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Farrace v. Bureau of Alcohol, Tobacco, Firearms and Explosives

United States District Court, D. Delaware

May 13, 2015

JOHN FARRACE, d/b/a LEVY'S OLD RELIABLE LOAN COMPANY, Plaintiff,
v.
BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES, Defendant.

MEMORANDUM

GREGORY M. SLEET, District Judge.

I. INTRODUCTION

The plaintiff John Farrace ("Farrace") initiated this action against the defendant U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") on April 14, 2014. (D.I. 1.) Farrace petitions the court for review of ATF's previous denials of Farrace's Amended Petition for Remission or Mitigation of Forfeiture and Request for Reconsideration, arguing the ATF's decisions are contrary to Constitutional and statutory law. ( Id. ) Presently before the court is ATF's motion to dismiss for lack of subject matter jurisdiction or failure to state a claim, or alternatively, motion for summary judgment. (D.I. 10.) The court will grant ATF's motion.

II. BACKGROUND

Although the parties depict the facts in vastly different ways, the historical background necessary to resolve this motion does not appear to be in dispute. Approximately on April 22, 2004, ATF seized an estimated 700 firearms from Farrace's pawn shop business: Levy's Old Reliable Loan Company.[1] ATF subsequently took steps to initiate the administrative civil forfeiture process. ATF sent a notice of the seizure to Farrace on June 16, 2004. (D.I. 10, Ex. 1.) The notice explained the procedures for filing a "claim" to contest the seizure, or for filing a petition for remission or mitigation. ( Id. Ex. 1.) The notice provided thirty-five days from June 16 (until July 21) to submit a claim objecting to the forfeiture. ATF also published notice in the USA Today newspaper once a week for three weeks, on June 24, July 1, and July 8, 2004. ( Id. Ex. 2.) Farrace executed a claim on August 19, 2004, and ATF received the claim on August 26, 2004. ( Id. Exs. 4, 5.) ATF notified Farrace that his claim was untimely and ineffective, and that ATF would "proceed with administrative forfeiture." ( Id. Ex. 5.)

On November 5, 2007, Farrace completed a petition for remission or mitigation of forfeiture, although there is no current record of it, and the ATF never addressed it. ( Id. Ex. 6, ¶¶ 3, 4.) On October 24, 2012, Farrace again completed an Amended Petition for Remission or Mitigation. ( Id. Ex. 7.) ATF denied the Amended Petition on September 30, 2008. ( Id. Ex. 8.) Farrace filed a request for reconsideration, which ATF also denied on March 14, 2014. ( Id. Exs. 9, 10.) Farrace initiated this action on April 14, 2014.

III. STANDARD OF REVIEW

The defendant can move to dismiss an action where the court lacks subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1); see also Fed.R.Civ.P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action). Unlike a motion to dismiss for failure to state a claim under Rule 12(b)(6), the plaintiff bears the burden of establishing that jurisdiction in fact exists. Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). "As there is no statutory direction for procedure upon an issue of jurisdiction, the mode of its determination is left to the trial court.'... [T]he district court is free to determine facts relevant to its jurisdiction...." Id. at 891 n.16 (quoting Gibbs v. Buck, 307 U.S. 66, 71-72 (1939)).

IV. DISCUSSION

Property linked to criminal activity is subject to civil forfeiture. 18 U.S.C. § 981. "[C]ivil forfeiture is a creature unto itself. It is an area of the law which is founded upon the many inherent fictions of our jurisprudence." United States v. One 1987 Jeep Wrangler Auto., 972 F.2d 472, 476 (2d Cir. 1992). In essence, forfeiture actions are premised on the concept that "the property has perpetrated some wrong." Id.

"When the seized property is $500, 000 or less, the government may use the administrative forfeiture process governed by the customs laws; this process entails no judicial involvement." United States v. McGlory, 202 F.3d 664, 669 (3d Cir. 2000) (citing 19 U.S.C. § 1607). The government must comply with statutory notice requirements:

[N]otice of the seizure of such articles and the intention to forfeit and sell or otherwise dispose of the same according to law to be published for at least three successive weeks in such manner as the Secretary of the Treasury may direct. Written notice of seizure together with information on the applicable procedures shall be sent to each party who appears to have an interest in the seized article.

19 U.S.C. § 1607(a). Such notice offers an opportunity for interested parties to file a "claim, " contesting the administrative forfeiture. Procedurally proper claims automatically require judicial intervention. McGlory, 202 F.3d at 670 ("If a claimant files a claim..., the administrative process is halted and the seizing agency must turn the matter over to the United States Attorney to commence a judicial forfeiture proceeding...." (citing 19 U.S.C. § 1608)). But if no claim is filed within the prescribed period, the government can "make a declaration of forfeiture and title will vest in the United States. This administrative declaration has the same effect as a final decree and order of forfeiture entered in a judicial proceeding." Id. (citing 19 U.S.C. § 1609(a), (b)); cf. Ibarra v. United States, 120 F.3d 472, 475-76 (4th Cir. 1997) ("Once the Government initiates forfeiture proceedings, the district court is divested of jurisdiction. The court remains without jurisdiction during the pendency of the proceeding unless the claimant timely files a claim. ..." (emphasis added)).

Farrace does not dispute that ATF complied with the statutory notice requirements: ATF mailed personal notice to Farrace on June 16, and ATF published notice in USA Today for three consecutive weeks, as required by 19 U.S.C. § 1607(a). Nor does Farrace contend that his claim was timely. He did not execute his claim until August 19, 2004, nearly a month after the deadline to submit a claim (July 22) had passed. (D.I. 10, Ex. 4.) As such, Farrace does not and ...


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