claims under the Fifth Amendment have become one of the classic categories of cases under the Tucker Act." Gregory C. Sisk, Litigation With the Federal Government § 4.09(c), p. 330 (4th ed. 2006).

Some cases hold that a Tucker Act suit can't be based on a violation of the due process clause because that clause, unlike the takings clause, doesn't say that victims of such violations must be compensated. Martinez v. Bureau of Prisons, 444 F.3d 620, 622-23 (D.C. Cir. 2006) (per curiam); Rothe Development Corp. v. U.S. Dep't of Defense, 194 F.3d 622, 626 n. 6 (5th Cir. 1999). These cases produce a curious remedial asymmetry between the two clauses. The only reason the cases give for the asymmetry-and, as we've noted, it's a conclusion rather than a reason-is that waivers of federal sovereign immunity are interpreted narrowly. Duarte v. United States, 532 F.2d 850, 852 (2d Cir. 1976). But we need to explain why we called the remedial asymmetry "curious."

The takings clause allows (more precisely, does not forbid) the government to take people's property for a public use, provided that the government pays "just compensation," defined as fair market value. United States v. Miller, 317 U.S. 369, 373-74 (1943); Shaikh v. City of Chicago, 341 F.3d 627, 632 (7th Cir. 2003). So defined, just compensation is less than full compensation (what is called "common law compensation"). Full compensation will often exceed fair market value-many people would not sell their home for its fair market value, if only because of moving expenses. But while acknowledging that fair market value is not always full compensation, the Supreme Court in Kimball Laundry Co. v. United States, 338 U.S. 1 (1949), blunted the point by saying that the shortfall "is properly treated as part of ...


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